Proyecto de Apoyo a Pequeños Productores en el Estado de Sucre (1992)
Resumen estructurado del informe de evaluación de Mediano Plazo
El área del proyecto comprende a la Península de Paria en el estado de Sucre. La superficie del área del proyecto es de 5 700 km², abarca siete distritos (dos de ellos parcialmente) de los 14 que comprende el estado de Sucre.
La pluviosidad varía desde las zonas de cierta aridez, en el extremo oriental de la península, con menos de 800 mm al año, hasta llegar a 1 400 mm anuales. La temperatura tiene una media anual de 24-28°C en las partes bajas y de 20-24°C en las zonas altas. La evaporación oscila entre 1 500 y 2 000 mm por año.
En el área se distinguen cinco unidades de suelos característicos, predominando los suelos poco profundos, de textura media, con moderado contenido de materia orgánica y también suelos moderadamente profundos, con un horizonte de arcilla entre los 50 y 60 cm. Tienen ciertas limitaciones de uso por pendiente y susceptibilidad a la erosión, pero son aptos para cultivos permanentes y temporales. Hay unas 11 700 ha. de suelos que presentan la mejor capacidad de uso, son de textura media, bien drenados, de baja acidez y con adecuada fertilidad natural, aptos para todo tipo de agricultura, correspondiendo -por lo general- a pequeños valles intercalados.
La península se conecta con las poblaciones importantes del estado de Sucre y el resto del país por una buena vialidad asfaltada. En el interior del área, carreteras pavimentadas en buen estado interconectan las distintas capitales de distrito y de municipio, así como la mayoría de los centros poblados del proyecto. El resto es servido por caminos vecinales, que requieren de mantenimiento y de construcción de algunos tramos adicionales.
La población total del área era en 1981 de 73 000 habitantes, equivalente a un 10% del estado, y que corresponde a unas 14 500 familias. De ellas un 38% se dedica a la actividad agropecuaria, incluyendo la pesca. Las familias dedicadas a la agricultura están localizadas en unas 4 700 explotaciones de las cuales unas 3 350 corresponden a superficies entre una y diez ha. Las familias tienen un promedio de 6.3 miembros y la población económicamente activa es un 46%.
Objetivos del proyecto y diseño
El grupo objetivo está compuesto por unos 3 840 familias de pequeños agricultores (que incluyen a 240 pescadores artesanales) que trabajan fincas con menos de diez ha. de extensión.
De los productores con menos de diez ha. del área, más de la mitad no poseen documento de propiedad que respalde su posesión, si bien la misma se ejerce pacíficamente y es generalmente reconocida.
Objetivos y componentes
El objetivo principal del proyecto es elevar los ingresos del grupo objetivo mediante el incremento de su productividad y la explotación de alrededor de 13 500 ha., ampliando la superficie cultivada en unas 2 000 ha. y aumentando las capturas en 60 embarcaciones pesqueras.
Los componentes son: 1) crédito, 2) transferencia de tecnología, 3) promoción y capacitación, 4) titulación de tierras, 5) infraestructura vial, de riego y drenaje, 6) asistencia técnica internacional, 7) seguimiento y evaluación, y 8) dirección del proyecto.
Supuestos y efectos esperados
Los objetivos específicos son: 1) aumentar la productividad y la producción agrícola mediante la transferencia a nivel de finca de una tecnología mejorada, que se transmitirá a los agricultores mediante servicios institucionales reforzados, 2) incrementar el empleo y los ingresos en la zona del proyecto por medio de la generación de nuevas obras agrícolas y la introducción de técnicas y medios mejorados de producción en la pesca, 3) proporcionar a los pequeños agricultores un acceso garantizado a un crédito suficiente, y 4) contribuir a integrar la economía campesina en el mercado y a acrecentar su participación en éste en condiciones favorables.
Dados los supuestos asumidos en el diagnóstico, la eficaz implementación del componente de crédito permitiría solucionar el principal obstáculo al incremento de la productividad y producción agrícola y pesquera en el área.
