Agriculture Sector Agriculture Sector AssessmentAssessment - Ukraine- Ukraine

Overview of theOverview of the

Sector Wide Approach (SWAP)Sector Wide Approach (SWAP)

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SWAP: Concept and ApproachSWAP: Concept and Approach

• An effective approach of working together between government and development partners;

• A mechanism for co-ordinating support to public expenditures;

• A mechanism for improving the efficiency and effectiveness of budget resource utilization in the sector (through medium-term budget planning);

• A truly programme-based approach operating at the level of an entire sector, addressing ‘cross-cutting’ issues;

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SWAP: A Shift in EmphasisSWAP: A Shift in Emphasis

• FROM …• Project-based approach

• Micro Level focus

• Donor-led approach

• Short-term and immediate issues

• Donor ‘independence’

• Parallel application alongside Government

• Fragmentation and low communication

• TO …• Sector-based approach

• Macro Level focus

• Government-led approach

• Longer-term and ‘cross-cutting’ issues

• Donor ‘co-ordination’

• Integrated with Government programmes (and Budget)

• Planned process with transparency and improved communication

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Factor Sector Wide Approach Typical Project Approach

Focus Long-term strategic and integrated view on entire sector

Short or mid-term, focus on a particular problem of a sector, setting narrowly defined objectives

Government Role Core strategy elaboration May be outside or additional to core donors’ strategy

Impact on Partner Country

Bringing coherence between sector policy, spending and results

Strengthen Government and Ministerial capacity

Results limited to specific project area No links between policy and budget Low involvement of the Government

Sustainability Higher Lower

Donor – Recipient Relationships

Partnerships with mutual trust and shared accountability

Recipient accountable to donor

Overall Approach Process-oriented approach through ‘learning-by-doing’ and reviewing

‘Blue-print’ approach (that is perceived as ‘imposed’)

Implementation Mechanisms

Through national Government or line Ministry; Increased use of local procedures

Project-level implementation units and parallel implementation arrangements

Low level of integration

Donors Collaboration High level of co-ordination and collective dialogue

Donors’ collaboration not a priority; bilateral negotiations and agreements with each donor the norm

SWAP versus Typical Project ApproachSWAP versus Typical Project Approach

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• Undermining the ‘ownership’ of policies and programmes by national authorities;

• Fragmentation, duplication of efforts and loss of coherence;

• Funding of multiple investments by donors has led to unbalanced sectoral development;

• High transaction costs of delivering aid through projects;

• The reliance on non-government project management, undermining the effectiveness of government systems;

• Corroding the normal structures of democratic accountability;

Short-Comings with the ‘Traditional’ Short-Comings with the ‘Traditional’ Project-based ApproachProject-based Approach

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SWAP ObjectivesSWAP Objectives

• Broaden ownership on policy, strategy and sectoral spending;

• Increase coherence between sector policies, spending and results;

• Minimise transaction costs in the provision of external funding directly, by adopting established government procedures, harmonisation of donor procedures, etc.;

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• More funds are made available for development of agriculture i.e. up to five time more funding is provided (€12m rather than €2m on average);

• The Agriculture Sector Development Strategy is streamlined, with a focus on a selected number of key sector priorities or ‘bottlenecks’;

• Closer links between sector policies and implementation are established; coherence between spending and results are increased;

• Quality of medium-term budget planning and implementation, or medium-term expenditure framework (MTEF) is improved;

• Inter-sectoral co-ordination and addressing cross-cutting issues, in terms of planning and budgeting, including inter-ministerial links, is improved;

• Capacity within Government and the sector Ministry regarding strategic planning and sector-wide programme implementation is increased;

• Sector performance transparency and budget accountability is increased;

SWAP Benefits: For RecipientsSWAP Benefits: For Recipients

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• Donors’ transaction costs are minimized due to: better co-ordination harmonizing of procedures improved information flows, and fewer costly project management units;

• Funding efficiency is increased because of better focus and co-ordination;

• Donors’ aid is generally more effective because of a better response, integration with national priorities and a more co-operative attitude from Government;

SWAP Benefits: For DonorsSWAP Benefits: For Donors

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• Sector Development Programme (SDP) is at the heart of any successful SWAP initiative

• Medium–Term Expenditure Framework (MTEF) is what makes a Sector Development Programme operational

• Programme-based Budgeting links ‘projects’ and activities clearly to assured sources of funds, and to detailed work programmes

• Performance Monitoring provides the means to judge whether ‘milestones’ and goals are achieved and have impact

• Co-ordinating Mechanism for greater integration and effectiveness

• Harmonisation of Information Flows for improved decision-making and partnership

SWAP Components in AgricultureSWAP Components in Agriculture

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SWAP ComponentsSWAP Components

Comp. 6: Harmonisation of Information

Comp. 5: Co-ordinating Mechanism

Comp. 4: Performance Monitoring

Comp. 3: Programme- based Funding

Comp. 2: Sector MTEF (Budget)

Comp. 1: Sector Development Policy

Capacity Development

and Sector

Performance

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The answer is usually “NO”, not at once!

