Southern Roseires Agricultural Production (1997) Mid-term Evaluation

Sudan  
October 1997

Project design and objectives

Target group

There are no accurate data concerning the population of the project area. At the time of the last census held in 1983, the settled population was 24 400 families, and the number of nomads was unavailable. At present, the most accurate estimate of the population is about 37 000 settled people in 4 600 households and a further 750 nomadic families representing 6 000 people, i.e. a total of 5 350 households or 43 000 people.

According to Appraisal, "...since all households have an income estimated to be below the average GNP per capita of USD 320, all inhabitants in the project area would comprise the IFAD target group..." (p22). The report goes on to state that although 9% of women head households, only 6% of them are cooperative members, and lists women's responsibilities, implying that they are included in the target group without stating this explicitly. At reformulation, this oversight was corrected and the target group was defined as:

"5 600 sedentary farming households consisting of 46 000 people, with specific emphasis on the poorer or destitute households;

1 000 nomadic pastoralist households consisting of 7 000 people, with specific emphasis on the poorer nomadic families; and

all rural women in the project area, contained within the households in (a) and (b) above"

Within this broad targeting, reformulation has made some effort at prioritisation in three specific cases:

  • on the assumption that people could not join cooperatives because of their inability to pay the joining fee, proposed that this fee should be paid by the project on their behalf as a grant;
  • women beneficiaries of the small ruminants credit were to be selected according to poverty criteria, the poorest being given priority over others; and
  • the allocation of new mechanised plots was to be done giving priority to the poorest, according to criteria approved by the Abu Gumani Cooperative Union (AGCU) Board.

Although the area is generally fairly deprived, there are distinct differences in wealth: a poor household would possess inadequate labour force, cultivating a small area of bildat and having no livestock. At the other extreme, one would find a household with considerable family labour (two wives, adult children), large bildat, jirouf and geneina, income from trade, fishing or wood and over a dozen cattle. A variety of other households can be found in between these two extremes. This implies the need for some eligibility criteria for targeting.

Objectives and components

It was expected that the project would accomplish the following objectives:

increase the production, income and food security of farming households through area expansion and improvement of productivity of crops and livestock;

improve marketing arrangements and provide formal credit in substitution for the prevailing informal exploitative credit systems;

generate greater beneficiaries participation in long-term development of their area through support to the existing cooperative structure to become an effective delivery mechanism; and

evolve a pioneering project management system, more strongly based in the private sector and reliant upon beneficiaries.

The project components include:

agricultural support services: the introduction of new farm machinery for semi-mechanised farming, support for the dissemination of improved technical packages (in particular, introduction of a three course rotational system) and improvement of animal health through provision of drugs and vaccines;

agricultural credit: seasonal short term credit to both semi-mechanised and traditional farming, and medium term credit to women for income-generating activities (IGAs) to fishing households for improved fishing gears and to Village Cooperative Societies (VCSs) for off-farm activities such as flour, oil mills and sugar cane crushers; and

institutional support: managerial and technical support to Abu Gumai Cooperative Union (AGCU) and VCSs, technical assistance and training to the Office of the Registrar of Cooperatives(ORC), the Agricultural Bank of Sudan (ABS), and the Regional Ministry of Agriculture, Natural Resources and Animal Wealth (RMANRAW).

Expected effects and assumptions

The expected results of the project could be summarised in the following:

increased agricultural production and productivity (in traditional rainfed agriculture sorghum production could increase by 20%, in mechanised farms productivity would increase by 15%, but areas under sorghum would decrease to correct improper land use where land is burdened with continuous cultivation of sorghum), farm income (in traditional agriculture farm income would increase by over 50%, while in mechanised farming it would almost triple). and food security, improved productivity of livestock, better marketing arrangements and less exploitative credit systems;

establishment of a replicable small-scale semi-mechanised farming system side by side with an improved productivity traditional farming system;

generation of greater beneficiaries participation through support to AGCU and VCSs in the long-term development of the area; and

development of a pioneering project management system based on private management principles rather than public sector controls, particularly in selection of managers, marketing and credit. This is considered an essential element of sustainability.

The basic assumptions were:

the project area is secure and stable;

the government would devote all the land under the Blue Nile Integrated Agricultural Development Project (BNIADP) to the Southern Roseires Agricultural Development Project (SRADP) and grant the usufruct rights to AGCU and VCSs.

the technical packages including mechanical land preparation, crop rotations, improved seeds, inputs and credit would be available and farmers would adopt these packages for improved production and productivity;

the AGCU would develop the institutional capacity through the project technical assistance support to raise the level of managerial competence and the government's willingness to devolve authority to AGCU to operate on private basis;

Evaluation

A Mid-term Evaluation (MTE) Mission for the Southern Roseires Agricultural Development Project (SRADP) visited The Sudan during the period 14 November to 3 December 1997.

Implementation context

The project area is part of the Great Central Clay Plain of the Sudan. It is located some 65 km by road south west of Damazine town, capital of the Blue Nile State. SRADP is a successor project of the Blue Nile Integrated Agricultural Development Project (BNIADP) financed by the United States Agency for International Development (USAID). In fact, at appraisal, the areas of the two projects were identical, though significant variations occurred during implementation when some of the project land was granted to private investors.

The security situation remained stable for most of the project period, but started to partially deteriorate in early 1997 with about 20% of the project area affected. However, the project beneficiaries residing in the secure areas provided significant assistance to the resettlement of the displaced population.

The main problem which confronted the project was absentee management. The complete lack of physical access during the production season (May to October) poses the most difficult constraint, since top management was not present for critical project and farming decisions.

The project, for various reasons, was plagued with discontinuity in senior staff. Among other reasons for discontinuity, apart from deficient social services, was the weak incentives given to project staff. The Damazine area attracted many joint-venture investments which paid lucrative salaries and benefits. In contrast, the project salaries remained under government scrutiny, even though some increments were awarded in recognition of it being a hardship area. Given the high inflation rate and the fast and vast loss of purchasing power, these incentive allowances needed timely revisions to remain attractive. This was not achievable under the governments pace of decision making and bureaucratic procedures. Indeed, the government resisted the application of competitive pay.

Instead of the project being under the AGCU management as a private entity, the Project Executive Board (PEB) extended its authority to bring project management totally under its control, on the pretext of its accountability for public funds.

Land allocation is one serious problem which resulted from the scrambling of large private investors to the area. Neither the current land area nor the land tenure arrangements are appropriate for the project. Contrary to normal practice, AGCU has been leased lands including village dwellings, village dedicated land, bildat, jirouf and livestock corridors which are subject to usufructuary rights held by the local population.

Inadequate GOS budgetary and financial support for SRADP was the most serious constraint for project implementation. The situation was aggravated by the exponential increase in the nominal value of the government budgetary contributions due to the excessive devaluation of the national currency. Project management was compelled to withdraw funds from the special account to cover some of the government financial obligations. The depletion of the special account either through non-eligible expenditures on behalf of government or because of failure to obtain expenditure returns and prepare properly the withdrawal applications to replenish the account resulted in an additional cause for further slowing of the project implementation rate. However, payment of government contribution improved considerably after the reformulation in 1995.

The major procurement problems were delays emanating from project management lack of interest and initiatives, rather than from procedural bottlenecks. The most crucial procurements for the realisation of the project benefits, the farm machinery were received only in 1997, five years after project effectiveness. These delays resulted in cost increases and made amendments of schedule 2, necessary to meet additional expenses. A more serious problem relates to specifications, however.

Project achievements

Agriculture

The main reason given for the dominance of sorghum and deviations from the rotational system was delay in starting mechanised operations beyond the optimum planting date for sesame and cowpea. VCSs could not be convinced to see cleared land without a crop and decided to seed sorghum also beyond the recommended optimum sowing date, on all land unseeded by sesame and cowpea. This decision is based on the fact that sorghum will produce a crop even if seeded late, while late planted sesame and cowpea will fail. However, both beneficiaries and project management are aware that sorghum yields decrease progressively with delayed sowing time.

Deviation of implementation from farming according to a rotation is very serious and if continued, it would undoubtedly lead to striga infestation and land degradation. In the absence of cowpea, a two-course rotation of sesame-sorghum similar to that adopted in bildat is unacceptable for sustained crop production. The three course rotation recommended by reformulation is considered adequate with either the cowpea or the fallow acting as a rejuvenation course for soil productivity.

Lack of planning of field layout for semi-mechanised farms is a source of concern. Absence of any form of drawings for farms actually in the field is serious as without these it is not possible for top management to detect deviations from design or concept or negligence of important layout components. In addition it constrains decision making, day to day management, communication and monitoring an impossible task. With maps, suggestions and alterations or correction of errors in layout could have been much easier.

Though working under difficult unprescribed conditions and for the first time without prior experience of operators, the farm machinery, with the exception of the precision planter, has performed well, which indicates that both machinery and staff could cope with the required operations even if the correct time frame is missed. This is an advantage. Performance would no doubt be much improved in future as operators gain more experience and as project develops means to overcome credit problems in time to start mechanised operations in the correct time frame.

Uncertified seed was used for all crops all the time. The procedures followed for introduction of new varieties denied beneficiaries their right of participation in decision making regarding their crops. Nevertheless, the sorghum variety Wad Ahmed which was released after Appraisal has become the dominant variety in the project. It has gradually replaced other improved varieties through good performance and satisfaction of farmers' wishes. Unlike the case of sorghum, Kenana-2 sesame variety has been seeded by the project during the 1997 season over the whole project area without prior demonstration or testing in beneficiary plots.

The prescribed base line conditions for semi-mechanised farming have not been in place prior to 1997, and the project achievements of yield should be judged mainly on 1997 being the real crop year one. Yields for this year are yet to be realised and compiled. However, judging from the standing maturing sorghum crops there is a very large variability in yield between beneficiary plots and between farm blocks (FBs) under semi-mechanised farming. The major determinant of yield is weeding; where well done, high yields will be attained. It is quite assuring at this stage of implementation that a good proportion of beneficiaries and indeed whole FBs will achieve average sorghum yields higher than predictions designed for project maturity in crop year five in spite of late seeding and sub-optimum plant populations. With more emphasis on weeding an increasing number of farmers will be able to achieve or exceed predicted yields.

The performance of Agricultural Development Centres (ADCs) and their involvement in all aspects of project activities at field level is satisfactory. In essence they have acted as the spearheads of project development at grassroots level and their contribution to establishing an improved farming system is commendable. Considering the problems that have faced the project, the present stage of implementation could not have been achieved without the contribution of ADCs.

Traditional Farming

Traditional farming: is a well established system with all its successes and risks known to almost every farmer. Being fundamental to food security, any change in the system is not easily acceptable as the change constitutes an unknown risk to household survival. Changes proposed by the project would therefore require a convincing extension service functioning over a long period of time directly covering a wide base of beneficiaries. This was not the case of agricultural extension in the project and traditional farming as a system remained unchanged by the project.

Certainly the project has not increased the average area cropped per farmer as this is really mainly governed by individual land ownership which is not expected to change with the project. The project did not attempt to draw a new rotation for bildat, neither did it attempt to change existing rotations. However, the project was able to satisfy mechanisation requests by using the old wide level discs. Though this is not the technology recommended by design, it does provide a useful service for bildat farming. The semi-mechanisation technology will not be used for traditional bildat because of its unsuitability to traditional small plots and overlap of required mechanised operations with semi-mechanised plots.

Extension services were conceived as a major activity for promoting improved husbandry practices in the project. An agreement was signed between the RMANRAW and AGCU to provide the required agricultural extension and animal health services. RMANRAW was unable to have in place the extension staff complement as required by the agreement. Recently, project extension has developed good working relations with the Director of Damazine Research Station of ARC, on a personal basis.

The extension approach is theoretically based on training and demonstration. Nine demonstration plots were cultivated and attended by the village extension agent on his bildat land. These demonstration plots were unsuccessful.

Rural Credit

Most of the demand for rural credit in the project area is met by the informal sheil system, which is the traditional form of consumption and production credit. The interest for sheil credit is substantially higher than the formal system, and can be punitive. The purpose of the project is to access farmers to institutional credit, from the ABS. To enhance farmers' credit-worthiness, the beneficiaries would be organised into cooperative societies resembling the innovative group organisation approach. Lending to these cooperatives (groups) would not require individual collateral. Moreover, loan recoveries to the threshold of credit sustainability would be anticipated from peers' pressure for prompt repayments.

The total project funds transferred to ABS for relending to project beneficiaries during the entire period amounted to Ls 989 million equivalent at the prevailing exchange rates to about USD 1.06 million. ABS received a total of Ls 200 million as support to meet its administrative costs.

Short-term credit started as early as 1992, while the medium term credit commenced in 1994. By 1997, the total number of beneficiaries of seasonal loans increased from about 1200 to over 2600 farm households on annual basis. The total short term loan disbursements increased in nominal terms from Ls. 14 million to over Ls. 352 million per annum. Medium-term loans, on the other hand, had a disbursement magnitude of Ls. 7.0 million per annum in 1997 compared to just over Ls. 1.0 million per annum in nominal terms in 1992. The total number of beneficiaries of the medium-term loans programme increased from 96 to about 256 in nine VCS over the period 1992-1997.

In spite of concerted efforts to provide timely credit, actual provision had experienced significant delays. Late sowing and failure of weeding are among the main causes of low productivity. Both operations have been adversely affected by the delays in credit. However, the main reason was failure of farmers to repay their previous debts.

Regarding the establishment of an effective credit delivery mechanism, the project contributed significantly by constructing the ABS Branch in the project area. Thus formal credit services were brought within reach of the farmers whereas in the past the nearest branch was in Damazine. A lending procedure has been put in place and farmers had an increased access to formal credit, while informal "Sheil" lending subsided considerably. A major shortcoming, however, was the absence of an operational revolving credit fund. So far, the project provided the funds which ABS lent to the farmers, in addition to the financing of about 70% of the operating costs of Abu Gumai Branch. Soon after the termination of the project, a serious lack of resources, both for operation and lending is likely to arise.

The number of beneficiaries has more than tripled over the period 1992-1998. The bulk of them was in traditional farming though their number started to pick-up in semi-mechanised farming with the arrival of farm machinery in 1997. VCSs members benefited considerably from the short-term loans financed by the project through ABS, and many interviewed by the mission indicated they were relieved from the exploitation by moneylenders under the "sheil" system. Nevertheless, it could not be established that the average yields or area under cultivation had increased due to credit.

Gender monitoring was lacking. To identify the participation of rural women in the lending programme, data was collected from five VCSs at random. The statistics which was found to be patchy and incomplete, provided mixed signals. Women were, however, the main beneficiaries of the medium term credit destined to small ruminants particularly goats and sheep. They also benefited from the installation of flour mills, which would decrease significantly household hardships.

Targeting

If poverty is defined as the lack of adequate facilities, the entire population is deprived of all amenities. However, there are socio-economic differences among the project area inhabitants. The approach to targeting taken by the project gives no consideration to these differences in wealth within the community, and overall those who have been given actual (even if not intended) priority in allocation of semi-mechanised plots, have been the richer and more powerful within the community.

Criteria for the allocation of semi-mechanisation plots or for prioritisation of poor women for small ruminant credit have not been applied. The project has not seriously attempted to focus its activities on the poorest, either among the male or female settled population. Moreover, a compensatory mechanism should have been devised to give access to poor non cooperative members to project activities not involving credit (e.g. extension, and cash access to inputs).

Concern about targeting of the nomads have been voiced during Appraisal and reformulation when the fact that nomads had been neglected for three years had become fully apparent, and this had some impact: nomads were provided with veterinary services and one nomadic cooperative has been created. In addition, nomadic women have access to the women's programme.

Participation

There are a number of indirect indicators of people's involvement, particularly their financial, managerial and practical participation to common enterprises such as the construction and management of the community development centres, attendance and involvement at meetings, etc. The evidence shows that communities had minimum participation in these activities. However, the increase in membership of VCSs clearly indicates the interests and willingness of villagers to become involved. Nonetheless, with a few exceptions, the VCSs are not yet perceived by the villagers as being their own institutions.

The VCSs have the potential for becoming genuine village level participatory institutions with the right support and training of their members since they include the vast majority of the population and the office holders have started to develop skills through project intervention, though participatory approaches and management skills are still extremely weak. But the main problem of using the cooperatives has been that the AGCU has retained, and possibly even increased, its power and ability to control resources. Project intervened to increase support of the VCSs and reduce the power of AGCU, but inputs were not substantially redistributed in favour of the VCSs.

While far from what had been planned at design, the level of participation of women in the project is reasonably high, with about one-third of households having a female participant. This ratio varies considerably as in some villages there are no women involved. The limitations are due principally to the delayed start-up of the Women's Training activities in the Community Development Centres.

Most of the centres are currently being constructed, but the community contribution to this construction was non-existent. Communities had allocated land for the sites, but participated neither financially nor in any other way in the construction process, with the work being done by contractors. The communities are not likely to consider these investments as "theirs", which will have a negative impact on their maintenance and sustainability.

Effects assessment and sustainability

To ensure future sustainability of the project services, the project design introduced an innovative approach to: a) entrust project management and implementation to the beneficiaries through their cooperative organisation, the AGCU; and b) apply private management principles. It is clear, however, that the design has under-estimated or even overlooked the resistance from the government bureaucracy to such an approach. It was indeed unrealistic to think that the bureaucracy would not challenge or even rule out the approach during the course of implementation.

Both for the semi-mechanised and traditional farming systems, a sustainable crop rotation which does not exhaust and degrade the soil nor lead to weed infestation should be strictly followed. Since this condition was already violated during the previous cropping seasons, particularly with the arrival of the farm machinery, there are urgent corrective measures to be undertaken to ensure the sustainability of agricultural production.

The state of agricultural extension in the project is the key to the success and sustainability of the whole farming system. Currently the extension unit is lacking in organisation, linkages and interactions, planning, approach, baseline information, extension messages and delivery and above all staffing. Staffing is the core of the problem. The only way to improve project extension services is to resort to the Federal National Agricultural Extension Administration for assistance in both staffing and training.

In addition to management competence, the VCSs need to have sources of income to finance their activities. They are building up a number of financial commitments for which they will have to take responsibility by the end of the project period if not before, including salaries and operating costs for extension, veterinary services, management activities, etc.

Lack of provision for some livestock corridors which were designed to remain undeveloped has negatively affected the environment by removal of natural vegetation and exposure of soil to erosion in large continuous areas. In addition it is most likely going to increase conflict between nomads and settled farmers.

Sustainability of credit depends on (a) the availability of profitable investment opportunities (high productivity, comparatively low cost, good marketing opportunities and equitable taxes), and hence effective demand for agricultural credit; (b) reduced risks in rainfed farming; (c) the establishment of an effective delivery mechanism; (d) high rate of loan recoveries; and (e) the establishment and operation of a revolving credit fund. On the account of those criteria, the project has not yet established a sustainable credit system, particularly the low levels of recoveries.

Main issues and recommendations

The MTE mission has drawn a detailed and comprehensive corrective programme in all aspects of agricultural production for both semi-mechanised and traditional farming. The government, the project, and IFAD should consider these corrective measures seriously and should immediately undertake necessary measures to implement them without further delay. A national expert to reside in the project area to physically manage the implementation of the corrective measures should be appointed. The expert should also be given the responsibility of implementing and or providing technical backstopping to project management particularly with respect to corrective measures and other recommendations.

AGCU and VCSs need further support to start managing some of the activities funded by the project such as the operation of the farm machinery. Hence, a clear plan for the handover of responsibilities, a managerial structure that would run these services, and financial and technical resources needed should be implemented immediately; and rehearsed during the remaining two years.

It would be unrealistic to expect that AGCU and VCSs pay the bill of all extension staff, though some beneficiary contributions may be used to support village extension workers or veterinary vaccination services. The state government should be encouraged to allocate more resources to the farm sector production and marketing services in the project area.

The key to increased household incomes is increased yields. Particular attention is required to address farmers who produce less then break-even yields.

For successful introduction of crops or crop varieties, it must first be ensured that they are both suitable and acceptable by beneficiaries under project conditions. For this purpose, testing and demonstration under farmers conditions are crucial. Gradual expansion which is made in response to farmers convictions is a key to success.

Project implementation and sustainability were seriously constrained by the current status of agricultural extension. Improvements in the project extension service is a top priority for the project to achieve its objectives. It is recommended that project and RMANRAW should seek the assistance of the Federal Minister of Agriculture to involve the national Agricultural Extension Administration in the project activities.

Project and ABS should work out new arrangements for settlement of credit to permit mechanised operations to be started in time. In this context experience has shown that project and ABS have been able to reach agreements on the bases of settlement of credit problems in June or July which was too late for the start of mechanised operations. It should be quite possible to advance this date to April or early May.

The success of semi-mechanised farming depends on efficient operation and maintenance of farm machinery, as well as timeliness. Beneficiaries have shown promise that they can undertake increasing responsibilities of mechanisation at the level of their leadership. Nevertheless they are still in need of assistance and intensive on-the job training before they can take over machinery operation on their own.

The ADCs, in collaboration with VCSs have demonstrated that they are the crucial foci of development and sustainability of a successful semi-mechanised farming system. Hence, the continuity of their role is essential for field management and monitoring. Furthermore, project should involve VCSs and ADCs in policy making which should follow the bottom - up approach.

Credit should be linked to the dissemination of technical packages, since farm machinery were received very late, credit was served mainly to traditional bildat farming, with very limited mechanical land tillage, improved seeds or extension messages. Yields stagnated and repayment capacity remained low, contributing to indebtedness.

Farmers capability for repayment can be enhanced only through better productivity and rewarding prices. Inventory credit was originally contemplated in design, but was subsequently dropped during implementation. It is necessary that a marketing credit modality be developed to assist the farmer to avoid selling his produce immediately after harvest, when farm gate prices are depressed.

The existing VCSs do not constitute a viable mechanism for the delivery of production credit. They lack cohesion, savings, accountability and managerial capacity. It would be more effective to reorganise the cooperatives into smaller credit groups and impart intensive training and provide social and financial intermediation to ensure cohesion and enhance financial management capacity and hence utilise the group as security for loans.

Lending to special groups (women, nomadic livestock herders, fishermen) is still very limited. Within the same context, some groups - which were already established (e.g. women groups within VCSs) or which could be initiated in short notice (e.g. fishermen) may be utilised for credit delivery.

In the meantime, ABS should act with restraint in debt collection and avoid the detention of the management committees of the VCSs. It will be prudent to identify and classify the wilful from the unwilful defaulters. While legal action may be necessary against defaulting farmers, rescheduling may be considered for the latter group. The exercise should be undertaken with the full support and participation of AGCU and the concerned VCS.

In the remaining period, a plan should be developed to build up the revolving credit fund (RCF) from repayments as well as from ABS' own resources. Perhaps the following supervision mission should undertake this task.

Allocation of the remaining areas for semi-mechanisation must be reserved for the groups which have previously not benefited: (a)  poor settled families i.e. those holding under ten feddans of bildat with neither jirouf nor geneina; (b)  female headed households; and (c)  nomads. Those poor families who are excluded from participation through poverty must be given the opportunity of joining and the earlier decision to pay their joining fees must be implemented effectively and immediately.

The project should address issues concerning the nomads as a matter of priority. If this is not done, in the medium to long run, tensions between settled and nomadic communities will almost certainly rise. Stress affecting nomadic communities will worsen and their valuable ability to use marginal lands in a sustainable way will be lost.

Urgent priority must be given to strengthening the technical and management capacity of the VCS officials. The project must immediately initiate a series of short training courses in management. In this context, VCSs should be able to supervise the AGCU and decide on the use of its funds, as well as making its budgets and annual workplans. Greater efforts must be made to turn AGCU into the arm of the VCSs, rather than it remaining associated with the project, ABS and the Ministry of Agriculture. The VCSs must be able to manage their Community Development Centres, pay their managers and extension assistants and improve the balance of power in their relationship with the AGCU.

At this stage, focus should be on improving the level of participation in villages where groups already exist, putting particular emphasis on encouraging the poorer women and female household heads to be involved with the project. Consolidation should take precedence over expansion.

For the project area which cannot be served from Blue Nile during harvest time it is advisable to resort to and improve traditional ways of water supply. Digging hafirs (i.e. dug out) near streams, where water is available and where natural ground topography is suitable for water storage, would be an appropriate solution. These hafirs should be protected by fencing to minimise contamination.

For monitoring and evaluation, project resources may be better utilised for a) building the system capacity in terms of analysis and reporting at the RMANRAW at Damazine; and b) institutionalising physical monitoring and evaluation and data collection at the implementing and service units.

Supervision should identify limited key interventions and concentrate on probation of these issues during the remaining project life. Agricultural production systems and credit and their sustainability, in addition to effective project management, should be the focus of supervision.

Lessons learned

The project design assumed: a) abundance of farm land and absence of constraints to access it and; b) automatic allocation of lands previously under BNIADP. Experience proved the contrary. In fact, this issue delayed project implementation for over three years. Moreover, experience clearly shows that land tenure arrangement are quite complicated and pregnant with multifarious problems which could constrain the progress of the project and its sustainability.

Beneficiaries are likely to take decisions (e.g. in crop rotation and cropping patterns) which are technically incorrect as well as incompatible with project design, and that project management accepts and implements such incorrect decisions. This points clearly to the need for careful scrutiny of VCSs' decisions, particularly relating to technical matters, at the highest levels of management.

However, it should be clearly understood that such technically deleterious measures are taken by farmers (individually or collectively) to reduce short term losses within a context of a short term survival strategy. Such decisions which result in less than optimal utilisation of farm lands and ultimately total loss of fertility are associated with inefficient management. This could be a reflection of a combination of poor design and implementation and absence of corrective measures.

Project success in introducing Wad Ahmed sorghum variety and failure of Kenana-2 sesame are both useful lessons to learn in that farmers have to participate in the selection of varieties after thorough testing and demonstration by extension.

The application of innovative private management principles by government-funded projects is likely to be resisted by the bureaucracy. It was indeed unrealistic to think that the bureaucracy would not challenge or even rule out the approach during the course of implementation.

For devolution of authority to the beneficiaries, a lot more serious training and capacity-building of the cooperative structures, the AGCU and VCSs was necessary, and the project design should have earmarked adequate resources for this purpose.

In countries with weak fiscal positions, governments seldom meet their financial contribution to projects, especially those servicing the rural poor, IFAD target group. Thus, delays in project implementation because of this are common, and hence, the design should seek to minimise government financial commitments rather than be forced to do so during reformulation, years after a problematic project start.

Procurements should be according to technical specifications and not to lowest price. Indeed in case of the precision planter the lowest tender price accepted turned out to have the highest cost to the project.

Farming under the conditions prevailing in the project area is a risky business. Furthermore, farm product prices are generally subject to high degree of fluctuations and given the remoteness, isolation and lack of accessibility of the project area for long periods, farm prices are normally depressed. Under such circumstances, the project design should have incorporated an elaborate risk analysis and device mechanisms that would enhance the capacity of farmers to meet their debt obligations. The evidence from the BNIADP at the time of Appraisal, supports this contention.

There are many intricacies associated with the shift from normal credit modalities to Islamic modes of financing. The reformulation exercise undertaken in 1994 has accepted these modalities as they were, whereas a thorough analysis of their impact and effectively a credit redesign were a necessity for the implementation and the success of the whole project.

Guarantee funds in high risk rainfed agriculture are essential for the commitment of participating banks and successful credit operation. In its absence, ABS opted for (a)  very short term credit, instead of a period of up to 18 months as per design, and (b) very strict and coercive measures to ensure repayments.

The securities for short-term loans were embodied into the cooperative system. The VCSs are large bodies which are loosely bonded. Training and financial intermediation were entertained only by the office bearers (the President, the Secretary and Treasurer). This is contrasted to the groups approach where (a) intensive training of all group members is undertaken, (b)  the groups are small and homogeneous, and (c)  meetings and savings are regular, etc. Hence in the groups approach, cohesiveness, peer pressure and joint savings resources could constitute a workable alternative to collaterals.

 

 

LANGUAGES: English

Soil and Water Conservation and Agroforestry Programme (SWaCAP) (1997)

Lesotho  
September 1997

Focused evaluation

The Kingdom of Lesotho, which is surrounded entirely by the Republic of South Africa (RSA), has an area of about 30 600 km2. About 18%, 18%, 51% and 13% of Lesotho is classified as lowlands, foothills, mountains and river valley in terms of terrain and altitude and, therefore, potential land use. The country's population in 1996 was estimated at 2.0 million with an annual growth rate of 2.6%. The summers are warm to hot while the winters are cold in the lowlands and foothills and very cold in mountainous areas. Rainfall, the bulk of which falls between October and April, varies from about 700 mm to 1 000 mm depending on location and is quite variable both between years and locations. Droughts are common. The SWaCAP programme area, covers the lowlands and foothills (altitudes from about 1 300 m to 2 000 m above sea level) of Maseru, Leribe, Berea and Butha Buthe districts, and includes more than half Lesotho's potentially arable land. Most of the programme area's soils are derived from sandstone or shale. Erosion is a major problem, and has led to significant losses in arable land. Maize dominates cropping. Yields are low and there is evidence of a declining trend over the years. Some sorghum is grown and beans are usually intercropped with maize. Small amounts of potatoes and wheat are cultivated as cash crops. Lesothos's economy is strongly dependant on the RSA.

Project design and objectives

Target group

The programme's target group includes households with land but lacking labour for cultivation; households with smaller than average holdings; de jure and de facto female-headed households; and landless households. Women were to be the programme's most important target group since both the de jure and de facto female headed households include households with smaller than average sized landholdings, those with land but lacking labour for cultivation and the landless. The four sub groups defined above together accounted for about 110 000 of the 130 000 rural households in the area where the programme's soil and water conservation activities would be implemented. However, all 278 000 rural households in the country were to benefit from a properly trained and functioning extension service, agro-forestry development and better conservation strategy and policy coordination.

Objectives and components

Objectives. The objectives of SWaCAP were to assist the Government of Lesotho (GOL) to: (i) promote soil and water conservation measures as part of the farmer's normal agricultural activities in a way that increases farm productivity, food production and family income; (ii) establish an agro-forestry research capability to contribute to the development of ecologically sound agricultural production systems; (iii) create an effective agricultural extension service based on the client demand approach; and (iv) monitor and coordinate its soil and water conservation policies, programmes and projects. SWaCAP was funded under IFAD's Special Programme for Africa (SPA). The ultimate goal of SWaCAP is to increase the income and living conditions of its target group while, at the same time, assisting with controlling erosion.

Components. (i) Conservation based agricultural production with two sub-components; namely the development and refinement of agricultural innovations and the introduction of conservation-based farming systems (26% of costs); (ii) re-organisation of the extension system (39% of costs); (iii) agro-forestry research and development (22% of costs); and (iv) conservation strategy and policy coordination (13% of costs). The programme was to be implemented by MOA through the Departtments of Field Services (DFS) and Economics and Marketing (DEM). SWaCAP's Programme Coordinator (PC) was to be located in the Planning Division of DEM, reporting to the Director of Marketing and Economic Affairs. Three Technical Assistance Advisers (Agronomy, Extension and Agro-Forestry) were to be recruited internationally.