Contexto de la implementación y su evolución
En febrero de 1989 el nuevo gobierno debió encarar un profundo ajuste e iniciar un severo plan de estabilización ante la constatación de que el país se encontraba en una virtual cesación de pagos exteriores. Este plan incluyó la liberación completa del mercado de cambios, recortes presupuestarios de gran magnitud y la eliminación casi completa de los subsidios a excepción de los combustibles. Como resultado, se registró una inflación del 81.5% en 1989, una devaluación del tipo nominal de cambio de casi tres veces, y una caída del Producto Interior Bruto (PIB) del 8.6% y del PIB no petrolero del 9.4%. La tasa de desempleo pasó del 6% a casi el 10%. El déficit fiscal se redujo, en ese año, a un 1.1% del PIB. A partir de entonces, la economía ha ido entrando en un franco proceso de estabilización y crecimiento, caracterizado, primordialmente, por el ajuste del sector externo, la caída abrupta del salario real y el equilibrio de las finanzas públicas.
Logros del proyecto
El proyecto ha alcanzado varios logros destacables. En el componente de transferencia de tecnología, la organización de equipos locales de jóvenes técnicos altamente motivados ha sido sumamente efectiva: se han atendido más de 150 comunidades campesinas llegando con métodos de extensión a más de 11 000 campesinos, de los cuales unos 1 400 ya son sujetos de crédito. La respuesta obtenida por la población es sumamente alentadora. El componente de crédito ha acompañado al anterior y, pese a varios problemas de administración y procedimientos, ha conseguido canalizar recursos significativos a los beneficiarios. El componente de promoción y capacitación, a pesar de iniciarse lentamente, ha desarrollado numerosas actividades con gran aceptación por parte de los beneficiarios: estas actividades van desde la motivación y promoción de la organización social hasta materias técnicas y la promoción y organización de microempresas (12 en operación y 12 en formación) manejadas integralmente por mujeres. El componente de infraestructura ha operado con una enorme dinámica: sus recursos están casi agotados y, a pesar de que existen graves problemas de gestión, en numerosas obras se ha beneficiado objetivamente a la población campesina.
Ante los insuficientes agentes adecuadamente cualificados y motivados del MAC dispuestos a trabajar en el proyecto, se contrató personal técnico (en su mayoría local) con resultados altamente satisfactorios en términos de motivación, dinámica y compromiso con los objetivos del proyecto y del desarrollo regional.
Existió un criterio de selección de beneficiarios sumamente restringido durante buena parte de la ejecución del componente de crédito (hasta julio de 1992). Para efectos operativos los técnicos consideraban como elegibles solamente a los campesinos con más de tres ha. y menos de diez y que, además, encarasen programas de desarrollo de fincas que simultáneamente incluyeran cultivos perennes, cultivos bianuales y cultivos anuales. Estas restricciones (que surgieron de modo poco claro pues no existen directivas escritas al respecto) limitaron la posibilidad de extender el número de cliente elegibles. Ahora, la consigna de selección permite extender el crédito a casos en que se trate de finas con superficie inferior a tres ha. y con los tipos de cultivo que se puedan adaptar a las condiciones productivas concretas.
La CAF, como institución cooperante, ha supervisado el proyecto desde su inicio. La CAF se ha desempeñado con pautas similares a las aplicadas en otros proyectos del FIDA que supervisa. Es decir, con una periodicidad en las misiones de supervisión que supera el promedio de dos misiones por año, con informes de supervisión satisfactorios y con un mantenimiento del flujo de información con el FIDA que se considera entre los más eficientes. Por ello, el papel de la CAF en general debe ser considerado como altamente satisfactorio. Sin embargo, en ningún informe de supervisión se alertó al FIDA sobre los problemas que se presentaban en la ejecución del componente de infraestructura.
Efectos, impactos y sostenibilidad
El proyecto ha provocado efectos no previstos, pero no por ello menos importantes, en relación al acceso por parte de los campesinos a varios servicios sociales públicos. En efecto, en el área del proyecto están presentes una serie de instituciones de servicios públicos y sociales, que van desde los hospitales y escuelas hasta las dependencias correspondientes a programas de crédito para vivienda y los servicios y maquinarias de las alcaldías. La labor cotidiana de los técnicos en las comunidades ha generado respuestas que exceden lo meramente productivo y crediticio: el personal del proyecto y el proyecto mismo se han convertido en un foro de demandas y en un núcleo articulador entre la población y el Estado.
Los incrementos en la producción por parte de los beneficiarios directos se estiman en más del 50% por causa del efecto combinado de aumentos en los rendimientos y las áreas cultivadas.
A pesar de no contarse con datos confiables sobe el uso incremental de insumos agrícolas, se estima que el mismo se ha más que triplicado en el área del proyecto.
