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Implementation Completion Report (ICR) Review - Price Vulnerability (food Crisis) /former Product Id: P113225


  
1. Project Data:   
ICR Review Date Posted:
04/12/2012   
Country:
Nicaragua
PROJ ID:
P114441
Appraisal
Actual
Project Name:
Price Vulnerability (food Crisis) /former Product Id: P113225
Project Costs(US $M)
 7.3  7.3
L/C Number:
Loan/Credit (US $M)
 7.0  7.0
Sector Board:
SP
Cofinancing (US $M)
 0  0
Cofinanciers:
Board Approval Date
  01/21/2009
 
 
Closing Date
06/30/2010 10/31/2010
Sector(s):
Other social services (57%), Other social services (57%), Crops (43%), Crops (43%)
Theme(s):
Global food crisis response (100% - P)
         
Prepared by: Reviewed by: ICR Review Coordinator: Group:
Ursula Martinez
George T. K. Pitman Soniya Carvalho IEGPS1

2. Project Objectives and Components:

a. Objectives:
The Project Development Objectives (PDOs) according to the Project Appraisal Document/Program Document (PAD/PD page v and page 62) were :

      1. To mitigate the negative nutritional impact of the food price increase on pre-primary and primary school children; and
      2. To promote poor rural households' food security by increasing agricultural production.

The PDOs according to the Grant Agreement (GA page 7) were:

      1. To assist the Recipient in mitigating the negative impact of food price increases on vulnerable groups' human capital and productive assets; and
      2. Strengthen programs aimed at preventing such impact in the future.
This IEG review uses the PAD PDOs as they are more precise and monitorable.

b. Were the project objectives/key associated outcome targets revised during implementation?
Yes

If yes, did the Board approve the revised objectives/key associated outcome targets? No

Date of Board Approval:

c. Components:
There were two components:
1. Support of the Integral School Nutrition Program (Programa Integral de Nutrición Escolar, PINE).
(Planned US$ 4.3 million; actual costs US$6.0 million).This included three main areas of intervention:

      1. Purchase and Distribution of School Lunches to children in 52 municipalities. The project was to finance the operation of the PINE for the first semester of 2009 (100 days) in 52 prioritized municipalities where the school nutrition program is not guaranteed by existing funding sources. In particular, the project would fund the purchase of school lunches for an estimated 263,000 students for the period of February (beginning of school year) to August 2009.
      2. Capacity Building at school level. The project would also support the nutrition program’s efforts to improve teachers and pupils knowledge on food consumption in all the municipalities of the Autonomous Regions of the Atlantic Coast (school lunch, nutrition practices, indigenous food, etc.). In particular, it would finance the printing of a manual and booklets and the costs of workshops.
      3. School Food Consumption Survey.The project would support the School Food Consumption Survey, which aimed to identify the food consumption patterns of primary school students (food consumed at home and at school), determine its quality in terms of micro and macro-nutrients, and propose improvements to the school lunch provided by PINE.

2. The Agro-Seeds Program (Programa Agroalimentario de Semilla, PAS). (Planned US$3.0 million ; actual costs Us$1.3 million). The Component included three main areas of intervention:
      1. Seeds. Delivery of 2,616 quintals of certified maize seeds, 17,171 quintals of bean seeds and 606 quintals of sorghum seeds to small producers.
      2. Agricultural inputs: Provision of 8,982 quintals of urea and 21,464 quintals of fertilizer to small producers.
      3. Training: Provision of training to extension agents, promoters and beneficiaries, orientation workshops on agronomic techniques, integrated pest management, etc.
      4. Operational cost: Operational costs for the seeds program.