Development and Refinement of Agricultural Innovations. This sub-component would develop and refine the production recommendations used by FISC (The SIDA financed Farm Improvement with Soil Conservation Project). A programme for developing and demonstrating these technical innovations would be undertaken in fields representative of the agro-climatic zones in the four programme districts. The results of the trials would be used to formulate improved cropping recommendations for delivery to farmers by the extension service. Introduction of Conservation Farming Systems. Assistance would be provided to farmers to construct and/or repair the in-field erosion control structures (e.g. terraces, waterways, etc.). The terraces would be planted with grass species (e.g. bana grass) and fruit trees to assist in their stabilisation. Stall feeding for cattle and fodder crops would be encouraged. For construction work, farmers would receive payment on a task basis in the form of agricultural inputs, while the landless who undertake conservation work on communal land would be paid in cash. Biological methods of soil conservation would also be promoted.

Reorganisation of Extension Services through the adoption of a client demand approach which would create a demand for advice by farmers, by promoting innovations and providing extension staff able to meet that demand. Small Resource Centres would be established in each district in places frequently visited by farmers and would include housing for all EAs and Area Supervisors (ASs). Training would be provided to EAs.

An Agro-Forestry Research and Development programme would be introduced into MOA's Research Division to develop ecologically sound production systems by establishing a series of research trials and develop an agro-forestry research capability. Trials would assess the performance of potentially useful species of plants, shrubs and trees, and promising results would be demonstrated and tested on farmers' fields.

Conservation Strategy and Policy Coordination. This component would assist MOA in coordinating and monitoring its policies, programmes and projects in the soil and water conservation sub-sector. SWaCAP PC would be responsible for its implementation and a Conservation Task Force (CTF) would be set up.

Expected effects and assumptions

Programme's design implied a number of assumptions including: (i) conservation incentives and crop production recommendations followed by FISC are viable and should form the basis of SWaCAP approach; (ii) incentives in the form of free inputs for conservation practices are sufficient to guarantee sustainable adoption of the practice; (iii) extension contact will be initiated by the farmers and staff role is to ensure that farmers know what MOA has to offer; (iv) gullies (donga) reclamation is an adequate activity in support of the landless; (v) reorganization of extension service around the concept of client demand is feasible; (vi) cooperation and coordination between various departments of MOA and between donors are feasible and forthcoming; (vii) the PC can assist MOA in formulating, coordinating and monitoring conservation policies and programmes. The Appraisal Report (AR) estimated a minimum Internal Economic Rate of Return of 15%, even if any longer term benefits from the introduction of agro-forestry development and national institution-building aspects were excluded. The 15% return was based on increased crop yields (maize and sorghum) from 13 900 ha of land. Yields increase was expected from the combination of soil and water conservation and improved production practices.

Evaluation

An inter-disciplinary Focussed Evaluation Mission (FEM) visited the field for a period of five weeks to assess the achievements and constraints of the programme's soil and water conservation and agro-forestry activities and their effect (and impact so far) on the target groups. Discussions were held with officials from the implementing agencies in the capital and the districts and extensive field visits were made to the four programme districts where interviews were held with farmers, and MOA staff from District Headquarters and Resource Centres (RCs). Interviews for RC staff and farmers were devised and pre-tested before final field use. The FEM visited all RCs and MOA's research sub-stations (where agro-forestry activities are undertaken). In addition to individual and group interviews of farmers in the project area the mission conducted a focussed survey of some Machobane farmers who have been following the system for some years.

Without exception SWaCAP was characterised by very poor collation of field data. Severe deficiencies were encountered with regard to information on input packages promoted by the programme to encourage farmers to participate in conservation-based productive practices; records of the numbers of on-farm trials and demonstration from both cropping and agro-forestry activities; results from crop and AF trials; and the monitoring of irrigation and bee-keeping activities. This, together with the fact that monitoring and internal evaluation of programme promoted activities have been very weak, greatly hampered quantitative assessment of performance.

Implementation context

The implementation of SWaCAP has been adversely affected by some unforeseen factors some of which were beyond the programme's control. Droughts in the late 1980's and mid nineties affected implementation. The Structural Adjustment of the early 1990's implied a significant shift in policy from strong economic control by GOL towards de-regulation, re-orientation of the role of government and reduced public service funding and staffing. The steady decline in morale of the public service and the inability of certain divisions to retain qualified staff led to a deterioration in government's capacity to implement and support the large number of donor projects. Budgetary rationalisation and dwindling migrant remittances from RSA affected counterpart funding and some aspects of programme implementation. Financial mismanagement within SWaCAP led to a suspension of disbursements from IFAD Loan for a period of 18 months. Many key programme staff left and the programme implementation was seriously affected. The reluctance of some departments within MOA to give its full cooperation to the programme has in many instances hampered implementation.

The GOL, IFAD and the Cooperating Institution (UN/OPS) showed very considerable flexibility in their approach to programme implementation. First a drought relief component was incorporated at the request of GOL, second the promotion of the Machobane farming system was agreed to by IFAD and OPS; and third Technical Assistance inputs were increased when it became clear that MOA could not provide technical staff as required.

Project achievements

Overall Objectives. Aside from providing some temporary drought relief there is no evidence that SWaCAP has achieved its ultimate objective of increasing the income and living conditions of its target group and assisting with erosion control. The programme has, however, successfully promoted Machobane farming, an indigenous concept which incorporates cash cropping and elements of more sustainable farming systems, and has provided some basis for a potentially viable Agro-Forestry research capacity, and agronomic research for conservation.

Development and Refinement of Agricultural Innovations. The SWaCAP research sub-component as developed in the AR stated that SWaCAP would develop and refine the crop production recommendations of the FISC project. This was discarded in the early stages of implementaiton as FISC recommendations were found not sustainable and were only acceptable to farmers because they were issued with free inputs. What was being advocated was a relatively high input package with little relevance to farmers in the target group. The main effort of innovation was re-directed to the conservation of water in conjunction with low cost/low input packages (a mix of fertilizers and manure) for resource poor farmers. Through this approach, the programme developed technologies based on the rip-line system of tillage. The period of research, contrary to AR stipulations extended for five years. The MOA/ARD did not allow SWaCAP to set new priorities different from established directions. The divergence of views was not sorted out and ARD's cooperation with SWaCAP remained minimal.

A large number of trial/demonstration work was conducted by SWaCAP the most significant is that of tillage technology. Unfortunately, the reporting of the trials does not do justice to the field work that was conducted and gaps remain with respect to physical details of the trials and farmers' comments and attitudes.

Tillage Technology. Because of the traditional use of the mouldboard plough which inverts the soil sod to the same depth with each cultivation a plough-pan or hardpan had developed at a comparatively shallow depth. The hardpan inhibits moisture penetration and limits the depth to which plant roots are able to penetrate. The hardpan situation was addressed by shallow ripping, incorporation of animal manure into the rip-line to prolong the effect of ripping and encouraging farmers to follow the same rip-lines with each tillage operation. Between 1990 and 1994 trials with the rip-line were implemented in farmers' fields. The results demonstrated that from an agronomic view the rip-line technique and its offshoots represent a superior technology to what the bulk of the farmers were using.

Nevertheless, the FEM found little evidence of substantial use of the rip-line technique amongst farmers despite availability of rippers at the Resource Centres. The FEM's assessment is that while the benefits of the rip-line technology are indisputable given the results of the SWaCAP trials, the use of this tillage practice has been limited due to variations in soil type, unavailability of adequate animal draught power and insufficient extension efforts.

SWaCAP conducted basic fertilizer trials with and without usig the rip-line system. The use of relatively moderate amounts of fertilizer in rip-lines, particularly LAN or dolomite resulted in substantial yield increase and can be potentially, a major break-through. Its limitation is the dependence of low fertilizer inputs on the use of rip-line tillage. If the rip-line technology can be accessed by a significant number of farmers at a reasonable cost SWaCAP research efforts will have a large impact.

Some trials on Vetiver Grass as a biological tool for soil and water conservation were also undertaken but results were not encouraging. No trial work for bana grass as a fodder or as a fodder related to conservation practices were undertaken. The assumption appears to have been made that bana grass is useful and then considerable efforts were made to multiply and distribute it among farmers. As a result, bana grass is now widely distributed throughout the programme area. Its performance has been mixed. Because of its clumpy growth habit, as a soil conservation agent its potential is quite limited, but it has the potential to serve as a useful fodder species in some farming systems. As a result of its widespread distribution by SWaCAP there is now a vast experience with this grass.

Overall, SWaCAP's on-farm research activities did not achieve the programme's objectives of refining and generating conservation-based technologies which could be immediately adopted by its target group. However, some potentially effective technologies based on rip-line tillage were produced. These technologies are limited by a lack of adequate animal draught power and/or heavy soils with a significant plough-pan or hardpan or both. If these problems can be overcome the technologies developed under SWaCAP have the potential to increase yields significantly.

Introduction of Conservation Farming System. Building on the FISC experience, a village by village approach to better conservation practice, was to be adopted stressing the building or repair of conservation structures. Incentives were to take the form of payments of farm inputs or cash, calculated according to stated work norms. During implementation design features were adjusted to fit the concerns of the MOA with more emphasis on vegetation than on structural control. Seven Conservation Incentive Schemes (CIS) packages were developed: (i) countor bund improvement; (ii) donga reclamation; (iii) grazing management; (iv) kraal construction; (v) village nurseries; (vi) water catchments; and (vii) bana grass multiplication. The packages are composed of inputs specifically required for each activity. Only some of these packages were widely distributed through RCs.

It was also soon realized that cash payments in relation to work norms were no longer acceptable to MOA because of unsustainability, and that incentives should comprise only the inputs required for the task. A keystone of the AR's proposal, that is the rewarding of participants in agricultural inputs equivalent in value to conservation work performed was, therefore, disbanded early in the life of the programme. SWaCAP no longer envisaged the intensive, area by area conservation focused programmes which were planned in the AR due to poor response from district and village officials in the Berea district. The extension service had been ill-equipped to undertake such efforts and its reorganisation was taking longer than expected.

Contour Bank Improvement. A large number of contour bank improvement packages were issued. As contour banks were not particularly prevalent in Berea, Leribe or Butha Buthe it is likely that many of the packages were used for purposes other than reclamation/stabilisation of banks. The FEM confirmed that at no RC was the distribution of the packages linked to any conservation activity. Village nurseries were understood to be small private agri-businesses that SWaCAP was capitalising and guaranteeing a market. This lead to confusion about the ownership of the durable equipment (shade cloth, treated poles, watering cans) and the responsibilities for market development. The distinction between the role of government (MOA staff) and that of the private sector (the farmer) was not clear enough. When market support stopped the nurseries collapsed. In addition, SWaCAP's provision of free trees for planting in dongas (or elsewhere) affected a potential market for nurseries dependent upon tree sales. Large amounts of bana grass were distributed mainly for terrace improvement.

Gully (Donga) Reclamation. Dongas are geomorphological features created by the hydrology of the landscape. Unless the hydrology is changed, the processes that created the donga will still function. Therefore, the notion of donga reclamation by building structures (silt traps) or planting trees and grass is rather simplistic. Structures can be washed out in heavy rains and, like other conservation structures, need continual maintenance. Tree planting, without addressing the fundamental causes of donga formation does little to change structural processes. Donga reclamation is almost always beyong the resources and control of individuals as their causes involve the activities of whole communities. Incremental benefits, if at all achievable, have a long gestation. They do not therefore present opportunities for the poor and landless as stipulated at appraisal. If projects are to address donga reclamation or prevention, their intervention must be community-based.

The FEM's investigations indicate that although donga reclamation is a popular concept in the expatriate community, it is not among the Basotho. While the Basotho would like dongas to be stopped or filled in, they are unsure of a successful and feasible technology. FEM found no evidence that packages released for Donga reclamation have had an effect on helping reclaim or prevent donga formation; or have for that matter been indeed used for this purpose. Donga reclamation is hard, recurrent work with no immediate returns and with high possibility of failure. Landless, even after surmounting the tenure obstacle, did not find the venture remunerative. Certainly there are cases of individual reclaiming dongas, but these are farmers with other resources that provide them with a livelihood.

Overall, no evidence was found that CIS increased farm productivity and household income or led to establish conservation as part of the farming system. Inadequate coordination and cooperation between the programme and the extension services, inadequacy of these services, lack of follow-up by EAs on the distributed packages and the suspension of disbursement have had some negative effects on the promotion of conservation-based activities. Nevertheless, programme design has underestimated the complexities and difficulties of identifying suitable interventions which would fit into the farmers'situations. The packages devised under the programme's Conservation Incentive Scheme (CIS) were generally not compatible with farmers' needs and priorities. Gully (donga) reclamation is beyond the resources of the poor while conservation structures were found of limited importance in three of the four programme districts. The nurseries are viable only in rare situations where viable marketing outlets exist within farmers' reach.

Agro-Forestry (AF) Reseach and Development. The output of the AF component is not up to the AR's somewhat ambitious expectations. Delays in rendering the MOA field stations operational for AF research purposes, staff shortages including the failure to appoint assistants for the Afro-Forestry Researcher (AFR) at headquarters level; lack of cooperation, at times, from MOA and a divergence of attention of AFR to the revival of Machobane farming, contributed to the component's inability to reach its stated objectives. However, a good basis for AF research has been established. Its sustainability hinges on AF research establishing a niche within the Agriculture Research Division (ARD). The sustainability of AF research relates to the whole issue of an appropriate organisation and approach within the currently demoralised ARD.

While below appraisal stipulation, good effort has gone into testing and promoting AF technologies on farmers' fields and later on-station. Trials encompassed screening of Multi Purpose Trees, inter-crop orchard, forage/fodder alleys and variety trials. However, the failure of the AF component to clearly colate and report the findings of its on-station and on-farm trials and demonstrations, be it in an interim or final form, is a major shortcoming. It is critical that a thorough assessment of all AF experience, based on this data, is undertaken before the programme is terminated. To date, agro-forestry results have not been integrated within the extension system.

The AF component's main attention was focussed on the promotion of Machobane farming from 1991 onwards with the explicit consent of OPS and IFAD and, over the years, with tacit agreement from MOA. An AF Network was established with support from SWaCAP, which is a good achievement in cooperation to share (and, to a degree, generate) knowledge between GOL, donors and NGOs.

Re-Organisation of Extension. Almost all infrastructure stipulated (RCs) has been completed. Currently many RCs suffer from theft of equipment and not all EAs reside there. The complexity of formulating and implementing a full re-organization of the extension system was grossly under-estimated. The concept of a service based on client demand using a radically re-structured extension system proved a major undertaking. The processes needed to implement such changes are time consuming and require a major shift in attitude on the part of both extension workers and the MOA hierarchy. Support from MOA was modest partly because it was being subjected to pressure by other donors advocating and implementing other extension methodologies. The refusal by GOL to appoint Area Supervisors (ASs), a key element in the SWaCAP promoted system, is one indication of the MOA's less than whole hearted support. The multi-purpose extension approach advocated at appraisal has not been effectively installed at RC level. Many EAs, despite their training as generalist, still function within their original discipline and the absence of ASs confuses programme set up and reporting system.

"Client Demand" seems to have been interpreted as an approach which makes farmers more aware of what is available through the EAs who wait at the RCs for the farmers to approach them. This has not worked to farmers' advantage particularly the poor. Closer and more frequent interaction between farmers and MOA staff, outside the RCs, is needed to determine what the farmers real needs are before programmes are developed and advice is offered. On balance the RC concept, with local adjustments as necessary, is an improvement over the previous system of spreading EAs in villages. The potential for better communication and coordination between EAs is much higher and training by Subject Matter Specialists in RCs is more cost efficient than EAs going to district centres. As a training facility for local farmers RCs is a positive contribution and probably the main benefit of SWaCAP's intervention with regard to RC extension so far.

Drought Relief. IFAD'S financing of drought relief operations represented a one-off intervention which was justified given the dire situation in Lesotho at that time. SWaCAP's active involvement was effective in implementing the input package activities and facilitating the provision of borewells for potable water. In addition, it activated the bee-keeping activity and started the pilot irrigation schemes. The last two activities have been shown to have potential for expansion.

The Machobane Farming System (MFS). The MFS activity was not included in SWaCAP's project design but arose through the interest and efforts of the programmes' AFR. Dr. J.J. Machobane (a Masotho) developed his farming system during the 1950's on his own farm. The technical parameters upon which the system is based are: (i) intensive inter-cropping by growing several crops simultaneously or in relay in the same field; (ii) adequate soil fertility and moisture retention capacity is achieved through localised placement of ash (household waste) and manure, combined with adequate weeding; (iii) ash and manure produced by a typical family is sufficient for one acre of land using localised techniques; (iv) one acre of land is sufficient to grow enough, for home consumption and sale; and (v) intensive cropping on the above basis offers a further, synergistic means of enhancing soil and moisture conservation and reducing income fluctuations.

The Machobane approach embodies an ideological framework for the development of endogenous capabilities, in which natural resource development and people's attitudes are inter -dependent. It emphasises self-reliance, hard work, dedication and a willingness by participants to train other farmers in adopting the system (farmers to farmers extension). In essence Machobane's approach requires participants to act as voluntary extension agents.

SWaCAP's AFR persuaded Dr Machobane to become involved in reinstating MFS. A small amount of SWaCAP funds was used to test and promote the MFS. Detailed recordings of input/output data for one year (91/92) were taken and gross margin analyses conducted on the resultant data. The outputs of the MFS were reportedly superior to mono-cropped fields. Between 1991/92 and 1996/97 the number of farmers using the Machobane system increased from 22 to 1 998 a ninety fold increase. By 1996 growers did not receive subsidies of any kind aside from free training.

The Focussed Survey undertaken by FEM on established Machobane farms suggests a population that is not typical of rural Lesotho. The farmers engaged in the system were older people with grown children and access to means of production which reflect the first generation of Machobane followers. Most of the farmers interviewed lived in areas with relatively good roads and a landscape where scotch carts could be used. Strict Machobane farming uses no mechanical implements at all - hand labour and hand tools are advocated for every operation. However, all of the farmers used either an ox-drawn plough or a tractor to till their fields. Half of the Machobane farmers only weeded by hand, the other half used an ox-drawn cultivator for between row weeding. Almost all farmers had access to free kraal manure. Labour requirements in Machobane fields were higher mainly because potatoes, a more labour intensive crop, were grown; manure and ashes (which are bulky) had to be transported to the field; and mechanical cultivation and weeding was difficult because of less space between rows of crops. Combined returns of the Machobane field is by far higher than returns of any mono cropping activity. Constraints are mainly labour availability and marketing of crops. Other less endowed farms, of more recent followers, practiced simple versions of Machobane but higher returns were always reported.

Conservation Strategy and Policy Coordination. Very little progress has been achieved under this component and the situation remains virtually unchanged since the MTR of 1993 and its assessment remains valid. Liaison between the programme and the Conservation Section of the MOA Planning Division has been limited, and there is little evidence of national monitoring or reporting on the conservation sector. Many of the shortcomings in implementation of this component stem from the difficult experience of the CTF, the limited time devoted by the PC, and lack of cooperation between MOA Departments. The fact that the programme has been put under the DEM has, to some extent, alianated other departments within MOA, whose cooperation is crucial in the success of this component and indeed of all others.

Effects assessment and sustainability

The Farming Communities. FEM could not establish significant or sustainable effects of conservation activities by its users. The records that were kept were not consistent from RC to RC. To the extent that these sources are reliable, most CIS activities appeared to have affected only a few people at each RC. Fodder grass seed distribution was the exception. This result was confirmed during FEM interviews with farmers (individually and in groups) as well as with MOA's staff. The CIS packages did not function as envisaged. Both the AR and the designer of the CIS considered the incentives (commodities and initially cash) to be payment for tasks performed. For the most part those implementing the project delinked the incentives from the task to be performed and transformed the incentives into promotion packages (mostly fodder) run under client demand concepts. Seeds or planting materials were announced at meetings, pitsos and on the radio, and were issued equally to all clients who showed interest. The activities for which the packages were supposed to be used were not systematically verified and followed up by extension staff. SWaCAP became identified with the provision of "free" inputs rather than the intended conservation message.

As a result, the project affected people's outlook, with regard to externally funded intervetion. It has confirmed the impression that projects and foreigners hand out things for free wihtout any obligation on the part of the recipient. More than one government official characterized SWaCAP as an entity that "spoiled the farmers" by "giving away too much for free". This attitude was also reflected in the group interviews conducted by the FEM, when expectations for continued free inputs was invariably expressed. FEM found no evidence that soil and water conservation measures promoted by SWaCAP, effected farmers income or household food security, The packages devised under the CIS were generally not compatible with farmers' needs or priorities. Nowhere in SWaCAP promotion/extension strategy was the conservation message clearly related to increments in production.

Among on-farm research efforts by SWaCAP the rip-line technologies and better dessimination have the best potential to impact a large number of farmers provided the problem of insufficient draught power are solved. So far, however, its actual effects and impact on farmers has been slight. Direct impact on Agro-Forestry trials have so far been insignificant.

The FEM concluded that it is the "progressive farmers" who have mostly taken advantage of the innovations associated with "free" inputs. The participation of progressive farmers has been reinforced by the extension staff as they focused the innovations on their known clients. Recipients of SWaCAP services were predominantly middle-aged, male-headed households with above average material resources, income and familiarity with the extension system. By and large, the target group, the rural poor, has received little benefit. Many participants have abandoned SWaCAP supported activities following receipt of free inputs. Significantly, the FEM could not find any evidence of the spread of activities due to farmer-to-farmer interaction in obvious contrast with the Machobane practice.

The introduction of Machobane farming system has had so far the highest impact on rural household with 2 000 practising farm families. The "selling point" of the Machobane philosophy is self-help, complemented by the need for very few, if any, cash inputs which allows participants to produce food for consumption and an output (potato, bean) for sale. The MFS, in the various forms, has the potential to allow access to a multitude of farmers that were previously shut out of the cash economy. It is probable that the re-establishment of Machobane farming will be SWaCAP's main legacy.

Drought Relief. Undoubtedly the 4 000 maize seed and fertilizer packages made available to farmers have had some positive affects on production compared to drought affected yields. Promotion of bee-keeping and small scale irrigation is at a relatively early stage so impact on production, to date, is limited but quite promising.

Targeting. The objective of targeting the poor has been frustrated throughout the project's duration by a failure to define the poor. A series of studies and workshops were unable to clarify the very general definition of the Appraisal Report. The responsibility for defining the poor was relegated to extension staff at each RC. Shortage of staff and other logistical problems made this task an unwelcome additional burden. Some staff of RCs and community leaders believe that most Basotho are poor, therefore most residents of the project area are within the target group. Others with a more critical view found great difficulty in discriminating at the point of delivery. They observed that tension can easily be created or enhanced by giving opportunities selectively. A common social concern is that to be labelled "poor" is a stigma; it is therefore distasteful for MOA staff to seek out the rural poor.

No provision was made in the design for activities which would reach women or female-headed households exclusively on the assumption that they represent the majority of poor rural households. This assumption may become increasingly invalid with the return of mineworkers from South Africa and decreasing possibilities of new entrants in RSA labour market. Two project components clearly restricted to the poor were not implemented; cash payment for work on conservation structures and donga reclamation for landless people. Drought relief was administered to the needy, but determination of the needy in time of drought may be even more problematic.

Field investigation by the FEM led it to conclude that SWaCAP activities have reached only a very small section of the intended target group. A survey undertaken by SWaCAP in 1995 gives further support to this finding despite some obvious statistical bias. In a sample of 189 households in the project area only 46% were found to have benefitted to any degree from SWaCAP intervention (of which 23% refer to Machobane farmers). If statistical bias are eliminated, this ratio decreases to about 14%, which indicate overall a very modest achievement in reaching the poor.

Participation was to have been achieved through the development of a structure based upon representatives of farmers being selected as Village Technicians (VTs), participation in on-farm agricultural trials ad demonstrations, and the promotion of share cropping arrangements between landless and households short of labour. Some VTs were selected and trained, but a coherent system of VTs was never developed. Agricultural trials and demonstrations were implemented on farmers' fields but these have not been consulted on the choice of these trials. Instead of the development of a two-way dialogue, emphasis seems to have been placed on stimulating client demand for packages and technologies developed by SWaCAP. Pitsos were held to inform people of project components and activities. Information about agricultural technologies and CIS packages also appeared on farm radio programs and in farmer publications. The Agricultural Show in Maseru promoted the use of the ripper. Beneficiary participation became synonymous with enhancing demand for SWaCAP inputs and services rather than providing what is demanded by farmers.

Institution Building: Agro-forestry Research Capacity. Despite earlier reluctance by MOA the AF concept has now been accepted by the ARD. The concept of AF is now entrenched within AF field station staff but to a much lower extent within the extension service. An AF capacity, although not up to AR expectations, has been developed within the ARD. The infrastructure improvements to the existing ARD research sub-stations represent a physical strengthening to ARD's capacity. For the AF activities initiated under the AF component to be sustained and increased further support, be it from normal GOL sources or donors, will be necessary.

On-farm Research. Due to the inability of SWaCAP and ARD to effectively cooperate, the impact of SWaCAP's research sub-component on MOA as an institution has been disappointing. The formation of the FSRU involved some input from SWaCAP. Recently a growing concensus has been emerging within MOA that agricultural research - including forestry, AF and conservation - needs to be better coordinated and focused on real farming needs. SWaCAP's AFR has been instrumental in advocating a coordinated research approach.

Extension. The construction of RCs has given the extension system in four districts a better base to work from, particularly with regard to farmer training. The "generalist" skills of some 90 field staff have been improved, to some degree, through training. However the system currently used is not working effectively on the principle of using multi-purpose extension agents. The FEM's conclusion is that, given more direction and support, the system proposed by SWaCAP can be acceptable to the bulk of the MOA's field staff. For the system to work and be sustainable, commitment by MOA at headquarters and district level is essential. Lack of such commitment has been a major factor preventing implementation of the "Client Demand" extension to be sustained. Adequately trained and remunerated ASs, with sufficient authority, will need to be appointed and staffing levels will need to be raised. Above all, support for the system at district level will need to be assured.

Main issues and recommendations

More weight should be given to detailed analyses of farmers resources, needs, priorities and perceptions of soil and water conservation in project design. Detailed interaction with implementing agencies at all levels is an obvious requirement. Participation by the target group and the on-the-ground implementers during design and implementation would allow tentative ideas conceived elsewhere to be radically changed by local discussion. Pre-conceived notions may be rejected completely, and widely held beliefs challenged. It is less costly to change plans and readjust design than to change or try to salvage a project with major problems.

The issue of effective cooperation betweeen the parent agency and donor projects or programmes arose with all SWaCAP components. Donor-supported activities should complement or supplement, under an atmosphere of mutual agreement, existing agency activities. The donors role, aside from providing funds, is to provide assistance with implementation (if necessary) while at the same time assuring that its specific interests (agreed to by both parties prior to implementation) are protected. The donor should not be felt as the dominant partner.

IFAD should take steps, drastic if necessary, to ensure that reporting by the project and the implementing agencies is adequate to take advantage of on-going implementation experience as well as extract maximum information from research/demonstration activities. If there is an identified need of external assistance with reporting the donor should ensure that this is provided. During the final phase of SWaCAP, specific studies (detailed in the main report page 73-76) to analyse programmes experiences should be undertaken. The evaluation feels that it is critical that the studies be conducted while SWaCAP staff are still available for consultation and while the programme's interventions are still remembered by farmers.

The MOA is in the process of formulting an appropriate extension approach for Lesotho. On the assumption that a multi-purpose extension force will form the basis of future extension methodology the evaluation recommends that future intervention considers: (a) appropriate measures (with regard to supervision, staff levels, staff training and operating means) to support an effective multi-purpose extension system based on genuine "client demand"; (b) the concept of RCs should be revisited prior to further duplication and criteria of choice of location be adjusted with provisions for on-farm follow-up by EA; and (c) the concept of client demand should equally be revised to include a two way approach to taping this demand from the inception of project.

At the RC levels the following steps should be taken: (i) experienced and adequately remunerated ASs with sufficient administrative authority would need to be appointed; (ii) a core of staff would need to be stationed at each RC; (iii) a concerted, intensive effort of training based on real needs would have to be conducted to allow EAs to function confidently as genuine multi-purpose agents; (iv) effective lines of communication would have to be reinforced between the Extension Assistants ASs and SMSs Districts ; and (v) adequate means for the EA to function, including access to transport would need to be provided.

IFAD should extend further suppport to adaptive research pending on MOA completely re-orientating and re-organizing its research structure. Realistically salary levels in ARD would have to be raised if they are to become competitive with alternative sources of employment. The time is currently ripe for agricultural research in Lesotho to be rationalised and more emphasis given on to a Farm Systems Approach. It is recommended that IFAD should assist, through SWaCAP funds if available, in this process. Two workshops would be needed. The first, involving farmers, government, donors, NGOs and other interested agencies, should assess, define and prioritise farmers' needs. On the basis of this effort, a second workshop involving the same participants should devise the outline for future agricultural research directions, priorities and methodologies.

Data from AF components' on-station and on-farm trials/demonstrations should be compiled and assessed prior to the closure of the project. If necessary, assistance should be given to SWaCAP to carry out this task. It is recommended that the assessment of results be considered a priority. Steps should be taken to consolidate the position of AF within Lesotho's research establishment. For the incorporation of AF in ARD to have any real relevance the ARD's research priorities and approaches will need to be thoroughly re-assessed along the lines suggested in para. 57.

With regard to on-going SWaCAP research activities the following recommendations are made: (i) SWaCAP should complete and strengthen its provision of infrastructure for ARD's research sub-stations regardless of how these facilities are used; (ii) an effort should be made during the final stages of SWaCAP to intensively train its TOs in AF research techniques without jeopardising on-going activities; (iii) a consultancy on the rural communities' perception of AF is recommended; and (iv) The IFAD-supported Sustainable Mountain Area Agriculture Development Programme (under design) should incorporate AF research and, provided the GOL undertakes comprehensive review of its agricultural research agenda, IFAD should continue to support AF research initiated by SWaCAP within and outside the mountain environment.

A detailed field study, using a practically-oriented agronomist and a sociologist familiar with Lesotho conditions, should be undertaken to investigate thoroughly over a number of years the yield response of rip-line technologies developed under SWaCAP over various soil charactristics and socio-economic conditions. The purpose is to precisely determine the causes for the current non-adoption by farmers and device solutions.

Small enterprise development (e.g. private nurseries) must observe appropriate forward and backward linkages and business principles. Equipment or start-up materials must be understood to be a loan and not a gift, with a clear understandings of expected repayment/return. Those who agree to enter a business must be assisted initially with training, identification of markets, connecting with it, effecting sales and keeping track of costs. They should be capable to sustain such activities without further intervention. Continuous dependence on a project entity or government is self-defeating.

There is a urgent need for objective soil erosion research. Donga prevention and control would benefit from an understanding of the role of the geomorphological and hydrological processes in their formation. A serious effort should be made to collect quantitative data which can support or refute many of the standard beliefs about gully origin, growth and control. This can only be a long-term project, since erosion processes occur over time.

As with all SWaCAP-supported activities, the programmes' experiences with both bee-keeping and small-scale irrigation should be carefully documented and detailed financial analyses provided for both enterprises. Small-scale irrigation, particularly, is an area that future projects should consider. Careful investigation and planning is necessary to assure that the water supply is adequate, the potential participants are suitable and that sufficient technical advice is available.

The MFS concept needs support. Given the current situation with regard to MOA perception of the concept and its research capacity, support to the Machobane Foundation would be the most effective way of investigating and supporting the MFS. Regardless of whether IFAD and/or other donors chose to support the foundation the following is required: (i) detailed cost/benefit studies of the MFS over a number of years including input, price, marketing implication of soil erosion and pest control; (ii) MOA should officially recognise the MFS concept as an alternative to current inorganic fertiliser-based systems and integrate into its extension system; and (iii) the MFS is a concept based on the re-cycling of organic materials and synergy between intercrops/relay crops, which in terms of crops grown and methods already has many variations. Formal studies into the multitude of practices that could be used within the MFS concept (for example shallow ripping, deep ripping) should be undertaken.