Efectos sobre la mujer: Organización exitosa de más de 24 grupos de mujeres organizados para la conformación de microempresas. Actualmente hay 12 microempresas operando y el resto está en proceso de iniciar operaciones. Esta tarea, financiada por el proyecto, no implica la concesión de financiamiento productivo con cargo al proyecto: las microempresas organizadas son relacionadas con programas especiales del Instituto de Crédito Agropecuario (ICAP) que concede los créditos correspondientes.
Cuestiones principales y recomendaciones
Los principales problemas del proyecto han sido: 1) las deficiencias de gerencia y manejo del personal que involucraron tanto al Ministerio de Agricultura y Cría (MAC) como al funcionamiento de la jerarquía de la Autoridad Única de Área (AUA), 2) el manejo no transparente de los gastos y decisiones del sub-componente de crédito pesquero y, sobre todo, en el componente de infraestructura, 3) los problemas de financiamiento, a partir de 1992, que afectan el nivel de las operaciones del proyecto, en especial en el programa de crédito, y que son causados por responsabilidad de las autoridades de Hacienda del gobierno, 4) una larga serie de deficiencias operativas y de procedimientos técnico-administrativos que han afectado la eficacia de los componentes de crédito, titulación de tierras e infraestructura y, en menor grado, transferencia de tecnología y promoción y capacitación, y 5) la inoperancia del sistema de seguimiento y evaluación.
Las carencias del proyecto en el marco institucional que se han revelado como obstáculos importantes a la eficaz ejecución de los componentes y actividades programadas son las siguientes: 1) falta de instancias de concertación con las organizaciones políticas y sociales locales, 2) insuficiente representación de los beneficiarios en la organización del proyecto, 3) suposición equivocada en relación a la disponibilidad de suficientes agentes adecuadamente cualificados y motivados del MAC dispuestos a trabajar en el proyecto bajo el régimen de "comisión de servicios".
El diseño del proyecto aceptó el nivel de tasa de interés nominal del 3% para todos los créditos (tasa que en ese momento ya era negativa) sin preverse de mecanismos expeditos de revisión de tales condiciones si el proceso inflacionario se acentuaba (como en la realidad ocurrió).
El componente de infraestructura fue mal diseñado. Las obras propuestas en el documento de evaluación ex-ante no fueron confrontadas con los planes en marcha de otras instituciones (alcaldías, gobernación, Ministerio de Transportes, etc.) por lo cual la mayor parte de las mismas fue llevada a cabo por esas instituciones antes de que el proyecto fuera efectivo. Esto motivó la realización de nuevas obras, no previstas en el proyecto, sin mayores guías para su identificación y ejecución, generándose una confusión (aún no resuelta) sobre las obras realmente hechas por el proyecto.
Pese a reconocerse que la temática de comercialización no estaba resuelta en el área del proyecto, el diseño del mismo carece de respuestas eficaces y aceptablemente estudiadas.
La formulación y utilización de indicadores de seguimiento y evaluación (S y E) no fue adecuada: faltó selectividad, acumulándose páginas y páginas de 'items' que no son indicadores y que no brindan una visión clara sobre la marcha del proyecto. Además, se careció de un sistema de mapas temáticos que permitan observar visualmente las actividades del proyecto dentro de las distintas localidades del área. Todavía no se han integrado al sistema de S y E los datos generados como subproducto del 'software' incorporado al componente de crédito. No se han establecido contactos con otros organismos para iniciar tareas de evaluación independiente y no se ha desarrollado ningún mecanismo que facilite la participación de los beneficiarios en el proceso de S y E del proyecto.
La relación ente la Unidad de Seguimiento y Evaluación (USE) y la dirección del proyecto no parece haber sido ni fluida ni funcional. En consecuencia, se ha dado poca prioridad a la asignación de recursos a la USE, y esto explicaría algunos de los problemas del sistema de S y E apuntados.
El proyecto debe encarar una profunda reestructuración administrativa y una urgente recomposición de la línea de jerarquías, para que no se profundice la crisis de ejecución desencadenada en los últimos meses. En este sentido, la agencia ejecutora debe adoptar acciones tendientes a depurar lo actuado, generar condiciones par mejorar la imagen del proyecto y asegurar una sana administración en el futuro así como proceder a corregir las desviaciones de fondos externos y asegurar un adecuado financiamiento de las actividades programadas.
