|1. Project Data:
ICR Review Date Posted:
|Afghanistan: Horticulture And Livestock Productivity Project
Project Costs(US $M)
Loan/Credit (US $M)
|Agriculture and Rural Development
Cofinancing (US $M)
|Afghanistan Reconstruction Trust Fund
Board Approval Date
|Central government administration (32%), Crops (23%), Animal production (19%), Agro-industry marketing and trade (16%), Agricultural extension and research (10%)|
|Other rural development (25% - P)
Conflict prevention and post-conflict reconstruction (25% - P)
Export development and competitiveness (24% - P)
Gender (13% - S)
Rural services and infrastructure (13% - S)|
||ICR Review Coordinator:
||Christopher David Nelson
|2. Project Objectives and Components:|
a. Objectives:The project was designed as a 3 year emergency operation. The Project Development Objective, stated in the Project Appraisal Document (p.6), is to " stimulate marketable output of perennial horticulture and livestock in focus areas by: (i) improving the incentives framework for private investments; and (ii) strengthening institutional capacity in agriculture" .
The Financing Agreement statement of Project Development Objective is (p. 4): "to assist the Recipient in stimulating marketable output of perennial horticulture and livestock by improving the incentives framework for private investments and strengthening institutional capacity in the agricultural sector".
The two statements are effectively identical but as per IEG’s current practice, this Review’s assessment is based upon the formulation of the project objective as in the Financing Agreement.
The project was formally restructured with the following revised objectives: "to assist producer households in adopting improved practices so as to increase horticulture and livestock productivity and production in Focus Areas" (p. 3 of Amendment to the Financing Agreement).
b. Were the project objectives/key associated outcome targets revised during implementation?
If yes, did the Board approve the revised objectives/key associated outcome targets?
Date of Board Approval: 12/09/2009
c. Components:1. Increasing Marketable Output of Perennial Horticulture (Appraisal Estimate (US$ 23.7 million, Revised Estimate US$ 18.89 million, Additional Financing Estimate US$ 4.36 million; Actual US$ 27.56 million) - This component aimed to provide civil works, goods, services, and grants to: (i) rehabilitate existing orchards and establish perennial tree crop cultivations; (ii) establish a Horticulture Development Council of Afghanistan and develop Ministry of Agriculture and Irrigation capacity for policy planning and supporting horticulture producers; and (iii) support pilot activities in private sector export clusters for green raisins and pomegranates (in collaboration with IFC).
2. Increasing Output and Productivity of Livestock (Appraisal Estimate US$20.2 million, Revised Estimate US$ 15.00 million, Additional Financing Estimate US$ 3.85 million, Actual US$ 18.19 million) - This component aimed to enable Afghan livestock owners to increase their access to and use of public and private livestock-related goods and services, to ensure the marketing of more and safer livestock and livestock products, and to improve the populace’s diet through better nutrition.
3. Capacity Building, Implementation, and Monitoring and Evaluation Support (Appraisal Estimate US$ 6.0 million, Revised Estimate US$ 18.49 million, Additional Financing Estimate US$ 6.79 million, Actual US$ 22.93 million) - This component aimed to provide goods, services, and incremental operating costs for developing human and physical capacity in policy formulation, programming development, financial management and procurement, supervising and monitoring, and evaluating impact.
d. Comments on Project Cost, Financing, Borrower Contribution, and DatesProject Costs:
Total Project Costs increased from the original appraisal estimate of US$ 49.87 million to US$ 54.3 million. Also additional financing increased the project costs to US$ 70.07 million. At project closing, project costs were US$ 66.83 million and US$ 3.25 million was canceled.
