Mid-term evaluation report summary
The project area is in the Inner Himalayan region in west-central Bhutan,
with peaks ranging from 3 000 to 5 000 meters and includes many
densely populated valleys. The area comprises mainly hilly land at elevations
of 1 200/1 800 meters. It is connected by a 70 km all-weather
tarmac road to Thimphu, which forms part of the main east-west highway of
the country. It enjoys cool dry winters and wet warm summers, with rainfall
averaging 600/800 mm, concentrated mainly in the summer (monsoon) months.
The soils are generally of good quality and the area under cropped agriculture
is around 5 000 ha, of which irrigated terraces comprise 81%, and
rainfed non-terraced cultivation 13%, with a further 3% under shifting
cultivation, 1.5% under kitchen gardens and 1.3% in orchards. Pasture/grazing
land is not included in the agricultural area estimates. The area under
improved pasture is negligible. Almost 518 of the irrigated land is planted
to paddy in the main summer cropping season and about 50% of this area
is cropped with a winter crop of wheat, barley, mustard or other crops.
The overall cropping intensity was about 150% at project commencement.
Project design and objectives
Target group
The target group originally was estimated to be 3 500 farm families,
comprising 20 000 people. Later, with better data on average household
size, the number of households was reduced to 3 200. Although the
original intention of the project was to include all households in the
targeted "gewogs" (excluding the urban areas), project support
was extended only to the households at elevations below 1 800 meters (except
for the credit component).
The farmers in the project area operate, on average, holdings of 1.5
ha. About 75% of this area is irrigated, mainly paddy planted. Most farmers
are small owner operators, but many of them (about 60%) are also part-tenants,
renting some land to augment their holdings. Small farmers represent 14%
of households and operate 6% of total cultivated land. Smaller farmers
are land poor but labour rich; they cultivate intensively and use their
resources more efficiently than larger farmers.
Objectives and components
The main objectives of the project were to increase food-grain production,
increase smallholder incomes and to strengthen agricultural institutions.
The project components were: (i) irrigation development, soil erosion
control and rural infrastructure development; (ii) agricultural extension,
adaptive research and training; (iii) animal husbandry and agroforestry;
(iv) training; (v) rural credit; (vi) marketing; (vii) monitoring and
evaluation; and (vii) Project Management Unit.
Expected effects
and assumptions
The expected effects of the project were to: (i) improve agricultural
production in the irrigated areas and crop production from the permanently
cropped rainfed areas; (ii) increase productivity in the livestock sub-sector;
(iii) strengthen supporting service institutions for the country as a
whole and in the project area in particular; and (iv) protect the agricultural
and natural environment through pilot activities in erosion control and
village forestry.
The project objectives and expected output and effects are premised on
the following assumptions: (i) an increase in rice production on irrigated
land is economical, and/or in the best interests of the country. It is
the most effective way of increasing food security and incomes of the
farmers in the project area; (ii) the technologies disseminated by the
project will be relevant to the farmers in terms of their preferences,
needs, and resource capabilities, and will be adopted by them (including
small farmers and tenants); (iii) the planned intensification/expansion
of crop and livestock production will not adversely affect the land and
environment; or if so the project's agroforestry and erosion control components
can effectively counteract any such negative effects.
Evaluation
The MTE Mission was in Bhutan from April 9 to April 30 1993. It visited
Thimphu and project sites. The report was written in Rome. In preparation
for the evaluation, IFAD (OE/PI) had designed and funded a Rapid Diagnostic
Survey that was conducted by the Planning and Policy Division (PPD) of
the Ministry of Agriculture (MOA) in 1991.
Implementation
context and evolution
The free trade policy and import of cheaper grains from India has affected
negatively incentives for greater food production. On the other hand,
this policy has allowed for cheaper imported agricultural inputs. The
new emphasis on commodities in which the country has a comparative advantage
(such as horticultural products) has introduced greater profitability
into agriculture. The recent devaluation of the Ngultrum has contributed
to a dramatic increase in agricultural exports over the last three years.
The objectives of improving institutions and supporting services are
being satisfactorily achieved. The project has continued the role of its
predecessor as path-finder and model for the design and development of
institutions and services across Bhutan.
Project achievements
The project has succeeded in raising crop production and productivity
on irrigated and rainfed lands through increases in yields and improved
utilization of wetlands.
There has been an increase in paddy production, with area and yield increases
well above the Staff Appraisal Report (SAR) estimates, achieved with traditional
and improved varieties.
The project is beginning to move into technology mixes which are less
costly, less dependent on imports and more sustainable (involving the
greater use of traditional varieties, greater use of farmyard manure (FYM),
green manure, etc.).