The project was restructured to increase the scope of component 1 (school feeding) and decrease the scope of component 2 (provision of seeds, fertilizer and training). This was approved by the Country Director on March 29, 2010. The restructuring responded to issues which had arisen in the implementation of Component 2 due to the impact of climatic conditions on seed production (drought related to the "El Niño" current followed by unexpectedly heavy rainfall) and the reluctance of farmers to take up credit. The original project objectives were unchanged. The target values for the outcome indicators were, however, adjusted to reflect the change in the scope of the project. In the case of Component 1, the number of days of school lunches increased from 100 to 133, while for Component 2, the number of beneficiaries decreased from 31,590 to 9,266 small farmers.

d. Comments on Project Cost, Financing, Borrower Contribution, and Dates

Cost:

  • The project was appraised to cost US$ 7.3 million and this was the amount spent although there was a reallocation of costs within the budget. After the restructuring described above, US$1.7 million were reallocated from component 2 to component 1. The new total allocations were US$6.0 million for Component 1 (US$0.3 million from counterpart funds and US$5.7 million from the grant) and US$1.3 million for Component 2.
Financing:
  • The Food Price Crisis Response Trust Fund (funded from World Bank surplus) funded the project (US$ 7.0 m).
Borrower:
  • The Government contribution was US$ 0.3 million as planned.
Dates:
  • The project closing date was extend on June 24, 2010 from June 30, 2010 to October 31, 2010 to complete project activities, including: (i) finalizing the third purchase of school lunches under component 1 of the project; (ii) finalizing the technical and financial audit of the project; (iii) concluding the delivery of the agricultural package (seeds, fertilizers and training) to beneficiaries of the agricultural season’s first planting cycle; and (iv) concluding activities related to the Indigenous Population People’s Plan (IPP).


3. Relevance of Objectives & Design:

a. Relevance of Objectives:
Original project: High.
Nicaragua was severely hit by the food crisis, and cost inflation of food items was 29.4 percent in 2008. The situation was worsened by natural disasters that dramatically affected domestic food production. Objectives were in line with the government approach of protecting the most vulnerable sections of the population and increasing productivity in the agricultural sector. Additionally, the objectives are relevant to government priorities for the period FY08-FY12, including: reactivating the economy, stimulating productivity and competitiveness and human capital development by improving social equity and opportunity.

The project's objectives were broadly consistent with the Bank's Global Food Crisis Response Program (GFRP) which was launched in May 2008, and aimed to: "(i) reduce the negative impact of high and volatile food prices on the lives of the poor in a timely way; (ii) support government in the design of sustainable policies that mitigate the adverse impacts of high and more volatile food prices on poverty while minimizing the creation of long-term market distortions; and (iii) support broad-based growth in productivity and market participation in agriculture to ensure an adequate and sustainable food supply response" (Program Document, pp. 2-3).

After Restructuring:
High. Project objectives remained relevant.

b. Relevance of Design:
Original Project:

Modest.
The components of the project were consistent with its development objective. They were also in line with GFRP guidelines.

  • Component I of the project: the Integral School Nutrition Program was aligned with the DO of mitigating the negative nutritional impacts of the food crisis on school children. It was also aligned with the GFRP objective of reducing the negative impact of high and volatile food prices on the lives of the poor in a timely way. Component I of the project had a fairly simple design, and built on an existing successful program (ICR pg 5), which allowed it to achieve and surpass the targets for the stated objective.
  • Component II: the agro-seed program was aligned with the project objective of promoting poor rural households' food security by increasing agricultural production and with the GFRP objective of reducing the negative impact of high and volatile food prices on the lives of the poor in a timely way. However, the design of the second component was affected by unexpected weather events, complicated institutional arrangements and not taking into account the impact of changing from an in-kind type of support for small farmers to a credit type of support.
  • The results framework was simple and appropriate for an emergency operation of this nature. The selection of indicators was appropriate. However, the targets for the agro-seed program targets were over-ambitious.
After Restructuring:
Modest Project design remained relevant as only the value of the target indicators was changed.


