Since 1974 the Bank has committed $1.2 billion for Agricultural Development Projects (ADPs) to increase farm production and welfare among smallholders in Nigeria. OED reviewed five ADPs and a supporting Agricultural Technical Assistance Project (ATAP), all implemented between 1979 and 1990. Only two of the six projects had satisfactory outcomes. In general, rainfed agricultural production was far below projections. Macroeconomic conditions, some national policies, and particular design and implementation problems prevented a more significant impact. Low-cost irrigated development of lowland areas (fadama) was, however, quite successful. Village water supply components exceeded their targets. The ADPs have evolved to be "permanent" institutions for rural infrastructural development and agricultural services, but their role vis-a-vis the regular state departments needs to be reviewed.
ADP concept The ADPs were designed in response to a fall in agricultural productivity, and hence a concern to sustain domestic food supplies, as labor had moved out of agriculture into more remunerative activities that were benefitting from the oil boom. Conversely, domestic recycling of oil income provided the opportunity for the government, with Bank support, to develop the ADPs. The projects provided agricultural investment and services, rural roads, and village water supplies. The government's adoption of the ADP concept put the smallholder sector at the center of the agricultural development strategy, and marked a clear shift away from capital-intensive investment projects for selected areas of high agricultural potential.
The first ADPs in Nigeria were enclave projects each covering a specific region within a state. Their early results impressed both the federal and state governments, and there was pressure to replicate the approach across whole states. By 1989 all Nigeria's then 19 states had ADPs. (See Box.)
Two of the projects audited--Ilorin and Oyo North--were enclave projects, and were located in the "middle belt" of Nigeria whose main crops are rainfed cereals and root crops. The three other ADPs audited--Bauchi, Kano, and Sokoto--were statewide projects in Nigeria's northern zone. Cropping in this zone is based on rainfed cereal crops and pulses, with localized areas of fadama in drainage lines that can support higher-value crops.
The northern ADPs applied an expanded version of the same model used in the earlier enclave projects in this zone. This model demanded large amounts of capital and services and intensive management. With hindsight, not enough thought was given to the implications of the large increase in scale--or indeed to the less favorable production environment than existed in the smaller enclaves.
All the five ADPs sought to increase food production and farm incomes. In all of them it was assumed that productivity increases would come from the use of improved technology, especially planting material and fertilizer. The agricultural components of the projects were designed around systems for developing technology and transferring it to farmers, distributing modern inputs, and land development including small-scale irrigation of fadama areas and land clearing.
Investments in infrastructure included an expanded feeder road network, construction of farm service centers for input distribution, and facilities for ADP staff and operations. All projects except that in Ilorin supported improvements in rural water supplies.
To support its agricultural development goals the federal government introduced controls on food imports and continued its substantial subsidies on farm inputs, particularly fertilizer.
The technical assistance project was designed to support the ADPs and strengthen the capacity of the Department of Rural Development in the Federal Ministry of Agriculture (FMOA) to plan and coordinate agricultural production programs. The project was to be executed through an existing Agricultural Project Monitoring and Evaluation Unit (APMEU) which assisted monitoring and evaluation units in the ADPs, and through a newly-created Federal Agricultural Coordinating Unit (FACU), which was to provide technical assistance to the ADPs in agriculture and infrastructure, undertake studies, and prepare new projects.
To get the projects implemented efficiently, special agencies were created. Each of the statewide and enclave projects was run by a professionally managed semi-autonomous agency, linked to a state ministry through a coordination committee representing the state governor, the major ministries, and project management. Staff were seconded to the agencies from existing government departments or appointed on contract. Their employment benefits were better than those of the regular state civil services.
Both the ADPs and the technical assistance project relied heavily on expatriate consultants (233 positions for the six projects, although only 70 percent of ADP positions were filled), including some in executive positions. Though out of keeping with Bank operational practice the approach was rationalized on the grounds that the programs were large, food production had to be increased quickly, and enough Nigerian professionals could not be attracted into government service.
Delays. The decline in oil prices that began in 1982 had a substantial fiscal effect in Nigeria and led to shortages of counterpart funds for these projects. In the two enclave projects, loan funds even had to be used to support local salaries and operating costs. In all projects, shortages of funds and delays in recruiting a full complement of staff meant that implementation was much slower than expected at appraisal. Closing dates were extended by 2.5 to 3.5 years in all projects.