La AUA debe encarar una serie de acciones y medidas tendientes a mejorar sustancialmente la implementación de todos los componentes. La firma de convenios con varias instituciones y la operación del convenio de asistencia técnica con el Instituto Interamericano de Cooperación para la Agricultura (IICA) permitirá mejorar la eficacia del componente de transferencia de tecnología. La reformulación y ampliación del componente de titulación de tierras es también una recomendación importante a seguir para los próximos años de ejecución del proyecto.
Todos los productores con fincas menores de diez ha. y que cumplan con las demás condiciones de elegibilidad incluidas en el reglamento de crédito, deberán comenzar a ser atendidos con crédito y asistencia técnica para el desarrollo de cultivos anuales y/o bianuales aún cuando las características de sus fincas no permitan el desarrollo simultáneo de cultivos perennes. No se deberá establecer ningún límite inferior en la superficie de las fincas a atender.
Incorporar a la operativa y administración del componente de crédito un análisis permanente y una exhaustiva evaluación de la cartera vencida y sus causas, definiendo con mayor precisión políticas para la recuperación de los créditos que incluyan mecanismos que incentiven el repago de los mismos.
Establecer una política en relación a los créditos concedidos para la provisión de motores que no funcionaron en forma adecuada impidiendo la operación de las embarcaciones (siete casos). Además de promover un refinanciamiento para la compra de nuevos motores y los gastos de instalación correspondientes, se debe condonar la totalidad de los intereses vencidos y punitorios.
Plantear un inventario de las principales necesidades de investigación agrícola aplicada que surja de la problemáticas detectadas en las fincas de los beneficiarios. Sobre la base de este inventario, se establecerán convenios formales con la Universidad de Oriente y con otros organismos capacitados para llevar adelante las investigaciones correspondientes, con recursos del proyecto a ser reasignados con la aprobación del FIDA y de la institución cooperante.
Replantear los alcances y cobertura del componente de titulación de tierras. Este componente fue concebido como soporte al componente de crédito y extensión pero la situación regional muestra que la existencia de pequeños productores sin títulos es muy superior al número programado de beneficiarios directos del componente.
Contratar a la brevedad (por medio del convenio con el IICA) un estudio sobre la problemática presente y futura de comercialización agrícola en el área, que incluya la identificación y formulación de propuestas operativas. Después del estudio debe iniciarse la ejecución de actividades de comercialización en forma de experiencias piloto y con alcances geográficos limitados. Sólo después de constatarse que algunas de estas soluciones han funcionado en forma eficaz y eficiente, el proyecto podría gradualmente replicarlas en áreas mayores.
Asignar recursos para la puesta en marcha y operación de un programa de radio breve que, al menos tres veces por semana, difunda un Boletín Informativo sobre precios de los productos de la zona en los mercados regionales.
Efectuar un relevamiento prudente y gradual de las necesidades sentidas de infraestructura de las comunidades campesinas. Este relevamiento debe realizarse de forma tal que no despierte falsas expectativas de pronta ejecución por parte de los campesinos. A continuación se procederá a un análisis de las demandas y -con criterios a definir conjuntamente entre el proyecto, la institución cooperante y el FIDA- se elaborará un plan tentativo de obras de acuerdo a un orden de prioridades y cuidando especialmente coordinar tales prioridades con los demás organismos involucrados para no duplicar las acciones. Después de lo anterior, la institución cooperante y el FIDA analizarán la factibilidad de reasignar recursos que, junto con recursos locales, podrían financiar el plan de obras.
La conformación de un Consejo Asesor del proyecto que incorpore a las autoridades y fuerzas vivas locales es una recomendación que serviría para mejorar y potenciar las acciones del proyecto en la región. En forma similar, la organización de un Consejo de Beneficiarios para apoyar e interactuar con la AUA es una acción imprescindible para asegurar el éxito futuro del proyecto.
Debe reorganizarse y poner en marcha un efectivo sistema de seguimiento y evaluación, involucrando a instituciones regionales en las tareas de evaluación. La eficacia de la Unidad de Seguimiento estará directamente vinculada a los cambios propuestos en la dirección y estilo de gerencia del proyecto.
La USE deberá: 1) formular un conjunto reducido de indicadores, 2) preparar un conjunto de mapas temáticos del área que permitan ubicar geográficamente las distintas acciones desarrolladas por los diferentes componentes y actualizar estas actividades a medida que se vayan ampliando, y 3) establecer mecanismos para la participación de los beneficiarios en el sistema de S y E.
