Smallholders Services Rehabilitation Project - Mid-term Evaluation(1992)

Mid-term Evaluation Report

The project is national in coverage but some components are directed to three districts in each of Eastern and Luapula provinces. Since almost all of rural Zambia is eligible for project assistance, the six districts are selected for special development effort on the basis of the following criteria: (a) drought proneness and/or persistent food supply problems; (b) the proportion of subsistence and women farmers; (c) satisfactory agricultural production potentials and (d) relatively good access to provincial centers. In Luapula the climate is subtropical. Rainfall varies between 900 and 1 300 mm/year. The main growing season is the hot/wet period October to April. Cassava is the staple diet, while fishing is for both household consumption and cash. In Eastern, the climate is hot and humid, with rainfall of 500 to 800 mm per years. The major crops grown are local maize, sorghum, millet and rice in flood areas for subsistence. Groundnuts as well as sunflower and cotton are grown as cash crops.

Project design and objectives

Target group

The project is designed to facilitate expansion of the cooperative services to reach the poorest segment of the rural population. More specifically, the project is expected to benefit primarily subsistence and marginal farmers in the selected districts with farm sizes ranging between 0.5 ha and 2 ha. The total numbers of targeted households are estimated at 45 000. However, at an adoption rate of 60% about 27 000 households would directly benefit in the 8th year of project implementation. In particular the project would attempt to reach the female headed households, comprising about 40% of all households in the selected areas of the Eastern Province. This group is among the most disadvantaged in terms of land allocation and all services. Project would give special attention to the nutritional status, particularly of the children, of whom 83% are below the normal weight. The project design contained several innovative features specifically designed to reach the target group. These are reflected in the mechanism for local cost funding, provision of group credit in a participatory mode and the Development Fund.

Objectives and components

Objectives. The project aimed to unblock the input delivery chain through the cooperative movement nationally, and to support rural development in key districts. It would furnish the regional impetus for shifts in resource allocation in the context of macro-economic restructuring including liberalization of inputs and products markets. Small farmers would be assisted in diversifying crop production in line with regional comparative advantage in production. To enhance the adjustment process, the project will provide the scarce foreign exchange for importation of farm input. Finally the project would reduce the national dependance on food imports and save foreign exchange.

Components. The project would finance: (i) input supply and credit services through providing funds to the Zambia Cooperative Federation Commercial Service (ZCFCS) to procure and distribute more efficiently farm inputs at the national level and utilize the revenue for local cost funding; (ii) provision of credit through ZCF Finance Services (FS) for processing enterprises; (iii) support of extension in Luapula Province in addition to promotion of cooperative services in both selected province; the Loan Agreement was subsequently amended to cover the financing of extension support in Eastern Province, too; (iv) up-grading of feeder roads and (v) establishing a fund to finance any development effort closely related to project objectives. The fund was designed as a window for flexible lending (and grants) to finance smallholders micro enterprises.

Project implementation would be supervised by a steering committee headed by the Permanent Secondary of Cooperatives. The Project Coordinator (PC) would be responsible for field implementation. The selected provinces would establish Coordination Committees to coordinate project activities at provincial level. The concerned line agencies, particularly the ZCF and its affiliations would execute their respective components.

Expected effects and assumptions

The expected results consist of benefits to smallholders in terms of increased agricultural productivity, value added from processing of farm produce and saving in transportation of inputs and products. Furthermore, households nutritional status should improve. Food security at the national level would be enhanced; and foreign exchange for food imports would be saved. The project would furthermore facilitate the implementation of a number of measures involved in the liberalization programme e.g. phasing of subsidies on maize.

Design Assumptions. Project implementation has suffered primarily because the assumption that the economic restructuring would start and take off was not valid. The continuation of the pan territorial pricing leads to serious misallocation of resources; and to inefficiency in maize marketing and fertiliser distribution. The continuation of subsidies lead to high inflation, making it difficult to maintain producer incentives in real terms. Finally the continuation of large subsidies on maize adversely affected demand and production of traditional foods such as cassava, sorghum and millet. Farmers' exposure to risk in maize cultivation increased yet further (late delivery of inputs, collection and payments); conversely the attraction of alternative crops increased, which was a costly and inefficient process of adjustment especially for the target group. Moreover during implementation, it became clear that the planned World Bank Research and Extension project tied to IFAD project, would not materialise and that the Department of Agriculture (DOA) could not provide adequate support from its own resources. There were therefore good reasons not to proceed with the project in its original design.


