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Implementation Completion Report (ICR) Review - Agricultural Extension Project


  
1. Project Data:   
ES Date Posted:
09/07/2004   
PROJ ID:
P008222
Appraisal
Actual
Project Name:
Agricultural Extension Project
Project Costs(US $M)
 79.0  59.7
Country:
Venezuela
Loan/Credit (US $M)
 39.0  23.1
Sector, Major Sect.:
Agricultural extension and research,
Agriculture fishing and forestry
Cofinancing (US $M)
   
L/C Number:
L3862      
   
Board Approval (FY)
  95
Partners involved
 
Closing Date
12/31/2001 12/31/2003
         
Prepared by: Reviewed by: Group Manager: Group:  
John R. Heath
Roy Gilbert Alain A. Barbu OEDST

2. Project Objectives and Components:

a. Objectives

"To assist poor farmers to become aware of, and to adopt, improved technology to enhance their productive efficiency and their economic welfare, to improve the environmental sustainability of their farming operations, and to accomplish this through supporting the establishment of a new decentralized public agricultural extension service to serve the needs of poor farmers who are not currently able to secure adequate extension services" (Staff Appraisal Report).

b. Components

(i) Municipal Extension (Expected cost, US$44.6 million, Actual cost, US$40.1 million). To support the establishment of a municipal extension system, including the formation of Civil Extension Associations (ACEs) in each participating locality.
(ii) Institutional Development (Expected, US$12.3 million, Actual US$16.2 million). To set up the national and state-level institutions needed to administer the extension system.
(iii) Training (Expected, US$5.8 million, Actual, US$2.1 million). To establish a training program for extension personnel.
(iv) Technical Assistance & Studies (US$5.5 million, US$0.5 million). To strengthen planning and monitoring and evaluation of the new system.

c. Comments on Project Cost, Financing and Dates
The ICR contains a number of internal inconsistencies in the reporting of costs (See Section 9 below). It is not explained why Bank financing fell from the expected amount of US$39.0 million to the actual amount of US$23.1 million. In Table 2b the largest cost item is Municipal Extension Services (actual cost US$40.9 million) but as this is not broken down by works, goods, technical assistance or recurrent costs it is not clear what was actually financed. It was intended that the cost of the municipal extension system would be shared by central government, state government, municipal government and beneficiaries. But the central government ended up paying more than three times the amount that was initially expected because state and municipal governments and beneficiaries did not come up with the necessary funds. Loan closing was two years later than expected owing to repeated delays in approval of the central government budget, a consequence of the national economic crisis.


3. Achievement of Relevant Objectives:


The development objective statement can be broken down into three parts, all of which were relevant.

(i) Assist poor farmers adopt improved technology (Partly achieved). Fewer than the expected number of farmers were attended by the project (only 45,000, not the 65,000 planned) and the percent of those attended who adopted new technologies was lower than anticipated (30 percent rather than 50 percent). But the number of technological innovations introduced greatly exceeded expectations (4,126 compared to the 720 forecast at appraisal), although the number of direct beneficiaries was less than foreseen, averaging only about 360 per nucleus, rather than the 500 that was envisaged at appraisal. Technology transfer was weakened by shortfalls in the training of extension agents: of the 428 extension agents only 13 attended courses. Horticulture crops showed the best response to the new technology.

(ii) Make farming more sustainable (Partly achieved). The project sponsored the reduced use of agrochemicals, better soil and water conservation, and the treatment of organic waste to produce fertilizer. The ICR notes that over 35 percent of innovations were designed to enhance sustainability but presents no information on adoption rates.

(iii) Create a decentralized extension service (Partly achieved). The development of Civil Extension Associations took longer than expected: at closing only 86 had been created compared to the 180 originally envisaged. Partly because of this delay beneficiaries were reluctant to put money into the system and ended up financing less than 1 percent of the planned amount. State and municipal governments also failed to meet financing targets.

4. Significant Outcomes/Impacts:

  • All eighteen states targeted at appraisal participated in the program;
  • Sixty percent of the the technologies adopted under the project supported on-farm investments with an internal rate of return of over 100 percent (but see Section 9 below for caveats). This is partly because many of the technologies were already available when the project began; they were awaiting the opportunity that this project provided for them to be diffused.

5. Significant Shortcomings (include non-compliance with safeguard features):

The project was less cost effective than expected owing to the the smaller than intended number of direct beneficiaries.
  • There was inadequate contribution to project financing by sources other than the central government. When the loan closed, the financing of actual costs as a proportion of the planned share was 48 percent for state governments, 29 percent for municipal governments and only 1 percent for beneficiaries.
  • Project management was not committed to the principle that beneficiaries should help to finance extension, on the (perhaps plausible) grounds that poor farmers do not have the necessary means.
  • Counterpart funding was erratic.

6. Ratings:ICROED ReviewReason for Disagreement/Comments
Outcome:
SatisfactoryModerately Satisfactory[The ICR's 4-point scale does not allow for a moderately sat." rating]. Objectives were achieved but with significant shortcomings; all reported outcome indicators fell short of targets.
Institutional Dev.:
SubstantialModestState and municipal governments face major capacity constraints with respect to decentralization and have not yet made a significant budgetary commitment to fund extension services; there were shortfalls in training key personnel.
Sustainability:
LikelyLikelyThe central government has committed substantial funds to maintain the program.
Bank Performance:
SatisfactorySatisfactory
Borrower Perf.:
SatisfactorySatisfactory
Quality of ICR:
Unsatisfactory

7. Lessons of Broad Applicablity:

  • It is unreasonable to expect beneficiaries to pay for extension until the service providers have established a record for achieving results.
  • Designers need to allow for the possibility that demand-driven agricultural extension services will demonstrate that the target community has a smaller demand for agricultural knowledge than for community services: agricultural productivity targets need to be correspondingly modest.
  • In setting up a decentralized system it is important not to overestimate existing local capacity available to contract, supervise and evaluate an extension program.

8. Audit Recommended?  No

          Why?  

9. Comments on Quality of ICR:


The ICR contains a rich discussion of lessons learned but this is overshadowed by a number of significant shortcomings. The evidence on outcomes (Annex 1) is sparse and more detail is needed on why targets were not met. The economic analysis (Annex 3) lacks the key supporting information: farm budget data, statement of key assumptions, and sensitivity analysis. The ICR is internally inconsistent in reporting costs. For example, actual Bank financing is reported as US$23.555 million in paragraph 5.4.2, US$29.24 million in Table 2b and US$23.07 million in Table 2d. It is not all clear what was actually financed under the Municipal Extension component. Nor is the substantial reduction in Bank financing explained.

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