Farming systems. The emphasis on modern technology in the ADPs led their agricultural research and extension services to focus on relatively high-input technology for sole cropping systems. These systems were not used by the majority of smallholders. Most smallholders, especially in the semi-arid north, used mixed/relay cropping systems as a rational strategy to reduce risks. They were also conservative in their use of cash inputs, even though such items as fertilizer were heavily subsidized.
It was only after mid-term reviews that the projects began to focus on the constraints and potentials of the mixed/relay cropping systems actually used by local smallholders, and only very late in the projects that the changed focus began to be reflected in the work of extension services.
Extension methods. An extension approach already in use--Training and Demonstration--which concentrated on a small number of cooperators using high-input technology on large demonstration plots, was to have been replaced by the Training and Visit (T&V) method, which promised much wider coverage of farmers. The changeover was slow and T&V was only used significantly after 1985. Even then, many problems persisted:
- top-down", rather than responsive, recommendations to farmers;
- continued technical emphasis without attention to socioeconomics;
- inadequate attention to demonstration plots; and
- deficiencies in staff transport.
Input supplies. Programs for multiplication of improved seeds generally fell short of goals, though a cassava program in Oyo North and Ilorin had some success. Supplies of fertilizer to farmers were erratic, largely because of centralized government control of international procurement and a very heavy subsidy program, neither of which encouraged timely delivery, especially in periods of fiscal difficulties.
Results. The available statistics show that the increase in total agricultural production in each of the ADPs was below appraisal expectations. Performance of rainfed crops was especially disappointing, reflecting the difficulties with technology development and transfer programs and input supplies. While yields of some rainfed crops--which accounted for a large share of agricultural output--rose in specific states, yields of others declined.
The fadama programs in the northern ADPs, though small in area relative to rainfed crops, were successful and exceeded their targets for developing small-scale irrigation. They used cheap techniques for extracting shallow groundwater, which permitted high-value vegetable crop production. A free-standing fadama development project has ensued.
The feeder road construction programs largely met their targets. But their reliance on force account required extensive supporting infrastructure, paid for out of scarce public funds. Some expensive mistakes were made in procurement. Of more lasting importance, however, is the lack of effective arrangements for maintaining the roads built, about half of which are already in poor condition.
The rural water supply programs based on boreholes and handpumps were successful, and the local government councils are cooperating in their maintenance arrangements. (See Box.)
Overall performance. Only the Bauchi and Kano ADPs were rated satisfactory. In these projects a substantial part of the returns came from the fadama development. But even for non-fadama agriculture the estimated returns were acceptable, at about 10 percent and 16 percent for Bauchi and Kano respectively.
The technical assistance project outcome was mixed. The FACU component of the project was quite successful in providing technical assistance to ADPs (although assistance in the area of infrastructure was not well developed), and FACU now has an important role in project preparation/supervision for the FMOA. APMEU trained M&E units in the ADPs in computer technology and data processing. It allocated most of its resources to evaluating the impact the ADPs were having on agriculture, but unfortunately, problems in survey design and an inability to manage and analyze the huge bulk of survey data hindered the production of robust estimates of impact.
Several public policy, project design, and institutional issues influenced project outcomes and offer lessons for future projects of this type.
Design. The ADP design had major shortcomings, for some of which the Bank must bear significant responsibility:
- Overoptimistic crop production targets.
- Unproven or inappropriate assumptions about agricultural technology, and a disregard for farmers' perspective in projecting how fast technology would be adopted.
- Little regard for the socio-organizational aspects of rural development.
- Overemphasis on implementation targets rather than on the establishment of sustainable development and service mechanisms.
In the technical assistance project, the design of the APMEU components did not adequately address concerns that were obvious at the time the project was prepared: deficiencies in the agricultural survey design and incapacity to manage and analyze the survey data. Nor did the designers of ATAP properly analyze the institutional environment in which FACU and APMEU were to work.
Timeframe. Targets for implementing the agricultural operations were too optimistic. It was overly ambitious to attempt to set up the implementing agency from scratch, undertake effective applied/adaptive research, establish and train a functioning extension service on a statewide basis, and install (or substantially modify) input supply services within an implementation cycle of five years.
Although it came to be accepted that the programs would take longer than first expected, the timeframe of the Bank loans nevertheless encouraged the ADP managers to concentrate on the more easily identifiable and achievable physical targets such as road construction and water supplies, rather than to pursue the more difficult objectives of institution building. The complex task of changing the behavior of agricultural smallholders in the use of improved technology was much more difficult to achieve than the construction elements. The ambitious implementation targets gave rise to the excessive reliance on expatriates.