The evaluation team visited the six districts in which the project is active and held meetings with Provincial and District officials involved in project implementation. Emphasis was placed on direct contact with project beneficiaries, and a high proportion of the mission time in the field was devoted to individual and group meetings. The project staff participated fully in the field work and provided much of the information required by the mission. Requests for data by IFAD prior to the mission were made, and detailed reports had been prepared by most of the Provincial and District staff implementing the project.

In Spring 1990, a field survey of households was conducted in Luapula project districts as part of the evaluation of the project. The MTE mission was supplied with descriptive data by district. The survey provided the base with which to analyse constraints and preliminary impacts at the group and farm level. Similarly, baseline surveys had been undertaken by the M&E Unit, but were only partially analysed and reported. There was little, if any, objective M&E data on project impact, and this restricted analysis by the evaluation mission.

Implementation context

The implementation of the project has been clearly linked with the macro-economic policy reform aimed at correction of distortions, liberalization of markets, curbing of inflation, assertion of comparative advantage in production and hence improving food security. As such the project has been part of a package, the success of which is dependent on the Government of the Republic of Zambia (GRZ) as well as donors commitment to its realization. The slow down of the implementation of reforms reflected negatively on project achievements.

The Project Facilitation Unit (PFU) is located in Lusaka, far from project activities; not less than 30 different line agencies are involved, across the two provinces and in the six districts. Nevertheless the PFU has set up a functioning financial management system and procurement system in spite of project complexity. But the PFU has not been able to provide leadership and guidance with regard to the overall development process.

Project achievements

Limitations to Increased Production. Farmers face three major constraints: first, an agronomic non-suitability of continued monocropping of maize on commonly acidic soils in the absence of liming; second, collapsing systems for input delivery and maize marketing; and third, rising cost of fertiliser because of price liberalisation and subsidies reduction. Maize based farming will continue but with comparative advantage in areas closer to markets and points of input supply. With reduced fertiliser use, and the shift from intensive towards extensive cultivation methods, availability of labour and land became more binding constraints.

At the time of project initiation, Luapula was a serious food deficit area because of the ravages of the cassava mealy bug. This disease was later controlled by the successful application of IFAD funded Biological Control Programme developed by another IFAD project in the country, which resuscitated cassava production in the province. In Luapula, prospects for improved production and income are limited, except for the cassava based systems, vegetables in wetlands and along rivers, and possibly for maize grown close to semi urban centers. The situation would become brighter if the government actively encourages cross border trade with Zaire, where maize fetches a far higher return than in Zambia.

Progress with extension methodology. Notable progress has been made in creating an extension organisation in Luapula that has adopted a methodology based on small micro plots (spats) more responsive to the needs of small farmers. The T&V approach has been modified, but not sufficiently: the system of visits built upon individual contact farmers has been repeatedly proven ineffective. The T&V approach was implemented without training and support for diagnosis and feed back from extension workers to headquarters. A core team of extension workers should have been selected and supported to diagnose adoption rates, current trends in farming systems and constraints, and to report to their superiors and to researchers.

The decision to support extension in Eastern Province, for which the original loan agreement was amended in September 1988,is perhaps understandable since expected World Bank funding fell through, but there is no evidence that the implications and returns were properly studied. To add a further layer of complexity for the PFU was not justified. The benefits of the provided extension support in this province are uncertain or negative.

Credit use in line with intentions. The credit has been used for fertiliser application and not been diverted into consumption. The statistical analysis shows that adoption of fertiliser is positively associated with use of credit. Similarly the use of credit resources to support fisheries production through the Development Fund and for hammermills although late deserves much praise. The latter save labour in processing and transportation, especially for women; the technology is particularly applicable for remote locations.