Lessons learned

The SWaCAP design was largely based on the seemingly successful experience of another donor in conservation activities. During implementation a change in course had to be effected. Replication of Donors' successful interventions, particularly in complex fields like soil and water conservation should be encouraged. To be viable, however, such replication should be done only following a thorough evaluation of these experiences which assesses farmers' acceptability and the specific conditions under which such experience appeared to be valid.

Extension Strategies based on Client Demand can easily run the risk of becoming Supply Driven. It is inadequate to assume that the resource poor farmers will take the initiatives of visiting frequently Resource Centres to pick and choose from available technological options. This behaviour can be typically expected from progressive farmers. A two ways interaction is indispensable when dealing with poor farmers. Extensionists should contact farmers in location and motivate them to visit and use the Centres' facilities. Centre visits, per se, are no guarantee for adoption. Researchers have to learn to develop their trials programmes with the farmers so that ultimate extension advice and options offered are pertinent. Stimulating client demand for packages and technologies developed in isolation of users socio-economic context is a supply based strategy. Genuine "Client Demand" necessitates a clear understanding by implementing agencies of their customers real needs; before options are developed and offered.

In the context of conservation activities incentives should be distinguished from subsidies. Incentives are measures to motivate or stimulate an individual to act in a certain way/adopt a certain practice. A subsidy is a payment (in cash or kind) provided to reduce the cost/raise the returns of an activity. Subsidies are often used, as in the case of SWaCAP, to reduce the cost of a number of conservation activities for the farmers. When subsidies were discontinued practices too were discontinued. Incentives on the other hand relate to the direct benefit resulting from practicing a specific activity (increment in production in the case of conservation). If this benefit is sustainable so will be the practice. Subsidies can be construed as incentives if production increases from conservation are delayed for some time, due to the nature of the activity, and farmers have no means to bear the loss incurred over this period. In such a case, the subsidy should be categorically related to losses incurred and phased out over time in proportion to production increase/decrease in losses.

The fast adoption of the Machobane farming system by a large number of farmers flies in the face of donors' attempts to integrate conservation methods into farmers' regular practices. While several interpretations can be advanced, the single most important factor is that the system offers farmers, within one season of adoption, what seems to be a sustainable increase in net income from a cash/food crop. Simultaneously, increments in food supply and net income for the rural household are realized. These incentives are sufficiently attractive that farmers are willing to invest their time, despite scarcity of labour to train other farmers willing to adopt the system. The level of financial input of this technology, the dedication of its promoters and the fact that its success is demonstrated by other farmers in the communities are also important. Promoters of conservation techniques have to remember that as long as the practice itself does not result in a quick felt benefit to the poor farmer, adoption will not take place. This basic and simple economic fact is most often overlooked by donors and governments alike.

Experiences

SWaCAP clearly illustrates the need for adequate consultation between beneficiaries, implementing agencies and donors. Because the interventions promoting conservation-based agricultural production were not seen as attractive by farmers they had little impact. Regardless of pressure from donors and/or government to proceed quickly to implementation, focused studies,which identify the needs and priorities of the beneficiaries and assess the capabilities of the implementing agencies, should be formalised as a routine procedure between inception and formulation phases in project design. During implementation interactions with beneficiaries for feedback on project interventions should be done on a continuous basis.

The complexities of formulating and implementing major changes to bureaucratic government organisations (the MOA's extension system in the case of SWaCAP), whose key players are likely to have their own agendas often driven by donors' conflicting approaches, should not be under-estimated. If, after all avenues are explored, agreement cannot be reached with governments or is only grudgingly given, donors may be better off abandoning the intervention.

IFAD, regardless of pressure to disburse funds, should be prepared to take action if critical Loan Agreement conditions are not met, in the interests of the programmes or projects. Had more pressure been exerted by IFAD on MOA to appoint ASs the re-organisation of the extension service is likely to have been considerably more advanced. Similarly if the AF and on-farm research components had been forced to report their work properly comprehensive trial results might now be available. IFAD's failure, despite repeated demands by OPS for better reporting, to take action be it sanctions or direct assistance with reporting, has been unfortunate.

Supervision missions are likely to benefit from periodical changes (or addition) to the composition of their team members to include disciplines pertinent to the problem at hand. Neither the OPS missions or the MTR recognised the weaknesses inherent in the CIS proposals.

Gullies result for actions and practices undertaken by the rural community as a whole. The reclamation of dongas or the prevention of their formation must therefore be addressed by communities with appropriate government guidance. Effective attention to dongas is beyond the resources and control of a single individual.

There is a need for a financial analysis to validate any technical options for farmers' point of view.. None of the on-farm research recommendations or the activities relating to the CIS packages were financially analysed. Had the viability of village nurseries and reclamation of dongas been analysed, these activities would not have been undertaken in the forms in which they were implemented.

Enough time should be allowed for on-farm research. SWaCAP's initial intention of "refining" FISC findings over one season was unrealistic. The bulk of the programme's research activities spaned over four years - this represents a minimum time-frame. The programme would have benefited from a further period of focused investigations to fine-tune findings.

Targeting should be accomplished through project activities and in close consultation with the community rather than through assessment of an individual's socio-economic status. Targets should involve identifying a group or communities worthy of assistance, working with them to assess needs, and then designing a project to fill those needs. The nature of the project would limit potential beneficiaries outside the target group (self-targeting activities).

 

LANGUAGES: English

Smallholder Support Project in Zanzibar (1997)

Tanzania  
September 1997

Interim evaluation

Purpose and objectives of the evaluation

The overall aim of the evaluation was to review the implementation performance of those IFAD-financed projects in Tanzania containing rural financial services/credit (RFS/C) components, and to draw up recommendations and lessons learned based on the evaluation for IFAD's future RFS/C operations in Tanzania and elsewhere. As a result, the evaluation focused on three projects/ from IFAD's overall project portfolio in Tanzania. The evaluation also took stock of the evolving structural changes in the economy of the country, which has embarked on liberalisation programmes aimed also at reducing the role of the government in economic activity, while simultaneously encouraging private sector-led development. The evaluation exercise was timely given that IFAD is in the early stages of designing a new project in Tanzania with a RFS/C element.

Country background

The islands of Zanzibar, Pemba and Mafia together with the mainland comprise the United Republic of Tanzania. The total land area of the country is 883,749 km2. The population as of mid-1996 was 30.6 million, with Dar es Salaam being the city with the largest population (around 1.4 million people). The climate is tropical on the coast, and semi-temperate inland. The country gained full independence in December 1961.

From independence till around the mid-1970s, the annual Gross Domestic Product (GDP) growth averaged 4.7%. After the mid-1970s due to a series of factors, the economy started to stagnate. However, the government persisted with its economic policies implemented since independence, based on the socialist system of government, including control and direct state intervention and investments in all sectors. By mid-1980s, the country suffered serious macroeconomic imbalances, including high inflation, persistent government budget deficits, declining per capita income and generally a very poor state of the economy. The consequences were many, most visible of them being wide-spread and acute poverty. Tanzania was obliged to seek external assistance. In 1986 it embarked on structural adjustment efforts and borrowed from the International Monetary Fund (IMF) to support economic recovery programmes, whose thrust was to implement a transition from state-control and central planning to reliance upon market forces and private initiative. Reforms included the civil service, financial sector, parastatals and the introduction of multiparty politics.

Economic performance over the reform period has been mixed. According to 1985 base figures, the average annual growth rate was 3.8% over the four years to 1995. This puts increases in real GDP marginally ahead of the population growth rate, but real income per head has been growing by less than a percentage point annually. External assistance and foreign earnings from export recovery allowed imports to recover well. But the fiscal deficit and inflationary pressure have persisted. The current account balance has remained weak. Agriculture is the principal determinant of overall growth. The sector has grown more or less in step with the rest of the economy over the past decade and its share in total value-added has remained close to 55%. Recorded manufacturing growth has been poor - in 1995 real manufacturing value added was 13% down on 1990. Mining more than tripled its contribution between 1990 and 1995, averaging 27% annual growth in real terms. Tourism is making an increased contribution to GDP. However, after nearly a decade of more or less continuous structural reform, Tanzania continues to be among the most aid-dependent states in Africa and receives some USD 1 billion gross in development assistance annually, upon which economic recovery is almost totally dependent. The long-term policy goal is to ease this dependence.

The financial sector and institutional setting

For most of the period since independence the Tanzanian financial sector was mainly government-owned with pervasive government interference in the financial system. Credit was directed on the basis of government priorities without regard to credit-worthiness, and banks were convenient agents of fiscal policy. The system allowed a single institution to have virtual monopoly in its functional area: the state owned National Bank of Commerce (NBC) monopolised commercial banking in Tanzania. Government restrictions on entry as well as sectoral and functional specialisation reduced competitive pressure. As a result competition has largely been absent. The financial system was also characterised by weak banking supervision. Each institution was governed by its own stature and the Bank of Tanzania's (BOT) supervisory role had been limited. Finally, the environment in which the formal financial institutions operated was also regulated by the state. Credit was allocated administratively by the BOT which established legal ceiling in bank lending and deposits in addition to regulating interest rules. In the prevailing environment, the financial sector's performance was very poor. Savings mobilisation was neglected. Loans to parastatals increased, and no pressure was applied on borrowers to repay their loans. The Government of Tanzania's (GOT) policies resulted in over-staffed and inefficient banks. These loan policies led in 1988 to 70% of NBC's loan portfolio to be in arrears and 95% of this was accounted for by parastatals. The Cooperative Rural Development Bank's (CRDB) rural sector loan portfolio was no better, with 66% of its loan portfolio in arrears as of end 1988. With a non-performing loan portfolio and unable to attract deposits, the formal financial sector was bankrupt, and dependent on financing from the GOT.

GOT reformed the financial sector in 1991 and established the Banking and Financial Institutions Act. Banks were restructured and many of them privatised. Interest rates were also liberalised, and financial operations were to be conducted on a more commercial basis. Along with banking de-regulation, the Cooperative's Act of 1991 was passed which authorised the re-structuring of the Cooperative movement and permitted the establishment of the Savings and Credit Cooperatives (SACCOs). Non-Governmental Organisations (NGOs) also started micro-credit operations in Tanzania. Currently, NGO's are financing approximately 18,000 micro-entrepreneurs. The two largest programmes are run by Pride Africa, with 9,000 members and Juhudiya Akina Mama Scheme managed by MEDA, with 4,000 members.

The legal and regulatory framework

The Banking and Financial Institutions Act of 1991 vested powers on licensing, supervision and regulation of banks and financial institution on the BOT. These powers are further consolidated under the 1995 BOT Act. Hence, BOT are responsible for regulation and supervision of formal financial institutions, including community and cooperative banks. However, supervision and regulation of SACCOs is the responsibility of the Registrar for Cooperatives, who operates through the Regional and District Cooperative Departments. These Departments have very low capacity to undertake such tasks, part of the problem being that they are very much under-funded, and lack equipment and transport to implement their functions satisfactorily. This has resulted in poor supervision, including weak accounting and monitoring standards.

Project implementation

Summary

Based on the objectives of the evaluation, only the implementation performance of the RFS/C components and related issues was reviewed. The credit components in all three projects under consideration were difficult to implement. This is due to a series of inter-related shortcomings: (a) inadequate government policies, including a history of directed credit; (b) lack of appropriate management and capability of the banks involved in credit operations, reflected in low professional competence and skills, inappropriate accounting and financial procedures and limited monitoring/supervisory capability; (c) overall mismanagement, high transaction costs, large non-performing loan portfolios, which contributed to liquidity problems; (d) nearly non-existent links with grassroots level, thus making credit uptake by IFAD's target group extremely difficult; and (e) slow ongoing restructuring of the concerned financial institutions and operating environment. With the overall banking system functioning below par, only a small fraction of credit funds have been utilised (for the three projects jointly, only 6 percent of envisaged credit funds have been disbursed). The three main lending institutions in Tanzania have a poor track record in general, especially in rural credit operations: (i) the CRDB was restructured in 1996 and it is now operating as a commercial bank. Following its restructuring, the bank has not been active in rural lending, although there seems to be an interest on its part to participate in micro/rural credit, mainly as a profit-making bank; (ii) the NBC has been restructured leading to the creation of a National Microfinance Bank (NMB); and (iii) the Peoples Bank in Zanzibar (PBZ) is undergoing reform in order to make its operations more responsive to the needs of micro-borrowers. However, the emergence of national banks and commercial banks in the microfinance sector is constrained by a lack of expertise in microfinance, banking regulations with respect to collateral requirements, a legal system and credit culture that do not support repayment, and the concern with profitability of a retail operation which relies on small amounts, and in many cases, low volume.

To boost its credit operations, IFAD, in close consultation and cooperation with the government, embarked on alternative arrangements for providing credit to members of IFAD's target group, which involved the use and promotion of grassroots level institutions. More specifically, under the Smallholder Development Project for Marginal Areas (SDPMA), a pilot activity involving the formation and training of SACCOs started in June 1996. SACCOs are a very simple form of financial institution, which fit well with the socio-economic milieu of the rural poor and the poor community as a whole. Hence, they are better placed to innovate and develop indigenous financial products relevant to the communities they serve.

With their emphasis on lending, mobilising savings and management at local level, SACCOs appear to be a very promising mechanism for delivery of financial services to the rural poor throughout the country. In view of their proximity to their clients, the operating and transaction costs of SACCOs are relatively low. Further, being organisations formed by beneficiaries themselves, the latter feel a sense of ownership in their respective SACCO and, hence, ensure that operations are conducted according to established criteria and procedures - this has resulted in more effective operations mirrored also in reduced risks in lending and repayments. Finally, SACCOs are democratic institutions where members have a voice in the policies of the SACCO, particularly regarding the setting of interest rates on savings/loans. In all, more than 100 SACCOs have since been formed in the area where the Southern Highlands Extension and Rural Financial Services Project (SHERFSP) is operating, and they appear to be performing well. Several of these SACCOs have operated under the project. In Zanzibar around 40 SACCOs have been registered, although none participated in the Smallholder Support Project in Zanzibar (SSPZ).

Smallholder development project for marginal areas (SDPMA)

Under this project, the first loans were not made till 1992, when a total of Tshs 38 million were initially provided to the CRDB for onlending. However, only Tshs 9.48 million were provided as loans to 147 participants in the Bahi rice irrigation sub-project in Dodoma region. Borrowers were unsatisfied with the loan product, as CRDB provided a twelve month "bullet" loan, with principal and interest repayable as lump sum at maturity. The cash cycle of the loan did not follow the cash cycle of the crop planted. Savings mobilisation was very low and interest rates charged were commercial rates, which was unrealistic also in view of the type of activities the credit was intended to support. Loan supervision and monitoring was very weak, contributing also to low repayment rates, which were around 67.5%. Further, CRDB credit modalities changed during project implementation confusing clients and discouraging potential beneficiaries. In view of the shortcomings with its initial credit operations, in 1994-95 CRDB used a different method for lending, that is the group lending approach. For this purpose, CRDB used the cooperatives as a loan distribution tool to farmers. The cooperatives were responsible for approving each member's loan, and for this an agricultural officer would visit each site to review individual borrower's activities. Once more, CRDB offered a single loan product; a twelve-month "bullet" loan, with principal and interest payable at loan maturity. In this round of operations, a total of Tshs 8.9 million was disbursed. However, no principal repayments have been received due to several factors including: late rains and hence poor harvest; cooperatives selected for loan distribution were newly formed following the Cooperatives Act of 1991 and lacked cohesion and commitment; CRDB staff were not aware fully of the composition of members of the cooperatives; and a pervasive lack of credit culture.

Given its overall poor performance, CRDB withdrew from the project in 1996, and SACCOs were used from this point to channel SDPMA's credit for the remaining period of implementation. SACCOs provided a better opportunity for promoting rural financial services, also because transaction costs were much lower and savings mobilisation improved. In this setting, loan size and repayment terms were linked to the type of activity financed, and no downpayment was required for loan uptake.

Smallholder support project in Zanzibar (SSPZ)

The credit component under this project was not implemented till February 1996, even if the project was declared effective in March 1991. This was because the Peoples Bank in Zanzibar (PBZ), the institution selected for channelling the credit, did not comply with the conditionality of IFAD's credit line, namely the provision of audited financial statements, achievement of a debt-equity ratio of 5 to 1, and a profit on loans of at least 1 percent. Around end 1995, PBZ initiated a major operational and organisational restructuring exercise to streamline its activities, a process which was still underway during the evaluation mission. Anyhow, PBZ did ultimately become operational under the SSPZ but has only made 20 loans amounting to USD 50,000. Repayment rates in mid-1997 was a mere 35 percent. The credit programme is obviously not cost-effective, also because the cost of lending was around Tsh 1.20 to every Tsh 1.0 lent. PBZ did not have sufficient capacity to handle such a credit line. Staff skills were inadequate, loans were often advanced without appraising the activity for which credit was demanded, savings mobilisation was nearly nil, loan monitoring and supervision were sub-standard, and recovery rates were exceedingly below acceptable levels. Additionally, the loan application process was lengthy, repayment terms considered harsh and loan ceilings regarded too low (only two types of loans were permitted: a short-term working capital loan up to USD 100 was to be made available to individuals and a medium-term loan of up to USD 1500 could be made to groups of USD 300 to individuals). Finally, political interference in the loan approval process also created further difficulties in implementation.

Southern Highlands Extension and Rural Financial Services Project (SHERFS)

At appraisal, the project envisaged a double track approach to rural financial services: (a) loans would be made through CRDB under the direction of the Ministry of Agriculture and Cooperatives (MOAC); and (b) the Ministry of Community Development, Women and Children (MCDWC) would provide institutional facilities for the formation of groups to mobilise savings.

As far as implementation is concerned no loans were made through the formal banking system. CRDB withdrew from the project and the subsequent subsidiary loan agreement signed with the NBC did not materialise, because of NBC's restructuring, which is still underway. However, in order to prevent a total failure of the credit activities, the Project Coordination Unit (PCU) undertook the CRDB function by recruiting four credit officers (COs) and one Loan Accounting Officer (LAO), and initiated its operations in October 1995, under what was known as the Pilot Credit Scheme. The COs were posted at the regional headquarters of the project area, whereas the LAO was posted at the PCU in Mbeya. Regional loan committees were established to scrutinise all loan applications. To initiate the flow of credit, an initial USD 100.000 (Tshs 61.3 million) was provided to PCU's Credit Management Unit (CMU), which received initially 1150 applications for input loans by November 1995. Disbursements were made to 194 informal farmer groups in kind, in the form of input packages for one acre (fertiliser, improved seeds and agro-chemicals) in all four regions (Mbeya, Iringa, Rukwa and Ruvuma) of the project.

Repayment rates are good and are over 90%. The loans being repaid were relent to 199 groups in 1996/97. The cost of lending was Tsh 0.65 per Tsh 1.00 loaned, although this is unfortunately now increasing. In general, clients were happy about this credit scheme, although some concern was expressed about the efficacy of in kind credit, saying that sometimes the loans arrived late, and some believed they could purchase the same inputs for lower prices.

Savings mobilisation has been low among other reasons, due to lack of sensitisation and institutional back up, although this is now improving. Average savings per group in project Year I was Tsh 13 448, while in Years II and III it was Tsh 5 353 and 34 671, respectively. Despite a setback in Year II, awareness of the advantages of savings by the beneficiaries resulted in a marked rise in savings in Year III. By June 1997, Tsh 58.3 million had been saved by smallholders. Despite the initiatives by the project in mobilising savings, some specific issues caused difficulties in this respect, including (i) closure of some bank branches in rural areas; (ii) decreasing trend of interest rates on deposits; and (iii) spirit of savings mobilisation are still low. In order also to facilitate the mobilisation of rural savings, the Savings and Credit Unit (SACU) promoted the development of SACCOs. As of 31 March 1997, the SACU covered 121 SACCOs with a total membership of 17768. The total savings amount to Tshs 150.2 million. Growth in the amount of savings mobilised has been steady, with the incremental savings of Tshs 44.6 million in FY 1996 and Tshs 13.7 million for FY 1997. However these savings have come at a high cost, with cost per shilling saved being Tshs 1.64 in FY 1996 and Tshs 3.25 in FY 1997.

Recommendations towards efficient rural financial markets and intermediation

An opportunity exists in Tanzania to further develop efficient rural financial services. There is considerable GOT ownership of the initiatives aimed at providing these services to the rural poor. The BOT has been appointed as the main focal point and the donor community has come together to prepare the basis for future multilateral and bilateral interventions. A number of studies have been commissioned which provide valuable information in relation to existing institutions and on the demand for credit. The establishment of the NMB may provide for an institution which could reach IFAD's target group. Finally, enhancing access to financial services for the rural poor entails preserving the macroeconomic environment, removing the remaining policy biases against agriculture and the rural sector, reforming the legal and regulatory framework, developing or strengthening efficient financial intermediaries, providing for capacity building measures and establishing performance indicators for evaluation.

In all three credit schemes, loan appraisal has been a major weakness. Several loans were advanced to beneficiaries starting new agricultural and business activities without them being properly, or in some cases at all, appraised. As a result, the profitability of undertaking some activities was not established in advance, which therefore did not yield expected results, thus causing concerned beneficiaries to default on repayments. It is recommended that future loans should only be approved following a thorough loan appraisal process, as this is essential for the sustainability of the credit schemes.

There has been limited donor-coordination regarding microfinance activities in Tanzania, leading to the promotion of the financial sector in a piecemeal fashion, without due regard to how projects and related activities fit into the overall strategy and framework of the financial sector. Future support needs to be programmed in close collaboration with multilateral and bilateral donors operating in the financial sectors. Cost-sharing arrangements and resource mobilisation will need to be undertaken to provide effective and coordinated development, and agencies should operate and finance those activities in areas where they possess a comparative advantage, in terms of their experience, technical capacity, strategy and mandate, etc.

Local institutions have limited experience in providing support for developing capacity within existing or new financial intermediaries. However, there are a number of regional institutions which could provide this service. Exchanges of experiences and study of best practices can contribute to the design of appropriate training programmes and curricula. It is recommended to include a capacity building component in future projects including training, and exchanges of experiences. Building up new financial intermediaries and/or supporting informal groups requires considerable capacity building measures, and involving reputed regional and sub-regional institutions for this purpose would be cost-effective.

Given the uncertain prevailing financial environment in Tanzania, it is recommended that intense efforts be made by SACCOs and other rural financial institutions to mobilise savings, which would reinforce the autonomy of the present rural financial system and increase their resources availability. In fact, this has been an area where all IFAD credit activities in Tanzania have not performed well. Savings mobilisation demonstrates group cohesiveness and their capability to work together, and must thus be undertaken as an active financial service responding directly to the various needs of savers, such as the security of funds, their confidentiality, their availability, and their role in making the savers eligible for loans.

With specific regard to the financial services under the SHERFS project, two credit programmes are being implemented in parallel, one directly through the CMU of the PCU and another through the SACU and SACCOs. This dual approach is causing increases in the overall cost of operations. Not only is the actual ratio of credit delivery to cost of delivery increasing steadily, but the effectiveness of credit is gradually being strained. Both schemes have occasionally targeted the same areas, causing undue confusion and competition. It is recommended that the two schemes be brought under one umbrella, which would not only reduce costs but improve targeting, monitoring and repayments. It may be more feasible and justified to transfer the CMU's credit operations to the SACCOs operating under the project.

IFAD's more recent experience through the SHERFS project has been quite successful, especially in terms of the operations of the SACCOs. However, it would be advisable to simplify the management of the pilot scheme and reduce its area of coverage. This recommendation is also made in view of the recent escalation in transaction costs of credit operations in the project, as mentioned above. The suggestion to use Ruvuma Region is appropriate. The Savings Mobilisation and Credit Assessment Survey being conducted by the Monitoring and Evaluation Section of the SHERFS project will provide the necessary information for the proposed reorientation.

SACCOs

The overall performance of the SACCOs has been encouraging despite some of their inherent weaknesses. Nevertheless, in view of the important role of SACCOs in rural financial services in the Tanzanian context, it may be worthwhile for IFAD to consider to replicate the SACCOs' experiences in the framework of future pipeline activities. To this end, if SACCOs are to improve, continue and expand their role in rural financial services, they need to be supported through the provision of appropriate capacity building assistance, including training and members' education on savings and credit. This would enable them to upgrade their current level of management, resources, skills, accounting/financial knowledge, assets and overall operating procedures, which would in turn contribute to their sustainability, and make them more effective and efficient.

SACCOs financial linkages with formal financial institutions need also to be strengthened. This will facilitate their integration in the financial systems and their growth and development, and enable them to develop into capable institutions subject to the Banking and Financial Institutions Act of 1991. The whole issue of financial linkage is an important one if SACCOs are to be effective in handling the demand for credit in the rural areas. For instance, this would enable SACCOs to borrow from formal financial institutions in order to lend to SACCO members and clients, and would have the effect to reverse flow of funds from the formal sector to rural areas. Plus, obviously financial linkages would improve SACCOs' overall fund management.

The regulatory and supervisory framework for the SACCOs revolves around the Registrar for Cooperatives and his staff (Regional Cooperative and District Cooperative Officers). The effectiveness of SACCO supervision is currently very low due to several reasons, including inadequate budgetary allocation to the Cooperatives Department and the resulting lack of transport and funds for visiting SACCOs for supervision of their accounts and auditing. Effects of poor supervision are losses incurred through theft, engagement and investment in risky non-financial activities, delayed reporting and un-audited accounts, and violation of Cooperatives Societies Act (e.g. accepting deposits from non-members). Supervision is of paramount importance and safeguarding of depositors' funds is crucial. There have been thoughts of establishing regional apex bodies for SACCOs to offer these services. However, the IEM does not think such an arrangement would be worthwhile as it will simply create a multiplicity of organs. Despite the aforementioned, the existing network is very valid and if strengthened appropriately, it could be a very effective mechanism for supervision and regulation. What is required is to reorganise and strengthen the existing Regional and District Departments of the Cooperatives to enable them to conduct services appropriately. This necessitates additional training and funds to cooperative officers, including the provision of transport and computer equipment to improve supervision and auditing. Furthermore, there is need for the Cooperatives Department to liaise more actively with the BOT with regard to supervisory aspects.

The more successful SACCOs should be allowed to transform into Community\Village Banks in order to make them more effective institutions. However, the graduation of selected SACCOs to Village Banks should be a stepwise process. More specifically, Village Banks are considered as those institutions able to make loans and receive deposits from non-members However, it is too much to expect from even the best positioned SACCOs to take on all such responsibility at once. A first stage should be the acceptance of non-member deposits while restricting lending exclusively to SACCO members. The restriction of lending to members is to enable the mechanisms of peer pressure to continue to apply, particularly to ensure loan repayment. Thus, all borrowers of the Village Banks should continue to be members until a certain threshold is reached where restriction on lending only to members acts as a constraint on the growth of the Village Banks. At that point, the restriction should be lifted, and they should then be allowed to lend also to non-members, which is the second stage.

In order to be in a position to assess the performance of SACCOs, a set of indicators need to be established which would facilitate such a task. Presently, it is not easy to evaluate the achievements of SACCOs and this task is further complicated by the fact that SACCOs, and the services offered by each SACCO, vary from one to another. Based on the aforementioned, it is recommended that broad areas be identified that may form the basis for assessing the performance of SACCOs. The following are a range of performance indicators that may be considered: outreach, quality of services, operational efficiency and portfolio quality, growth rate, profitable interest rates, Management Information Systems' quality, good practice and governance, and transparent financial reporting (please see chapter VI for further details).

It is not possible to do a thorough analysis of loans made to women due to lack of necessary data. In the SACCOs visited by the mission, the majority of clients are men, although a large number of transactions are done by women as they are responsible for operating joint accounts in their husband's name. In some SACCOs, only around 15% of the accounts are in the name of women. Basically, women's use of financial services provided by SACCOs is disproportionate in relation to their representation in the decision-making bodies and ownership of SACCOs. SACCOs should make extra effort to involve women as members so that they may directly be entitled to loans and once they have joined, they should be encouraged to get involved in SACCOs' management and operations.

NGOs

Few NGOs in Tanzania are currently capable of making an effective transition from being traditional credit providers to cost-effective business oriented rural financial services institutions, due largely to their very weak overall capacity. Hence, the role of NGOs as a credit delivery instrument should be very carefully examined. NGOs can nevertheless play a useful part in promoting rural financial services, especially in view of their strategic position in the rural community: they could offer non-financial services (in support of financial services), such as training clients, business management training and advisory service, advocate on behalf of women and the informal sector, etc. Hence, it is recommended that (i) NGOs should be involved in the provision of rural financial services only if they are run as profitable financial institutions, and (ii) NGOs could effectively provide non-financial type of assistance. In both cases, donors and GOT need to extensively invest in institutional capacity building and staff skill training if such institutions are to meaningfully contribute to the promotion of the rural financial sector in Tanzania.

Lessons learned

Financial viability and long-term sustainability of credit operations

The experiences gained through the three projects illustrate that the viability of credit operations depends on a number of factors, including the existence of demand for credit, how well credit operations are managed overall and on the success in keeping transaction costs of lending to a bare minimum. Related to this is the interest rate issue, and the ability of credit intermediaries to adopt such interest rates which will be accepted by its customers, yet provide it with adequate spread to cover its administrative costs. Finally, long-term sustainability of credit operations depends also on (a) high levels of recovery rates to preserve integrity of the capital base; and (b) successful savings mobilisation to increase the amount of funds available for lending.

Institutional appraisal of financial intermediaries

During project design a comprehensive institutional appraisal in the field should be undertaken of those financial intermediaries under consideration to being involved in future projects and related activities. This is fundamental for the success of the financial services component and the project itself. The appraisal should assess the institution's track record in reaching the poor efficiently, its scale of outreach and the relative poverty of the clientele, the quality of the financial services and of the loan portfolio, governance, accounting procedures and experience, management capacity, financial performance over time, and the existence or potential for sound reporting, monitoring and information systems. In none of the projects under review was an attempt made to assess the cost and profitability to the bank of implementing the proposed credit line. It is preferable not to implement credit or financial services components until the financial intermediaries are sound.

Customer-oriented financial services

The financial requirements of the rural poor are not homogeneous and often vary according to the local conditions and circumstances. Customisation of credit packages are essential, which should be based also on the nature of activities the credit is to support. Varying socio-economic circumstances may also necessitate different financial products, including savings mobilisation, short, medium and long term loans, transfer services, and currency exchange. What is important is to have an analysis of the needs and services required by the intended target group, otherwise the efficacy and efficiency of the entire credit operations may be jeopardised, as was the overall case in Tanzania. Project design teams need to customise the loan programme to beneficiary demands, which should be clearly understood through a consultation process.

Credit culture

The success of credit programmes is higher in cultures where borrowers understand their responsibility to repay the loan, in accordance with the terms and conditions imposed at the time the loan was made. At the same time, lenders should also appreciate that they too have to take their responsibility in credit monitoring and repayment to ensure success of the schemes. Design missions should talk with lenders currently active in the region to assess the credit culture and if it is found to be poor, serious reflections should be given regarding implementing the credit component. Project design missions should also consult community leaders, existing and potential clients of financial intermediaries and analyse defaults and product performance.