Expatriate involvement. The expatriates working on the projects played a useful role in assisting implementation, but their numbers were excessive and they acted largely as implementers, rather than training Nigerian personnel on the job.
Institutional aspects and sustainability. At project closure, most of the ADPs had a weak and uncertain funding structure, and were providing poorer services than should be expected of such semi-autonomous development institutions. Though they were developed to perform a temporary role, in providing investments and services in lieu of relatively ineffective line agencies, the ADPs have nonetheless assumed a permanent status--which supports the contention that this type of agency was needed to implement the development envisaged under the projects. They are now recognized as the major agricultural development institutions in the states, but difficulties persist with their funding (as with other government agencies and departments). Their functions need to be rationalized with regard to those of the state departments of agriculture and of related sectors. There is a similar need to rationalize the FACU and APMEU institutions vis a vis other federal entities, which have some overlapping functions in the agriculture sector.
Sustainability. Many of those technologies that were adopted by farmers can be expected to go on having positive effects on production in the near/ medium term. But some problems in the farming systems need more attention:
- The northern fadama areas are facing increasing pest and other problems associated with intensive cultivation, and the traditional millet-sorghum-cowpea system is subject to an increasing challenge from the parasitic "striga" weed.
Hopefully, the recently approved natural agricultural technology support project will address these technical issues.
Subsidies. The pervasive subsidies in the agricultural sector and in the ADPs created many inequities and distortions. Most important were the effects of the government's monopoly in procuring and distributing subsidized fertilizer:
- The inadequate quantities procured, combined with the high level of subsidy, led to illicit rents being obtained in the distribution process. In recent years, farmers have been paying much more for fertilizer than the official prices, diverting a significant part of the subsidy to the rent seekers.
- The high fertilizer subsidy absorbs a substantial part of the federal and state budget allocations for agriculture. Much of the expenditure on subsidies could be used more beneficially in the sector.
Editor's note: The borrower, while agreeing with most of the analysis in the audit report, considers that the weakness of the data for the three ADPs which OED rated unsatisfactory precludes a definitive judgment on their performance.
Box 1: The Projects in Context ______________________________________________________________________________ Loan Amount Approved Closed ($ m) ______________________________________________________________________________
First Generation: Enclave Agricultural Development Projects
Funtua 29 1974 1982 Gusau 19 1974 1982 Gombe 21 1974 1982 Lafia 27 1977 1984 Ayangba 35 1977 1983 Bida 23 1979 1986 Ilorin 27 1979 1988 Oyo North 28 1980 1988 Ekiti Akoko 33 1980 1985
Second Generation: Statewide Agricultural Development Projects
Bauchi State 132 1981 1989 Kano State 142 1981 1989 Sokoto State 147 1982 1990 Kaduna State 122 1984 ongoing South Borno 25 1986 ongoing
Third Generation: Multistate Agricultural Development Projects
Multistate I 162 1986 ongoing Multistate II 85 1989 ongoing Multistate III 101 1989 ongoing
Box: Village Water Supply
All projects except that in Ilorin supported improvements in rural water supply. This impressive program exceeded its targets and has probably benefitted 300,000 - 500,000 people, bringing them better health and saving time spent by women collecting water. These were investments which villagers needed and appreciated, and the experience with their maintenance emphasizes the advantages of involving beneficiaries in investment decisions.
Construction. The water supply was developed mainly through constructing wells or drilling boreholes equipped with handpumps, with the agreement of local governments. For boreholes, the ADPs successfully used private contractors, engaged through international tenders and supervised by consultants. Where boreholes were not feasible--in parts of Oyo North-- the ADP built dams with water filtration systems. Dams were constructed by force account.
Maintenance. The boreholes, wells, and handpumps are successfully managed by communities. The ADPs developed maintenance systems in which local government councils and villagers participate. Some early problems with pumps were corrected and local production of spare parts facilitated the maintenance program.
- In Kano, a consulting firm contracted to the ADP trained local communities in maintenance; then pump mechanics were appointed and paid by the local government councils to check pumps every two weeks.
- In Sokoto, the ADP paid itinerant pump attendants to carry out above-ground maintenance, and in the process to train village caretaker committees, who then took over full responsibility. Toward the end of the project, handpump performance in Sokoto was kept at about 95 percent.
- In Oyo North, local communities did not support the relatively complex and costly maintenance of dam-based water treatment and distribution facilities. This probably reflects the lack of community involvement in developing these supplies. The local water boards and population consider the schemes "ADP projects" in which they were not consulted or involved.