4. Achievement of Objectives (Efficacy) :

Original Project

1) To mitigate the negative nutritional impact of the food price increase on pre-primary and primary school children: Substantial.
  • The results framework did not measure nutritional impacts because of the short duration and the emergency nature of the operation. However, all of the target values for indicators related to this PDO were largely achieved. The baseline number of preschools receiving lunches in targeted areas was 38,022, the target (revised) was 35,411 and by completion the number achieved was 50,777. In terms of the number of school children receiving lunches, the baseline was 225,099, the target value was 216,627 (revised) and the actual value at completion was 558,365. In terms of the number of days that children received lunches the baseline was 65, the target value was 133 (revised) and actual value at completion was 172.
  • The results frameworks measures intermediate outcomes such as school retention rates which were largely achieved. School attendance was set at appraisal at 83%, and the project achieved a school attendance rate of 80.1% (96% of target).

2) To promote poor rural households' food security by increasing agricultural production: Modest.
  • There was no baseline available for the "area planted with seeds" indicator. The original target value was 26,030 manzanas (blocks), and the actual value at completion was 17,595 manzanas (68% of target).
  • However, none of the intermediate outcome indicators reached their target values. The indicator (number of farmers that received seed, fertilizer and technical assistance in targeted areas) had an original target value of 31,590 farmers, and the actual value at completion was 8,810 farmers (28% of target).
  • The maize yields indicator had an original target value of 1,288 kg/ha, and the actual value at completion was 1,821 kg/ha (141% of target).Bean yields had an original target value of 920 kg/ha, and an actual value at completion of 651 kg/ha (71% of target). Sorghum yields were eliminated as an indicators when the project was restructured.
  • The pay-back as a percentage of the value of the inputs provided within the stipulated period, had an original target value of 70%, and the actual value at completion was 25% (pertaining to the 2009/2010 cycle).

Restructured Project:
To mitigate the negative nutritional impact of the food price increase on pre-primary and primary school children: Substantial for the same reasons as cited above.

2) To promote poor rural households' food security by increasing agricultural production: Substantial.
  • The area planted with seeds had a restructured target value of 14,762 manzanas and the actual value at completion was 17,595 manzanas (119% of the revised target).
  • None of the intermediate outcome indicators reached their target values, even afterrestructuring. The number of farmers that received seed, fertilizer and technical assistance had a restructured target of 9,266 farmers and an actual value at completion of 8,810 farmers (95% of the revised target).
  • Maize yields had a restructured target of 1,380 kg/ha and the actual value at completion was 1,821 kg/ha (132 of the revised target), whilst the yield of beans at completion (651kg/ha) was below the restructured target of 754 kg/ha.
  • The pay-back as a percentage of the value of the inputs provided within the stipulated period had a restructured target of 100%, while the actual value at completion was 25% (pertaining to cycle 2009/2010).

5. Efficiency:

Efficiency is rated modest because of incomplete data and information for the Agro-seeds program.
The project did not have measures of efficiency at appraisal. In the case of Component 1 (PINE), the ICR established that a 3 percentage point increase in school attendance after the Program translates into an estimated 7,000 children that could have dropped out of school if the project has not been implemented. The overall lifetime private benefits from approximately 7,000 children resuming schooling can be valued at around US$36 million, which is 532 percent larger than the overall cost of the grant sub-component of US$5.7 million (ICR pg 11).
There is no efficiency analysis of Component 2.

a. If available, enter the Economic Rate of Return (ERR)/Financial Rate of Return at appraisal and the re-estimated value at evaluation:


Rate Available?
Point Value
Coverage/Scope*
Appraisal:
No
%
%
ICR estimate:
No
%
%

* Refers to percent of total project cost for which ERR/FRR was calculated

6. Outcome:

The relevance of objectives of the original and restructured project is rated high. The relevance of design is assessed as modest for both the original and restructured project. Efficiency was modest for both the original and restructured project. The project partially achieved its stated objectives. While it substantially mitigated the negative nutritional impact of the food price increase on pre-primary and primary school children, the project encountered difficulties in achieving its second objective of promoting poor rural households' food security by increasing agricultural production. Both the original and restructured project fell below target in providing beneficiaries with a pay-back for the expenditure on agricultural inputs.