Credit in kind

Credit in kind should only be considered if the various actors in the process are reliable and committed, otherwise repayment rates will suffer and credit operations will not bear desired results. For instance, under the SHERFS project, while being pleased that loans are being made available, clients are dissatisfied with the in kind component. Such credit has arrived late, in poor quality and at more costly rates than what the beneficiaries themselves could purchase. Where such mechanisms are implemented, it is essential to ensure efficiency and quality of the in kind instrument, so that the credibility of the programme is maintained, as well as the commitment of the beneficiaries to repay and to remain engaged in such schemes.

Pilot components/schemes

When designing pilot schemes after project implementation has started and in response to changes in the macroeconomic conditions or the regulatory and legal framework, it is necessary to review also the major assumptions which were present in the original project design. The size of the pilot scheme must be tailored to the changed environment and the area covered may also need reconsidering. Staffing, resources and procedures require tailoring, and a clear-cut time-bound action plan ought to be worked out to prevent the pilot scheme from becoming too costly in the end, and more importantly, to prevent it from blowing out of its intended proportion and scope. A pilot is an experimental phase, one through which procedures, mechanisms and technologies are to be tested and to gain understanding if the pilot exercise may be replicated at a larger scale, cost-effectively with success.

Developing and promoting grassroots institutions

The strategy of achieving cost-effective credit delivery mechanisms through the promotion and strengthening of grassroots-based institution, especially in the absence of a functioning financial sector, has so far yielded positive results. The use of grassroots organisations not only ensures better outreach, but also results with reduced cost of loan administration. The initiative to involve SACCOs in rural financial services has done much to promote the credit components, especially in the SHERFS project where SACCOs are being used on a wider scale. SACCOs are innovative type of grassroots institutions able to secure the participation of communities at local level, also given their simple approach to credit management and participatory dimension. As IFAD projects are principally concerned that credit reaches the more remote areas of developing countries, it is necessary for IFAD to involve and promote such innovative grassroot institutions to meet the credit needs of rural populations, who, in addition, are able to better identify themselves in such institutions.

Geographic proximity

Especially in larger countries decentralisation of rural financial services are essential if they are to reach and benefit the intended target group, who often live in remote rural areas where distances are huge and means of transportation and communication are much lagging. Decentralisation overtime not only reduces transaction costs, but leads to better credit uptake, monitoring, repayment and management. Geographic proximity not only refers to the establishing of mechanisms for decentralising financial systems such as mobile banking, but also to the need to remain and interact at the grassroots level in a way that actively involves both parties (lender and receiver) throughout the credit lending and repayment cycle.

Management information system

MISs are crucial especially for the success of financial institutions, no matter the size of the latter. MISs need not be complex, neither do they need to capture infinite types of data. What is required is to gather a minimum set of data to ensure proper and efficient credit management, which can provide accurate and timely information on operations and financial performance. Computerisation of MIS would be better, but in the absence of such possibilities what is fundamental is to at least have systematic procedures for data collection, and to ensure books are regularly updated to facilitate accounts and financial statements to be prepared. This will also facilitate and make more reliable/credible the audit function, which is indispensable always, but more so for credit institutions.

Auditing and inspection

It is of utmost importance that project-related accounts are systematically prepared and audited as stipulated in the loan agreement, and that reports are submitted to IFAD and the Cooperating Institutions in a timely manner. These activities are essential to reinforce the quality and security of operations. Internal controls through self-inspection to complement external auditing is also a necessary step in the direction towards sound and proper financial management. At all times accounts should be prepared and audited, and audit reports should be followed up expeditiously, and that external auditors be brought in when audit reports are not received on time.

 

LANGUAGES: English

First Eastern Zone Agricultural Project (1997)

Bhutan  
April 1997

Interim evaluation

Project design and objectives

Target group

The EZ comprises the project area of FEZAP, the population in 1991 was estimated at 191 000 and the target group comprised a total of 21 730 households (131 000 people). The latter were defined as farm families with less than 3.0 ha and incomes of no more than the lowest paid government employees (105 USD per capita). Irrigation schemes to be rehabilitated would be selected where 50% of the households would have wetland less than 0.3 hectare.

Objectives and components

The Project sets out to improve the living standards, cash incomes and household food security of the small farmers with holdings below 3.0 hectare. Five project components were included in the original SAR design: (i) Renewable natural resource development (RNR; (ii) Small-scale irrigation; (iii) Participatory community development; (iv) Credit; and (v) Institutional support. The RNR components comprised support for research, extension, and the Natural Resources Management Unit.

Expected effects and assumptions

The RGOB policies for rural development, expressed through the "Five Year Plans" aim to reduce income disparities, curb the drift from rural to urban areas and protect the environment. Soil degradation and erosion arise if households are forced to continue extensive cultivation systems. But relevant production technology must be first generated to permit an agricultural intensification to proceed that generates higher land and labour productivity. The generation of such technology is constrained by the wide variation in cropping suitability, microclimate and market access.

The path to progress is to design the processes where the emerging capabilities in technology generation are supported by the building-up of institutions and methodologies for decentralised decision making. Rural communities are best served when their own location specific priorities guide research as well as project supported service provision. The shift from directed service provision in research and extension, and from central to decentralised decision making for rural communities, in determining priorities and annual work programmes is a tall order not just in Eastern Bhutan. To achieve success, issues must be correctly defined: methodologies must be made transparent, processes of solutions can then be more easily agreed upon. This was not the case in the design of the FEZAP, in two central areas, in the generation of production technology and in participation: outcomes then were not in line with needs or expectations.

First, the SAR underplayed the importance of designing capabilities to generate processes and production technology relevant to the great variation in location specificity. With the benefit of hindsight, it is fair to state that the principal cause of FEZAP's problems rests in the ambiguity created in the SAR as to the Project's proper nature. The SAR under project risks, stated: "Technically no unusual risks are involved as the Project would promote proven technology. The farmers are conservation minded and have demonstrated their willingness to adopt new and financially viable technical recommendations." The only exception in the SAR concerned essential oils, where reference was made to the risk that high quality standards required for premium export prices may not be maintained.

The ambiguity about the true nature of the Project was compounded by the rationale provided by the SAR for the farming systems component. The farming systems research was not described as an effort that primarily would generate useful technology or relevant recommendations by involving farmers.. Instead, this component would identify constraints and development opportunities for the various farming systems. The point was never driven home that farmers need to fully participate in research and trial design, if efforts are to become productive and generate results that are ultimately adopted by farmers.

The Project should have been presented as a research and development operation in RNR of national interest. It should have been presented as a Project that would generate and test different technologies and village level interventions, and where extension would support farmers' capacity to experiment, not least because of the wide variation in agro-ecology and farming conditions. Standard messages would be adapted. Technology and recommendations would be forthcoming, aligned with the great disparity in farming conditions.

Second, the bias in favour of merely extending already proven messages was compounded. since the RGOB Blue Book in redefining the SAR proposed participatory community development component, removed the participatory elements. The rural awareness and empowerment elements were removed: this component was narrowly redefined as organising farmers to receive technical extension messages, again reflecting the incorrect notions that adequate technology was available and that extension is a simple one way diffusion process.

The key to economic, social and environmental benefits from research investments and subsequent development and extension efforts is to design technologies which farmers can access, and choose to use. Institutional capabilities for R&D, especially a well directed process supported by effective training delivery, are required to reach this end. The final design for FEZAP excluded this necessary institution building.

Evaluation

Methodology

Purpose: The evaluation sets out to understand to what extent MoA programme managers, project and Dzongkhag staff review implementation progress against the physical targets set. Moreover, are they also seeking the data that show impact at the village and farm level? Finally, are they trained and encouraged not only to explore causes to variations in performance, but also to seek to address these underlying causes?

Data have been obtained with which to understand: (i) farmers' constraints and their coping strategies; and (ii) how the Project has managed to assist farmers to overcome or mitigate their constraints? The OE conducted one survey in preparation of the evaluation (wealth ranking and poverty profile), the FEZAP conducted the PBME; moreover, the mission conducted a PRA and an informal survey of irrigation schemes.

Wealth Ranking and Poverty Profile: Precise data on the size distribution of resource endowments were not available at the time of design. The SAR presumed that 80% of the households would possess livestock and almost all households owned some land. More precise and up-to-date data sets were required for the IE. The First Phase IE mission which visited the FEZAP project area in Bhutan in October - November 1995, explored a methodology for wealth ranking.

Distinctions between wealthy and resource poor households were explored with structured but open ended questionnaires, in four villages, two in Khar gewog in Pemagatshel and two villages in Toetse gewog in Trashiyangtse. Some 40 farmers classified as poor were interviewed to determine if the use of the farmers' direct ranking correspond well with an "actual" or objective ranking of their assets (owned wetland, dryland and livestock). This testing confirmed that the direct method of ranking farmers can be used as a shortcut to identify those that are resource poor.

The PRA undertaken by the mission confirmed the validity of the Phase I IE wealth ranking. The PRA was conducted in three villages (in Khar, Lhuntse, and in Menjabi gewogs). It confirmed that the absolutely poor are those who borrow food and money in order to survive the hungry season. Data on food insecurity and on entitlements of productive assets represent powerful indicators for poverty.

The PBME: The FEZAP replicated the wealth ranking in its own survey, the PBME survey, on a wider scale. The PBME survey, conducted in two gewogs in each of Pemagatshel, Lhuntse and Trashigang Dzonkhags, sampled 477 households. FEZAP should be praised for issuing its report in advance of the mission's arrival. Yet, much important data remained to be analysed by the IE on return to Rome (Chapter 5).

Implementation context

The Zonal Administrations were abolished shortly after FEZAP became effective (October 1992). Responsibility for project implementation shifted to the six eastern Dzongkhag Administrations, supported by a new Project Facilitation Office (PFO). Project activities became part of the individual Dzongkhag development plans. Important changes were: (i) the resources and activities of the Community Development Division and the Natural Resources Management Unit were transferred to the training and extension programme to be undertaken by the PFO and the District Administrations; (ii) the irrigation programme was extended to include new schemes (up to 400 ha); (iii) a crop promotion programme was introduced; (iv) financial support was given to a breeding programme for Mithun (draught) cattle and to fodder development; and (v) the credit component was taken out (grant funding was available from another donor).

Project achievements

Progress: The FEZAP organisation and management structure has evolved satisfactorily once the reorganisation of the administrative structures was completed and roles and responsibilities of the PFO had been re-established. The task is huge of operating through six different Dzonkhag administrations in vast and remote areas.

Satisfactory relationships between the PFO and Dzongkhag staff have been reached.

Physical progress has surpassed targets in many areas, over the last two years. Physical progress across the crop and livestock sub-components (all part of the RNR component), implemented through the Dzongkhag administrations on the whole has been quite satisfactory. FEZAP is funding the livestock stations at Lingmethang and Arong, both have been fully equipped. The irrigation component is making steady progress; unit costs have been lower than expected, and disbursements are less than planned, but physical progress in terms of construction activities ranges between 20%- 45% of targets in the 7th FYP.

Research is undertaken by the RNRRC, but progress has been stymied by insufficiencies in direction, in the building-up of capabilities, and in transport equipment. Support for the PFO is well on target, with civil works and equipment all being provided. Yet, provisions for vehicles and training are far below requirements.

Constraints: FEZAP has continued to operate under three critical handicaps. First, the misconception based on the notion of "proven" technology led to a minimal appreciation of the need of direction in research: capabilities were not put in place to generate relevant improved technology to farmers. Proven messages were available for some produce, for potatoes and vegetables; some of the local cereal varieties were of reasonable quality in some niches and altitudes. But the actual extent of missing knowledge and insufficient capabilities increasingly have become visible.

To wit: (i) proven technology and recommendations were not - and are not - available for improved maize and rice varieties across the agro-ecologies; (ii) fertiliser and manuring recommendations for cereals are too high and not used by most farmers; (iii) the irrigation systems could not generate expected productivity: agro-economic parameters, geotechnical considerations and soil instability were not sufficiently considered in design; maintenance costs become too high in relation to overall earnings of farmers, and capacity to contribute cash and labour; (iv) soil erosion has become a major issue not least on wetland, but relevant approaches and messages for soil conservation have not been generated; mere propagation of vetiver grass is insufficient; (v) the relevancy, and productivity of pasture and fodder production is not confirmed, and little progress in found for fodder trees: (vi) farmers' adoption of AI, and natural insemination for improved breeds is uncertain in the absence of a subsidy; (vii) capacity utilisation at the Lingmethang farm is low in producing improved poultry; unit costs of feed are too high in relation to selling price, and experiments need to be designed in decentralising poultry multiplication to the village level are required; and (viii) a study of pig production and feed under village conditions is underway, but results are not complete and not sufficiently monitored.

Second, the misconception as to proven technology was accentuated because of the biases against fact finding about farmers' conditions and reflection: (i) insufficiently participative methodology and procedures also within the commodity driven research system; (ii) limited use made of the technical assistance provided; and (iii) an inward looking M&E unit, developing neither any indicators for progress, adoption and constraints at the gewog, WUA and farm levels, nor any updated farm budgets.

Third, the removal by the RGOB of the directly participatory elements included under the SAR design meant that FEZAP did not have at hand the overall capabilities, resources and methodology with which to train EAs to empower farmers and encourage experimentation in group mobilisation and farmer led diffusion methods. Moreover, the importance was not appreciated of supporting the GYT mechanism with which to encourage feed back from the gewogs so that RGOB and FEZAP resources could provide services in line with local priorities.

Staff skills, staff positions, technical assistance were defined narrowly. The capabilities set-up were aligned with an extension project: i.e. the dissemination of proven technology and farming and irrigation systems. The importance of creating capabilities for diagnosis, research and technology generation was not set out: what was not clearly understood could not be resolutely acted upon.

Addressing design weaknesses: the FEZAP staff should be praised. They increasingly realised that they needed far more research support to generate productive messages that would respond to farmers' constraints, but that this support was not forthcoming. The PFO and RNRRC staff should be much acknowledged for their efforts in reducing uncertainty and re-directing the Project through: (i) the two village level studies, conducted with SNV support, on adoption behaviour for maize and rice, which defined a proper methodology for obtaining farmers' screening criteria; (ii) the training workshops with extension agents in supporting them with methodology to undertake experiments with farmers; (iii) the undertaking of the far ranging PBME survey; (iv) supporting a pilot project to develop community based land use development plans; and (v) applying the requirement that farmer communities themselves request assistance with irrigation scheme rehabilitation.

Effects assessment and sustainability

Growth has taken place across the project area, especially farmers with more land are benefiting from increased specialisation in production and trade in horticulture and vegetable, but the resource poor households are far from sharing proportionately in these benefits. Overall land distribution across the Eastern Zone is unequal rather than equal. Although land poor but labour rich households rent in wetland and the distribution of owned and operated land is more equal than that of owned land (Chapter 5), the limited assets of land and livestock contribute to low productivity of labour and high degrees of food insecurity. Resource poor farmers have little choice but to increase the input of the only resource they control, their family labour. They benefit only to a smaller degree in the overall growth related mainly to marketing of cash crops. Moreover, prospects for off-farm cash income to women through weaving are bleak because of the competition from cheap manufactured Indian cotton cloth. The IE Phase I survey showed that of the resource poor farmers, two thirds are food insecure for more than three months; of the latter, half had not repaid their borrowed food even after the harvest.

Declining physical resource endowments increase already high labour loads of women: the Project has not directly eased women' labour constraints . Distances involved in herding cattle and to collect fuelwood are increasing. Labour productivity declines further when mineral fertiliser or organic manure is not available. The effects of peak labour loads and prolonged food security is associated with high incidence of malnutrition, and with illiteracy, of adults and children.

Women in resource poor households may sleep only three hours per night during the peak labour season, and the incidence of diarrhoea and malnutrition increases. The frequency of children under five years of age, exposed to chronic malnutrition (height for age) in the EZ was recorded at a far too high rate of 64% in 1989. Stunting levels of children probably still remain far too high, and recent research confirm that future mental capacity is then impaired.

Farmers with little land, in addition, are less literate and their children are more likely to drop out of school. The illiteracy of those most resource poor is as high as 80%; moreover, 36% of the children in the poorest group are dropping out; compared to 22%, and 17% in the next two size groups. Productivity in farming is negatively affected by such low levels of literacy and schooling.

Current inequities in distribution of land and access to production technology can be justified neither in terms of equity, nor growth. Those owning little land are highly efficient in their resource use; their cereal yields are higher, and they contribute less to soil erosion in relative terms. The latter may be explained since ownership, compared to tenancy, is normally associated with more incentive to invest labour in soil conservation and erosion control.

Perpetuated literacy and malnutrition for the already food insecure and most resource poor farmers should be a cause of concern. Their situation is further worsened because of the RGOB legislation to prohibit the use of traditional tsheri. The damage of crops by wild animals is already unacceptably high and negates much of the overall RNR efforts: losses are probably increasing when the prohibition to use tsheri land is enforced: wild animals may come closer to the settlements.

Main issues and recommendations

Two critical features stand out in this evaluation. First, the ineffectiveness of FEZAP as a vehicle for extending proven technology because of its weaknesses in design; and second its praiseworthy efforts in addressing the original shortcomings. The knowledge basis has begun to be slowly built-up to permit system design and extension recommendations to spring first from a diagnosis of the constraints that affect the target groups, and then a pursuit of experimentation and testing of viable solutions accepted by local farmer communities. But these efforts, or their impact, will remain marginal and not be properly supported unless the entire Project is correctly defined. It must be understood that: (i) technology generation through research and experimentation at the village and farm level needs to precede extension; and (ii) this process needs to be supported by the creation of institutional capabilities for the delivery of services to the rural communities.

Vicious circles perpetuate poverty and food insecurity in the EZ and a two pronged strategy is called for. The concerns of those which have already a surplus of marketable produce need to be addressed.

Nonetheless, for the RGOB it is neither equitable nor efficient to permit the resource poor farmers to fall further behind. To begin with, technology needs to be developed through on-farm and village level trials that suits the particular need and niche of resource poor households. It has to meet the needs of food security, be land saving, generate higher labour productivity and reduce incidence of erosion. A properly designed R&D project can and should be an effective vehicle for poverty alleviation: this was not the case so far under FEZAP.

The demand of smaller farmers for cereal varieties that meet their need of food security (shorter maturities) and for relevant manuring recommendations must be met. About 40% of all households have no cattle; on average, probably about 10% of overall farmers, or 30% of the food insecure households, have neither pigs nor poultry. Improved breeds of poultry and pigs normally represent a highly productive investment for the resource poor, generate animal protein, a decent return on labour and reduce overall risk. But such breeds are made available by FEZAP only in very limited numbers. Recommendations for feed and maintenance under village level conditions are to be developed through adaptive research and testing.

Second, the institutional component will have to ensure that: (i) mineral fertiliser is more accessible to permit smaller farmers to realise their comparative advantage in production (yields); (ii) a strong extension programme is carried out especially for vegetables to permit smaller farmers to progress beyond cereal production and share in the benefits of vegetable production; the latter compared to perennial crops (oranges and apples) is neutral to scale, may contribute to less erosion, and generate earlier needed cash; (iii) infrastructure for the marketing is available; (iv) farmer-to- farmer extension approaches are used to increase coverage and increase FEZAP cost-effectiveness; and (v) group credit is becoming available to permit smaller farmers to diversify their enterprises and reduce co-variant risk.

But smaller farmers are exposed to the inequities of the current land distribution which is unequal rather than equal. For this reason, a priority is to: (i) make more wetland with improved irrigation available to smaller farmers by ensuring that inequities in the present land distribution, especially of wetland are removed; and (ii) target the rehabilitation of irrigation schemes to those wetlands where 75% of all farmers have landholdings below 0. 3 ha.; per se this should reduce the incidence of soil erosion.

To wit, the benefits of a future programme to farmers in general and smaller farmers in particular will be compromised unless: (i) the current prohibition for farmers to use their tsheri land is redesigned; and (ii) effective measures are finally introduced to combat widespread damage to crops of wild animals. The widespread damage to crops by wild animals acts as a disincentive for parents to send their children to school: current high illiteracy rates are perpetuated.

Once the nature of the Project is recognised, the FEZAP Phase II Project should be redefined as a research and development project to: (i) devise extension recommendations for annual and perennial crops, for livestock and to design small scale irrigation systems to serve not least the resource-poor families in the different agro-ecologies; (ii) develop productive, sustainable and equitable approaches to overall land use and the maintenance of soil fertility and moisture; and (iii) devise and set in train a process of awareness and training in order for the relevant national institutions and other partners in development to appropriate the methodology of programming and executing research, development and ensuing extension activities through participatory processes.

This strategy translates into four sectoral objectives: (i) Renewable Natural Resource Development: crops, livestock and irrigation; (ii) small scale infrastructure and marketing support; (iii) credit; and (iv) institutional development. A final priority for a future FEZAP II is to co-operate closely with an organisations such as UNICEF and the Ministry of Health, to ensure that the health and nutrition dimensions are properly followed up on. Essential is to ensure that indicators for nutritional status are monitored, presented and discussed, for a representative sample of villages in the project area.

Renewable Natural Resource Development including Irrigation: the component entitled Renewable Natural Resource Development should include irrigation to become a component designed to improve farmers' overall systems which comprise both dry- and wetland. Farmers strive to cope with the demands for intensification, but without improved technology their productivity of efforts is falling behind. So far little has come of the approach advocated in the SAR with the recommendations to address soil erosion with emphasis on permanent cropping measures (pasture, trees, horticulture, strip farming, contour and bunding on cropped areas most at risk together with conservation of up-slope forested areas). Instead, soil erosion has become more serious, more on wetland and dryland than on shifting cultivation land.

Community based solutions to shifting cultivation should be sought for: moreover, it is not realistic to presume that permanent cultivation can or should become a universal solution.

In the irrigation sector, a two pronged strategy is called for that combines raising productivity and reaching more farmers, but at a lower RGOB cost per benefiting farmer.

The RGOB cannot afford in the longer run to provide continued subsides, beyond the regular first year "put right" support, to almost all completed irrigation schemes, even though maintenance requirements and repairs exceed the farmers ability to contribute. Farmers' capacity to contribute. maintain and self manage will increase only when productivity in total water use is improved. The first prong in this strategy comprises raising scheme productivity by improved design (emphasis on secondary and tertiary canals, geophysical factors, agronomy, e.g. crop rotation to reduce soil erosion). Criteria for selecting schemes for rehabilitation would be where: (i) market access for cash crops is ensured, which translates into high returns to farmers on cash and labour; (ii) a reasonably effective WUA has been already created; and (iii) the resource poor farmers share proportionately in the benefits that accrue (the targeting dimension).

The second prong of this strategy is to start a sub-programme, a pilot programme, to rehabilitate a subset of the large numbers of FMIS, which can be improved without large investment or high unit costs. This effort emphasises training of farmers that have been selected by the farmers themselves and through this training of trainers approach, the direct involvement of the irrigation sector staff can be reduced.

The experiment-demonstration element needs to be broadened and diversified. The extension of relevant messages, for instance, of the Integrated Pest Management (IPM) recommendations against fruitfly in Khar, needs to be made more effective. Alternative methods for farmer-to-farmer diffusion and group extension need to be explored.

Community based programmes: a community oriented approach offers much promise in promoting a sustainable pattern of improved land use, soil conservation and reduced erosion. Farmers' patterns of overall land use, interactions between different enterprises and factors explaining labour constraints need to be pursued at the local level. Interactions, constraints and feasible local institutional solutions emerge only through a dialogue with farmers and interest groups at the community level. The MoA LUPP Unit in Thimphu has undertaken a praiseworthy survey and developed a master plan for improved land use for Drametse gewog in Mongar. The FEZAP has built on this design. An experimental design for a community development plan has been drafted, oriented towards sustainable land use including social forestry; and necessary changes in land use regulation were to be approved in Thimphu. This orientation needs further support: technical solutions have to be designed through participatory methods, and incentives in undertaking conservation measures need to be properly explored. Pilot initiatives need to be launched to test technical solutions, approaches and acceptability at the local levels. As regards fodder trees, and living hedges, a research programme needs to be mounted, together with the Forest Services, without delay.

The core programme would comprise a set of community development plans in each gewog: co-operative solutions to land use should be tested based on the local priorities. With an approach geared to needs, agro-economic potential and to tangible solutions by type of households, family income status and food security can be analysed with a set of indicators.

Small Scale Infrastructure and Marketing Support: The marketing of horticultural crops, vegetables, potatoes and oranges needs targeted support. Demand in India and Bangladesh provide the main impetus in marketed cash production. Markets are becoming more efficient, farmers even in distant communities are aware of border prices, but limited road access, storage and transport constrain supply response. Success in intensification necessarily requires higher margins for output to justify rising labour inputs, irrigation scheme maintenance and fertiliser application.

A Community Development Fund is proposed to propel the creation of small scale infrastructure, power tiller roads, hanging bridges, storage sheds at the road side. This infrastructure would be built on a self-help basis; farmers in Bumdeling gewog stating their need for such a road and a shed at the road side, were prepared to provide the necessary labour themselves. More often than not, such infrastructure is a requisite for a take-off in the production of cash crops for outlying gewogs.

The need of finding effective solutions to improving the delivery of mineral fertiliser falls under this component. The financing arrangements of the commission agents selling fertilisers need to be reviewed, so as to ensure that farmers actually obtain the means with which to improve soil fertility.

Credit: The RGOB and BDFC must ensure that the rural financial services are becoming more accessible and farmers' transactions costs are reduced. A pilot credit component should be designed to explore decentralised, self-governing financial services with autonomy vis-à-vis the rest of the Project. Typically, farmers' transactions costs for accessing BDFC credit are high, if not prohibitive. More easily accessible credit, with the use of group collateral to reduce risk, is fundamental in order to provide a take-off for intensified production where a market is already available. This component, must incorporate experimentation and testing in order for the BDFC and NWAB to merge and devise methods for setting up decentralised rural financial services. Rural financial services should reach first those gewogs where a sufficient loan volume can be foreseen. This is the rationale for the proposed Gewog Banking Units.

Institutional Support and Strengthening: the institutional support and strengthening component is expected to answer to three "transversal" objectives, namely: (i) analysis of the socio-economic environment and the building-up of a gewog based progress and performance monitoring system; the responsibility belongs to the M&E Unit and the Dzongkhag planning officers; (ii) promoting the research and development methods and extending testing and pilot efforts to support farmer group approaches to multiply: these responsibilities all fall under a strengthened extension component together with the RNRRC and the irrigation sections; and (iii) promoting participation to generate higher efficiency of resource allocation though feed back and aligning gewog level activities with local preferences. A seconded institutions specialist is required at the level of the PFO. The institution building component should be linked to the community development fund to permit the finance for self-help projects, to drive also the institution building efforts.

Reassessment of land use legislation: Present land use patterns and legislation need to be reassessed The current RGOB prohibition of shifting cultivation on tsheri land needs to be re-evaluated; the findings of this IE reconfirm the negative assessment of the current legislation by FAO in 1989. An argument can be made in favour of a land redistribution on five grounds, to: (i) increase overall production from a given area; (ii) improve food security and nutrition of the resource poor; (iii) provide better incentive to farmers in undertaking the additional labour required for soil conservation measures, since they own the land; (iv) improve parents' capacity to send their children to school and raise the literacy of their children; and (v) facilitate the uptake of technology by the next generation of farmers.

The argument has already been made: the LUPP study for Drametse argued for a redistribution of land, since one or two land owners in this gewog had very large areas of land.

Targeting: targeting mechanisms are most effective when technology is developed through on-farm and village level trials that suit the particular need and niche of resource poor households. It is for this reason that a properly designed R&D project can and should be an effective vehicle for poverty alleviation. A second priority is to ensure that inequities in the present land distribution, especially of wetland are removed. A third priority it to target the rehabilitation of irrigation schemes to those where 75% of all farmers have landholdings below 0.3 hectare.

Nutrition Monitoring: a final priority for a future FEZAP II is to co-operate closely with an organisations such as UNICEF and the Ministry of Health, to ensure that the health and nutrition dimensions are properly followed up on. Essential is to ensure that indicators for nutritional status are monitored in a representative sample of villages in the project area.

Lessons learned

(a) FEZAP has Four Essentials Lessons to be Borne in Mind for Research and Development Projects:

Need to recognise "research and development needs"

It is fundamental, before designing any project, to identify those recommendations that are available, i.e. sufficiently tried out and adapted to the point where they are suited for extension purposes, or have begun to be adopted. This means discerning also those that need further development, testing and adaptation to the conditions of the target area and target group, and those that should be discarded.

Too often, projects are designed with limited data and knowledge as to the degree of variation in farmers' productivity, entitlements, constraints and risk. What is not observed is not explained. The economic justification and analysis of benefits versus costs is further constrained by the emphasis on obtaining a quantifiable ERR. The latter accentuates the bias towards overestimating the extent of the actual knowledge and the usefulness of available or so called proven technology.

This means that projects too often are justified as extension projects when they should have been designed as research and development projects. The case for farming systems research and on-farm and village level testing that should drive the generation of improved production technology is then either not understood in-country, or it is underplayed.

A primary precondition for more appropriate project design is that more attention is placed on the diagnosis of research and development needs; it is essential that this process be conducted in representative locations together with the target group itself. By such diagnosis, farmers' actual preferences and community level constraints can be understood. Design of extension activities can be avoided that will later prove ill-adapted and not effective.

Knowledge generation and diffusion

In the first place, a research and development project has to be developed in terms of the methods of approach and not in terms of detailed activities and outcomes. First, results should be seen in terms of gaining knowledge and know-how, and not of material achievements. Second, against the overall project strategy, measurable objectives need to be specified to assist the local staff and the relevant institutions to acquire the necessary skills in this research and development. Thirdly, a series of indicators need to be designed against which acquisition of skills can be monitored. Fourthly, research and development take time: this dimension needs to be taken into account in order to secure continuity in the approach beyond project end.

An R&D approach for rural financial services

Extending provision of financial services into rural areas is vital to encourage intensification and diversification of farm enterprises. Alternative innovative models need to be tested so as to increase access to credit for the rural population. This is the case, especially when credit supply is not well adapted to demand, transaction costs of borrowers are prohibitively high, and there are no institutional solutions in the country that are backed by sufficient experience, and are established, recognised and replicable.

Innovative solutions are required for technical assistance

Innovative or alternative solutions need to be found for long-term technical assistance. A compromise is required between the need of reduced costs, as against securing continuing longer term benefits from the knowledge generation process. Long-term partnership arrangements with institutions specialising in research and development, with regular support missions, training courses and attendance at workshops, is one solution. Such "twinning" arrangements should be explored with both bilateral and multilateral donors.

 (b) Lessons Learnt for Project Design in General

Aside from the lessons learnt concerning the need for making precise distinctions as to the actual knowledge available, and about proven technology, and the need to adopt a research and development methodology and clear-cut procedures at the design stage, FEZAP has seven lessons to impart as regards project design in general.

An understanding of initial socio-economic conditions

The project's acquaintance with the socio-economic conditions of the target group at the start was limited. The greater is this initial insufficiency, the higher is the probability that changes to the project concept will be needed in the course of execution. Moreover, the harder it will be to modify and adapt a project during its implementation. This is why it is essential, at the design stage, to analyse the target group's socio-economic as well as physical environment, and to conduct highly specific surveys to ascertain its constraints, preferences to contribute labour, and approval .

