Adaptable, context-specific instruments and approaches are key to support innovation

Photo by CIAT/StephanieMalyon

Cutting-edge research is vital if we are to make progress on the Sustainable Development Goals, the Paris Agreement climate targets, and efforts to reduce poverty and economic inequality. However, translating research insights into useful, real-world agricultural innovations is often a lengthy process, making it difficult to address these global priorities with the urgency they need. Over the past 20 years, a series of new financial instruments have been tested to reduce this lag time and improve innovation uptake and scaling processes.

What can the past two decades teach us about these instruments, and how can they be better designed to fit into the toolkits of national and private sector investors in innovation?

Ensuring instruments play their part

To answer these questions, CoSAI has commissioned the South African Institute of Natural Resources (INR) to undertake a study on the effectiveness of different instruments at stimulating and supporting innovation in agriculture. The study looks at 13 instruments – including innovation platforms, accelerators and results-based payments – and explores how successful they are in getting user involvement, facilitating more rapid uptake at scale, and promoting the environmental, social and economic objectives of sustainable agricultural intensification.

As part of this study, CoSAI and INR recently held two stakeholder engagement events on October 12, 2021. These were attended by CoSAI Commissioners as well as stakeholders representing international organizations, donor agencies, non-governmental organizations, farmer organizations and research institutions, among others. INR’s Dr Brigid Letty, the study’s principal investigator, kicked off the events with a presentation of the initial study findings. This was followed by lively plenary discussions to understand why some instruments worked and others did not.

Context is key

Discussions highlighted the importance of the contexts within which instruments are applied. After all, the real world is never static, but constantly shifting in its social, cultural, economic, political, institutional and ecological characteristics. As a result, the success or failure of an instrument can depend on its flexibility to adapt to changing environments. Adaptation can be through tweaking and tuning the design of individual instruments, or by combining and integrating different instruments. On this, Dr. Irene Annor-Frempong, CoSAI Commissioner and Chair of the Oversight Group for the study noted:  

Understanding different contexts and observing shifts in the parameters that define these contexts are imperative to the successful design of instruments that see to the reality of what is happening on the ground, and that effectively influence and inform investments in innovations for sustainable agriculture intensification.  

Going beyond contextual shifts, the capacities and capabilities of farmers are also changing. Prof. Bancy Mati, Director of the Water Research and Resource Center and Professor at Jomo Kenyatta University in Kenya, remarked:

The modern farmer is increasingly more individual in terms of access to information and even access to funding. So, going forward, some of the traditional approaches that aimed to support farmers without involving them in the design and implementation may no longer be feasible, and alternatives must be sought.

This means that assessing the current and changing needs of farmers and other target beneficiary groups – and matching those needs with the right instruments – is crucial for successful instruments. As Karen Musikoyo, Agribusiness Expert at the Forum for Agricultural Research in Africa (FARA), commented:

Efforts must be made to assess the intensity of farmer needs so that instruments are appropriately designed and selected. For example, while the immediate need of a farmer group may be financial, the crucial need may be capacity building. Without this level of needs assessment, we risk jeopardizing the sustainability of instruments.

Embracing the risks of innovation

The plenary discussions also grappled with the question of when to assess the impact of these instruments, be they agricultural, ecological, financial or social. Without timely impact assessments, recalibrating instruments and readjusting investment priorities can be little more than guesswork. However, finding feasible points in the project cycle to assess impact can be difficult, especially for instruments used in time-bound, donor-funded development projects. Acknowledging these challenges, participants generally agreed that regularly reviewed and adapted instruments are more capable of responding to dynamic contexts compared to instruments designed via the traditional linear research-and-development process.

Related to this point were the discussions around risk, with many attendees arguing that embracing the risk of failure and adopting an iterative "trial-and-error" mindset are vital for the continuity and successful out-scaling of innovations. As Kenneth Chomitz, Chief Analytics Officer at the Global Innovation Fund (GIF), remarked:

Funding innovation is all about embracing risks. Innovations are inherently risky — not all of them are going to deliver the benefits we hope for.  But by sifting through them, testing them, and supporting the ones that show promise, we can develop a portfolio of innovations that can grow towards impact at scale.

Digital technology only part of the solution

Another point raised was the prominent role of the digital economy and technologies in catalyzing contextual shifts. Knowing how to make the most of these emerging technologies could significantly complement the design – and thus effectiveness – of financial instruments. However, even though farmers today have better access to information and markets thanks to digital technology, participants noted that there are still many caveats regarding the extent to which digital technology can be considered the "be all, end all" innovative solution. Suzanne Phillips, an international consultant at the Food and Agriculture Organization (FAO), noted:

We have learned that having access to information is not the same as having the capacity to assess and use it. For example, farmers may have access to information on pesticides and where they can buy them through their mobile phones, but they may not have the capacity to assess whether they need them and how they can use them.

Overall, the two stakeholder engagement events stimulated plenty of passionate and informed discussion about the challenges and solutions to designing and implementing effective instruments. This, in turn, has provided INR with a wide range of insights to help shape the final study report, which is expected for release in early November 2021.