Financing initially comprised an IDA Grant of US$ 20 million, Japanese Social Development Fund Grant of US$ 10.0 million and IDA administered Afghanistan Reconstruction Trust Fund financing of US$ 20 million and beneficiary contribution of 1.06 million. JSD Financing did not eventuate. The reason was not provided by the ICR or the task team later on. Project restructuring increased financing under Afghanistan Reconstruction Trust Fund to US$ 34.3 million and additional financing added another $ 15 million under Afghanistan Reconstruction Trust Fund. The actual disbursements at the time of closing were US$ 46.05 million under Afghanistan Reconstruction Trust Fund and US$ 21.48 million under the IDA Grant. Beneficiary contribution was a negative figure at project closing (US$ -0.7 million). The team's response to why this occurred was: "Contributions were counted towards the revised financing estimate during the additional financing. Although contributions were collected, the Bank kept disbursing at a rate of 100% against expenditures for Goods, works, non-consulting services, consultants’ services, training and Operating Costs for the Project. Since the Ministry of Agriculture, Irrigation and Livestock ran out of time to use those funds in acceptable project expenditures before closing, it was asked to return the money to the Bank; resulting in negative number in the disbursement column and the lower Bank final disbursement when adjusted for this fact". This explanation was unclear: if beneficiaries did contribute but these funds were returned back due to not being used, then the beneficiary contribution should be zero, rather than a negative number.
The Borrower was not expected to make a contribution.
With the restructuring on December 9th, 2009, the closing date of December 31, 2009 was extended for 2 years until the end of 2011 due to slow disbursement and not being able to achieve targets by the closing date. The additional financing which was approved in November 2011 to scale up activities also extended the closing date for another year until December 31, 2012.
|3. Relevance of Objectives & Design:|
a. Relevance of Objectives:Original Objectives:
The project development objective of stimulating marketable output of perennial horticulture and livestock was relevant to country priorities and sector strategies but very ambitious for the three year timeframe and circumstances. Agriculture was key for overall economic growth and poverty reduction. During the time of appraisal it was central to the Afghan economy, contributing to 53 % of GDP and providing employment for 67 % of the labor force (PAD, p. 2). About about 80 % of the population lived in rural areas and incidence of poverty was high (ICR, p. 1). However, as a result of many years of conflict agriculture had suffered significantly resulting in decreasing yields and high value sub-sectors such as horticulture and livestock were neglected. These had been a substantial part of the economy and exports before conflict. Therefore helping to stimulate these sub-sectors sectors was essential for rural poverty reduction and economic development. In addition this would also provide a core element of a counter-narcotics strategy by fostering an alternative to the opium industry which had become an important income source, employing 17% of the population in rural areas (PAD, p. 3). Building State capacity to create an enabling environment that included the private sector was also essential for the sector to grow.
Agriculture with particular consideration to perennial horticulture, animal health, and food security was recognized in the Interim Afghanistan National Development Strategy and the associated 5-year Agriculture Sector Development Master Plan developed by the Ministry of Agriculture (2005). However, implementation of the strategy was impeded by the prolonged conflict that impacted the horticulture and livestock sectors, leaving the capacity of the government and the private sector not sufficient to assist the agricultural sector given the lack of basic infrastructure. Therefore, the Government requested World Bank assistance in developing policies and programs for the agriculture sector (ICR p. 1).
Although as a three-year emergency operation, the project was not part of the Country Assistance Strategy and was inserted later following an urgent request from Government, project development objectives were relevant to the World Bank's Interim Strategy (2012-2014) but optimistic. Under the "Inclusive Growth and Jobs" Pillar of the strategy, agriculture was identified as one of the critical sources of growth and employment.
The revised project development objective, more realistic under the country circumstances and a clearer statement focusing more on adoption (assisting producer households in adopting improved practices ... to increase horticulture and livestock productivity and production in Focus Areas) was highly relevant to country priorities, strategies and World Bank strategies and programs.
b. Relevance of Design:Original Design
The original project design had a major shortcoming within the results framework: a broad and vague PDO that was very difficult to achieve in Afghanistan in only 3 years, and the results framework that did not meet the ambitious objectives. The objective of stimulating marketable output of perennial horticulture and livestock in focus areas was to be achieved through 3 components: (i) horticulture development that mainly aimed to rehabilitate existing orchards and establish new ones, and develop capacity of the MAIL; (ii) livestock development that tried to develop capacity of the General Department for Livestock Production and Development, as well as promoted private-public sector partnerships for the delivery of veterinary services, and dairy and poultry development; (iii) capacity building on implementation and monitoring and evaluation. However, the stated objectives clearly necessitated a longer term institutional development approach. A 2008 Quality Assessment of Lending Portfolio found that the Project, as designed, was unlikely to achieve its original physical targets and PDO by the Grant closing date, due to the PDO's, scope and targets being too ambitious given the institutional capacity, the country’s security environment, and the Project's three-year, emergency status.