Low cost survey technology

Structured approaches are necessary for obtaining the necessary data. A low cost "survey technology", described in the IE report, is available to obtain better data on resource poor farmers. In preparation for the Interim Evaluation, a wealth ranking exercise was undertaken in the project area. Villagers themselves were asked to identify the resource poor households. The reliability of the results was confirmed by direct interviewing. The experience proved the benefits of using low cost methods for wealth ranking followed by subsequent targeted surveys. Once identified, the resource poor households are interviewed: feasible solutions to reduce constraints and food insecurity can then be discussed with them, and pursued.

Institution building and capabilities

The creation of capabilities should be part of a sector strategy with which to raise productivity in the systems for the delivery of services to the rural population. But the creation of capabilities for generating better performance within and across projects is a neglected dimension at time of design. At the stage of design, a strategy for training, for creating capabilities, a management structure, and financial resources for training must be formulated. Training should focus on: (i) the processes required for generating knowledge from diagnosis, experiments, testing and monitoring; (ii) disseminating the knowledge generated from the R&D among local staff and institutional partners; and (iii) evaluation.

Extension activities

Conventional, ministry driven transfer of technology oriented agricultural extension has failed to promote rural development in particular in those regions defined as agro-ecologically diverse, resource poor and risk prone. It is recognised that farmer-led approaches better integrate research and extension functions drawing upon knowledge and research capacities of local communities and combining them with those in formal research and development organisations. Local capacity for experimentation must be supported so as to permit technology to be adapted and further disseminated.

Present diffusion models need review. The possibility of using farmers as part time lower level extension workers (after necessary training) need to 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).

Land use and conservation

Project based lending normally fails to generate productive and sustainable land use that reduces soil erosion. Projects concerned with the development of land and water resources should identify and address cases to already visible erosion. Soil erosion needs to be analysed by type of land, and by type of management and cropping system. The current IE has found that soil erosion on small owned plots is less than on larger holdings. Smaller farmers who own their land, cultivate more intensively, and are likely to generate less erosion. Such findings should lead to reflection and further exploration. In future projects, land use and soil erosion should be monitored by type of land and size of entitlements of farmers.

Neglect of small livestock

Much attention is normally given to large stock across projects in contrast to small stock, pigs and poultry. Pigs and small poultry under right conditions provide high returns to female household labour and provide animal protein as well as cash. Research support for small stock is often minimal, and this area of intervention is one of the most promising in assisting the IFAD target group.

More attention to animal feed

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.

 (c) Lessons learnt as regards project operation

FEZAP offers three important lessons for project implementation in general:

Beneficiary participation and tenancy

In sites where tenancy rights are uncertain, voluntary labour contributions are not forthcoming for channel rehabilitation. Tenants are reluctant to participate/contribute to channel rehabilitation, since their short-term tenure preclude 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. Areas of conflict between different users should be monitored to explore more efficient and equitable mechanisms for water sharing, which then can be supported by project interventions.

Beneficiary participation: labour constraints

The management unit of the Project should maintain close, ongoing co-ordination with the district authorities to ensure that the demands for beneficiary labour contributions are not excessive and do not interfere with agricultural and other income-generating activities.

Full account must be taken of higher on-farm labour requirements resulting from project initiatives to promote infrastructure and increased cropping intensities. The RGOB still practices a system of taxing rural households through labour contributions: the timing and the extent of such labour needs to fit into the seasonal farming calendar so as to not worsen food insecurity.

M&E

The evaluation and support provided by IFAD and the Co-operating Institution are essential for developing the capacities of the monitoring and evaluation units. The competence of these units should be related to job descriptions and activities, be specified at the outset and be upgraded over time. The units should not be permitted to be overloaded with demands for its services. Otherwise, their ability to gather and analyse information, and to develop its own capacity for reflection and adaptation will suffer.

 

LANGUAGES: English

Southern Highlands Extension and Rural financial Services Project (1997)

Tanzania  
April 1997

Interim evaluation

Purpose and objectives of the evaluation

The overall aim of the evaluation was to review the implementation performance of those IFAD-financed projects in Tanzania containing rural financial services/credit (RFS/C) components, and to draw up recommendations and lessons learned based on the evaluation for IFAD's future RFS/C operations in Tanzania and elsewhere. As a result, the evaluation focused on three projects/ from IFAD's overall project portfolio in Tanzania. The evaluation also took stock of the evolving structural changes in the economy of the country, which has embarked on liberalisation programmes aimed also at reducing the role of the government in economic activity, while simultaneously encouraging private sector-led development. The evaluation exercise was timely given that IFAD is in the early stages of designing a new project in Tanzania with a RFS/C element.

Country backround

The islands of Zanzibar, Pemba and Mafia together with the mainland comprise the United Republic of Tanzania. The total land area of the country is 883,749 km2. The population as of mid-1996 was 30.6 million, with Dar es Salaam being the city with the largest population (around 1.4 million people). The climate is tropical on the coast, and semi-temperate inland. The country gained full independence in December 1961.

From independence till around the mid-1970s, the annual Gross Domestic Product (GDP) growth averaged 4.7%. After the mid-1970s due to a series of factors, the economy started to stagnate. However, the government persisted with its economic policies implemented since independence, based on the socialist system of government, including control and direct state intervention and investments in all sectors. By mid-1980s, the country suffered serious macroeconomic imbalances, including high inflation, persistent government budget deficits, declining per capita income and generally a very poor state of the economy. The consequences were many, most visible of them being wide-spread and acute poverty. Tanzania was obliged to seek external assistance. In 1986 it embarked on structural adjustment efforts and borrowed from the International Monetary Fund (IMF) to support economic recovery programmes, whose thrust was to implement a transition from state-control and central planning to reliance upon market forces and private initiative. Reforms included the civil service, financial sector, parastatals and the introduction of multiparty politics.

Economic performance over the reform period has been mixed. According to 1985 base figures, the average annual growth rate was 3.8% over the four years to 1995. This puts increases in real GDP marginally ahead of the population growth rate, but real income per head has been growing by less than a percentage point annually. External assistance and foreign earnings from export recovery allowed imports to recover well. But the fiscal deficit and inflationary pressure have persisted. The current account balance has remained weak. Agriculture is the principal determinant of overall growth. The sector has grown more or less in step with the rest of the economy over the past decade and its share in total value-added has remained close to 55%. Recorded manufacturing growth has been poor - in 1995 real manufacturing value added was 13% down on 1990. Mining more than tripled its contribution between 1990 and 1995, averaging 27% annual growth in real terms. Tourism is making an increased contribution to GDP. However, after nearly a decade of more or less continuous structural reform, Tanzania continues to be among the most aid-dependent states in Africa and receives some USD 1 billion gross in development assistance annually, upon which economic recovery is almost totally dependent. The long-term policy goal is to ease this dependence.

The financial sector and institutional setting

For most of the period since independence the Tanzanian financial sector was mainly government-owned with pervasive government interference in the financial system. Credit was directed on the basis of government priorities without regard to credit-worthiness, and banks were convenient agents of fiscal policy. The system allowed a single institution to have virtual monopoly in its functional area: the state owned National Bank of Commerce (NBC) monopolised commercial banking in Tanzania. Government restrictions on entry as well as sectoral and functional specialisation reduced competitive pressure. As a result competition has largely been absent. The financial system was also characterised by weak banking supervision. Each institution was governed by its own stature and the Bank of Tanzania's (BOT) supervisory role had been limited. Finally, the environment in which the formal financial institutions operated was also regulated by the state. Credit was allocated administratively by the BOT which established legal ceiling in bank lending and deposits in addition to regulating interest rules. In the prevailing environment, the financial sector's performance was very poor. Savings mobilisation was neglected. Loans to parastatals increased, and no pressure was applied on borrowers to repay their loans. The Government of Tanzania's (GOT) policies resulted in over-staffed and inefficient banks. These loan policies led in 1988 to 70% of NBC's loan portfolio to be in arrears and 95% of this was accounted for by parastatals. The Cooperative Rural Development Bank's (CRDB) rural sector loan portfolio was no better, with 66% of its loan portfolio in arrears as of end 1988. With a non-performing loan portfolio and unable to attract deposits, the formal financial sector was bankrupt, and dependent on financing from the GOT.

GOT reformed the financial sector in 1991 and established the Banking and Financial Institutions Act. Banks were restructured and many of them privatised. Interest rates were also liberalised, and financial operations were to be conducted on a more commercial basis. Along with banking de-regulation, the Cooperative's Act of 1991 was passed which authorised the re-structuring of the Cooperative movement and permitted the establishment of the Savings and Credit Cooperatives (SACCOs). Non-Governmental Organisations (NGOs) also started micro-credit operations in Tanzania. Currently, NGO's are financing approximately 18,000 micro-entrepreneurs. The two largest programmes are run by Pride Africa, with 9,000 members and Juhudiya Akina Mama Scheme managed by MEDA, with 4,000 members.

The legal and regulatory framework

The Banking and Financial Institutions Act of 1991 vested powers on licensing, supervision and regulation of banks and financial institution on the BOT. These powers are further consolidated under the 1995 BOT Act. Hence, BOT are responsible for regulation and supervision of formal financial institutions, including community and cooperative banks. However, supervision and regulation of SACCOs is the responsibility of the Registrar for Cooperatives, who operates through the Regional and District Cooperative Departments. These Departments have very low capacity to undertake such tasks, part of the problem being that they are very much under-funded, and lack equipment and transport to implement their functions satisfactorily. This has resulted in poor supervision, including weak accounting and monitoring standards.

Project implementation

Summary

Based on the objectives of the evaluation, only the implementation performance of the RFS/C components and related issues was reviewed. The credit components in all three projects under consideration were difficult to implement. This is due to a series of inter-related shortcomings: (a) inadequate government policies, including a history of directed credit; (b) lack of appropriate management and capability of the banks involved in credit operations, reflected in low professional competence and skills, inappropriate accounting and financial procedures and limited monitoring/supervisory capability; (c) overall mismanagement, high transaction costs, large non-performing loan portfolios, which contributed to liquidity problems; (d) nearly non-existent links with grassroots level, thus making credit uptake by IFAD's target group extremely difficult; and (e) slow ongoing restructuring of the concerned financial institutions and operating environment. With the overall banking system functioning below par, only a small fraction of credit funds have been utilised (for the three projects jointly, only 6 percent of envisaged credit funds have been disbursed). The three main lending institutions in Tanzania have a poor track record in general, especially in rural credit operations: (i) the CRDB was restructured in 1996 and it is now operating as a commercial bank. Following its restructuring, the bank has not been active in rural lending, although there seems to be an interest on its part to participate in micro/rural credit, mainly as a profit-making bank; (ii) the NBC has been restructured leading to the creation of a National Microfinance Bank (NMB); and (iii) the Peoples Bank in Zanzibar (PBZ) is undergoing reform in order to make its operations more responsive to the needs of micro-borrowers. However, the emergence of national banks and commercial banks in the microfinance sector is constrained by a lack of expertise in microfinance, banking regulations with respect to collateral requirements, a legal system and credit culture that do not support repayment, and the concern with profitability of a retail operation which relies on small amounts, and in many cases, low volume.

To boost its credit operations, IFAD, in close consultation and cooperation with the government, embarked on alternative arrangements for providing credit to members of IFAD's target group, which involved the use and promotion of grassroots level institutions. More specifically, under the Smallholder Development Project for Marginal Areas (SDPMA), a pilot activity involving the formation and training of SACCOs started in June 1996. SACCOs are a very simple form of financial institution, which fit well with the socio-economic milieu of the rural poor and the poor community as a whole. Hence, they are better placed to innovate and develop indigenous financial products relevant to the communities they serve.

With their emphasis on lending, mobilising savings and management at local level, SACCOs appear to be a very promising mechanism for delivery of financial services to the rural poor throughout the country. In view of their proximity to their clients, the operating and transaction costs of SACCOs are relatively low. Further, being organisations formed by beneficiaries themselves, the latter feel a sense of ownership in their respective SACCO and, hence, ensure that operations are conducted according to established criteria and procedures - this has resulted in more effective operations mirrored also in reduced risks in lending and repayments. Finally, SACCOs are democratic institutions where members have a voice in the policies of the SACCO, particularly regarding the setting of interest rates on savings/loans. In all, more than 100 SACCOs have since been formed in the area where the Southern Highlands Extension and Rural Financial Services Project (SHERFSP) is operating, and they appear to be performing well. Several of these SACCOs have operated under the project. In Zanzibar around 40 SACCOs have been registered, although none participated in the Smallholder Support Project in Zanzibar (SSPZ).

Smallholder development project for marginal areas (SDPMA)

Under this project, the first loans were not made till 1992, when a total of Tshs 38 million were initially provided to the CRDB for onlending. However, only Tshs 9.48 million were provided as loans to 147 participants in the Bahi rice irrigation sub-project in Dodoma region. Borrowers were unsatisfied with the loan product, as CRDB provided a twelve month "bullet" loan, with principal and interest repayable as lump sum at maturity. The cash cycle of the loan did not follow the cash cycle of the crop planted. Savings mobilisation was very low and interest rates charged were commercial rates, which was unrealistic also in view of the type of activities the credit was intended to support. Loan supervision and monitoring was very weak, contributing also to low repayment rates, which were around 67.5%. Further, CRDB credit modalities changed during project implementation confusing clients and discouraging potential beneficiaries. In view of the shortcomings with its initial credit operations, in 1994-95 CRDB used a different method for lending, that is the group lending approach. For this purpose, CRDB used the cooperatives as a loan distribution tool to farmers. The cooperatives were responsible for approving each member's loan, and for this an agricultural officer would visit each site to review individual borrower's activities. Once more, CRDB offered a single loan product; a twelve-month "bullet" loan, with principal and interest payable at loan maturity. In this round of operations, a total of Tshs 8.9 million was disbursed. However, no principal repayments have been received due to several factors including: late rains and hence poor harvest; cooperatives selected for loan distribution were newly formed following the Cooperatives Act of 1991 and lacked cohesion and commitment; CRDB staff were not aware fully of the composition of members of the cooperatives; and a pervasive lack of credit culture.

Given its overall poor performance, CRDB withdrew from the project in 1996, and SACCOs were used from this point to channel SDPMA's credit for the remaining period of implementation. SACCOs provided a better opportunity for promoting rural financial services, also because transaction costs were much lower and savings mobilisation improved. In this setting, loan size and repayment terms were linked to the type of activity financed, and no downpayment was required for loan uptake.

Smallholder support project in Zanzibar (SSPZ)

The credit component under this project was not implemented till February 1996, even if the project was declared effective in March 1991. This was because the Peoples Bank in Zanzibar (PBZ), the institution selected for channelling the credit, did not comply with the conditionality of IFAD's credit line, namely the provision of audited financial statements, achievement of a debt-equity ratio of 5 to 1, and a profit on loans of at least 1 percent. Around end 1995, PBZ initiated a major operational and organisational restructuring exercise to streamline its activities, a process which was still underway during the evaluation mission. Anyhow, PBZ did ultimately become operational under the SSPZ but has only made 20 loans amounting to USD 50,000. Repayment rates in mid-1997 was a mere 35 percent. The credit programme is obviously not cost-effective, also because the cost of lending was around Tsh 1.20 to every Tsh 1.0 lent. PBZ did not have sufficient capacity to handle such a credit line. Staff skills were inadequate, loans were often advanced without appraising the activity for which credit was demanded, savings mobilisation was nearly nil, loan monitoring and supervision were sub-standard, and recovery rates were exceedingly below acceptable levels. Additionally, the loan application process was lengthy, repayment terms considered harsh and loan ceilings regarded too low (only two types of loans were permitted: a short-term working capital loan up to USD 100 was to be made available to individuals and a medium-term loan of up to USD 1500 could be made to groups of USD 300 to individuals). Finally, political interference in the loan approval process also created further difficulties in implementation.

Southern highlands extension and rural financial Sservices project (SHERFS)

At appraisal, the project envisaged a double track approach to rural financial services: (a) loans would be made through CRDB under the direction of the Ministry of Agriculture and Cooperatives (MOAC); and (b) the Ministry of Community Development, Women and Children (MCDWC) would provide institutional facilities for the formation of groups to mobilise savings.

As far as implementation is concerned no loans were made through the formal banking system. CRDB withdrew from the project and the subsequent subsidiary loan agreement signed with the NBC did not materialise, because of NBC's restructuring, which is still underway. However, in order to prevent a total failure of the credit activities, the Project Coordination Unit (PCU) undertook the CRDB function by recruiting four credit officers (COs) and one Loan Accounting Officer (LAO), and initiated its operations in October 1995, under what was known as the Pilot Credit Scheme. The COs were posted at the regional headquarters of the project area, whereas the LAO was posted at the PCU in Mbeya. Regional loan committees were established to scrutinise all loan applications. To initiate the flow of credit, an initial USD 100.000 (Tshs 61.3 million) was provided to PCU's Credit Management Unit (CMU), which received initially 1150 applications for input loans by November 1995. Disbursements were made to 194 informal farmer groups in kind, in the form of input packages for one acre (fertiliser, improved seeds and agro-chemicals) in all four regions (Mbeya, Iringa, Rukwa and Ruvuma) of the project.

Repayment rates are good and are over 90%. The loans being repaid were relent to 199 groups in 1996/97. The cost of lending was Tsh 0.65 per Tsh 1.00 loaned, although this is unfortunately now increasing. In general, clients were happy about this credit scheme, although some concern was expressed about the efficacy of in kind credit, saying that sometimes the loans arrived late, and some believed they could purchase the same inputs for lower prices.

Savings mobilisation has been low among other reasons, due to lack of sensitisation and institutional back up, although this is now improving. Average savings per group in project Year I was Tsh 13 448, while in Years II and III it was Tsh 5 353 and 34 671, respectively. Despite a setback in Year II, awareness of the advantages of savings by the beneficiaries resulted in a marked rise in savings in Year III. By June 1997, Tsh 58.3 million had been saved by smallholders. Despite the initiatives by the project in mobilising savings, some specific issues caused difficulties in this respect, including (i) closure of some bank branches in rural areas; (ii) decreasing trend of interest rates on deposits; and (iii) spirit of savings mobilisation are still low. In order also to facilitate the mobilisation of rural savings, the Savings and Credit Unit (SACU) promoted the development of SACCOs. As of 31 March 1997, the SACU covered 121 SACCOs with a total membership of 17768. The total savings amount to Tshs 150.2 million. Growth in the amount of savings mobilised has been steady, with the incremental savings of Tshs 44.6 million in FY 1996 and Tshs 13.7 million for FY 1997. However these savings have come at a high cost, with cost per shilling saved being Tshs 1.64 in FY 1996 and Tshs 3.25 in FY 1997.

Recommendations towards efficient rural financial markets and intermediation

An opportunity exists in Tanzania to further develop efficient rural financial services. There is considerable GOT ownership of the initiatives aimed at providing these services to the rural poor. The BOT has been appointed as the main focal point and the donor community has come together to prepare the basis for future multilateral and bilateral interventions. A number of studies have been commissioned which provide valuable information in relation to existing institutions and on the demand for credit. The establishment of the NMB may provide for an institution which could reach IFAD's target group. Finally, enhancing access to financial services for the rural poor entails preserving the macroeconomic environment, removing the remaining policy biases against agriculture and the rural sector, reforming the legal and regulatory framework, developing or strengthening efficient financial intermediaries, providing for capacity building measures and establishing performance indicators for evaluation.

In all three credit schemes, loan appraisal has been a major weakness. Several loans were advanced to beneficiaries starting new agricultural and business activities without them being properly, or in some cases at all, appraised. As a result, the profitability of undertaking some activities was not established in advance, which therefore did not yield expected results, thus causing concerned beneficiaries to default on repayments. It is recommended that future loans should only be approved following a thorough loan appraisal process, as this is essential for the sustainability of the credit schemes.

There has been limited donor-coordination regarding microfinance activities in Tanzania, leading to the promotion of the financial sector in a piecemeal fashion, without due regard to how projects and related activities fit into the overall strategy and framework of the financial sector. Future support needs to be programmed in close collaboration with multilateral and bilateral donors operating in the financial sectors. Cost-sharing arrangements and resource mobilisation will need to be undertaken to provide effective and coordinated development, and agencies should operate and finance those activities in areas where they possess a comparative advantage, in terms of their experience, technical capacity, strategy and mandate, etc.

Local institutions have limited experience in providing support for developing capacity within existing or new financial intermediaries. However, there are a number of regional institutions which could provide this service. Exchanges of experiences and study of best practices can contribute to the design of appropriate training programmes and curricula. It is recommended to include a capacity building component in future projects including training, and exchanges of experiences. Building up new financial intermediaries and/or supporting informal groups requires considerable capacity building measures, and involving reputed regional and sub-regional institutions for this purpose would be cost-effective.

Given the uncertain prevailing financial environment in Tanzania, it is recommended that intense efforts be made by SACCOs and other rural financial institutions to mobilise savings, which would reinforce the autonomy of the present rural financial system and increase their resources availability. In fact, this has been an area where all IFAD credit activities in Tanzania have not performed well. Savings mobilisation demonstrates group cohesiveness and their capability to work together, and must thus be undertaken as an active financial service responding directly to the various needs of savers, such as the security of funds, their confidentiality, their availability, and their role in making the savers eligible for loans.

With specific regard to the financial services under the SHERFS project, two credit programmes are being implemented in parallel, one directly through the CMU of the PCU and another through the SACU and SACCOs. This dual approach is causing increases in the overall cost of operations. Not only is the actual ratio of credit delivery to cost of delivery increasing steadily, but the effectiveness of credit is gradually being strained. Both schemes have occasionally targeted the same areas, causing undue confusion and competition. It is recommended that the two schemes be brought under one umbrella, which would not only reduce costs but improve targeting, monitoring and repayments. It may be more feasible and justified to transfer the CMU's credit operations to the SACCOs operating under the project.

IFAD's more recent experience through the SHERFS project has been quite successful, especially in terms of the operations of the SACCOs. However, it would be advisable to simplify the management of the pilot scheme and reduce its area of coverage. This recommendation is also made in view of the recent escalation in transaction costs of credit operations in the project, as mentioned above. The suggestion to use Ruvuma Region is appropriate. The Savings Mobilisation and Credit Assessment Survey being conducted by the Monitoring and Evaluation Section of the SHERFS project will provide the necessary information for the proposed reorientation.

SACCOs

The overall performance of the SACCOs has been encouraging despite some of their inherent weaknesses. Nevertheless, in view of the important role of SACCOs in rural financial services in the Tanzanian context, it may be worthwhile for IFAD to consider to replicate the SACCOs' experiences in the framework of future pipeline activities. To this end, if SACCOs are to improve, continue and expand their role in rural financial services, they need to be supported through the provision of appropriate capacity building assistance, including training and members' education on savings and credit. This would enable them to upgrade their current level of management, resources, skills, accounting/financial knowledge, assets and overall operating procedures, which would in turn contribute to their sustainability, and make them more effective and efficient.

SACCOs financial linkages with formal financial institutions need also to be strengthened. This will facilitate their integration in the financial systems and their growth and development, and enable them to develop into capable institutions subject to the Banking and Financial Institutions Act of 1991. The whole issue of financial linkage is an important one if SACCOs are to be effective in handling the demand for credit in the rural areas. For instance, this would enable SACCOs to borrow from formal financial institutions in order to lend to SACCO members and clients, and would have the effect to reverse flow of funds from the formal sector to rural areas. Plus, obviously financial linkages would improve SACCOs' overall fund management.

The regulatory and supervisory framework for the SACCOs revolves around the Registrar for Cooperatives and his staff (Regional Cooperative and District Cooperative Officers). The effectiveness of SACCO supervision is currently very low due to several reasons, including inadequate budgetary allocation to the Cooperatives Department and the resulting lack of transport and funds for visiting SACCOs for supervision of their accounts and auditing. Effects of poor supervision are losses incurred through theft, engagement and investment in risky non-financial activities, delayed reporting and un-audited accounts, and violation of Cooperatives Societies Act (e.g. accepting deposits from non-members). Supervision is of paramount importance and safeguarding of depositors' funds is crucial. There have been thoughts of establishing regional apex bodies for SACCOs to offer these services. However, the IEM does not think such an arrangement would be worthwhile as it will simply create a multiplicity of organs. Despite the aforementioned, the existing network is very valid and if strengthened appropriately, it could be a very effective mechanism for supervision and regulation. What is required is to reorganise and strengthen the existing Regional and District Departments of the Cooperatives to enable them to conduct services appropriately. This necessitates additional training and funds to cooperative officers, including the provision of transport and computer equipment to improve supervision and auditing. Furthermore, there is need for the Cooperatives Department to liaise more actively with the BOT with regard to supervisory aspects.

The more successful SACCOs should be allowed to transform into Community\Village Banks in order to make them more effective institutions. However, the graduation of selected SACCOs to Village Banks should be a stepwise process. More specifically, Village Banks are considered as those institutions able to make loans and receive deposits from non-members However, it is too much to expect from even the best positioned SACCOs to take on all such responsibility at once. A first stage should be the acceptance of non-member deposits while restricting lending exclusively to SACCO members. The restriction of lending to members is to enable the mechanisms of peer pressure to continue to apply, particularly to ensure loan repayment. Thus, all borrowers of the Village Banks should continue to be members until a certain threshold is reached where restriction on lending only to members acts as a constraint on the growth of the Village Banks. At that point, the restriction should be lifted, and they should then be allowed to lend also to non-members, which is the second stage.

In order to be in a position to assess the performance of SACCOs, a set of indicators need to be established which would facilitate such a task. Presently, it is not easy to evaluate the achievements of SACCOs and this task is further complicated by the fact that SACCOs, and the services offered by each SACCO, vary from one to another. Based on the aforementioned, it is recommended that broad areas be identified that may form the basis for assessing the performance of SACCOs. The following are a range of performance indicators that may be considered: outreach, quality of services, operational efficiency and portfolio quality, growth rate, profitable interest rates, Management Information Systems' quality, good practice and governance, and transparent financial reporting (please see chapter VI for further details).

It is not possible to do a thorough analysis of loans made to women due to lack of necessary data. In the SACCOs visited by the mission, the majority of clients are men, although a large number of transactions are done by women as they are responsible for operating joint accounts in their husband's name. In some SACCOs, only around 15% of the accounts are in the name of women. Basically, women's use of financial services provided by SACCOs is disproportionate in relation to their representation in the decision-making bodies and ownership of SACCOs. SACCOs should make extra effort to involve women as members so that they may directly be entitled to loans and once they have joined, they should be encouraged to get involved in SACCOs' management and operations.

NGOs

Few NGOs in Tanzania are currently capable of making an effective transition from being traditional credit providers to cost-effective business oriented rural financial services institutions, due largely to their very weak overall capacity. Hence, the role of NGOs as a credit delivery instrument should be very carefully examined. NGOs can nevertheless play a useful part in promoting rural financial services, especially in view of their strategic position in the rural community: they could offer non-financial services (in support of financial services), such as training clients, business management training and advisory service, advocate on behalf of women and the informal sector, etc. Hence, it is recommended that (i) NGOs should be involved in the provision of rural financial services only if they are run as profitable financial institutions, and (ii) NGOs could effectively provide non-financial type of assistance. In both cases, donors and GOT need to extensively invest in institutional capacity building and staff skill training if such institutions are to meaningfully contribute to the promotion of the rural financial sector in Tanzania.

Lessons learned

Financial viability and long-term sustainability of credit operations

The experiences gained through the three projects illustrate that the viability of credit operations depends on a number of factors, including the existence of demand for credit, how well credit operations are managed overall and on the success in keeping transaction costs of lending to a bare minimum. Related to this is the interest rate issue, and the ability of credit intermediaries to adopt such interest rates which will be accepted by its customers, yet provide it with adequate spread to cover its administrative costs. Finally, long-term sustainability of credit operations depends also on (a) high levels of recovery rates to preserve integrity of the capital base; and (b) successful savings mobilisation to increase the amount of funds available for lending.

Institutional appraisal of financial intermediaries

During project design a comprehensive institutional appraisal in the field should be undertaken of those financial intermediaries under consideration to being involved in future projects and related activities. This is fundamental for the success of the financial services component and the project itself. The appraisal should assess the institution's track record in reaching the poor efficiently, its scale of outreach and the relative poverty of the clientele, the quality of the financial services and of the loan portfolio, governance, accounting procedures and experience, management capacity, financial performance over time, and the existence or potential for sound reporting, monitoring and information systems. In none of the projects under review was an attempt made to assess the cost and profitability to the bank of implementing the proposed credit line. It is preferable not to implement credit or financial services components until the financial intermediaries are sound.

Customer-oriented financial services

The financial requirements of the rural poor are not homogeneous and often vary according to the local conditions and circumstances. Customisation of credit packages are essential, which should be based also on the nature of activities the credit is to support. Varying socio-economic circumstances may also necessitate different financial products, including savings mobilisation, short, medium and long term loans, transfer services, and currency exchange. What is important is to have an analysis of the needs and services required by the intended target group, otherwise the efficacy and efficiency of the entire credit operations may be jeopardised, as was the overall case in Tanzania. Project design teams need to customise the loan programme to beneficiary demands, which should be clearly understood through a consultation process.

Credit culture

The success of credit programmes is higher in cultures where borrowers understand their responsibility to repay the loan, in accordance with the terms and conditions imposed at the time the loan was made. At the same time, lenders should also appreciate that they too have to take their responsibility in credit monitoring and repayment to ensure success of the schemes. Design missions should talk with lenders currently active in the region to assess the credit culture and if it is found to be poor, serious reflections should be given regarding implementing the credit component. Project design missions should also consult community leaders, existing and potential clients of financial intermediaries and analyse defaults and product performance.

Credit in kind

Credit in kind should only be considered if the various actors in the process are reliable and committed, otherwise repayment rates will suffer and credit operations will not bear desired results. For instance, under the SHERFS project, while being pleased that loans are being made available, clients are dissatisfied with the in kind component. Such credit has arrived late, in poor quality and at more costly rates than what the beneficiaries themselves could purchase. Where such mechanisms are implemented, it is essential to ensure efficiency and quality of the in kind instrument, so that the credibility of the programme is maintained, as well as the commitment of the beneficiaries to repay and to remain engaged in such schemes.

Pilot components/schemes

When designing pilot schemes after project implementation has started and in response to changes in the macroeconomic conditions or the regulatory and legal framework, it is necessary to review also the major assumptions which were present in the original project design. The size of the pilot scheme must be tailored to the changed environment and the area covered may also need reconsidering. Staffing, resources and procedures require tailoring, and a clear-cut time-bound action plan ought to be worked out to prevent the pilot scheme from becoming too costly in the end, and more importantly, to prevent it from blowing out of its intended proportion and scope. A pilot is an experimental phase, one through which procedures, mechanisms and technologies are to be tested and to gain understanding if the pilot exercise may be replicated at a larger scale, cost-effectively with success.

Developing and promoting grassroots institutions

The strategy of achieving cost-effective credit delivery mechanisms through the promotion and strengthening of grassroots-based institution, especially in the absence of a functioning financial sector, has so far yielded positive results. The use of grassroots organisations not only ensures better outreach, but also results with reduced cost of loan administration. The initiative to involve SACCOs in rural financial services has done much to promote the credit components, especially in the SHERFS project where SACCOs are being used on a wider scale. SACCOs are innovative type of grassroots institutions able to secure the participation of communities at local level, also given their simple approach to credit management and participatory dimension. As IFAD projects are principally concerned that credit reaches the more remote areas of developing countries, it is necessary for IFAD to involve and promote such innovative grassroot institutions to meet the credit needs of rural populations, who, in addition, are able to better identify themselves in such institutions.