High risk maize production supported by seasonal credit. The support of small or marginal producers, in a context of severe distortions in pricing and marketing structures, has meant that maize is produced in locations with little or no economic comparative advantage in production. At least until recently, credit in kind for fertiliser on maize was an economic package. The fertiliser subsidy compensated during the late 1980's for a price of maize that was not always aligned with increases in the general price level. The relative price of maize to fertiliser fluctuated widely in the 1985-90 period, but did not deteriorate markedly until the 1989-90 season. In this season, the price of maize rose by 127%, whereas prices of urea and compound D, increased by 300% and 440%, respectively.

The seasonal credit assured access to inputs of fertiliser for maize producers in locations where such service support and comparative advantage in maize production were uncertain. The supervised credit, highly subsideised with negative real interest rates exceeding 50% in the 1987-89 period, raised the probability of timely delivery of input (and assured easy repayment in king). But assisting small producers in distant locations means that maize production was encouraged in sites where input delivery was uncertain and not assured, and where maize had little or no comparative advantage as a cash crop, once project support and/or subsidies on transport and fertiliser would be removed.

Group formation and participation. The rationale for organising farmers into groups was to achieve cost-effectiveness in the use of credit, transport and farm input supply and marketing services. Once groups were formed, credit would be extended for bankable projects. The group would borrow as an entity and use social collateral as security. Approval of subsequent loans would depend on the group's repayment performance. A similar system had been used by ZFC FS, under the Cooperative Credit Scheme, with formally registered primary cooperative societies as the target groups. But, reportedly, there was no defined ZFC FS strategy and time table set for achieving such transition. Modules were not developed for the gradual progression of groups towards more participation and for gaining an increasing measure of participation.

The group promotions approach has been quite successful in terms of quantity of members enrolled and credit uptake and recovery at least until shortly before the MTE. But the attempt to create a cadre of credit agents that would deal at the village level with issues beyond rural and financial intervention has failed. This means that the regular government extension services will have to handle these non credit promotion aspects.

Input supply programme. The input supply component, although in principle sound, has had its limitations. With a low economic demand for farm inputs in the project districts, local funds generated were less than the local project costs to be met. In line with intentions, farm inputs (except for fertiliser) sold nationally, outside of the project area, have contributed to generate required local funding. But there are three limitations to the operation of this mechanism. Firstly, it presumes that foreign exchange for the import of farm inputs remains scarce. Secondly, there needs to be an economic demand for such imported inputs; the market demand for inputs directed at the target group has to be very carefully assessed. Thirdly, because of high inflation rates, profitability, savings mobilization and working capital is eroding; and the resultant-cash flow problems have led to the suspension of disbursements to ZCF.

Roads and processing plants. The performance of the roads and the processing plant programmes have not been in line with expectations. Although culverts and drifts were constructed, a mere km 67 of roads or 7% of target had been built at the time of MTE. The three multipurpose processing plants have been established, but two have proven uneconomic and/or have a too low capacity utilisation, the exception is the hammermill.

M&E Limited information base. The information base did not materialise with which to adjust project design. Rapid diagnostic surveys from the field could have furnished the necessary data with which to redesign the project at an earlier stage than the MTE to minimize the cost of continued distortions in production. But the M&E unit failed to deliver farm level data and information on adoption rates. The Management Information System (MIS) never became operational. As too often is the case, the project was implemented in line with assumptions that were not being tested on reality.

Effects sssessment and sustainability

Beneficiaries. The project has had a positive impact on smallholders in the project area, who have received advice, access to inputs and some services. In a situation with a severe scarcity of foreign exchange, inputs have been targeted reasonably successfully to smallholders in the project area, estimated at 73% of farm chemicals and 54% of equipment.

Effects on beneficiaries income. Cotton production has risen rapidly in Eastern Province in part because of insecticides. Cotton inputs were supplied through the SSRP for the 1990/91 season. LINTCO reports that the use of these inputs has increased cotton yields by over 50% and raised quality, which increases price by 3% . Reportedly, an incremental 4 000 ton of seed cotton was produced from 9 866 hectares and was directly due to the inputs supplied by the project. The net benefits from production were estimated at USD 0.9 million. Inputs for other crops have been procured through the project, valued at USD 1.6 million by the MTE. Benefits of these inputs have not been estimated but are likely to be satisfactory.