The Revised Project addressed the major issues of the results framework by revising the PDO to a more focused and measurable one with better links to outcome indicators and more realistic levels set for outcome targets. The revised project focused on activities in 11 Government-selected provinces and districts to enhance impact by mobilizing and focusing more intensively on participation and producer group formation, extension activities for adoption, value chain development, input supply and marketing. The following activities were cancelled with the restructuring: previously there were activities such as setting up a high level board on horticulture, this was dropped; dairy sub-sector specific activities were dropped; the project developed livestock extension packages that were to be disseminated in areas where intensive farmer mobilization efforts would be made; there were producer group formation efforts pre-restructuring but after the changes the focus came from bottom up rather than top down.
|4. Achievement of Objectives (Efficacy) :|
The original objective was : "stimulating marketable output of perennial horticulture and livestock by improving the incentives framework for private investments and strengthening institutional capacity in the agricultural sector ." Rated Modest.
- 1,151 ha of new orchards (about 23% of the original end-2009 target) benefited 5,727 households, planting 445,350 superior varieties of seedlings using advanced techniques on selected farms.
- 44% of target farmers adopted at least five best suitable practices (including winter/summer pruning, trellising and thinning), boosted by training and other project-financed inputs.
- Seedlings were produced by contracted private nurseries and had an average 92% survival rate in 42 sampled orchards after 9 months (target 60% survival).
- 4,000 ha of existing orchards (35% of target) were rehabilitated via technical advisory services to farmers on improved practices including IPM/pest control, on their land.
- Value chain development (grapes) was piloted in Mir Bacha Kot District of Kabul Province in 2009 but market prices declined slightly over baseline (vs. 20% target increase in producer price). Planned expansion into stone fruits fell through due to security and bureaucratic issues.
- Planned germ-plasm banks were not created because a competing, large-scale donor program was found to be already operational.
- 7,000 women (28% of original target of 25,000) starting in 2009, received semi-intensive poultry package.
The results framework had insufficient indicators to measure the intermediate outcomes of improving incentives framework for private investments and strengthening institutional capacity. The ICR reported several activities as private investment incentives such as:
In terms of strengthening institutional capacity the ICR reported several activities/achievements, the most important were:
- 114 government-supported Veterinary Field Units were privatized (95% of target), and
- provided training, and other operational support to establish pay-for-service animal health services.
- Liquid Nitrogen Plant was built to support Artificial Insemination activities, and arrangements negotiated for its operation/ownership, product distribution and pricing.
- Extension services were established and expanded using the Farmer Field School mechanism for targeted horticulture producers. The Project recruited, trained and assigned 120 horticulture staff to target districts, and mobilized/organized Producer Groups.
- Beneficiary cost-sharing was introduced: 25% for grape vine installation, 35% for grape, and 25% for almond, apricot, apple, peach and plum orchard establishment.
- Ministry of Agriculture Irrigation and Livestock headquarters buildings were rehabilitated and staff trained.
- Farmer Field Schools were established as the primary vehicle for extension services delivery.
- Male/female Producer Groups were mobilized/organized and coverage expanded. The Project tried to reform- among the 1300 largely top-down, existing coops – those with potential to become sustainable Producer Groups, mobilizing 200 men’s and 182 women’s Producer Groups.
- Tree productivity increased an average 110% for four major, marketable, perennial tree/vine crops (almond, apricot, grape and pomegranate) vs. the targeted 20% from over 4,000 ha of rehabilitated orchards (about one-third of the original end-2009 target).
- Farm prices declined except for pomegranate.
- Sales of fresh fruits from the project rehabilitated orchards increased an average 14.11% by end-2009 compared to an average increase among control households in the survey of 8.75%.
- 71% of farmers achieved/exceeded the targeted 10% increase in production of four target crops. Net of control group effects, the average production increase was 9.75%.
- About 3.7 million eggs were produced (31% of target for end-2009).
- Meat production targets were deemed premature by the Mid Term Review and deferred to the restructuring period.