For the original project, the efficacy of the two objective are rated substantial and modest. Relevance of objectives is high while efficiency is rated modest. Outcome is rated moderately satisfactory.

For the restructured project, the efficacy of both objectives is rated substantial. Relevance of objectives is high while efficiency is rated modest. Outcome is rated moderately satisfactory.

Given that the outcome rating is the same for the original and restructured projects, the overall outcome is assessed as moderately satisfactory.

a. Outcome Rating: Moderately Satisfactory

7. Rationale for Risk to Development Outcome Rating:

The risk to development outcome is rated Moderate. The program, as noted by the ICR (pg 13), depends on external financing which could have a direct impact on access and services coverage in the future, although the Government is making an effort to finance at least 50%. In terms of the technological package for small farmers, the Government has made significant progress to improve the seed program (ICR, page 13). However, it remains doubtful whether a credit based program will succeed, rather than grants for small farmers.

a. Risk to Development Outcome Rating: Moderate

8. Assessment of Bank Performance:

a. Quality at entry:
Increases in food prices required a quick and flexible response. The Bank prepared this project under the emergency procedures of OP 8.0. However, the design of the agro-seeds program was complex, involving five implementing agencies and a new, credit-based approach to the program(in-kind transfers were used by past Administrations). The Bank gave insufficient attention to the lack of coordination between the agencies involved. Moreover, the agencies, especially at a local level, were insufficiently prepared to start their activities when implementation commenced.

Quality-at-Entry Rating: Moderately Satisfactory

b. Quality of supervision:
The Bank ensured intense supervision of the project, mainly from the Country Office (ICR pg 14). The involvement of the Social Protection Sector Manager and the Country Manager was very important in speeding up negotiations with the government during the restructuring. The agro-seeds program required constant Bank and Government (Ministry of finance) supervision in an effort to meet the revised targets.

Quality of Supervision Rating: Satisfactory

Overall Bank Performance Rating: Moderately Satisfactory

9. Assessment of Borrower Performance:

a. Government Performance:
The Government was committed to the achievement of the development objective. However, there were some shortcomings in readiness for implementation, especially at the local level. The Government was supportive after the restructuring and provided close monitoring and supervision.

Government Performance Rating: Satisfactory

b. Implementing Agency Performance:
The Minister of Agriculture and Forestry (MAGFOR) had overall responsibility for the implementation of the project. MAGFOR and the Minister of Education (MINED) entered an inter-institutional agreement for the implementation of the first component (PINE) with the help of public agriculture agencies such as the Rural Credit Fund, the Nicaraguan Agriculture Technology Institute, the Nicaraguan Basic Food Company and the Rural Development Institute.

During 2009, turnover in the procurement and financial staff at MINED temporarily slowed the pace of the Ministry activities. As a result, the first food purchase took more than seven months. To remedy this issue MAGFOR offered in-house training to MINED's procurement unit.

According to the ICR, MAGFOR was insufficiently ready at the start of the project since it still had to identify the real demand of the program and support the organization of small farmers to obtain credit lines through an intensive dissemination exercise. There were significant financial management problems (see section 11).

Implementing Agency Performance Rating: Moderately Unsatisfactory

Overall Borrower Performance Rating: Moderately Satisfactory

10. M&E Design, Implementation, & Utilization:

a. M&E Design:
Most of the performance indicators were appropriate for an emergency operation. All indicators were part of the results monitoring systems of the agricultural and educational sectors (ICR p. 7). However, indicators for Component I were not well aligned with the PDO of mitigating the negative nutritional impact of the food price increase on pre-primary and primary school children as they measured outputs or intermediate outcomes such as school attendance and retention rates, but did not attempt to gauge the nutritional impacts of the project on the target population.

b. M&E Implementation:
Component I was based on the monitoring system of PINE which provided updated information on the number of children covered by the program and allowed monitoring both at the central and local level. This system has been functioning for several years.


