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Implementation Completion Report (ICR) Review - Agricultural Services


  
1. Project Data:   
ES Date Posted:
08/09/2000   
PROJ ID:
P001660
Appraisal
Actual
Project Name:
Agricultural Services
Project Costs(US $M)
 64.80  52.81
Country:
Malawi
Loan/Credit (US $M)
 45.80  43.60
Sector, Major Sect.:
Research,
Agriculture
Cofinancing (US $M)
 12.70  7.90
L/C Number:
C2514      
   
Board Approval (FY)
  93
Partners involved
African Development Bank 
Closing Date
09/30/1999 12/31/1999
         
Prepared by: Reviewed by: Group Manager: Group:  
Nalini B. Kumar
Christopher D. Gerrard Ridley Nelson OEDST

2. Project Objectives and Components:

a. Objectives
The project was conceived as the first phase of a long term program to reform and integrate the delivery of key agricultural services for smallholders. It was to (i) support institutional and management reforms in research, extension and input supply, with the aim of providing cost-effective and sustainable technologies for different types of smallholders and agro-ecological zones; (ii) enhance smallholder incomes and food security by increasing the productivity of smallholder agriculture, especially that of female and resource-poor farmers. At the Mid-term Review in May/June 1998 the project was de facto restructured to accommodate support for a Starter Pack Scheme (SPS) which involved free distribution of a package of fertilizer, hybrid maize and legume seeds for 0.1 ha per household.

b. Components
Four Components: (i) Agricultural Research; (ii) Agricultural Extension; (iii) Input Supply; (iv) Institutional Strengthening.

c. Comments on Project Cost, Financing and Dates
As appraised, total project cost was US $ 64.8 million of which the IDA share was US $ 45.8 (70.6 percent), co-financing from the African Development Bank (ADB) was US $ 12.7 million and the contribution of the Govt. of Malawi was US $ 6.3 million. Actual IDA disbursement was for US $ 43.62 million. Actual Govt of Malawi contribution was for US $ 1.32 million. ADB disbursement was US $ 7.87 million at project closure. The ADB loan is scheduled to close in December, 2000. The project was identifed in early 1988, appraised in 1992 and became effective in January 1994. It formally closed as scheduled on September 30, 1999 although some component categories remained open until December 31, 1999 to allow reimbursement of final claims for procurements.


3. Achievement of Relevant Objectives:

The design was complex and ambitious and the project could not achieve its principal objective of delivering agricultural services to the smallholder sector, in particular the resource poor. The absence of specific performance indicators over the life of the project make assessing the increase in smallholder productivity, income and food security difficult. Even though SPS was effective in targeting poverty and household food security in the two seasons that it was supported by the project, the scheme was more in the nature of a short term emergency measure whose sustainability without continuous donor support is questionable. Parallel co-financing created complex implementation and interdependency problems over the life of the project. Project performance was also negatively influenced by extraneous factors such as HIV/AIDS and a major drought in 1994.

4. Significant Outcomes/Impacts:

(i) Amendment to the Special Crops Act which allowed smallholders to grow burley tobacco; (ii) Production and marketing of hybrid seed was liberalized; (iii) A database of region-specific fertilizer recommendations for farmers was compiled; (iv) A successful Contact Research Program procedure for channeling resources to scientists was developed;

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

(i) Despite significant TA and supervision input, effective M&E for agricultural development in Malawi was not established; (ii) Training favored senior headquarters staff, with overall achievement substantially below target; this was largely a result of a lack of proper guidelines or a needs assessment (which was eventually undertaken late in the project's life) for the use of training funds; (iii) Research-extension-farmer linkages were not developed; (iv) Bulk of civil works programs were not implemented because of a lack of an action plan. In hindsight, in the light of the current decentralization process, the planned civil works were not needed; (v) There was little improvement in efficiency and effectiveness of extension delivery; (vi) A large number of transport vehicles (4x4, motorcycles,bicycles) were procured; however, with the departure of the TA, the transport management system collapsed for lack of borrower commitment; (vii) Imported fertilizer prices could not be reduced for a number of technical and policy related reasons; (viii) Ministry of Agriculture and Irrigation failed to channel resources to extension field level staff and research scientists on a secure and regular basis.
6. Ratings:ICROED ReviewReason for Disagreement/Comments
Outcome:
UnsatisfactoryUnsatisfactory
Institutional Dev.:
NegligibleNegligible
Sustainability:
UnlikelyUnlikely
Bank Performance:
SatisfactoryUnsatisfactory
    Bank performance is downgraded to unsatisfactory for several reasons: (i) Project design was too ambitious, placed too much emphasis on centralization of management systems, and did not provide for concrete measures to realistically deal with risks and challenges; (ii) Serious problems that emerged early during project implementation were not adequately recognized or dealt with; (iii) Institutional strengthening was a critical part of the project but the lack of government commitment prevented any significant progress. Given the poor performance of the project, the Bank should have initiated action to close the project earlier.
Borrower Perf.:
DeficientUnsatisfactory
Quality of ICR:
Satisfactory

7. Lessons of Broad Applicablity:

The lessons identified by the ICR are interesting. Four lessons from the ICR are repeated here. (i) Investments aimed solely at increasing productivity are unlikely to yield enhanced farmer incomes unless market development related issues are adequately addressed simultaneously; (ii) The policy reforms carried out under the project alone are not sufficient to yield significant benefits to the sector and a range of "second generation" reforms need to be addressed; (iii) Research-extension-farmer linkages can only be strengthened by farmers participating in the development of research agendas; (iv) In the interests of sustainability and affordability, a clear definition of publicly funded extension priorities is essential, together with partnerships between government, NGOs and the private sector.
The ES adds the following further lessons: (i) An assessment of borrower's capacity to implement and its commitment to change is crucial to the design of realistic project objectives. The Malawi Agricultural Services Project was too complex for a weak Ministry of Agriculture to implement; (ii) It is not only essential to identify the risks and challenges upfront but also to develop an effective strategy to take corrective measures early when things do not work out; (iii) The project appears to question the validity of top down approaches to the delivery of agricultural services particularly when you have a weak Ministry of Agriculture.

8. Audit Recommended?  No

          Why?  

9. Comments on Quality of ICR:

The ICR is satisfactory. It gives a frank account of the project's experience. Given the complex nature of the project, co-financier's comments would have been valuable.

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