The project has completed ten schemes covering a total of 48 km of channels
(of which three are new schemes), while a further 21 schemes are undergoing
construction or rehabilitation.
The project has disbursed a total of Nu 6.76 million (USD 328 509)
in rural credit. Since recoveries amounted to Nu 3.55 million, total net
lending amounted to Nu 3.02 million (USD 151 077). Whereas the SAR
had estimated that 40% of the lending would be for seasonal purposes and
60% for medium-term loans, the latter have absorbed 70% of all lending
up to the end of 1991.
Effects, impact
and sustainability
The project has improved food security and has also contributed to an
increase in small farm incomes. In regard to livestock, the base has been
laid for increasing productivity, through necessary infrastructure, veterinary
and breeding services. The pilot activities in erosion control, agro-
and social-forestry, should contribute (through appropriate methodology
and technology) to environmental protection in Bhutan. The project is
making a very positive contribution to agricultural development in Bhutan.
The irrigation technology, after initial testing, has been rapidly adopted.
Water flow has improved and farmers' labour in maintaining channels has
been substantially reduced.
About 90% of farmers have adopted the recommended practices for the paddy
wheat rotation. There is little or no difference in adoption between men
and women. The adoption rates for fodder development and fodder trees
exceed 90%. For the other livestock-related activities, there is no single
case where the proportion of adopters was less than 50%.
Farmers have adopted paddy double cropping (recommended and subsidized
by the project) only to a limited extension. The number of farmers adopting
the double paddy rotation has declined slightly, while the area planted
has continued to increase. The latter is only 0.42 acres for the larger
farmers and 0.28 acres for the small farmers, covering about 11%-16% of
the total paddy areas. Most farmers plant only a few terraces of their
wetland with double cropped paddy, while they use the rest of their farms
for the traditional paddy-wheat combination supplemented by vegetables
for cash.
Services such as extension and credit have reached women almost to the
same extent as men. However, women bear a disproportionately larger share
of the added labour burden of the project's intensification. Expansion
of production has fallen mainly on the crops with which women are most
engaged.
The subsistence orientation is gradually disappearing in the project
area. Project activities and overall growth in Bhutan have made the peasant
dominated sector more active, and enhanced monetization and market orientation.
The project intends to establish a pipe spinning plant in the area to
produce necessary concrete pipes. Given the mountainous terrain and scarce
sand and labour for timely channel construction/repair, this appears a
justified use of scarce capital so as to ensure the sustainability of
the technology introduced.
The sustainability of the trend towards a more equitable income distribution,
in part, has been compromised because of the subsidy on power tillers.
The greatest part of medium-term loans went for the purchase of power
tillers, whose private and social profitability are doubtful, yet power
tillers are subsidized at a rate of about 50%. This equipment in part
is used for the purpose of transportation. But when used for tillage,
it represents land augmenting technology and reduces the demand for labour,
and work oxen teams, hired from smaller farmers.
On the other hand, there is a shift in the project towards greater sustainability,
towards what can be realistically continued by the farmers without subsidies
and support after project completion. For example, there is a greater
stress on lower input systems, more emphasis on the use of farmyard manure/compost,
introduction of multi-purpose green manure crops, the direct seeding of
the first paddy crop (instead of using expensive plastic sheeting to cover
seedlings), and generally a move towards a closer integration of crops
and livestock and agroforestry, although there is much more to be done.
Effectiveness
of the M&E system
Physical and financial progress under the project is monitored reasonably
well, although, there is a need for beneficiary contact monitoring to
provide an assessment of needs and constraints on a periodic basis. It
is recommended that group or village level meetings/questionnaires be
used for this purpose.
It is also necessary to emphasize the importance of special studies and
diagnostic studies of particular problems as an aid to project planning
and implementation as well as evaluation.
Main issues
In the rural credit activities there has been an impressive increase
in lending between 1989 and 1991, but benefits to small farmers have been
less than expected. The low uptake of seasonal credit is due to factors
involving both demand and supply. Supply is limited because of long delays
and difficulties in obtaining loans. Demand is limited because of feared
inability to repay and insufficient collateral.
Far too liberal credit approval by the project (Bhutan Development Finance
Corporation -BDFC), coupled with the large subsidy (see above), has permitted
a rapid expansion of medium-term credit for power tillers. The most serious
issue relating to credit is associated with this unwarranted and damaging
increase in the number of power tillers (even though the subsidy is outside
the project's domain). The SAR provided for four such tillers, but by
April 1992 not less than 71 units had been provided. The power tiller
issue touches on the very foundation for sustaining equity-oriented growth
in the project area. Large farmers are the main purchasers and their purchase
becomes profitable because of the subsidy. Until recently, tillers were
financed at an interest rate of 10%, less than half the market interest
rate, and less even than the rate of inflation (estimated at 12% per year).