- The Project planned to establish a model dairy processing unit involving 19,500 farmers and an incremental 40,000 liters/day by end-2009 but due to late field activation, and the realization that dairy results needed an extended lead time, only the Inception Study was completed and all other dairy activities were dropped.
The objective of stimulating marketable output of perennial horticulture and livestock is rated modest as some targets on increased production of perennial horticulture and livestock could not be met and activities on meat were postponed and dairy was dropped.
The revised Project Development Objective was: " "to assist producer households adopting improved practices so as to increase horticulture and livestock productivity and production in Focus Areas". This is rated substantial.
- 71% of farmers adopted at least two best horticulture practices, and adoption rates averaged 55% (vs. target 50%) over 16 separate practices covering improved production, new orchard management, and crop protection.
- Recruited, trained and assigned to project sites 152 field extension workers (cumulatively under original and revised project) to advise farmers.
- 92% of surveyed orchard farmers confirmed that HLP had assigned extension workers to their village and 90% reported frequent visits (min. weekly/monthly).
- 90% of 919 sampled producers by end-2011 reported being trained by HLP livestock extension workers.
- 560 poultry producers or 62% of a random sample, had adopted and fully-applied all seven improved practices, exceeding the 60% target.
- The project provided training and set-up support of the 214 privatized Veterinary Field Units (129% of target).
- A Farmer Field School system was fully functioning as the primary extension delivery mechanism by end-2011 and the beneficiary survey showed 93% satisfied with the project extension training in horticulture, livestock and farmer organization development.
- Productivity of rehabilitated orchards improved compared to control groups by end-2012: area and tree productivity of the four target crops rose an average 230% and 142% respectively over baseline exceeding targets at 70% and 48% respectively. According to the ICR this is attributed primarily to further systematization of extension delivery using the Farmer Field School approach, and the organization/mobilization of Producer Groups (p. 17);
- Average production of target farmers for four key crops rose 41% vs. 10% target for end- 2012.
- Cumulatively under the original and revised project, 4,952 ha of new orchards were established in 76 districts- benefiting an aggregate 23,923 target households.
- Sapling survival rates averaged 76% vs. targeted 60%. 6 field inter-crops were established (such as garlic, alfalfa, tomato, water melon, Egyptian Clover and onion) helping to reduce/eliminate inter-cropped wheat, barley and maize, ecologically degenerative crops which compete with newly-planted seedlings (150 % of target).
- Established another 17,800 semi-intensive household poultry production units distributing improved egg laying pullets to a total 25,000 women overall by end-2012, 100% of the overall project target over five years.
- Backyard units produced 12.0 million eggs in 2010 (80% target) and 13.2 million in 2012 (88%). Hen productivity increased 67.4%/hen/year by end-2011 (target 15%) but began to decline due to women’s inability to maintain/invest in flock renewal/care as instructed by the project.
- However, backyard poultry mortality rates averaged a 24 point increase by end-2012 despite widespread adoption of improved practices, attributed to initial delivery issues not farmer mishandling. The PDO indicator for that was 10 % reduction and was not achieved.
- Meat production targets were dropped by the Additional Financing after repeated postponement (The target was 450 tons of meat production per year).
- Better extension/health services for livestock through development of Veterinary Field Units, and improving animal care led to mortality rates decline an average (cumulatively for original project and revised project) 3.5 points for large and 8.5 points for small ruminants over baseline (vs. target 5 points and 10 points respectively).
Based on survey evidence, the Project overall made important steps in achieving the adoption of improved practices by mobilizing extension agents using the Farmer Field Schools and organizing producer groups, The horticulture-related outcome targets were in general achieved, and livestock outcome targets were partly achieved (there were still issues with the poultry production and, as noted, meat production targets had to be dropped). Due to achievements in terms of adoption of technologies and resulting productivity and production increases, particularly for the horticulture sub-sector, the overall efficacy rating for the revised objective is substantial.
Rated modest on balance. The ICR provided economic analysis calculations for the original and revised project. The numbers are positive in both cases and treated cumulatively so no distinction in efficiency rating in terms of the original and revised project was made in this review.