Geographic proximity

Especially in larger countries decentralisation of rural financial services are essential if they are to reach and benefit the intended target group, who often live in remote rural areas where distances are huge and means of transportation and communication are much lagging. Decentralisation overtime not only reduces transaction costs, but leads to better credit uptake, monitoring, repayment and management. Geographic proximity not only refers to the establishing of mechanisms for decentralising financial systems such as mobile banking, but also to the need to remain and interact at the grassroots level in a way that actively involves both parties (lender and receiver) throughout the credit lending and repayment cycle.

Management information system

MISs are crucial especially for the success of financial institutions, no matter the size of the latter. MISs need not be complex, neither do they need to capture infinite types of data. What is required is to gather a minimum set of data to ensure proper and efficient credit management, which can provide accurate and timely information on operations and financial performance. Computerisation of MIS would be better, but in the absence of such possibilities what is fundamental is to at least have systematic procedures for data collection, and to ensure books are regularly updated to facilitate accounts and financial statements to be prepared. This will also facilitate and make more reliable/credible the audit function, which is indispensable always, but more so for credit institutions.

Auditing and inspection

It is of utmost importance that project-related accounts are systematically prepared and audited as stipulated in the loan agreement, and that reports are submitted to IFAD and the Cooperating Institutions in a timely manner. These activities are essential to reinforce the quality and security of operations. Internal controls through self-inspection to complement external auditing is also a necessary step in the direction towards sound and proper financial management. At all times accounts should be prepared and audited, and audit reports should be followed up expeditiously, and that external auditors be brought in when audit reports are not received on time.

 

LANGUAGES: English

Income Diversification Project (1997)

Jordan  
April 1997

Mid-term Evaluation

Jordan is a small country with a population of 4.5 million (1997). Its total area is 89 200 km2 of which only 1% is inland water. The country is divided into four regions starting from the West and running from North to South: (i) the Ghors, which includes the River Jordan Valley, (ii)  the highlands, (iii) the plains, and (iv) the Badia (the arid desert). The climate is Mediterranean. The temperature increases and rains decrease towards the east and the south where only grazing livestock can be sustained in the rainy season. The desert constitutes more than 85% of the total area. Only 10% of the land receives more than 200 mm rainfall annually while (1%) receives more than 500 mm. Jordan faces an acute shortage of water. The economy is dominated by the service sectors accounting for 65% of GDP. Per capita income has been estimated at about USD 1 650 for 1996. The agricultural sector contributes 5.5% of GDP. Of Jordan's total area of 8.9 million ha only 270 000 ha are cultivated annually of which some 65 000 ha are irrigated. Food crops and livestock dominate the agricultural sector. Wheat is the most important food crop followed by barley. The Jordan Valley irrigated agriculture is capital-intensive and high-yielding, producing fruits and vegetable. Livestock contributes 50% to agricultural GDP. Livestock population is dominated by sheep and goats. The rangeland has been overgrazed for many years. The project area encompasses a number of agro-ecological zones, covering rainfed areas above the 200 mm per year.

It does not include irrigated areas in the Jordan Valley neither the rangeland in the semi-arid desert. Administratively, the Kingdom of Jordan consists of 12 governorates: Amman, Irbid, Mafrag, Zarqa, Balga, Karak, Tafila, Jarash, Ajlun, Madaba, Aqaba and Ma'an. The project area straddles all the twelve governorates of Jordan.

Project design and objectives

Target group

The incidence of rural poverty is highest in the low rainfall areas in the south and in the east. Small and decreasing farm sizes, unsuitable soils, unavailability of technical and financial sources and large family sizes combine to depress incomes. Fluctuations in rainfalls result in instability in household income and in food security. The project target group consists of 8000 resource-poor, households below the poverty line in the project area including those with: (a) limited access to alternative sources of off-farm income; (b) limited opportunity for diversification of farm enterprise, (c) restricted access to financial resources; and (d) lack of ownership of land to make longer-term investment, or lack of hired labour. Households headed by women are specifically targeted. Targeting was meant to be implemented using a number of criteria including household income, gender aspect, access to off-farm income, ownership of land and livestock varying by agro-ecological zones, annual rainfall as well as various ceilings on loans for various activities. Women in the male-headed households of the target group were meant to be separately targeted hence, multiple credit lines for target group households were to be encouraged.

Objectives and components

The objectives of the project are to increase household income and enhance its stability for the disadvantaged, resource-poor women and men in the project area by improving the productive potential of their livestock, land, water resources and labour. The project has been designed to benefit the very poor strata of rural livestock keepers with particular emphasis on women, marginal and landless farmers. The objectives of the project were to be achieved by: (i) upgrading of family flocks with Shami Goats, breeding stock, selected breeding of sheep, in conjunction with improved forage production and integrating it with crops; and fattening of purchased lambs; (ii) supporting the planting of olive and fruit trees; water retention and harvesting, and protected agriculture; (iii) supporting produce processing and farm services with emphasis on family and small scale enterprises.

The project components are : (i) Credit for onlending to target groups (40% of cost) covering medium-term loans for: Shami goat multiplication and production; Baladi goat production; Awassi sheep production; lamb fattening; permanent/annual crops; produce processing and farm service enterprises. Credit also covers short-term/seasonal loans as a package linked to the medium-term loans; (ii) Institutional support covering: rehabilitation and expansion of two MOA small ruminants breeding stations; production and service support for smallholders; and strengthening field level financial services (23% of cost); (iii) Project coordination covering staff training, target group mobilization/training, coordination and M&E (7% of cost).

The design of the project entails delivery of goods and services in a coordinated manner, from a number of implementing agencies: Ministry of Agriculture (MOA), Agricultural Credit Corporation (ACC), Jordan Cooperative Corporation (JCC) distinctly delineating their functions and responsibilities: (a) MOA for upgrading the livestock, its distribution and monitoring the technical parameters, transfer of appropriate technology through demonstration and extension; (b) ACC for provision of comprehensive and viable credit packages and improved financial services; and (c) JCC for identification and mobilisation of beneficiaries, promotion of groups/coops, their needs (focus on women), and provision of training in association with NGO. A Project Coordination Unit (PCU) were to be hosted by MOA to secure: smooth and effective coordination; progress/impact monitoring; targeting; overall efficiency in project management; and collective accountability for the project as a whole. This unit will be headed by a Project Coordinator. The PCU will be guided and directed by a Project Coordination Committee (PCC), with senior members drawn from the Ministries of Planning, Finance and Agriculture, ACC and JCC. PCC can coopt other representatives as and when necessary and will be chaired by the Minister of Agriculture. It will have access to the existing high level National Permanent Steering Committee (PSC).

Expected effects and assumptions

The principal direct result of the project will be an increase in crop and livestock farm production. Incremental meat production has been estimated at 2300 tons on an annual basis representing 1% of the total annual small ruminant off-take of which about 15% is expected to be consumed by the producing households. Incremental milk and dairy production is estimated at less than 3% of the national current production. The small incremental fodder production is estimated to be readily absorbed by the households. Other incremental agricultural output is an equally small fraction of total production. Households participating under the project are expected to achieve reasonable increases in their disposable income varying by the composition of activities engaged in. Institutional benefits were expected through upgrading MOA breeding stations, support to JCC and NGOs for participatory development, as well as the creation of a replicable model for coordination.

Project's design implied a number of assumptions including (i) diversification of income sources for poor households is feasible through product/processing activities, new crop options and on-farm water conservation; (ii) multiple socio-economic, financial and agro-ecological targeting criteria can be easily combined and implemented to reach the specified target group through NGOs, JCC and front-line staff; (iii) fattening activities by small farmers will remain remunerative under conditions of unsubsidized feed and forage production will respond positively to higher feed prices; (iv) a separate funding mechanism for the credit component through ACC and its full autonomy will facilitate credit disbursement throughout the project area will not compromise coordination and targeting efforts to reach the rural poor; (v) institutional capacities of JCC and the two NGOs involved in the project are adequate (with some added support) to perform the mobilization, training and targeting tasks within the project; (vi) the need for coordination between various agencies can be taken care of through the proposed PCC mechanism.

Evaluation

An interdisciplinary MTE mission visited the field for a period of four weeks. The MTE mission held discussions with Project Staff in Amman and the governorates, staff of MOA, Ministry of Planning, ACC, JCC, NGOs involved in the project, animal breeding stations, university staff, staff of relevant research institutions and members of the Project Coordination Committee. The mission operated in four teams and travelled, with the appropriate national counterparts, to eleven of the projects governorates: Amman, Irbid, Madaba, Ajloon, Jerash, Mafrek, Karak, Tafilah, Zarqa and Al-Salt. A large number of project beneficiaries were interviewed by the mission in the eleven governorates in group discussions as well as individually. An open-ended questionnaire was devised and pre-tested before field use and activities promoted through project credit were assessed.

Implementation context

An interdisciplinary MTE mission visited the field for a period of four weeks. The MTE mission held discussions with Project Staff in Amman and the governorates, staff of MOA, Ministry of Planning, ACC, JCC, NGOs involved in the project, animal breeding stations, university staff, staff of relevant research institutions and members of the Project Coordination Committee. The mission operated in four teams and travelled, with the appropriate national counterparts, to eleven of the projects governorates: Amman, Irbid, Madaba, Ajloon, Jerash, Mafrek, Karak, Tafilah, Zarqa and Al-Salt. A large number of project beneficiaries were interviewed by the mission in the eleven governorates in group discussions as well as individually. An open-ended questionnaire was devised and pre-tested before field use and activities promoted through project credit were assessed.

Project achievements

Overall Objectives. The well documented problems associated with the importation of Shami goats have severely hindered the overall progress of IDP. As a result project objectives have been so far only partially achieved. The number of beneficiaries covered by project credit by MTE varies by source of information. In all sources the numbers referred to represent individuals (loans) not households hence it cannot be compared categorically with project target of 8000 households. It is also not possible to distinguish the number of loans received by one family nor the overall coverage of rural women and the landless. The real beneficiaries' coverage of the project remains therefore somewhat obscure. At best it does not exceed 25% of the aggregate planned target. Nevertheless given the unforeseen exogenous constraints encountered this achievement should be considered reasonable. By end 1997 project disbursement was just 25% of IFAD's loan. Incremental farm and non-farm output remain therefore quite limited.

Income Diversification and Stability. While beneficiaries reaction to project interventions indicate some positive effects on household income, the mission found no evidence that any diversification hence higher income stability has taken place. Activities financed by credit are still largely dominated by traditional livestock (sheep and goat) activities. Of total cumulative project beneficiaries about 90% have taken loans to finance such activities. Crop production and product processing remain at 10% of the total. The latter fall almost entirely within the domains practised traditionally by the small farmers in Jordan. Existing opportunities for diversification outside the livestock sector require relatively large capital and implies high risks. Only better-off farmers seem currently willing and able to undertake it. Other relevant possibilities of diversification have not been so far fully explored by the project. Some institutional strengthening has taken place but these have still to be adequately translated into improvement of ground level field services offered to beneficiaries.

It is the assessment of the mission that with the improvement of livestock productivity offered under the project and the continuous high demand for these products in the country, the livestock based activities will continue to provide remunerative opportunities for the target group despite increases in feed prices (and temporary drought related lower animal prices). The first tier of project objective remains therefore valid. The objective of enhancing income stability through diversifying production opportunities appears, so far, to be unattainable for the targeted poor.

Livestock Activities. Only 10 Shami goats multiplication units have so far been initiated by the project (14% of target at mid-term) while achievements for Shami goat importation is only 15% of the planned mid-term target. No Shami goat production units were established. Baladi goats and Awassi sheep production achieved implementation rates of 87% and 50% of mid-term target respectively while lamb fattening achievement was almost 200% of the target. Home based and small-scale dairy processing achievements are less than 10% of target and forage production is an equally low 8%.

To overcome the problem of shortage of Shami goats and problems associated with distant sources of supply, the project decided to start its breeding activities at Ma'an station for Shami goats (not stipulated at Appraisal). However, official annexation of the station to the project was still by MTE awaiting a decision by MOA. In addition, delays in reaching an agreement with NCARTT for co-operation at Khanassri and with the University of Jordan for Science and Technology regarding the application of Embryo Transfer techniques has held back progress in the implementation of upgrading of Awassi sheep and multiplication of Shami goats.

Support to Breeding Stations. Support extended to the breeding stations (including veterinary equipment, mobile clinic, vehicles and others) are so far adequate and the technical standards of the stations are satisfactory. However, MTE established that the capacity of Wadi Wala and Fujeij stations cannot provide (in the rest of the project life) breeding does and ewes to complete implementing the planned programmes of SAR. Moreover their geographical location is a great inconvenience for the beneficiaries and limit their effective coverage. The research programmes at the station can be expanded to allow for the investigation of the potential of goat breeds other than just Shami goats as well as the potential role of cattle in the dryer areas of Jordan.

The decision not to recruit the Animal Breeding Specialist (ABS) has led to delays in proposing breeding programmes and decreased project the ability to address the problem of the supply of Shami goats. The capabilities of staff and the capacities of the institutions involved with livestock need to be enhanced if the livestock component of IDP is to be implemented as planned. The project technical staff at the breeding stations are being unnecessarily constrained because of lack of managerial freedom and flexibility hence they are unable to react with adequate speed to emerging constraints.

Implementation progress for the up-grading programmes for Baladi goats and Awassi sheep are satisfactory. Performance of improved Awassi sheep has been equal to or better than sheep from Fujeij in all respects, and farmers reported little difficulty in repaying loans. This success seems to be owed to the inherent knowledge of the farmers in keeping these animals. The achievement of home based dairy processing and small-scale dairy processing (i.e. the establishment of facilities by farmers' groups, cooperatives and/or small family enterprises) was far behind scheduled at MTE. The exceptionally low rates of progress in these activities are due to the fact that they have not been well publicised and beneficiaries not adequately trained and mobilized. Fattening was meant to be exclusively targeted to landless households. This was not categorically followed during implementation and the high demand for fattening loans was met to make up for shortfalls in demand for other activities. Moreover, the exact usage of fattening loans have not been established. Clear guidelines in terms of the selection of recipients and the analysis of the proposed source of feeds need to be supplied to Credit officers of ACC and extension staff in the governorates as soon as possible.

The removal of subsidies on livestock feeds by GOJ in August 1996 has had deleterious impacts on all aspects of livestock production in the project. For example in multiplication units most of the farmers do not feed balanced rations; quantities fed do not meet more than 50-60% of the daily production requirements of the animals, and consequently milk yield has decreased. With the higher cost of feed the existing size of loans for this purpose is unrealistic. In addition, MTE calculations demonstrated that fattening activities are no longer financially viable.

The mission found little interest in forage production and in crop/livestock integration despite the great importance of these activities on environmental and economic basis. There is however, a pressing need to try and reduce the costs of animal feeds following the liberalization of feed markets, which needs to be addressed through, inter alia, such integration.

Crop diversification. The rationale for crop diversification and processing in IDP rests on providing investment opportunities for farmers to improve the stability of their incomes and to reinforce (in the case of forage) livestock activities. Project design includes a number of low cost methods aimed at optimisation of water use (conservation and harvesting). The uptake of these activities has not been particularly popular; overall the project has achieved just 21% of the target at mid-term (of which 75% is for gardens). The provision by other projects of support to soil and water conservation by means of grants, has affected the demand for such activities in IDP. Farmers reactions to growing fodder crops were mixed. The traditional practice has been to grow cereals on small areas of the farm, for harvesting when conditions permit or grazing when the crop is not worth harvesting. Farmers' views seem to favour this approach, rather than growing a specific crop as animal feed. Few farmers were persuaded to grow vetch but, more time is required to tell if this practice will be continued as part of the farming system. Crop activities require larger loans than for livestock activities. Given ACC criteria for granting loans, beneficiaries of these activities are most likely to be the better-off farmers.

Credit. The project credit disbursement at the time of the MTE was 81% of planned disbursement. Over 85% of this amount has been used for the purchase, housing and fattening of sheep and goats. There are some evidence that part of these loans (particularly fattening) may have been diverted to other productive activities, or used for consumption. In terms of reaching the intended target groups (the poor, landless and women) the effect of the credit operations is below expectations. Neither ACC's nor PCU's data are systematically classified by gender. Mission estimates for the two years 96 and 97 suggest that just about 20% of loans have been allocated to women. The figures are far below the SAR stipulates that, at least 45% of credit beneficiaries should be women. ACC lending conditions require property collateral as well as a guarantor who will accept monthly salary deductions. This practice excludes many of the poorest and the landless. There is also no grace period for any activity, even if a gestation period is technically necessary for the flow of income. While few existing cooperatives benefited from project funds; no attempt was made by ACC so far to lend to farmers groups mobilized through JCC and NGOs as per appraisal stipulations. Savings mobilization is not on ACC's agenda.

The geographical allocation of disbursed loans was found to be biased to the richer northern and central regions. The poorer southern region has only 14% of disbursed loans. This reflects both the lower population density in the south, hence a sparser coverage by ACC, and a greater perceived demand for Islamic lending. There is also evidence that the poorer people in the south cannot easily find guarantors who are prepared to accept salary deductions. The loan approval process is unnecessarily long and complicated. The small size of the loans provided by the project and the time, effort, and cost incurred by the beneficiaries, as well as the excessive collateral required, means that a large proportion of potential beneficiaries could lose interest in participating in project activities. Except in few governorates effective coordination between ACC and MOA staff locally is lacking .

The recovery rates on the project are inevitably high at 95% because of the rigid lending and repayment criteria, especially the salary deduction scheme. High recovery rates do not means that beneficiaries are not facing uncertainties in the production process. They face problems of price fluctuations of inputs and outputs, livestock mortality, drought and feed shortages. ACC did not comply with appraisal stipulations to study the possibility of introducing a credit risk fund. The deduction system is masking inefficiencies in other more traditional methods used to achieve high recovery rates, such as the efficiency of appraising loans, the efficiency of loan collections, and the efficiency in managing available funds through continuous monitoring of the ratio between long, medium, short and seasonal loans.

The conversion of ACC to a rural development bank will affect all activities of the Corporation, including the project's lending programme. If a credit risk fund is not established, ACC will probably insist on maintaining its restrictive credit policies, which are a serious barrier to the project target group taking loans from ACC. As a result of the liberalisation policies changes occurred in the relative profitability of the project activities included in the SAR, and these need to be fully analysed to ensure that benefits can continue to flow to project participants.

Organization and management. Overall, it was found that the decision making processes in the project are highly centralised, with substantial authority retained in the Project Steering and the central Project Coordinating Committee (for almost all budgetary items). The result of this pattern of control is that decision-making tends to rise to the levels of higher authority, reducing both the incentives and enthusiasm of the middle-level staff to propose and be responsible for their own activities. At the governorate level, the local project supervisor has little authority, equipment or in many cases, staff to implement project activities. Not surprisingly, a lack of motivation was noted in some staff. In addition many of the staff at the governorate level have limited identification with the aims and objectives of the project. This lack of authority continue to the level of the Project Coordinator, who only has authority for expenditure up to JODs 500.

Co-ordination of project activities. Despite the need for coordination receiving so much prominence in the design, the synchronisation of project activities was found to be poor. Little coordination of plans occurs so that annual programmes of the PIs are not compiled into a single comprehensive work plan for the project. Similarly coordinated reporting and the exchange of results does not take place. Beneficiary participation in the planning of project activities is largely absent. In addition, the ACC has assumed a dominant role in the determination of beneficiaries and the allocation of loans effectively marginalizing other project entities. This was facilitated by the separate funding mechanism granted under the project to ACC.

The role of JCC and NGOs. The JCC no longer has a central role to play in the project implementation, and hence the NGOs, which were to be contracted through the JCC, have also not played an active role in the project. In part this situation has arisen because of the changing status of the JCC (to more regulatory and auditory functions for cooperatives), and in part because the MOA was given the right (in the loan agreement) to sub-contract the designated activities assigned to the JCC. Unfortunately these changes were not incorporated in revisions to the project design, and the JCC has continued to claim the role described in the SAR. The result has been dissension in the planning forums, especially the PCC. It is perhaps unlikely that JCC could have successfully implemented the tasks assigned to it given its weakened status, but what has happened is that the MOA has assumed a pivotal role in training and social mobilisation, a role which it is patently not equipped to perform.

Project staffing. The project has a complement of 90 staff located in the central PCU (Amman), the Research Stations, and the Governorate offices. In addition two staff members are funded in the JCC and 2 consultants are retained to support the livestock programme. For the present stage and rate of implementation of the project the staffing levels are adequate, with the exception of the need for more veterinary services. The staff in IDP are adequately qualified for their tasks, although many are young with only a few years' experience. They require intensive and extensive practical training to enable them to properly perform their tasks and to make them able to deal with the project's farming beneficiaries and to interact effectively with ministry's senior staff.

Technical assistance. The project included the possibility of hiring short-term technical assistance for specific tasks including an animal breeding specialist, a resource person to assist with the design of the baseline survey, and a sociologist to help with refining the definitions of the target groups. MOA has chosen not to make use of these assistance posts so far. MTE's assessment is that given the relatively junior level of IDP staff and the complexities of some technical issues encountered, technical assistance in the early years of the project could have provided the ideal practical training for the staff. It could have also helped to establish the implementation methodology on a sounder footing.

Training. At the time of the MTE total expenditure on training was just under JOD 20 000, which amounts to approximately 10% of the planned expenditure by mid-term. A number of training courses have been arranged but the numbers trained are still limited. At MTE there was no strategy for training in the project and training takes place in a piecemeal fashion. The programme design offered scope for a very wide range of training activities, with the possibility of extensive capacity building for all the PIs. Both the scale and intensity of training required for this national project are still absent. In addition, neither training needs of the staff nor of the beneficiaries have been or are being assessed. The capabilities of staff and the capacities of the participating organisations are not strengthened to permit smooth implementation of the project. The discrepancy between design documents and the loan agreement on the responsibility of training and the ensuing disputes have been partly responsible for this state of affairs.

Monitoring and evaluation. The M&E unit of the project is computerised (at central PCU) and consists of one M&E specialist and one data-inputting assistant. Data collection and reporting have been timely and comprehensive and cover all aspects of the project. However, exclusive emphasis is given to physical progress in project implementation based on some quantitative indicators of monitoring which reflect only partly design requirements. No attempt was made to assess project effects and impact on intended beneficiaries given project objectives and rationale. Indicators specified in the project design document to measure effectiveness have neither so far been quantified nor used. Data collected have not been geared nor used to identify constraints, analyse their causes and propose corrective actions. The baseline survey had only just been completed by MTE.

The work of the mission has been affected by the lack of baseline information and systematic disagregation of data by gender, number of loans for one household, extent of benefit to landless and women, and the socio-economic characteristic of beneficiaries.

Substantial amount of time has been devoted by the M&E unit to the development of a computerised database system, PROMIS. By MTE (December 1997) the design of the system had not been finalised and only a limited pilot data-inputting phase has been initiated. As a result, the project remained by that time, without a well defined Monitoring and Evaluation System. Data collection by PCU at governorate levels is undertaken manually without clear and coherent linkages to an overall M&E system hence the observed scepticism about the usefulness of such data. Staff, including managers, still lack rigorous and comprehensive training on the use of M&E as a management tool.

Project supervision. The supervision function is regular and financial matters (disbursement and procurements) have been followed up adequately. However, the technical, managerial and socio-economic issues facing the project have not been dealt with promptly and adequately. Many of the problems and constraints discussed in the MTE report could have been identified by supervision ad remedial actions proposed. This could have accelerated the rate of implementation. The short duration of supervision missions for a large project like IDP, and the fixed missions' composition (i.e. lack of use of experts of various disciplines reflecting sociological and specific technical issues) affected the coverage of reporting and decreased the capacity of supervision to provide a true implementation support function to IDP and its staff.

Effects assessment and sustainability

Targeting. The project design at appraisal arranged for targeting to be an integrated and coordinated responsibility of the various bodies and institutions involved in project implementation. By MTE the initial screening of beneficiaries was in the hands of the PCUs at the various governorates; but in the final analysis the beneficiaries were determined by ACC. The selecting mechanism is exclusively based on ACC lending criteria. ACC ended up having more control in the selection of borrowers than any other institution. The very final decision-making on loan approval is in the hand of the ACC branch credit committee. Many of the eligible beneficiaries could not qualify for ACC lending criteria and are therefore not encouraged to apply for a loan or rejected after identification by governorate PCC. The evaluation mission is seriously concerned that, by continuing to enforce its regular eligibility requirements, ACC is excluding the poor and landless farmers and poor rural women.

The design's detailed and elaborate criteria for determining the target beneficiaries proved too complex to apply during implementation. Both the PCU and ACC prepared their own simplified versions and distributed them to their respective constituencies. Very aggregate targeting criteria of income (1800-2000 dinars), household size (5 to 8) and land ownership (below 40 dunums) are generally applied, but no effort have been devoted to specifically target the landless or women. As these are not as a rule eligible for ACC lending their access to credit is limited.

Geographical distribution of beneficiaries. Poverty concentration of the target population is found in the governorates of Mafraq in the north and Karak, Tafilah and Ma'an in the south. SAR stipulated an equal distribution of beneficiaries coverage whereby 50% of beneficiaries would be located in the better-off governorates of Irbid, Balqa and Amman and the remaining 50% in the poorer governorates. So far the emerging pattern of beneficiary participation in project credit reveals a bias against the poorer governorates. About three quarters of project beneficiaries so far are concentrated in the better-off governorates .

Participation and mobilisation. Local leaders (mukhtars) as well as representatives of female and male farmers were to be identified at the onset of the project and trained to represent farmers in relevant committees. By mid-term no such involvement took place. Farmer representatives in governorates PCU are appointed and almost all males. A media campaign and one seminar in each governorate were organized by JCC in 1996, but JCC staff and staff of the participating institutions did not see mobilization as their task. Extension staff in the directorate were neither trained nor specifically assigned for that task. The participating NGOs, to date, are not clear as to their role in the project. They did not receive funds from the project as stipulated by appraisal towards training and assigning staff to the IDP. The mobilisation efforts undertaken by the various PIs can therefore at best be described as passive. That was substantiated by the interviewed farmers, most of whom reported that their awareness of the project was by word of mouth from fellow farmers.

Beneficiaries' training. To date the actual number of farmers who attended training was very little in comparison with appraisal stipulation. As such training coverage to date stood at 7% of intended beneficiaries. Modern development-oriented techniques of participatory training methodologies were not used in training.

Beneficiary training was not based on farmers' needs assessment.

Conversely, no impact assessment took place to identify the relevance or accrued benefits to farmers of the provided training.

Beneficiaries reaction to the project. The mission used a focused group methodology and met with farmers groups in eleven of the twelve projects. Overall, 85% of the interviewed farmers were content with the project and consider their participation therein a rewarding experience. More than 75% of farmers were engaged in livestock activities. They established, across the board, that the livestock activities contribute to family food requirements. The poorest, however, were worst hit by recent policy changes of lifting the subsidies on feed. Of all interviewed farmers, 41% said they were fully satisfied; 40 % were satisfied but had some problems; and 16% were dissatisfied. About three quarters of the farmers (75%) have not participated in any training workshops. About 40% were content with the current activity and will not change it. The remaining 60% expressed desire for land rehabilitation and gardens;  food and/or dairy processing; medicinal herbs.; and protected agriculture.

The majority of the interviewed farmers were aware that they had taken the loan from the ACC, but not necessarily that they were beneficiaries of the IDP. This situation constrains their knowledge of the array of services that the project can offer them, in terms of training, extension and veterinary services, as well as farm-enterprise feasibility analysis and management. Women participants displayed a higher degree of lack of knowledge about the project.

Long loan processing period by ACC was a major complaint by farmers. A significant number of farmers (more than 90%) complained that the loan processing time is very lengthy, costly and extend for more than three months in many cases. This is particularly significant with regards to fattening and other seasonal activities, where such delay could cause the farmer to lose a season -without generating income, while loan repayment starts immediately upon approval. A number of reason was given: (a) ACC's policy to screen and approve loans in Amman rather than at governorate level, which in certain instances, causes the farmer to go to Amman and incur an extra expense; (b) Some ACC directorate branches are understaffed; and (c) ACC document requirements are too many, involving several trips to many government agencies like the department of land and survey, MOA, etc. The cost of photocopying of documents, comprises an added financial burden to the ‘poor' farmer.

Loan eligibility criteria. Invariably farmers complained about ACC collateral and guarantors requirements. The farmers expressed frustration that the ACC's guarantee requirements far exceed the (small) amount of the approved loan. They believe that either the automatic salary deduction of the guarantor or the physical collateral should be adequate guarantee. Combining the two were seen as extremely harsh and unnecessary. Many complained that these requirements prevent them from applying for a second loan and affect their disposable income in the short run.

Lack of grace period for repayments and the small size of loans were also frequent constraints. Some argued that in the end they realised that the (small) loan approved was not worth the effort (and trouble), especially in light of the increasing cost of livestock activities. Participating women revealed that almost always they had to rely on the monthly salary or pension deduction of a male kin, usually husband or brother, and their land collateral. Very few women had land ownership in their name which restricted female coverage. Moreover, the loan procedures are particularly difficult for women whose mobility is limited by their productive and reproductive roles (on the farm and in the home). There was also an indication by some women of ACC staff scepticism regarding women's ability to run viable projects.

High prices of livestock in MOA animal breeding stations was an issue repeatedly mentioned. A number of farmers expressed preference to buy animals/livestock from the market than from the project as livestock market prices are lower than those of the breeding stations. In addition, there are traits associated with the breed that farmers traditionally seek that are not found in the imported MOA stock which further turn farmers away from station stock. Farmers generally complained about the inadequacy of veterinarian services, as well as the high prices of veterinary medicines. Another constraint to poor farmers is the high cost of hired labour. There were conflicting impressions regarding extension and project-follow-up services in general. This phenomenon seems to correlate with the energy and commitment levels of project staff in the governorate specifically the project supervisor, and on the distance of the farmers from the project.

Sustainability issues. Project activities could prove sustainable in the four areas under certain conditions: (a) the breeding stations can carry on their breeding and distribution programmes as long as MOA is communicated wishes to do so and provides the means; (b) the Shami goat multiplication units will provide pure bred does and bucks to other farmers provided multipliers are chosen carefully and followed-up adequately for financial and technical services; (c) the Baladi goat and Awassi sheep up-grading units can go on as long as in-breeding and intersexing are avoided; (d) veterinary services can continue by maintaining the equipment provided by the project and by replacing them when necessary; and (e) extension services can continue by maintaining the equipment provided by the project and by fully implementing relevant training programmes.

Main issues and recommendations

Livestock. The project should immediately appoint the Animal Breeding Specialist (ABS). It should take steps to further enhance the capabilities of staff involved in livestock, and to provide them with more incentives and better facilities. The technical staff at the breeding stations should be given more administrative and financial flexibility. The project should build on its positive experience with the mobile veterinary clinic.

To increase the supply of Shami goats the project should import female does from Syria and use modern techniques of reproduction (embryo transfer) on the existing flock at Wadi Wala. Both approaches should be pursued simultaneously and on a very urgent basis.

The project should also immediately (i) finalise the agreement with NCARTT to use El-Khanassri station as a source of Awassi sheep and if possible for Shami goats as was proposed by NCARTT, and (ii) complete the annexation of Ma'an station and provide it with all necessary equipment. Animal breeding stations should be non-profit making entities and animals should be supplied to farmers at cost. An accurate calculation of the cost of animals at the station should be undertaken and factors relating to efficiency of the stations as well as requirements to achieve adequate uptake analysed and addressed.