The promotion of labour-saving technology through mechanized plowing by
power tillers impairs the project's equity orientation.
With prospects of declining labour productivity in cropping, farmers
strive to expand their cattle population. With limited grazing areas,
the biomass is not sustained. Yields and/or cropping intensity cannot
be sustained in the longer run. Ultimately, the supply of Farmyard Manure
(FYM) is falling. Maintaining soil fertility, and labour productivity,
requires enough fodder and grazing resources to enable higher FYM application
intensity.
Despite project vehicle provision, the mobility of extension workers
has been impaired by unforseen scarcity of funds for fuel, staff travelling
expenses and procurement of spare parts.
Recommendations
The tenancy situation must be reconsidered when selecting water channels
for rehabilitation in order to avoid delayed implementation. In sites
where tenancy rights are uncertain, where tenants are subjected to additional
payments not permitted by the Land Act, voluntary labour contributions
are not forthcoming for channel rehabilitation. Implementation is delayed
and disputes need early arbitration. Other channels, not affected by unequal
ownership patterns and/or disputes, should be given chronological priority.
The project, as a matter of priority, needs to develop criteria for selecting
irrigation channels for rehabilitation not subject to disputes and consequent
delay.
It is time to see the double paddy rotation programme in a broader perspective.
Firstly, its net financial returns are not necessarily higher than those
of the traditional wheat-paddy rotation. The best strategy for extension
workers is to encourage small farmers less towards more paddy cultivation
(through double cropping), and more towards higher value production by
exploiting market opportunities.
While the animal husbandry breeding programme is going well, it is necessary
to articulate a strategy for reaching more farmers. Improved, locally
adapted crosses should be developed (possibly 50% Jersey, 25% Mithun
and 25% Siri) over a broader base of farmers. The breeding programme
should be encouraged by incentives such as the concentration of veterinary
and extension services in areas of relatively intensive dairy production,
while preference in further incentives and credit be given to farmers
prepared to adopt complementary measures in pasture improvement and reduction
of unproductive animals.
Agricultural research must focus on innovations which fit farmers' resource
availability; models of low input use need to be explored. Technologies
economizing on scarce labour during peak demand and providing opportunities
at other times are appropriate.
Research should be targeted to seek a stabilized and improved supply
of FYM and improved use of green manure. Efforts should also increase
for research on low input (mineral fertilizer) use and on how to adapt
dosages to farmers' cash constraints.
Women need to be specifically targeted for possible labour saving technology
respecting their typical activities (e.g. seed selection, weeding, transplanting
and FYM collection). Although one new female extension worker has been
recruited (more should be recruited) this is no panacea for more effectively
reaching women farmers. Male extension workers should be given more training
in diagnosis and be re-trained also to assist women farmers and explore
possible points of impact regarding the operations they perform. The possibility
of using female farmer extension assistants at village level should also
be explored.
A more affirmative and more comprehensive approach is required to safeguard
the environment under the pressures of increasing human and animal populations,
and project-induced agricultural intensification. Firstly, conservation
efforts should deal not only with ad hoc cases by gully
plugging, but also with the different types of erosion on given representative
land use patterns including communal grazing lands. On lands that are
not individually owned, group formation and training, as well as tenurial
incentives (to encourage tree planting) and subsidies, become necessary.
Small farmers have benefitted from project-induced intensification, but
with soil infertility and/or FYM constraints and reduced labour demand
from larger farmers (the power tiller issue), their prospects are no longer
bright. To counter these negative trends, it is necessary to focus more
particularly on the smaller farmers, respecting their technological and
institutional needs. They need to be specially targeted for shifting to
higher value crops/products. This requires a re-channelling of extension
and credit for these activities, so as to bring relevant technology within
their reach.
Improved methodologies are required in research and in extension for
identifying points of impact so as to support farmers in their efforts
to intensify crop and animal husbandry practices. This need translates
into use of (i) participatory methods in setting research and extension
priorities, and in the design and verification of trials; and (ii) further
economic analysis to understand farmers' decision making and to improve
the allocation of scarce project resources.
The Government and the project should review the rationale of the double
paddy programme. Adoption of double paddy cropping becomes less attractive
once subsidies are eliminated on inputs. Output prices will be kept low
for the foreseeable future because of cheap imported Indian grain. Especially
for the small farmers, the primary aim of the project should be to maximize
their income and food security.