According to the Memorandum and Recommendation Document (p. 9), it was estimated at appraisal that incremental income increase for participating farmers would be between 6 % and 140 % based on type of investment. Most tradable input and product economic prices were assumed to be equivalent to their market prices (except for labor where a shadow price of 0.7 was applied - to reflect the high underemployment in rural Afghanistan). All prices were assumed to remain constant in real terms throughout the life of the project. On this basis, the economic rate of return on total project investments over 20 years was estimated at 40.2% and, assuming a 12% discount rate for the expected costs and benefits, the net present value would be US$ 104.7 million.
The ex post ICR calculation on economic analysis mainly used similar assumptions on prices and costs to the ex ante analysis but incremental benefits were reportedly based on actual outcomes from data collected in several random samples of beneficiaries and control groups, including the baseline and the M&E annual output monitoring surveys. The ICR reported that (p. 53): "…the number of small ruminants by category (including animals sold) per year and at the end of the project cycle compared with the without project scenario, were derived introducing the project improved parameters, over and above those shown by the control population according to the data measured by the project M&E team". As mentioned in Section 10, the project's M&E system tried to compare the baseline to the current situation with and without the control groups, and from the information provided by the ICR, the control group comparisons seem comparable and therefore valid. Farm model budgets were also based on data provided by project horticultural and livestock teams. The ICR reported that (p. 19) incremental revenue increases were from the establishment of new and rehabilitation of existing orchards; and/or increased productivity of livestock and poultry. Ten farm models were used in the analysis combining crops and livestock activities and representing typical benefited households of different targeted project districts. Accordingly, the enterprise farm level aggregations showed that net income would have been expected to have increased between 7% and 41% above the without-project situation. However, it should be noted that this net income increase was based on farm budgets that include numerous assumptions. Also, given the questions on the sustainability of livestock activities (see section 7), there is a risk that benefit streams, assumed in the models to be sustained for 15 years, may not be sustained to the extent assumed. Furthermore, as stated in the ICR (p. 57), 72 % of those surveyed stated that the increase in livestock incomes were due to the improving economy, which raises concerns about attribution to the project. It seems likely that horticultural production would also have been significantly influenced by improvements in the economy.
The ICR efficiency analysis considered the results of the original project including implementation years 2007 – 2009, and separately, for the revised project - including the additional financing, as well as coming to a consolidated result for the overall project. Based on these assumptions the overall Economic Rate of Return was estimated at 21.6 % and the Net Present Value at US$ 40.8 million. Separate analysis of the original project period (2007 – 2009) provided an ERR of 12.9 % and a NPV of US$ 1.9 million, while the restructured project including the additional financing resulted in an ERR of 33.4 % and a NPV of US$ 38.9 million. Both the original and revised project economic analysis calculations showed satisfactory rates of return although the ERR for the original project was only slightly higher than the opportunity cost of capital.
However, there were operational and administrative inefficiencies. According to the ICR (p. 9) the Project incurred high overhead costs and low coordination between components and cross cutting activities (e.g., disconnect between Producer Group formation and investment activity) which eroded the amount of investment funds reaching farmers. Greater effort was needed to involve national professionals and phase out contractors as they had unreasonable/excessive cost. It was noted by the Bank team in mid-2011 that some 60-70 cents of every US Dollar were being spent on administrative costs with about 30% for expenditures in direct investments benefiting farmers. A National Horticulture and Livestock project indicator required that at least 70% of expenditures directly or indirectly reach/benefit farmers. Later there was a greater effort to address costs, particularly under the Additional Financing. The ICR did not provide information on the extent to which costs were reduced nor did it provide comparison data from other donors on overhead costs so the extent to which this situation is specific for this project or a systemic issue due to security reasons is unclear. The ICR cites (p. 9) two specific cases of high cost consultancies that were also not very effective.
On balance, given some concerns about the assumptions in the models, particularly sustainability (partly associated with the lack of credit - see discussion below under Risk), and the shares of attribution (project versus economy), and given questions about administrative efficiency and therefore cost effectiveness, efficiency is rated modest.
a. If available, enter the Economic Rate of Return (ERR)/Financial Rate of Return at appraisal and the re-estimated value at evaluation:
* Refers to percent of total project cost for which ERR/FRR was calculated