Careful selection of beneficiaries for the multiplication unit is essential on the basis of their earlier experience in keeping cross-bred goats and on their financial capabilities. The project should negotiate with ACC an increase in the size loans allocated for feed costs to be realistically consistent with current prices. Other technical recommendations detailed in the MTE mission report relating to Baladi goat and Awassi sheep should be implemented. The project needs to further examine the feasibility of lamb fattening in various locations, to investigate the viability of this activity under various conditions given current prices.

Where found viable the project should propose a method whereby the poorest members of the rural communities can benefit from this activity. The project should make sure that both home-based and small-scale milk processing activities are well publicised through its units in the governorates, extension officers of MOA, and social mobilizers of NGOs.

Increased awareness of the importance of promoting fodder production should be ensured. Agricultural staff in the project need to discuss the requirements for forage production with their counterparts from ACC to ensure that there is a clear and uniform message being given to goat and sheep producers in this respect. MOA should ensure that there is a concerted programme to investigate the optimum parameters for forage production under various conditions in Jordan.

Extension advice provided should include appropriate messages on forage production.

Diversification. The opportunities for income diversification and improved income stability for farmers are probably at their greatest where there is an integration of crops and livestock. This has been given additional prominence with the removal of feed subsidies. The programme of demonstrations and the training provided to extension officers should be revised to reflect these priorities. Crop activities and crop processing should receive further emphasis (as detailed in mission report). The project should continue to make efforts to promote water conservation activities.

Credit. PCU and ACC in close coordination, are recommended to evaluate the activities for which credit is to be made available, so as to ensure that under the prevailing market conditions the activities are profitable for project beneficiaries. The result would be a series of credit models to be used in determining loan size and repayment schedules. ACC has to stop immediately all long term lending activities from the project funds and should correct the unbalanced allocation between short and medium term loans.

ACC needs to propose revised and relaxed credit conditions for project beneficiaries as well as loan application procedures with focus on the requirements of the poor and rural women. This will require ACC to examine in detail the implications and methodology of a credit risk fund, the possibilities of group lending, and savings mobilisation. In collaboration with PCU and Queen Alia Fund, ACC should initiate a limited pilot group lending (especially for women) based on the experience of Queen Alia Fund in this field supported by the results of the above-mentioned study. ACC should initiate an in-depth study on the effects of converting to a rural development bank on IFAD's target group.

The level of staffing, the training provided to staff and the existing management information systems available in the Corporation all need to be upgraded. ACC should recruit the six credit officers described in the SAR (including female credit officers) to support the branches of the southern governorates. ACC has to improve its activities and outreach in the southern region through, inter-alia, the introduction of mobile credit systems.

To create better coordination MOA Local Coordination Committees should be replaced by Loan Approval Committees consisting of the Director of Agriculture, the ACC branch manager, the branch credit supervisor, and the local project supervisor, to review and approve the project loan applications. The committee should have the right to invite any other PIs as deemed necessary to its meetings. The decisions of this committee have to be final, so that the ACC branch credit committee is only required to endorse them.

Organization and management. The central Project Coordinating Committee should function only as an advisory committee, with no executive powers. The role of the central PCC should be more strategic in nature and has specific functions which are not duplicated elsewhere in the project. The project Coordinator should control all budgetary aspects of the implementation and should be solely responsible for carrying out the annual work programme and report to the PCC only for strategic issues and approval of the annual work programme and budget. Coordination of regular project activities would be undertaken between designated senior contact officers in each organisation. The project supervisors in the governorates should become responsible for implementing their own project work programmes, their authority delegated from the Project Coordinator.

They should be given limited financial authority for this task.

Monitoring and evaluation. A series of national workshops should be held, on a regular basis, for IDP staff. These would re-emphasise project objectives, allow staff to determine and/or modify implementation methods, examine and unify where possible project procedures, and allow for exchanges of ideas and experience between IDP staff. Arrangements should be made for information to be transmitted between the project offices electronically which will require the purchase of at least 12 computers, plus software and staff training. The design of the computerised data system must be finalised and tested as soon as possible, so that all backlog of data can be inputted. An International M&E expert should be recruited to this effect. M&E workshops should be held with all project staff on a regular basis.

A series of focused local studies to assess the effects and impact of project activities and beneficiaries reaction should be undertaken, consecutively, over the coming two years 1998/1999. The project should be assisted in this respect by a consultant on impact assessment methodology. Project M&E staff and ACC staff should coordinate and harmonise the classification of data and the definition of beneficiaries entry for the project database. Both institutions should classify data by gender, by activities specified in the appraisal report, by number of households classified by number of loans received. Monitoring indicators (including gender sensitive indicators) spelled out in the design should be implemented.

Training and mobilization. MOA should take responsibility for training aspects of the project, and be able to contract training from the most appropriate sources, including the JCC. The rate of implementation and effectiveness of training should be specially monitored by the Steering Committee. A full-time training officer should be appointed for IDP. The starting point for a revised programme has to be a needs assessment for staff and beneficiaries.

The MTE report provides a guide to the scale and depth of staff training required. At least six full-time social mobilisers must be obtained from the NGOs and appropriately trained, ACC should activate and use training funds allocated under the project to strengthen capabilities in reaching the poorest. The techniques used in training beneficiaries need to be greatly improved.

Finally, while the project has so far involved limited expansion of livestock activities, any increase in livestock productivity and production in general should be assessed with due consideration to environmental consequences and the policy framework that will create appropriate incentive to achieve the right balance between livestock and natural resources.

 

 

LANGUAGES: English

Tunisia: Irrigation Development Project in the Governorate of Sidi Bouzi

Tunisia  
December 1996

Completion evaluation

The geographic area covered by the project coincides with the twelve districts of the Governorate of Sidi Bouzid, totalling 755 500 hectares. In 1994 the total population in the Governorate was 377 700 inhabitants, of whom 78% living in rural areas. The cultivated area is 412 000 hectares, with 33 000 farms (381 000 ha) plus the Government's "organised sector" (31 000 ha). It consists of plateaux intercepted by rocky ridges. The climate is semi-arid to arid in the south (300-200 mm). Agriculture is primarily based on rainfed tree crops, localised but dynamic irrigation and sheep production. Rainfed cereal crops cover large areas but production is unpredictable. Until some forty years ago the region was dominated by cereal crops and extensive sheep farming.

Intensive irrigation was practised on 27 700 ha in 1996 compared to only 12 000 ha in 1984. Part of the existing area has been developed under Public Irrigation Schemes (PPI 2 900 ha, borehole irrigation). The rest consists of privately owned farms which use shallow-well irrigation (24 800 ha). Other areas partly use spate irrigation (8 750 ha). The PPIs include 1 305 holdings and the shallow well subsector accounts for 6 750. Most of these farms, which also practise rainfed cultivation, are considered to be small or medium-sized.

Project design and objectives

Target group

The Sidi Bouzid irrigation project stems from another, wider-based, project to develop the Governorate's "small and medium-sized holdings", using rainfed and irrigated cultivation methods. The original project was scaled down following the World Bank's project appraisal (rainfed activities were not considered profitable). The objective of the revised project was to rehabilitate the existing Public Irrigation Schemes (PPIs), create new ones, rehabilitate shallow well equipment and develop spate irrigation. Since irrigated farms were primarily considered to be small or medium-sized enterprises, the target group implicitly covered all the rehabilitated or equipped areas.

Objectives and components

The objective of the project was to make better use of the existing irrigation infrastructures (PPIs and wells) and to enhance water resources with rehabilitation and extension measures. Spate irrigation installations were mainly designed to recharge the principal groundwater reservoir tapped, that of Sidi Bouzid, so as to compensate for excessive withdrawals from the shallow wells. At the same time, more effective institutional support was to be given to irrigation management by strengthening the capacity of OMVPI (Irrigation scheme development service) with regard to maintenance, monitoring, the extension service and the organisation of users.

The project components were:

Development of irrigation infrastructure

Rehabilitation of eight PPIs (1 200 ha).

Creation of one PPI (240 ha).

Rehabilitation of one spate irrigation scheme, setting up 240 ha of new schemes and feasibility study covering an area of 4 200 ha.

Rehabilitation of 700 shallow wells and provision of credit to equip some 450 wells.

Construction of 60 km of tracks serving the irrigation areas.

Institutional strengthening of OMVPI

Strengthening of PPI maintenance and emergency repair service.

Strengthening of the extension service.

Creation of two mechanisation units. 

Boosting marketing support services.

Strengthening of assistance capacity for the supply of inputs.

Technical assistance.

The Ministry of Agriculture was to entrust project implementation to four operators:

The major hydraulic works department of the Ministry of Agriculture for spate irrigation studies.

The roads department of the Ministry of Equipment for rural tracks.

Local banks (BNT, STB and Banque du Sud) for credit matters.

OMVPI for all the other components.

Expected effects and assumptions

The area of the PPIs was expected to increase from 902 to 1 250 ha with an increment in the volume of water distributed from 600 to 2 400 m3/ha. Irrigation efficiency was to rise from 40 to 60%. PPIs would see their fruit production increase by 3 000 t, vegetables by 1 000 t and fodder crops by 7 500 t. Areas with shallow well irrigation would produce an additional 15 000 t of vegetables and 6 000 t of fodder crops.

PPIs were to be extended to 560 farmers (50% of the total in 1984), surface wells would benefit 1 500 farmers (close to 50% of the total in 1984), and spate irrigation would concern 500 farmers. The average income of small and medium-sized PPI holdings would increase from TND 480 to 960 and from TND 1 800 to 3 565, respectively. The average income of holdings using surface wells for irrigation was expected to grow by 50%.

Evaluation

The mission had at its disposal the information contained in the annual reports, the mid-term evaluation report (1987) and the final appraisal report drawn up by CRDA in January 1996. The quality of the information was affected by the fact that numerous unclassified documents were inaccessible following the dissolution of OMVPI and by insufficient monitoring and evaluation data. The information was integrated by field work and special farmer surveys during the final mission as well as during the preparatory missions. A simulation study of the effect of the spate irrigation structures on the recharging of the aquifer  was also carried out as part of this work.

Implementation context

The principal change during the project was that of the institutional framework. Indeed, the dissolution of OMVPI occurred in 1989 and its responsibilities were transferred to the regional Commissariat (CRDA) representing the Ministry of Agriculture. Said transfer was accompanied by the liberalisation of the economy and the Government's disengagement from some of its functions. The components of direct Government intervention (mechanisation, marketing, inputs) were thus no longer justified. The mid-term evaluation, carried out prior to the changes, formulated various recommendations that were taken into account. The project, originally planned to last six years, extended its resources over a period of 10 years (1984-93). The extended closing date was possible thanks to remainders resulting from costs that were lower than those forecast and from local currency funds derived from exchange rate differences. These remainders were allocated to the rehabilitation and extension of PPIs which had not originally been planned and to an extension of the spate irrigation component.

Project achievements

The dollar comparison of forecast costs (USD 16.3 million) and effective costs (USD 16 million) shows only a slight difference. A notable difference, however, appears when evaluated in Tunisian dinars (TND), the effective cost in TND (13.0 million) being 40% higher than the forecast cost (10 million). This can be explained by a weakening in the value of the TND. The structure of the effective costs is also different from that forecast. Hydraulic infrastructure thus absorbed 56% of the costs instead of the expected 39%, rural tracks 11% compared to 15% and extension services 6% instead of 10%. IFAD financed 52% of the costs instead of the forecast 45%.

From 1984 to 1989 total project expenditure and IFAD's loan accounted for respectively 67% and 35% of OMVPI's cumulative investment budget. During the CRDA period (1990-1993), these figures were 16% and 8%. In terms of the OMVPI and CRDA cumulative investment budget, from 1984 to 1993, these rates were 35% and 17%. The beneficiaries were not involved in funding the public investments (PPIs and spate irrigation). However, their contribution, assessed by the mission, amounted to 13% of the credit for shallow wells. Including the latter self-financing, according to the project accounts the actual cost of the project was TND 14.1 million, instead of 13.9 million.

Rehabilitation and creation of Public Irrigation Schemes. The project rehabilitated 9 of the 10 PPIs created between 1958 and 1965, i.e., 1 554 hectares. The project also created 3 PPIs (492 ha equivalent to 43% of the area in 11 PPIs created since 1985). Overall, the project concerned 12 of the 21 PPIs, i.e., 2 046 ha or 74% of the total PPI area. After rehabilitation, the pumped volumes in the pertinent PPIs increased from 1.4 to 4.8 million m3. The threshold of 2 million m3 was however only reached in 1994 (2,6 million m3), when the effects of the World Bank investments for the electrification of pumps were added to IFAD's actions. The volumes distributed to the plots rose, on average, from 950 m3/ha to 1 550 m3/ha, which was below the forecast increase (2 400 m3/ha). The technical results were poorer than expected. In the three PPIs created by the project, water consumption is still less than the exploitable discharge, due to – hopefully temporary - under-utilisation of the infrastructure. The last two PPIs were created following good technical standards, and included certain innovations in the distribution of water throughout the network.

Spate irrigation schemes. This is a traditional type of irrigation in the region but with poor infrastructure it is not very effective. During the project design phase, only one modern scheme (Wadi El Hachim, 1965) was envisaged to irrigate 3 000 hectares of land. Damaged by a flood in 1969, it no longer irrigated more than 500 hectares. It was rehabilitated by the project but insufficient rainfall in the catchment area showed that the infrastructure was over-dimensioned. A partial solution consisted in irrigating its downstream area (500 ha) from Wadi Fekka of which Wadi El Hachim is a tributary and which has a catchment area that is five times larger. Rehabilitation costs were 205 TND/ha. The development of irrigation in the Wadi Fekka area went far beyond the forecasts (some 4 000 ha instead of 500 ha). Although the pilot project analysis phase was "skipped", the technical achievements are satisfactory. The development cost varies, according to the scheme considered, from 1 200 and 2 000 TND/ha. The maintenance of these infrastructures is their major long-term problem. Users, forming water-user groups, only pay between 2 and 3 TND/ha while the actual cost is 19 TND/ha.

Irrigation development using shallow wells. During the design phase priority was to be given to the existing wells while drastically restricting the number of new wells owing to groundwater overdraft, particularly at Sidi Bouzid. The spate irrigation schemes were to contribute to recharging the acquifer. The first action envisaged by the project was the creation of OMVPI technical units to clean and rehabilitate the wells. This action was unsuccessful and the equipment used by the units was passed on to private farmers. The main action, however, was to provide an equipment loan for wells. Contrary to the forecasts, this loan was mainly used to equip 813 new wells. From 1984 to 1992 the number of wells in the Governorate increased from 3 200 to 6 800. FOSDA, the World Bank and IFAD financed 2 332 wells, accounting for 65% of the 3 600 new wells. This change in the project was the response to the very strong demand from the farmers and constituted an important economic revitalisation factor. It did mean, however, that the groundwater management problem remained completely unresolved.

Rural tracks. The project implemented the planned 60 km of tracks, but at a cost of 25 000 TND/km compared to the allocated 11 000. The difference is due to a change in the technical standard (asphalting of 23 km). These rural tracks/roads are located mainly in areas that are already well served by roads.

Agricultural credit. Credit was a key instrument in financing the project but it ultimately only concerned shallow wells. The total estimated investment of TND 2.19 million in 1983 was to include 25% self-financed by farmers, a subsidy of 14%, and 61% credit. At the end of the project the total investment was evaluated at TND 2.41 million, of which 13% self-financed by farmers, 38% Government subsidies, and 49% consisted of loans (financed by IFAD). The loans financed 853 operations totalling TND 1.19 million. It was managed by BNT - subsequently merged with BNA - STB and Banque du Sud. All the operations were completed but the repayment rate is only of the order of 23%. Of the borrowers 97% have outstanding payments. The loans were allocated without land collateral. In the likely assumption that the reimbursements remain unpaid, 87% of the cost of developing the shallow wells will have been financed by subsidies and by an involuntary grant corresponding to the amount of the uncollected debts.

Strengthening of institutional support. The funds allocated to this component were used for the following operations:

Creation of two OMVPI units responsible for PPI management.

Farm mechanisation. The two mechanisation centres set up ceased to operate in 1989. During the mid-term mission they were only operating at 50% of their potential. Their equipment was passed on to SONAM.

Provision of subsidised inputs. The 15 stores envisaged were implemented. They stopped operating in 1990 with the liberalisation of the input trade. The stores were converted into depots for the territorial extension units.

Marketing support. Three existing collection centres have been equipped and three new centres have been built. These centres worked at a loss for two years and disappeared with the dissolution of OMVPI.

Extension services. The infrastructure and facilities were implemented, thus making it possible to provide one extension officer for each 197 farmers (compared to 1 per 250 prior to the project). Since 1990, the advisory function for irrigated farming is no longer distinguished from CRDA's overall extension service.

Technical assistance. This has mainly helped to improve OMPVI's management system. It was not possible to "integrate" the improvements in the CRDA, except by maintaining an accounts unit responsible for the IFAD project. Assistance provided in monitoring and evaluation had no lasting impact.

Project effects

Effects on the target group. The beneficiaries were chosen following a "spatial" logic in the PPIs and spate irrigation schemes - all farms included in these schemes being "integrated" - and a "demand" logic for shallow wells. For the shallow well component, 48% of the credit went to farmers with a total (rainfed + irrigated) area of less than 10 ha while 21.5% was allocated to farms of more than 20 hectares. With regard to the allocation of loans it was observed that beneficiaries with more than 5 ha of irrigated land (24.7% of the total) own 44.5% of the irrigated areas receiving the credit. Beneficiaries with farms of 2 to 5 ha (63.5% of the total) own 51.7% of these areas, the remainder owning farms of less than 2 ha (11.9% of the beneficiaries). The beneficiaries totalled 890. The PPI component included 1 024 beneficiaries: 14.9% in the over-20 ha category (rainfed + irrigated), 53% had farms of 5 to 10 ha and 32% had less than 5 ha. It was observed that 9% of the farmers own in excess of 5 ha in the PPIs (covering 34.1% of the PPI area) while 61.2% own 2 ha of irrigated land (27.7% of the PPI area). In the spate irrigation schemes, it is estimated that 32% of the 1 000-odd beneficiaries who receive water on a regular basis have farms of less than 5 ha and 54% have farms of 5 to 20 hectares. The average area applying spate irrigation is 4 hectares. The beneficiaries of the irrigation project are involved in the management of public infrastructure through water-user groups. The latter are a recent creation and their operation is still erratic.

Effects on yields. The area equipped for irrigation (using PPIs, wells and spate irrigation) on the farms involved in the project has risen from 2 041 ha to 9 181 hectares. The latter area comprises an effectively irrigable area of 7 953 hectares. The cultivated area is 8 776 hectares. In the PPIs, the overall efficiency of irrigation has risen from 40 to 55%. In the areas irrigated by shallow wells, the volume of water reaching the plants is in the order of 3 400 m3/ha (compared to 1 500/2 000 m3/ha without the project). In the spate irrigation schemes, the average volume of water used is of the order of 3 000 m3/ha. Yields have increased notably with improved irrigation and a more rational use of inputs.

Effects on production. Additional production in the irrigated sectors involved in the project is estimated at 5 956 t for olives (compared to the forecast 7 610), 2 363 t for fruit trees (2 049 forecast), 32 880 t for market garden produce (16 050 expected), 4 235 t of fodder (14 141 forecast) and 4 358 t of cereals. Farmers have changed from fodder crops to market garden produce.

Effects on income and employment. The farm models show substantial improvements. In the PPIs, family income from an average farm (without off-farm income) has risen from TND 2 414 prior to the project to TND 3 964; the remuneration of a day's work has increased from TND 13.4 to 18.9. On farms using irrigation water from new wells, the family income has increased from TND 1 192 to TND 6 569 while remuneration for a day's work has risen from TND 10.2 to 19.5. On PPI farms, income from irrigated production accounts for [compared to that from rainfed agriculture] around 50 to 60% of the total. On farms with shallow wells, the income from irrigated farming accounts for 75 to 80% of the total.

Rate of return on investments. The overall rate of return of the project is 31.8%, more than twice the original estimate of 13%. The rate of return on the investments for each component is 23.2% for rehabilitated PPIs, 10.1% for new PPIs, 39.3% for shallow wells and 31.3% for spate irrigation.

Effects on natural resources. One of the principal expected effects of the project concerned recharging the Sidi Bouzid aquifer through spate irrigation. This effect was only partially appreciated but the problem would need to be analysed in a different context today based on hydrogeological knowledge that was unavailable in 1984. Indeed, the water resources are greater than expected notably because of the continuity of the shallow aquifer with the deep aquifer. The drawdown observed in the wells is therefore not an indicator of depletion. But another risk emerged: salinization by the downstream aquifer if the increase in withdrawals beyond a certain threshold coincides with a succession of years of drought. This risk can be minimised through strict groundwater management. Soil salinization in the spate irrigation zones is also a risk which could be kept under control through improved drainage. Another risk lies in the indirect effects of water pollution from a paper mill outside the project area at Kasserine.

Recommendations

Recommendations for PPIs

For PPI rehabilitation,  replace the case-by-case "repairs" approach adopted during the project by a selective "rehabilitation" strategy, taking into account each PPI as a whole.

For PPI management, encourage a new relationship between the Government and the users, the latter taking collective responsibility for management functions. The role of the Government should be limited to monitoring groundwater management, ensuring the consistency of overall projects, and overall regulation. The creation of new PPIs by the Government should only be contemplated when the operation is beyond the group or individual capacities of private entrepreneurs. 

Recommendations for shallow wells

Encourage collective accountability for groundwater management, for instance by promoting water-user groups.

Devise an electrification programme for shallow-well pumps in order to reduce the cost of water, improve pumping efficiency and provide the means to control withdrawals. The short-medium term cost of electrification should be measured against the risk of well-water irrigated farms losing their competitiveness and against the risk of irreversible salinization of the aquifer as a result of uncontrollable withdrawals.

Recommendations for spate irrigation

Put greater emphasis on the economic benefit of spate irrigation and de-emphasise its role in recharging the aquifer.

Improve the dimensioning of infrastructures according to the potential of the catchment areas.

Ensure improved maintenance of the infrastructure by users, particularly by financing a maintenance fund during good years.

Leave users to solve by themselves the problems of distributing water among the plots. The distribution of the land among the traditional social groups must not be overlooked and the irrigation network must be adapted accordingly.

Launch a global study of the development potential of spate irrigation, taking into account the long-term construction of Khangat Zazia dam.

Recommendations for institutional support

Set up consultation mechanisms, encourage technical services adopt an "integrated" and multidisciplinary approach in their work. Introduce systems to disseminate information on the actions and results obtained in each sector.

Improve adaptation of national extension strategy to local needs and conditions and draw up programmes with users rather than on the basis of "national orientations" originating from central agencies.

Rethink credit mechanisms in order to better adapt them to farmers' needs, to the (notably collective) guaranties they are able to give and to their repayment capacity.

Set up a monitoring and evaluation system that will make better use of the capacity to adapt already shown the by CRDA agents.

 

LANGUAGES: English, French

Saint Vincent and the Grenadines: Smallholder Crop Improvement and MarketingProject

  
December 1996

Mid-term evaluation

Project area

St. Vincent and the Grenadines (SVG) comprises an archipelago of islands in the Eastern Caribbean. The Smallholder Crop Improvement and Marketing Project (SCIMP) covers all the island of St.Vincent. The Grenadines is not included as a specific part of the project, except for the livestock component, given that there are only an estimated 590 farming households in the Grenadines and that tourism in many of these areas provides the population with alternative income means. All of SVG has a total land area of 389 square km or 39 000 ha, of which only 26% is arable, due to mountains.

Project design and objectives

Target group

The Project aims to assist families having less than five (5) acres of land and living close to or below the poverty line estimated at ECD 11 160 (USD 4 430) per annum. For persons without land, their total income would need to be in the order of ECD 14 000 (USD 5 185). For households with land, the family would have to fall within at least one of the following: (i) female headed household; and (ii) one member of the household working full-time on the farm, at a minimum. For those without land, beneficiaries would fall into at least one of the following: (i) unemployed youths; (ii) single mothers and (iii) women-headed households.

It is expected that under the project about 2 000 of the poorest households from within the target group of 5 745 would benefit from the project. Women-headed households would form a specific sub-sector of the target group for the project. Fixed income earners or Government employees would be excluded from the target group.

Objectives and components

The main objective of the SCIMP is to provide an environment in which small farmers and the rural poor have increased flexibility to respond to changes in market demand and thereby the means to increase their incomes and improve standards of living. In practical terms this means that small farmers were to (i) diversify their agricultural production out of and around bananas and (ii) increase the efficiency of existing banana production.

The project had four components:

  • (i) agricultural production;
  • (ii) agricultural marketing;
  • (iii) credit, and
  • (iv) project coordination and monitoring & evaluation.

Expected effects and assumptions

The expected effects of the project included: (i) working with smallholders in improving their farms' productive capacity, including encouraging the implementation of soil conservation measures; (ii) increase the efficiency of banana production; (iii) strengthening institutions providing support to farmers; (iv) develop infrastructure that would enhance the national export capability and an overall market system capable of responding to local, regional and extra-regional market conditions; (v) providing a line of credit for smallholders and small agriculture-related enterprises, including agro-processors; and (vi) strengthening the Credit Unions and supporting their saving-generating capacity.

The project objectives and expected effects are based on the following critical assumptions: (i) EC prices for bananas would continue to decline thus producing incentives for small farmers to diversify; (ii) hurricanes and tropical storms would not severely disrupt production; (iii) support from the Project Marketing and Management Unit (PAMU) would be adequate to boost export levels; (iv) DEVCO would be able to improve its repayment record; (vi) mechanisms would be adequate or could be developed to get credit to the small farmers; and (vii) the capacity of NGOs would be adequate to gain the participation of small farmers in project activities.

Evaluation

The MTE mission was in St. Vincent from May 2-17, 1996. The mission's itinerary included visits in the Kingstown area, site visits to E.T. Joshua airport, the Tannia Demo Farm (Orange Hill), Layou Pasture Nursery, Belmont Livestock Center, and meetings with the Lauders/Greggs Community Groups, traffickers, and loan recipients on the Windward side of the island. The mission conducted interviews with collaborating institutions and beneficiaries and it reviewed a number of project documents, reports and surveys.

Implementation context

The project rationale to support small farmers to "respond to changes in market demand and thereby the means to increase incomes and standards of living" remains valid. The policy context for the project is increasingly favorable as the GSVG shows added political commitment to the overall diversification program and works to establish a viable program framework. However, there has been little incentive for small farmers to diversify since bananas still remain the most attractive crop because of preferential treatment by the EU, and for a variety of other reasons described in Chapters II and III. Indeed, during the project period agricultural production has become more concentrated in bananas rather than less so. Because the EU mechanism is increasingly uncertain over the next several years the SCIMP is likely to have correctly anticipated farmers' desire to diversify and ultimately it may be successful. At the current moment however, given the existing EU mechanism and current risks and market constraints, this desire on the part of small farmers is marginal or it does not exist.

Project achievements

Since project effectiveness in July 1993, significant progress has been made in laying the foundation to accomplish the main project objectives to benefit small farmers through diversification around bananas. Serious delays in implementation, due in large part to marketing constraints, institutional weaknesses and roadblocks, and lack of communication between PAMU and the MAL, show positive signs of easing during the remaining period of implementation.

In the production component some progress has been made but more is expected. Institutional strengthening has taken place; 40 extension officers have been trained and they have provided training to 50 farmers in Districts 1 and 8; several demonstration plots have been established; the Communications Unit has been producing project promotional materials and the livestock program is well underway.

The SCIMP has made much progress on the marketing side especially in terms of strengthening exporters, however, it has been severely disadvantaged by not having the full time Marketing Officer specified in the loan agreement. Progress that has been delayed at the airport cold storage site appears to be back on track with estimated completion date for the facility being July 1996.

The credit component of the project has experienced the most severe implementation problems and delays. Eighty four (84) DEVCO subloans totaling ECD 75 600 have been approved to date, reflecting roughly 10% Annual Work Plan targets. The involvement of the Cooperative Credit Union League (CCUL), which was supposed to have played a major role in credit has not occurred because of an impasse with DEVCO in reaching acceptable terms for a sub-loan.

On the management and coordination side the Project Management and Marketing Unit (PAMU) has been established as has the project Steering Committee. The PAMU and MAL have experienced serious communication and management problems which currently show signs of easing. Steering Committee members expressed positive views on the new leadership and the improved balance between public and private sector interests. On the coordination side there have been substantial lost opportunities to coordinate with the World Bank financed Agricultural Rehabilitation and Diversification Project.

Effects assessment and sustainability

Currently, there are few benefits from the SCIMP that may be considered to be sustainable. And for those few benefits that do exist their ultimate sustainability depends on the degree of support in the wider Agricultural Diversification Program. This observation should not be taken to undermine the fact that the SCIMP has laid an important foundation on which diversification efforts can continue to be built.

First, with regard to diversification, the project has had only a very marginal impact in terms of assisting small farmers to diversify around bananas. The uptake of new crops and practices by small farmers participating in the demos is not clear due to inadequate reporting by the MAL.

Second, with regard to exports and creation of new markets the project has enjoyed a better record and has assisted exporters to access new markets in the U.S. and Europe which though small seem to be reliable. On the export side, with the collaboration of TROPRO, the project has both helped to create and strengthen APEAN. This seems to be the most important benefit with good potential for sustainability. The importance of this benefit can not be underestimated.

Third, with regard to the physical infrastructure created or renovated by the project there seems to be solid indications of its use for intended purposes and adequate upkeep. This holds true for the Belmont Livestock Center and for the packhouse equipment secured for traffickers. The animal revolving scheme, just now getting off the ground, also shows positive early signs of sustainability.

Fourth, a good deal of effort has been focused on strengthening the MAL and its extension work. For these activities to be effective in the long run will require continued institutional strengthening and restructuring of MAL, including more rational management structures, an increase in the number of qualified extension agents, and strengthening of the Agricultural Planning Unit.

Effectiveness of the M&E System

The M&E system was setup in PAMU with a little delay when the necessary TA was provided in PY1. The final report of the M&E specialist was submitted in November 1994. The report, which contains the design of the M&E system, is well conceived and provides for a good reference manual for the M&E Officer. The M&E system makes use of the indicators suggested in the annexes on M&E in the appraisal document. Generally speaking, a good system has been established, which allows for information to be captured systematically and stored in electronic format. To be most effective the system will require additional focus on monitoring the uptake of demonstration activities by small farmers and a more participatory approach generally so that the project can become more responsive to small farmer interests and needs.

Main issues and recommendations

Main issues

On the production side additional progress is needed to better coordinate market and production activities; to advance adaptive research, to improve the infrastructure at Rabacca Station and to continue to actively promote the project through the Communications Unit and extension. General strengthening of extension and reform of MAL management structures should also help to support production.

Because the project is market driven, efforts to strengthen exporters (APEAN) and to train small farmers in an export orientation must be a continued priority. The immediate appointment of a full-time Marketing Officer is a key to further success in this component. Poor access to competitively priced extra regional transport continues to be one of the key market contraints. The creation of domestic and intra- regional marketing opportunities for agricultural produce will also continue to be a major challenge.

The underlying causes of the poor credit performance on the demand side are the small farmer's avoidance of debt, uncertainty of markets and prices for nonbanana production and lack of extension support. On the supply side DEVCO is hesitant to make additional loans because of problems with bad loans and loan repayment; farmers' misperceptions of loans as a sort of "grant;" DEVCO's loss of money on the IFAD line of credit and the generally high cost associated with small agricultural loans. Given these factors the credit component needs substantial reworking and possible reappraisal.