Effects on nutrition and food security. In 1990, Luapula province, within the project area, had the worest record countrywide in malnutrition. Though provincial level in nutrition data depict Eastern province to be marginally better than Luapula, household data reveal wide spread malnutrition in Eastern Province too. Initially, project aims of improving the food security situation and living standards appear to have been directed at the household level, as reflected in the kind of data to be included in the baseline study. However, as the project was developed at macro level, food security issues have taken precedence and activities have been directed toward the interests of more prosperous farmers. Despite the absence of quantitative data for assessing project progress on Household Food Security (HFS), the Mission was able to obtain indications in one region where project's activities have directly influenced household food supplies. Farmers in the Chama valley area, who received project loans for hybrid maize production, reported having retained the total production for home consumption. Repayment was made in kind using groundnuts, a food crop grown in surplus quantities according to the farmers. A logical conclusion that both larger food quantities and diversification of food at household level have become possible.

Specific effects on women. The target group conforms to the criteria stated for gender, with about one third of those targeted in the two provinces being women. This is in line with the actual proportions of women in the rural population according to the MTE survey conducted prior to the evaluation. This is also consistent with the SAR estimates of 35% of female headed households at national level, though women account for up to 75% of smallhodlers in many rural areas.

Environmental effects. Beneficial effects on the environment have been anticipated from the project interventions. The introduction of improved and tested farming systems would result in better land use as compared to the traditional shifting cultivation and more efficient soil and water conservation practices. However, the MTE reported that current research in Lake Bangweulu in Luapula, which is one of the important lakes in Zambia, indicates that "there is a general trend in declining catches and in mean fish lengths encountered". This situation is not resulting from the project, but it is essential to lay out precautions against any further deterioration.

Effects on Local/national Economic Development Trends. The project has contributed to production increases of cash crops (cotton, and maize) and food crops (cassava); gaining and saving foreign exchange. The provincial economy would benefit from these increases, border trade and feeder roads (though implementation is unduely slow). It has also benefitted from the support provided by the project to the cooperative organization both financially and commercially.

Extension. With continuing high deficit on domestic and external accounts, the standard T&V system is not justified, neither in terms of productivity nor in terms of recurrent costs. There is little reason to believe that the Government can continue to fund recurrent costs once the project is terminated, nor can the vehicles supplied under the project be refinanced once written off. A different type of extension system, more effective and financially sustainable, has to be sought for.

Credit. The focus on credit for high input use goes against farmers' natural inclination to progress stepwise across seasons from zero through low to high input use. In fact, the emphasis on credit-available for only a minority of farmers - discourages the diffusion of stepwise improvements from season to season over a longer time period.

Main issues and recommendations

Focus project resources and decentralize.

Overstretching of management resources is an important problem. A decision should be taken whether to remain in the Eastern province or to concentrate on Luapula Province, a preferred option for all activities except possibly for roads. Such a decision would focus the project managerial and financial resources and lead to proper targeting of project interventions. If project activities should continue in Eastern Province, then it should be in support of others donors interventions and integration of the development activities in the province. This should be preceded with proper need assessment diagnosis of farming problems and a well laid out extension strategy.

The PFU has been over-extended in executing its functions including procurement, monitoring and prioritization of project activities. It would be more appropriate to decentralize through appointment of deputy coordinators for each province. These deputies would liaise directly, as necessary, with the PFU. They would facilitate and expedite activities in each province so as to improve management by objective, participation processes and overall project performance. For further consolidation there is a need for a management advisor in the short-term as well as consultancy services in aspects of need assessment and diagnostic studies.

Support cooperative movement.

Fundamental to the design of the project was the rehabilitation of services through the cooperative movement based on real participation of small holders and independence from Government directives; but the policy agreed upon at negotiations was not adopted. The Government has taken steps to ensure the autonomy of the Cooperative movement and to strengthen the participatory processes as originally intended in project design. IFAD and Government should have an active dialogue to ensure the implementation and effectiveness of these policies and the success of the project.

Design a structured process to participation.

A more structured approach to participation at the district and community levels is necessary. The project should define criteria for eligibility, selection and approval based on economic potential, need of assisting IFAD target group, continued participation reflected in demonstrated self-help activities and/or contributions. The project should build upon the group promotion effort already achieved. A district development plan can be formulated based on the needs of communities where groups are already established. Within districts, subsets of selected communities would provide the focal point for project interventions. This effort should be supported by setting-up teams of service providers at the district level.