There is a case where modest subsidies promote soil conservation measures.
There is little reason to expect small farmers, even in a group context,
to undertake major soil conservation measures using credit. Subsidies
should be targeted at smaller farmers.
Livestock productivity needs to be considered more carefully in project
planning and implementation. The genetic quality of the herds has been
upgraded through the provision of stud bulls and Artificial Insemination
(AI) services.
Farmers in general, and particularly small farmers, need to be involved
in planting fodder trees on their drylands and on leased forest lands.
They need planting material, credit and extension advice.
The possibility of using radio as an instrument of extension for reaching
farmers in more remote villages should be explored in order to improve
outreach and improve cost-effectiveness. The experience elsewhere with
radio listening groups, using a village appointed group leader (monitor)
is worth emulating.
The BDFC needs to be more flexible in its credit appraisal, relying more
on expected productivity of investment and less on individual collateral.
In terms of credit programme sustainability the high costs of credit
delivery to a great number of scattered small farmers must be covered.
Interest rates need to exceed prevailing rates of inflation.
The project should explore the feasibility of improving the marketing
site in Wangdi by providing space, simple roofing, water and sanitation.
Women from distant villages selling vegetables would benefit.
Any future project in this area should consider not only roads, but also
foot-bridges and rope-ways to help the people with their transport and
marketing needs.
The M&E System must firstly monitor labour demand and supply, by
land-poor and land-rich households, secondly the incidence of technology
adoption by farm size, and thirdly the nature of tenancy contracts and
their impact on productivity and equity.
Relatively simple PC-based software is available for the monitoring of
credit delivery, loan administration and repayment performance. Such software
should be installed both in Punakha and Wangdi; the credit officers should
receive necessary training from the Office for Project Services (OPS)
bureau in Bangkok which is familiar with relevant software and training
possibilities.
Lessons learned
Lessons on extension
activities
In view of the Government's financial constraints and the need for relevant
feedback, present diffusion models need review. The possibility of using
farmers as lower level extension workers (after necessary training) should
also be explored. The use of village level extension workers offers promise
in terms of a cheaper, more effective channel to encourage farmers' experimentation,
relevant feedback, and dissemination of extension messages in the remote
villages. Such farmer-extension agents would not be directly paid by Government,
but could be assisted in kind through free inputs, training, etc., and
villagers could compensate them for foregone earnings (labour lost).
Lessons on
nutrition and food security
With a more diversified production, food security has improved, and this
is not exclusively related to paddy production. The percentage of small
farmers with a rice-deficit is, of course, larger than that of larger
farmers. But, while much has been made of the importance of the double
paddy crop for the food security of small farmers, these farmers obtain
the necessary purchasing power through selling other crops. Their food
security is not necessarily related to their degree of rice self sufficiency.
The argument that paddy double cropping is necessary for the small farmers'
food security can be justified only if it provides the small farmers with
the highest returns on land and labour over the entire year, which available
data do not show convincingly. In fact, net financial returns from paddy
double cropping are not necessarily higher than those of the traditional
wheat-paddy rotation. The best strategy to use for small farmers is to
steer them less towards more paddy cultivation (through double cropping)
and more towards higher value production exploiting market opportunities.
Lessons on beneficiary
incomes
In the light of the tight feed situation, continued acquisition of more
cattle (even if improved) gradually becomes counter-productive. Compensating
measures are needed to increase feed while reducing useless cattle units.
Lessons on beneficiary
participation
In sites where tenancy rights are uncertain, voluntary labour contributions
are not forthcoming for channel rehabilitation. Tenants were found to
be reluctant to participate/contribute to channel rehabilitation since
their short-term tenures precluded reaping their longer-term benefits.
Implementation is delayed and disputes need early arbitration. Other channels
that are not affected by unequal ownership patterns and/or disputes should
be given chronological priority.
The introduction of new water users' groups has often resulted in conflict
and lack of participation, as has happened in some other Asian countries.
Hence, all modifications must be done in close consultation with the farmers.
Meanwhile, project inputs can be used as an incentive when working with
farmers to modify existing organizations and water distribution practices
with a view to improving their efficiency and equity.
Lessons on environmental
impact
Farmer participation is essential for the successful introduction of
erosion control measures, because of sharing of potential costs/benefits
and the long-term nature of possible benefits. Experience in other countries
has shown the need: (i) for farmers to be aware and appreciate the erosion
and soil loss; (ii) for a menu of technologies and practices from which
they can choose according to their needs; and (iii) of flexibility in
tailoring activities to meet the different location-specific requirements.