For component 2 a new information system was created forthe agro-seeds program. This system built on the national seed system program (also supported by IDA). The system provided information on the number of farmers receiving seeds, fertilizers and technical assistance in the areas planted as well as yields. Monitoring also relied on the Rural Credit Fund. Both systems were strengthened by the project.

a. M&E Utilization:
The M&E system provided the information necessary to restructure the project, as the data collected indicated the very low take up of credit from small farmers. Government used the information and the lessons from the project to design an additional financing operation for the IDA-supported Agricultural Technology II Project.

M&E Quality Rating: Substantial

11. Other Issues:

a. Safeguards:
This was classified a Category B project under OP4.10. The ICR reports that an Environmental Assessment was prepared, and that the requisite safeguards were satisfactorily observed. No significant negative environmental impacts were reported during project implementation (ICR p. 8). Safeguards on Pest Management Policy (OP 4.09), and Indigenous Peoples (OP 4.10) were also triggered. The safeguard ratings in the Implementation Status Reports were moderately satisfactory throughout the project's life since relevant activities could not be implemented during the first year (ICR pg 7).

b. Fiduciary Compliance:
The procurement capacity of the implementing agencies was one of the major factors which delayed implementation and this explains the moderately satisfactory rating for procurement during most of the project life.

The implementing agencies managed their budget through the integrated financial management system (SIAF). SIAF was already operational in MAGFOR at appraisal and it was fully implemented in MINED during the project. However, because of delays in presenting the project's financial management reports and in contracting the project external audit, the project 's financial management rating was moderately unsatisfactory until the last quarter of implementation when it was changed to moderately satisfactory upon the contracting of the 18 month period external audit (ICR p.8). There is no indication in the ICR as to whether the external auditor's opinions were qualified.

c. Unintended Impacts (positive or negative):
None reported

d. Other:



12. Ratings:

ICR
IEG Review
Reason for Disagreement/Comments
Outcome:
Moderately Satisfactory
Moderately Satisfactory
 
Risk to Development Outcome:
Moderate
Moderate
 
Bank Performance:
Moderately Satisfactory
Moderately Satisfactory
 
Borrower Performance:
Moderately Satisfactory
Moderately Satisfactory
 
Quality of ICR:
 
Satisfactory
 
NOTES:
- When insufficient information is provided by the Bank for IEG to arrive at a clear rating, IEG will downgrade the relevant ratings as warranted beginning July 1, 2006.
- The "Reason for Disagreement/Comments" column could cross-reference other sections of the ICR Review, as appropriate.

13. Lessons:
The following lessons are taken from the ICR with some adaptation.

(a) High level commitment, both by the Bank and Government, is critical in preparing emergency operations and increasing effectiveness.

(b) In the case of emergency projects, a simple design is a key factor for success. Complexity in design and the low state of readiness of the agencies concerned, as in Component 2 of this project, pose major implementation challenges.

(b) The probability of success of a Bank project in an emergency situation increases when the Bank relies on a well established, credible and effective program in the country (e.g. PINE).

(c) Emergency operations provide an opportunity for crafting longer-term responses to vulnerability. In time of crisis governments realize their ability to respond depends on the importance of given to establishing effective social protection systems.

(d) The importance of monitoring and evaluation should not be underestimated in emergency operations.

14. Assessment Recommended?

Yes
Why?
An assessment would contribute to the study on the Bank's Response to the Global Food Price Crisis that IEG is undertaking, and would assist in verifying the ratings.

15. Comments on Quality of ICR:

The ICR is complete and concise in presenting a clear picture of the various aspects of this operation. The lessons are useful. The ICR should have indicated if external project auditor's opinions were qualified.

a. Quality of ICR Rating: Satisfactory

(ICRR-Rev6INV-Jun-2011)