Four interdependent steps are required to initiate a planning and implementation based on a participatory process: these are creation of awareness, a need assessment and rapid diagnostic surveys, identification and prioritization of activities and series of workshops for the technical and economic review at these development plans. This process of engineering community development plans by district based on participation and local commitment would become a major priority for the PFU. The approach proposed requires a certain attitudinal change for field staff, in the sense that local communities and farmers would become active in planning and resource allocation.

Increase smallholder productivity.

Promotion of Low Input Technical Packages. Support is required to promote sustainable low input systems since present systems are not considered viable. Possibilities of intensification within the cassava garden system, the introduction of alley tree crop farming, small ruminants and liming represent priority areas which should be studied.

Review the Method of Extension. The extension methodology should be reviewed, the T&V system be reformed and more use be made of mass media. Extension must devote more attention to identify impact points in improving yields and management performance. The MTE survey confirmed that small farmers' demand for improved information on crop husbandry and farming systems is significant. A proposal for a pilot extension programme should be prepared and it should emulate the try-outs with farmer representatives ongoing inter alia in Zimbabwe, reportedly with good results. Fishery extension should be included in the review. Long term plans should include the source of funding of extension staff, which should be at least partly funded by the user.

Feed back and diagnosis within extension is limited and the project should set up two diagnostic teams within the extension system in Luapula. They would have to design recommendations that take into account the spatial dimension, i.e. transportation costs in marketing, assist in generating a flexible multi-season extension strategy that pays special attention to single female headed households. They shwould conduct need assessments and train other extension staff in the use of diagnostic techniques.

Effective utilization of credit and development funds.

Credit funds should be handed over to the ZCF CS and seasonal credit be shifted for medium term credit for tools, but with strict follow up of eligibility criteria. Credit should be provided to single headed households to acquire small ruminants. Lending under the Development Fund should be broadened to incorporate micro projects for the setting-up of simple market structures and lending for trading activities by women should be encouraged.

The Input supply funding mechanism needs careful redesign to ensure that imports reflect the actual demand of the target population for farm inputs, and that the benefiting institution is given incentives to operate efficiently. This has not been achieved in the project.

Effective monitoring and evaluation.

The monitoring cum evaluation of the project needs to be reestablished with first priority for creating a MIS (for process evaluation) and second priority for impact monitoring. Data are required about trends in farmers' resource endowments, adjustments and coping strategies. Data from the representative households should include preferences with regard to overall needs, priorities for investment, extent of own contributions and participation.

Lessons learned

Participation. A more structured approach to participation and planning at the district and community levels is necessary. The project relies on district agencies for implementation, but these are not trained and supported in setting priorities on the basis of needs and production potential. There is little evidence of any attempt to carry out such an approach in the project, and no call for it in the project design. Projects that intend to use field agencies for implementation in a participatory mode need to conceptualise and set out the detailed design with which to achieve this objective.

Importance of needs analysis, targeting and Specificity. The Project has undertaken a complex programme but interventions have not been well directed to ensure complementarity between the different support activities. A principal reason is the absence of continued needs assessments with which to target beneficiaries and interventions. For example trends in socio-economic conditions within the project area need to be assessed for project design to address primary issues and constraints. Likewise extension recommendations need to be targeted according to the location of households, especially if agricultural marketing is liberalised. The use of high input systems to produce low value bulky crops, like maize, will not be economic especially in remote areas with difficult access.

Multi-season (year) growth strategies. The demand for credit normally exceeds by far supply and alternative development pathways should be identified and adopted where appropriate, based on surpluses generated for continuous re-investment without external help. This requires a multi-season/year approach in extension advice.

Viability and Relevance of technology. The project design did not set out the recommendations for the extension service to promote crop diversification. Without assured delivery of relevant recommendations, project impact will remain uncertain. Even when technology is available, an economic appraisal is required before it is introduced. For example, the multi-purpose processing plants were found too expensive to be operated by local cooperatives, returns are low or negative; moreover the technical sophistication of the plant in combination with limited market demand makes it impossible to maintain it with local resources. Such an appraisal will have to explore also the capacity utilization of plants already operating in the project area.




07 September 1992