The drawn out pattern of poor relations between the PAMU and MAL with its serious deleterious impact on the SCIMP should have been addressed by CDB, IFAD and GSVG at a much earlier stage in order to control damage. In the future these kinds of problems should be addressed promptly and in a direct way with adequate support and follow-up from the collaborating institutions and the host government. The major challenge for the new Project Manager will be to build solid coordination and cooperation amongst the current and new institutional players with a clear focus on the intended project impact. Better relations with the MAL and other branches of government will greatly increase the likelyhood that the project will gain the resources that it needs in order to succeed.

Participation of small farmers in the project has been disappointing, especially in the credit aspect, although this is not surprising given the major constraints. To date roughly 453 households, or less than 25% of total targeted beneficiaries have benefited from the project through credit, training, extension, export support and the livestock program. At this stage there is little evidence of incremental diversification by small farmers due to the project.

Behind this there are a variety of interrelated causal factors, chief of which are: lack of knowledge about the project, marketing bottlenecks, risk adversity and avoidance of debt on the part of the small farmers, weak project and credit outreach, lack of institutional coordination and the lack of involvement of key nongovernmental institutions that have a comparative advantage in reaching the poor. In short, these problems pose the major challenges to the project and outline the key areas in need of immediate improvement.

Recommendations

Small farmer participation

The second Rural Development Officer (RDO) should be assigned to project by GSVG by June 30, 1996. The RDO should be female. One RDO would cover the Leeward and the other would cover the Windward side of the island.

Two small farmers (preferably female) should be selected immediately by GSVG to the project Steering Committee.

A Letter of Agreement should be signed between PAMU and NFU to increase the participation of farmer groups in project activities. NFU should take a proactive role in identifying projects for subloans, training, etc.

Production

Regular meetings between MAL and APEAN should be scheduled to coordinate marketing and production strategy and activities within the GSVG's diversification program.

CARDI should be formally involved in the project through a letter of agreement between SCIMP/MAL/ CARDI to assist in adaptive research and if needed in execution of management of livestock programs including Drug Revolving Scheme.

Improve infrastructure at Rabacca Station, in a fashion similar to Belmont Center, by August 1996. Funded by SCIMP project resources.

Video equipment for the Communications Unit should be purchased immediately through SCIMP resources to enable more effective and efficient project promotion.

Training

Implement the SCIMP 1996 Training Plan with UWI/CEPAT and IICA. Training in agribusiness for small farmers is especially important.

Marketing

The Marketing Officer should be assigned to SCIMP by GSVG by June 30, 1996.

A Working Capital Guarantee Program financed by SCIMP loan resources should be implemented to strengthen APEAN and exporters.

Complete Phase II of technical assistance for Agro-processors improving the technical and marketing capability of 15 local agro-processors. This should be as planned on week of June 24, 1996.

Complete civil works at E.T. Joshua Airport for outbound fresh produce shipments. APEAN should complete management system (fees, electricity, security, staffing, etc.). The facility should be operational by July 31, 1996. SCIMP should be involved in Management Committee of air cargo facility.

Airfreight contracts should be signed between APEAN/SCIMP and carrier, with assistance of GSVG, to fly 50,000 lb/week breadfruit, mangoes, peppers, soursop, etc. to Barbados for interline connection to Toronto, Montreal, London and NYC. SCIMP to guarantee 30,000 lbs/week during February through November. Rate not to exceed 9.5 cents US/lb.

A Fruit Ripening Facility should be co-financed by SCIMP and BGA with participation by NFU and CARIPEDA to expand local markets. SVBGA should take up membership in APEAN and begin the process if its product market diversification around bananas, taking a lead role with SVMC and other exporters.

Credit

The Ad-hoc Credit Survey should be completed by PAMU according to TOR by July 1, 1996. The Survey results should be used to further inform the selection of most effective mechanisms for credit delivery.

Draft and execute subsidiary loan agreements between GSVG to NCB and NDF by August 1, 1996 in order to expand credit. The credit should be provided to NDF, NCB and at 4%. The credit institutions should be free to on-lend at competitive rates below 12% with specific on-lending terms to be informed by results of the Credit Survey. Institutions should successfully complete a management audit in order to activate the subsidiary loan agreement.

Provide institutional strengthening in agricultural loan management to NCB, NDF, CCUL and credit unions beginning August 15, 1996. Training and attachments should be provided by CCCU Barbados and ACB Jamaica through project resources.

Expand credit outreach by DEVCO to include: a) minimum once weekly "office" hours in rural areas using low-cost outreach facilities; b) speeding approval process for loans; c) DEVCO's authority to on-lend directly to member credit unions.

Increase the percentage of project loan expenditures for credit from 65% to 80% in order to reduce risk to credit institutions and to increase scope of credit. Implement by September 1, 1996.

Implement Insurance Fund for Delinquent Loans of up to 10% of outstanding loans to eligible project beneficiaries in order to reduce risk to credit institutions and to increase credit scope. The guarantee should be funded by project resources and may only be invoked for delinquency after loans are over 180 days past due and the institution has exhausted all avenues of collection on a project-by-project basis.

Project Management, coordination and evaluation

PAMU should build and maintain close coordination and collaboration with MAL, DEVCO, specified credit institutions, and other groups and institutions involved in project implementation.

PAMU and the Steering Committee should build closer coordination with Agricultural Diversification Program and Phase III of the Agricultural Rehabilitation and Diversification Project.

An Annual Review and Planning Meeting with participating institutions and small farmers should be coordinated by PAMU in September 1996 and annually until end of project.

The terms of reference for the Project Steering Committee should be signed by GSVG by June 15, 1996.

CDB and IFAD should closely monitor SCIMP during the next year in joint missions to ensure that project performance gets back on track.

The M&E Unit should remain positioned in PAMU in order to enable most efficient and effective M&E activities and in particular participatory M&E of beneficiary uptake of new practices. The M&E position should play a more central and active role in advising Project Manager for management decision-making.

Project promotion

Project promotion activities should be planned and implemented in close collaboration with the Communications Unit and participating institutions:

  1. TV documentary (½-1 hour) emphasizing benefits to farmer and team-approach of participating agencies produced and aired 3x per month for several months beginning November 1996. Funded by project resources.
  2. Daily 2 minute radio spots aired at a prime time (say between news and obituaries) beginning July 1996.
  3. PAMU to aggressively seek creation of opportunities to promote the project through news media, comic strips, trade fairs, etc.

 

LANGUAGES: English

Projet de Développement de la Pêche Artisanale - Phase I (1996)

Djibouti  
December 1996

Completion evaluation

La République de Djibouti est un petit pays de 23 000 km2 dont la population actuelle est estimée à 520 000 personnes sans compter les réfugiés. Les conditions naturelles sont extrêmement sévères (125 mm/an de pluviométrie et moins de 3% des terres du pays cultivables avec irrigation). La pêche a un poids extrêmement faible dans l'économie (0,1% du PNB en 1993 et 0,5% de la population du pays directement lié au secteur: pêcheurs, revendeurs et leurs familles) mais est considérée comme une des rares activités du secteur primaire ayant un potentiel de développement important. Il s'agit d'une pêche artisanale. L'essentiel de la flottille est constitué d'embarcations en fibre de verre de 5 à 10 m, motorisées. La ligne à main est la principale technique utilisée.

Conception et objectifs du projet

Groupe cible

Les pêcheurs de Djibouti-ville, Obock et Tadjourah, les consommateurs pauvres et les revendeurs sont les principaux bénéficiaires ciblés par le projet. Leur nombre est estimé par les deux rapports de pré-évaluation (phase pilote puis deuxième phase) à, pour les pêcheurs et leurs familles 700 ou 3 000 personnes, pour les consommateurs pauvres 125 000 ou 150 000 personnes. Pour la deuxième phase, les éleveurs semi-nomade de Khor Angar (environ 400 personnes) et les femmes sont spécifiquement pris en compte.

Objectifs et composantes du projet

L'objectif général du projet est le développement du secteur de la pêche artisanale grâce à un accroissement de la production et de la commercialisation.

Le projet pilote de développement de la pêche artisanale (1980-85) a comme double objectif d'améliorer les conditions de vie et les revenus des pêcheurs et de leurs familles et d'accroitre la consommation locale de poisson frais en augmentant la disponibilité et l'accès au poisson des consommateurs pauvres de Djibouti. La seconde phase du projet (1985-93) a comme principal objectif la consolidation des réalisations de la phase pilote ainsi que la promotion des femmes dans les activités de vente et de transformation du poisson et la promotion de la pêche de subsistance dans le village de Khor Angar.

La phase pilote, comme la deuxième phase, consiste en la fourniture de moyens financiers, d'assistance technique et d'activités de formation pour augmenter la production, améliorer la conservation et la commercialisation et renforcer l'encadrement existant.

L'augmentation de production doit se faire grâce à la fourniture à l'ACPM de moyens de production à rétrocéder aux pêcheurs selon un système de crédit géré par la coopérative (embarcations en polyester, moteurs hors-bord, pièces détachées, matériel divers et engins de pêche); l'installation et l'équipement d'un atelier de réparation mécanique et d'un chantier naval; la fourniture de deux unités de pêche artisanale modernes pour l'expérimentation de "nouvelles" techniques de pêche; la construction d'un dépot de carburant pour la vente aux pêcheurs d'essence détaxée. La deuxième phase propose aussi la fourniture de bateaux à rames et d'engins de pêche aux habitants du village de Khor Angar pour encourager la pêche de subsistance et la formation et l'équipement de jeunes pêcheurs.

L'amélioration de la conservation et de la commercialisation passe par la construction et réhabilitation des installations de stockage et de distribution (machine à glace, chambres froides, caisses et camionettes isothermes) de la Pêcherie; la fourniture de caisses isotherme pour les houris; l'organisation du transport du poisson entre la coopérative et les poissonneries avec des camionnettes isothermes; la construction de poissonneries : neuf à Djibouti, une à Obock, une à Tadjourah, une à Dikhil et une à Ali Sabieh. Pour la deuxième phase, la participation des femmes doit être encouragée par la formation aux techniques de transformation ainsi que par l'accès au crédit et à la gestion de poissonneries.

Le renforcement de l'encadrement existant comprend la fourniture d'assistance technique aux responsables (un coordinateur de projet, un maitre pêcheur, un mécanicien, un conseiller en pêche, un spécialiste d'organisation coopérative); des consultants pour des missions spéciales à court-terme et des formations à l'étranger.

Le système de S&E est défini en detail en 1983 dans un document du département d'économie et planification du FIDA. Ce document inclue la definition du cadre logique (impact/objectifs de développement, objectifs immédiats, produits directs, intrants; hypothèses de base), indicateurs (un groupe par categorie logique), sources de données, relations causales, les études à faire, etc.

Le coût de la phase pilote était de 3,7 millions de dollars EU dont 2 millions financés par le FIDA; 0,7 millions par l'USAID; 0,23 millions par le FAC et 0,8 par le gouvernement. Celui de la deuxième phase était de 1,4 millions de dollars EU financé par le FIDA à hauteur de 1,1 miilions et par le gouvernement à hauteur de 0,3 millions de dollars EU.

Effets attendus et hypothèses

De la phase pilote étaient attendus un accroissement de 470 t de la production, une diminution des coûts de production par un meilleur service de maintenance des unités et engins de pêche, une augmentation des revenus des pêcheurs de 400 000 à 600 000 FD, un renforcement des institutions, le développement de la recherche en matière de ressources halieutiques et techniques de pêche et une amélioration du niveau nutritionnel de la population.

La deuxième phase devait permettre un doublement de la production (1 159 t en 1990) dont 40% serait disponible pour l'exportation. La consommation de poisson de la population urbaine pauvre augmenterait jusqu'à un équivalent protéique de 8,7 kg/an.

La logique interne du projet reposait sur deux hypothèses majeures:

  • L'ensemble des moyens mobilisés permettra un accroissement de la productivité et de la production des pêcheurs et donc de leurs conditions de vie et revenus.
  • Cet accroissement de production, combiné aux moyens spécifiques de la commercialisation améliorera la disponibilité et la régularité de l'approvisionnement des consommateurs à des conditions de prix favorables.

Evaluation

Evolution du contexte en cours d'exécution

Les zones de pêches ont été réduites à plusieurs reprises. La côte nord a été interdite en 1980, puis entre 1991 et 1993. En effet, de 1991 à 1994, une guerre civile a déchiré le pays. A l'automne 1991, troubles et affrontements ont éclatédans le pays et ont affecté les villes d'Obock et de Tadjourah. La population d'Obock s'est enfui, de nombreuses embarcations et infrastructures ont été détruites. Des embarcations ont été saisies par l'armée pendant toute la durée du conflit. En 1985 et en 1989, les autorités somaliennes ont interdit leurs zones de pêche aux djiboutiens.

En 1988, l'USAID a changé de politique d'intervention. L'assistance technique américaine a quitté le projet; une subvention directe a été accordée au gouvernement.

Réalisations du projet

L'ACPM était l'organisme par lequel passait l'essentiel des réalisations du projet. Selon son mandat, elle assurait trois fonctions principales:

  • la vente à crédit d'embarcations, de moteurs et de matériel de pêche;
  • la commercialisation du poisson livré par ses membres;
  • la fourniture de services de réparation et d'entretien des embarcations et moteurs.

Des services complémentaires étaient fournis à prix subventionné: vente de carburant partiellement détaxé, vente de glace (gratuite jusqu'en 1984 puis à prix subventionné).

En 1993, l'ACPM ferme ses portes. En 1994, un gérant privé reprend une partie des fonctions assurées par l'ex-ACPM: vente de carburant détaxé et de glace. Quelques pêcheurs approvisionnent la Pêcherie qui commercialise cette production comme un point de vente privé.

Ont été fournis à crédit et à prix avantageux (environ deux fois moins cher que dans le privé), environ 54 embarcations en polyester de 5 ou 7m, 3 embarcations de 10 m et 140 moteurs. La "plastification" d'embarcations et les réparations ont aussi été réalisées à crédit (main d'oeuvre gratuite). Deux bateaux équipés de moteur ont été fournis au village de Khor Angar. Le remboursement s'effectuait par prélèvement automatique de 10% de la valeur de la production débarquée à l'ACPM. En fin de projet, le taux de remboursement des crédits était de l'ordre de 33%.,

Un chantier naval et un atelier mécanique ont été mis en place. Une série de "plastifications" des houris en bois a été entreprise. Six unités en polyester ont été construites puis le chantier naval n'a plus été utilisé. Aujourd'hui, l'atelier de mécanique est occupé par le mécanicien formé dans le cadre du projet.

Des navires (le "khor Angar", le "Khor ambado" et des vedettes en polyester) ont été fournis à la DEP pour la formation des maitres pêcheurs, pour les travaux de recherche pour l'évaluation des ressources halieutiques et pour l'expérimentation de nouvelles techniques de pêche. L'équipage du "Khor Angar" a surtout été formé pour l'utilisation du chalut, mais aucun coup de senne n'a été donné. Les nasses à poissons, les casiers à crustacés, les "sticks" ou palangrottes verticales et la pêche à la traîne sur tangons ont été expérimentés. Aujourd'hui, aucune des "nouvelles techniques" présentées dans le cadre du projet FIDA n'est utilisée par les pêcheurs professionnels djiboutiens.

Des recherches ont été entreprises afin d'évaluer plus précisément l'importance des différents stocks halieutiques, en mer avec le navire "Khor Angar" qui réalisa plusieurs campagnes expérimentales de chalutage, et à terre avec la récolte de données statistiques sur les débarquements. Une partie de ces études a été mise en valeur par la publication du livre : Poissons de Djibouti (Bouhlel M., 1988). Ces travaux ont été suivis en 1991 par un programme de recherche, financé par la coopération allemande (GTZ) et se poursuit à l'heure actuelle au niveau des principaux centres de débarquement par la collecte de données sur les captures et sur l'effort de pêche pour alimenter la base de données pour l'aménagement de la pêche (BADAP) gérée par la DEP.

La formation de professionnels issus de la filière pêche a été très limitée. Les programmes prévus pour les patrons pêcheurs et les mareyeurs n'ont pas été réalisés. Le Centre de Formation et de Perfectionnement des Pêcheurs à Obock (CFPP) a formé deux promotions de jeunes pêcheurs de 15 et 31 stagiaires. Par binômes, les élèves de la première promotion ont reçu une embarcation entièrement équipée. Actuellement, seuls les plus motivés des jeunes pêcheurs formés dans le cadre du projet sont occasionellement recrutés comme marins par des patrons pêcheurs. Le CFPP a été entièrement détruit pendant la guerre civile. La remise en état des bâtiments du CFPP est actuellement en cours grâce aux financements de Caritas et de l'Ambassade du Canada.

Des infrastructures de stockage ont été rénovées ou agrandies à la Pêcheris (l'ACPM), d'autres ont été installées sur les centres de débarquement d'Obock et Tadjourah ainsi que dans deux villes de l'intérieur du pays, Ali Sabieh et Dikhil.

La politique de commercialisation de l'ACPM était d'acheter la totalité du poisson débarqué afin d'encourager la production. En fait, la commercialisation assurée par l'ACPM n'a jamais concerné la totalité de la production djiboutienne et a baissé tout au long de la vie du projet. A partir de 1989, suite à des problèmes de trésorerie, l'ACPM ne payait plus comptant mais délivrait des bons de livraisons; la production livrée à l'ACPM diminuait car les pêcheurs préféraient vendre comptant aux revendeurs privés.

Des points de vente au détail ont été mis en place. Les poissonneries de Djibouti-ville ont dans l'ensemble fermé assez rapidement (2/9 sont encore utilisées aujourd'hui). Les étals du marchés central ont été agrandis et rénovés (28 étals en tout). A Balbala, 4 étals ont été ouverts puis abandonnés. A Obock, le marché au poisson a été dévasté pendant le conflit. A Tadjourah, Dikhil et Ali Sabieh, les points de vente et les chambres froides ont fonctionné peu de temps.

L'UNICEF et le CRS ont mené, en collaboration avec le projet des actions de promotion de la consommation de poisson.

Les femmes n'ont bénéficié d'aucune actions spécifiques: les crédits commercialisation n'ont jamais été attribués et la formation aux techniques de transformation du poisson n'a pas eu lieu.

Dans le cadre des activités du projet environ quinze homologues et assistants djiboutiens ont été formés "sur le tas" par les experts en place à Djibouti. Afin de consolider les formations du personnel de la DEP, huit cadres ont bénéficié de formations ou de stages de spécialisation à l'étranger.

L'assistance technique mobilisée au cours des deux phases du projet a été importante, sept experts étaient en place pour la première phase du projet et pour une partie de la seconde phase. De très nombreux consultants sont aussi intervenus sur le projet au cours des différentes missions de supervision ou d'évaluation ou encore lors de missions à court terme plus précises.

Le suivi de la gestion des crédits a été mal assuré. Le S&E des crédit a été absolument insuffisant. Certains pêcheurs ont remboursé plus que leur dû, d'autres n'ont pas remboursé du tout. Le projet a souffert d'une absence générale de suivi de ses activités. La supervision n'a pas été en mesure d'ameliorer cette situation.

Appréciation des effets du projet et de leur perennité

Bénéficiaires: une centaine de pêcheurs ont bénéficié des crédits dispensés par l'ACPM. Plus généralement, l'ensemble des pêcheurs du pays (270-300 personnes) a bénéficié, dans une certaine mesure de l'ACPM: vente de leur production, accès au carburant détaxé et à la glace à prix subventionné. Les revendeurs ou revendeuses ont bénéficié de la construction ou réhabilitation des étals du marché central et des différentes poissonneries (une cinquantaine de personnes). 46 jeunes ont fréquenté le centre de formation d'Obock. Des mères et des enfants malnourris ont été soutenus par les PMI (plus de 1000 familles).

Les crédits dispensés ont essentiellement permis de moderniser et de renouveller la flotille. Le nombre total d'embarcations ne semble pas avoir augmenté de façon importante et ce d'autant plus que si certains des bateaux et moteurs endommagés ou saisis par l'armée sont de nouveaux opérationnels, d'autres sont définitivement perdus. En revanche, cette modernisation a permis d'augmenter la productivité et la production du secteur. La production est passée de 250 tonnes en 1980 à 830 tonnes en dix ans. Le conflit a sérieusement affecté ce secteur. La flottille a repris assez rapidement son activité après la fin des hostilités mais la production semble aujourd'hui limitée par des problèmes de commercialisation et par un manque de moyens financiers des propriétaires d'embarcations pour faire face aux éventuelles pannes et réparations.

Effets sur les revenus des bénéficiaires: Un compte d'exploitation réalisé par la mission pour le cas d'une embarcation de 7 m en fibre de verre et d'un pêcheur actif et expérimenté montre que les revenus d'un patron pêcheur sont de l'ordre de 60 000 FD (340 USD) par mois et de 40 000 FD (225 USD) par mois pour un matelot. Ces revenus seraient en augmentation par rapport aux estimations réalisées par l'étude socio-économique de 1983 qui faisait varier le revenu d'un patron pêcheur entre 26 000 et 44 000 FD par mois.

Cependant, les pêcheurs correspondant à ce modèle de "pêcheur actif et expérimenté" sont actuellement une minorité à Djibouti. La majorité des embarcations et des pêcheurs est limitée par les difficultés à écouler la production et le manque de moyen financier et se situe bien en dessous de ce niveau. D'autre part, les obligations sociales et familiales font que les revenus sont rapidement consommés et que la plupart des pêcheurs n'arrive pas à mettre de l'argent de côté pour se prémunir d'une future panne ou pour assurer l'avitaillement nécessaire à une nouvelle sortie en mer. La consommation de khat s'avère être un des postes de dépenses les plus importants.

La diffusion des techniques de glaçage et d'éviscération a permis de diminuer les pertes après capture et de débarquer un poisson de bonne qualité.

La consommation de poisson demeure très faible, de l'ordre de 1,6 kg/hab/an.

Effets sur les revenus et les conditions de vie des femmes: Bien qu'elles n'aient que très peu bénéficié du projet et que le contexte social ne favorise pas leur insertion dans le marché de l'emploi, plusieurs femmes montrent un intérêt pour les activités liées à la pêche. Des femmes créent des points de vente de poisson, en plein air, dans les quartiers; d'autres apprennent à cuisiner le poisson et revendent du poisson cuisiné. Seule la pêche proprement dite reste une activité d'exception pour les femmes (il existe une seule femme pêcheur à Djibouti).

Appréciation de la durabilité du projet: Les réalisations du projet ont reposé sur l'ACPM qui ne s'est pas révélé une institution durable. Elle n'a pas fonctionné comme une coopérative gérée par ses membres mais comme un "prolongement" du DEP. Le système de commercialisation qui ne tenait pas compte des possibilités réelles d'écoulement ni des coûts de fonctionnement des infrastructures de stockage n'était pas viable. Le système de crédit a présenté des taux de remboursement tout à fait insuffisants et le fonds de crédit renouvelable a été utilisé pour résoudre les problèmes de trésorerie de la coopérative. L'ACPM a fermé ses portes en 1993.

Principaux problèmes rencontrés et recommandations

L'ACPM a souffert de nombreuses faiblesses: Elle n'a jamais été une coopérative indépendante; elle a toujours été très dépendante des services de l'élevage et des pêches (directeur identique, partie du personnel identique, pas de comptabilité séparée pendant de nombreuses années, locaux appartenant au SEP, subventions directes et indirectes). Les pêcheurs ont été peu impliqués dans les décisions la concernant. La gestion de l'ACPM avait comme objectif prioritaire d'encourager la production; les contraintes économiques n'étaient pas prises en compte. La comptabilité et le suivi des crédits ont été tout à fait insuffisants.

Le système de crédit n'était pas pérenne et a cessé avec le projet: Le taux de remboursement était largement insuffisant. Les pêcheurs évitaient le prélèvement automatique de 10% de la production débarquée pour remboursement des crédits en débarquant leur production aux revendeurs privés plutôt qu'à l'ACPM. Le fonds de crédit renouvelable a servi à répondre aux besoins de trésorerie de la coopérative et ne pouvait donc constituer un fonds de roulement durable. Et, les habitudes de non remboursement héritées de ce projet peuvent avoir des conséquences facheuses pour l'avenir. Les pêcheurs sont maintenant habitués à des crédits à prix subventionné dont le remboursement est "facultatif". Le crédit est assimilé à un "don" de l'ACPM.

Les UPAM avaient des objectifs trop ambitieux et le transfert technique était difficile: Il était techniquement très difficile pour les deux UPAM très aussi polyvalentes que le prévoyait leur programme (chalutier, fileyeur, ligneur, senneur et bateau de transport). Un patron pêcheur et son équipage peuvent difficilement passer d'une technique à l'autre tout en restant performant. Dans l'expérimentation des nouvelles techniques, la priorité a été donnée, par les maître pêcheurs expatriés aux techniques qu'ils connaissaient le mieux et qui correspondaient aux travaux que le projet avait initié D'autre part, le choix des techniques à promouvoir n'a pas été fait avec les patrons pêcheurs "leaders"; les essais n'ont pas été faits dans des conditions "réelles" et les différentes techniques proposées nécessitaient des investissements importants. Aussi, aucune des techniques expérimentées n'a finalement été adoptée par les pêcheurs.

La commercialisation est resté une contrainte importante: La politique de commercialisation de l'ACPM (achat de la totalité de la production débarquée) était irréaliste. Les prix fixés ne dépendaient pas des coûts de stockage et de fonctionnement ni même des variataions de l'offre et de la demande. Or, les infrastructures du froid sont souvent tombées en panne car le matériel n'était pas adapté aux conditions climatiques extrêmes de Djibouti. Ceci a accentué les difficultés d'écoulement en saison chaude. La demande locale de poisson est restée faible et orientée vers des espèces particulières (le Thazard est l'espèce la plus recherchée). La rentabilité des points de vente du projet n'était pas assurée; les charges d'eau et électricité étaient trop importantes. Et, les poissonneries étaient souvent mal situées.

Recommandations:

Les associations qui émergent actuellement devraient être appuyées et devenir des partenaires à part

entière des projets cherchant à développer le secteur de la pêche artisanale. Une approche participative permettrait d'évaluer avec les associations les possibilités et les modalités de développement de leurs activités et d'impliquer réellement les bénéficiaires dans les décisions et la gestion.

Un système de caisses d'épargne et de crédit doit être expérimenté et adapté à la réalité du pays et du secteur. Ces caisses devraient être gérées directement par les personnes concernés sans dépendre des services de l'Elevage et des Pêches. Les ressources de ces caisses peuvent provenir i) de l'épargne des membres, ii) de l'épargne et d'un don d'un bailleur, iii) de l'épargne et d'un prêt du secteur bancaire classique. Le plus important est d'expérimenter prudemment et notamment avec des montants de crédit limités (pas de financement d'embarcations et de moteurs) au moins dans un premier temps (habitudes de non remboursement héritées de l'expérience ACPM).

Les échanges d'expériences au sein des pays de l'IGADD dans le domaine des pêches artisanales doivent être encouragés en organisant des réunions et des voyages professionnels au niveau régional entre les différents groupes de la filière pêche (patrons pêcheurs, mareyeurs, charpentiers) afin de favoriser les transferts de technologies.

Les infrastructure de stockage devraient être réhabilitées car les problèmes d'écoulement au cours de la

saison chaude sont d'autant plus importants que les capacités de stockage sont très faibles. Il serait

important de prévoir des installations frigorifiques adaptées aux conditions climatiques très particulières

de Djibouti et de prévoir un budget important pour l'entretien. Ces infrastructures devraient être gérées

par une structure adéquate qui pourrait être le nouveau port de pêche autonome (voir le projet BAD).

Une étude de marché parait nécessaire tant pour préciser la demande locale que pour évaluer la possibilité de développer à nouveau les exportations.

De façon plus générale, plusieurs bailleurs (BAD, IGADD/CUE) financent ou vont financer des projets qui concernent le secteur de la pêche artisanale avec une approche plus ou moins différente de celle développée par le projet de développement de pêche artisanale financé par le FIDA. Le projet BAD développe une approche assez semblable, notamment sur le volet crédit (embarcations équipées fournies aux pêcheurs), prévoit une étude pour mieux définir les actions à mener en matière de commercialisation et de promotion de la consommation de poisson et va mettre en place des infrastructures de stockage importantes. La CUE cherche à développer une approche différente grâce à un projet régional concernant la formation et le crédit. En matière de crédit ce projet devrait permettre d'expérimenter une nouvelle approche: caisses d'épargne et de crédits avec forte participation des pêcheurs et revendeurs. La formation doit s'appuyer sur des échanges régionaux.

L'espace pour une éventuelle intervention du FIDA parait donc bien mince et ne pourrait, en tout état de cause, qu'être formulé après une analyse détaillée des réalisations et des manquements éventuels de ces deux projets.

Leçons à tirer de l'expérience

Une organisation créée par décision gouvernementale avec des statuts qui la rendent dépendante à la fois sur les aspects financiers (subventions directes et indirectes) mais aussi en matière de gestion (directeur nommé par le ministre qui prend l'essentiel des décisions) ne permet pas une implication active des bénéficiaires. Or, le manque de participation effective des bénéficiaires à la conduite des activités ne peut qu'amener à une irresponsabilisation et une incapacité à s'autogérer dès que l'appui technique et financier cesse. Pour favoriser la participation des bénéficiaires, un projet de développement devrait chercher à appuyer des organisations indépendantes de l'administration locale dont les statuts, les objectifs et les modalités de fonctionnement seraient établis par les bénéficiaires eux-même.

Une certaine séparation des fonctions est indispensable pour assurer une saine gestion. La fonction crédit doit en particulier relever d'une organisation spécialisée avec ses règles propres (exemple: critères d'attribution des crédits en fonction des capacités de remboursement).

Les crédits peuvent alors être gérés de façon professionnelle avec une évaluation et un suivi rigoureux des dossiers. Pour devenir un système de financement durable, un système de crédit ne doit pas avoir pour premier objectif la fourniture de matériel.

Le transfert de technologie ou l'introduction de nouvelles techniques de pêche nécessitent quelques précautions. Un transfert de technologie de type résine polyester et fibre de verre doit se faire de façon progressive en partant de l'amélioration très concrète d'une technique locale (la remise à flot d'un houri) et doit être accompagné de la disponibilité des matériaux nécessaires sur le marché local.

L'introduction de nouvelles techniques doit se faire avec l'aide de quelques pêcheurs "leaders". L'expérimentation doit impérativement respecter certaines règles: pêcher dans la même zone avec le même type d'embarcations, modifier progressivement une technique utilisée localement et démontrer, par une production supérieure, l'efficacité des nouvelles techniques.

La politique de commercialisation ne peut être entièrement déterminée en fonction d'objectifs d'encouragement de la production.

Les coûts de fonctionnement, de stockage, l'évolution de l'offre et de la demande doivent être pris en compte sous peine de conduire à la faillite du système. En particulier, les installations frigorifiques pour la pêche dans les pays chauds nécessitant des aménagements et un entretien particuliers, il vaut mieux préférer la qualité des installations à leur taille ou leur nombre; les modifier si nécessaire pour les adapter aux conditions climatiques et réserver une partie importante du budget à l'entretien.

Un système de S&E permanent et efficace est une condition nécéssaire à garantir une saine gestion du projet et la réalisation de ces objectifs. La supervision devrait garantir qu'un tel système fonctionne correctement et que les indications sur toute deviation des objectifs du projet se traduisent en actions correctives dans le meilleur delai possible.

 

LANGUAGES: English