As SWAP is a dynamic long-term partnership that continually develops, implements and improves the sector development programme, all the components develop gradually and incrementally together as the programme evolves, led by the Government.

How Can SWAP be Implemented? How Can SWAP be Implemented? Can it be Done in One Step?Can it be Done in One Step?

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Sequencing through ‘Steps’ on a ‘Staircase’

Each step adds value, but also builds to the next step

Step 1

StreamlineSWAPPre-Conditions

Step 2

SWAPLaunched

Step 3

SWAPIn Action

Step 4

SWAPReaching itsObjectives

Enables

Enables

Enables

SWAP Development: Step ApproachSWAP Development: Step Approachto Reach Objectivesto Reach Objectives

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• Consensus between Government and the international donors over key sector issues;

• Strong and effective leadership at Sector level e.g. MAP;

• Good institutional and inter-Ministerial co-ordination and integration, led by the Ministry of Finance;

• Basic capacities and skills in Budget programming (MTEF);

• A reasonable degree of macro-economic and political stability and policy predictability;

• Agreement and co-ordination among the donors on the issues and priorities, with a ‘lead donor’ ideally identified;

Fundamental is the Government firm intention and will to collaborate with donors in preparing and

implementing a Sector Development Programme

SWAP Implementation ConditionsSWAP Implementation Conditions

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SWAP Implementation ConditionsSWAP Implementation Conditions

Where can the Sector-Wide Approach (SWAP) be best used?

The public sector plays a substantial role

There is broad agreement on the Sector Strategy

The donor contribution is significant

There is a supportive macro Budget (MTEF)

Institutional relationships between Ministries are manageable and co-ordinated

Where countries have strong positive incentives to support SWAP objectives e.g. EU-Ukraine Action Plan

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Indicators of Ownership:• Government policy priorities are backed by budget allocations

• High-level Government and Ministries involved, especially the Ministry of Finance, as well as the Sector Ministry

• Government has gone through an ‘internal’ consultation processes

• Government is committed in terms of explicit policy agreement

The most important success factor for SWAP is establishing true ownership by the local partner.

Many donors particularly emphasized the need to incorporate the SWAP within the overall national budgetary strategy. This was considered to be the surest way of securing broadly based Government ownership and of enlisting the national and sub-national Government bodies in support of the programme.

Experience and Lessons LearnedExperience and Lessons Learned

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The simple answer is YES, But… with Conditions!CURRENT STATUS

Consensus between Government and international Donors over key sector issues

To be developed

Government intention and will to collaborate with donors in preparing and effectively implementing a Sector Development Programme

To be developed

Leadership at the Sector Level i.e. MAPNeeds to be strengthened

Institutional coordination Needs to be strengthened

Basic capacities and skills in budget programming; some experience in mid-term financial planning at sector level

Needs to be strengthened

A reasonable degree of macro-economic and political stabilityNeeds to be strengthened

Swap for Ukraine: Can Ukraine Meet Swap for Ukraine: Can Ukraine Meet the Conditions for the SWAP?the Conditions for the SWAP?

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Swap for UkraineSwap for Ukraine

Ukraine Agriculture SWAP Development

Step 1

Step 2

Step 3

Step 4

Step 1: Streamline SWAPPre-Conditions

- Outline sector development strategy and key sector needs

- Basics of MTEF - Basic arrangement for

performance monitoring and budget programming

- Dialog and co-ordination - Assessment of information

flows and institutional links

Step 2: SWAP Launched

- Agreed agriculture sector targets and instruments

- Prepared MTEF for agriculture sector

- Deepen linking resources to performance

- Set-up performance monitoring system

- Ongoing dialogue, co-ordination and consultation

- Set-up reliable financial information system

Step 4: SWAP Reaching

Objectives

- Streamline sector wide budget implementation;

- Integrated fully functioning sector budget system

- Accountable and transparent economic and financial performance of the sector

Step 3: SWAP in Action - Sector development

programme is integrated with MTEF;

- Strengthen capacity for programme-based managing for results

- Agreement between Government and Donors on funding arrangements

- Financial information and performance monitoring coherent

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• The following ‘priority’ issues have been identified:

Market Infrastructure and Competitiveness issues

Food Safety and Quality Standards issues

Rural Development issues

Future EU InterventionsFuture EU Interventionsin the Ukraine Agriculture Sectorin the Ukraine Agriculture Sector