El seguimiento del componente de crédito se basará en los datos generados como subproducto de la aplicación del sistema computarizado para la atención de los prestatarios.
La formulación de proyectos con importantes componentes de crédito debe asignar mucha mayor atención al análisis del contexto macroeconómico a fin de prevenir procesos de descapitalización de los fondos prestables. En particular, además de la temática relacionada con la tasa de interés de los créditos, es importante diseñar mecanismos de canalización de los recursos externos que eviten su desvío hacia otros fines mediante maniobras presupuestarias y bancarias. Es muy importante, también, asegurar recursos suficientes para garantizar la posibilidad de encarar investigaciones agrícolas adicionales a la existencia de paquetes tecnológicos pre-existentes, ya que la aplicación de los mismos en forma ampliada genera inevitablemente nuevos requerimientos y problemas productivos.
La supervisión de los supervisores debe ser acentuada por parte del FIDA en todos los casos en que se decidan reformulaciones de componentes, una vez iniciada la ejecución del proyecto. En los casos en que estos componentes son obras de infraestructura, será necesario reformular con rigor el plan de obras, sus costos y los procedimientos de ejecución correspondientes. El FIDA debe delegar pero no resignar sus atribuciones de control frente a las instituciones cooperantes y los prestatarios.
Es importante que la función de evaluación se ejecute con independencia de la dirección del proyecto, de lo contrario las funciones de seguimiento y evaluación se implementarán de forma inadecuada.
Sao Tome et Principe: Pilot food crop development project
Interim evaluationSao Tome et principe is constituted of two islands at 300 km of Gabon. The various agro-ecological conditions (930 mm of rainfallsin the north and more than 7 000 mm in the south) ensure a high agricultural potential. After independence in 1975, plantations became state enterprises. In 1985, agricultural policies began to promote farm household and food crop production. Since 1987, the governement implements Structural Adjustement Programmes wich aim at the transformation of the formally centrally planned economy to a liberal market system. The main cultures are: cocoa, coco, palm trees, cafe. Only 10% of the cultivated area is covered by staple food crops. The small scale food crop production is done by plantations workers or independent subsistence farmers. A land reform is planned to allocate land to former workers of state enterprises, young people trained by the agricultural training center, former civil servants, unemployed workers.
Project objectives and design
Project beneficiaries would include plantation workers and independent subsistence farmers, whose number would increase because of expected lay-offs in the plantations and the public sector. Vegetable farmers already benefitting from the Mesquito Centre services would be excluded. The number of expected beneficiaries is about 3 100 people i.e. 35% to 50% of food crop farmers.
The project aims at the development of staple food crops as a means to improve incomes and the nutritional status of poor rural households.
Project components included in the project are:
- A socio-economic study to be undertaken by a socio-economist and an agronomist. Project components could be revised on the basis of the study results.
- Input supply including seeds, chemicals and simple tools would be provided, while storage capacity at the Mesquita Centre would be improved and mobile sales provided for.
- Extension support through the recruitment of six additional agents (five existing), staff training and provision of motorcycles.
- Variety trials and seed selection would improve the quality and the range of available crops, with particular attention to staple food crops. The Poto Research Station would be strengthened to carry out soil and fertility tests on demand by the project.
- Seed multiplication to be undertaken to reduce the dependence from outside sources. Technical assistance would be provided.
- Training would include staff training for extension workers, with the help of short term consultants, covering fields such as soil conservation, storage, simple accounting, etc. Farmer training would take place through field days and demonstration plots.
- Groups, Credit. Existing experience in group support would be strengthened through the setting up of extension groups. Technical assistance would be provided to define the modalities and assist in the implementation. Input credit in kind would be tried out on a pilot basis.
- Technical Assistance. An assistant would be recruited for the trials and multiplication activities, and he would function as the deputy project director, the Mesquita director being the project coordinator. Short-term consultancies for training and for group formation has been included
The project design included an comprehensive approach to the development of staple food crops and was intended to be integrated in the already on-going programme of the Mesquita Centre. However, from the beginning in 1989, representatives of the Centre, the FAC, the Cooperating Institution and IFAD, because of the multitude of sources of financing in support of the Centre, agreed on a division of labor. Decentralized extension infrastructure, studies, institutional strengthening, seed selection, multiplication and storage and if needed, input supply were to be financed by IFAD. The FAC would continue to support extension, input supply, marketing, technical assistance, training, and farmer group formation. UNCDF would support irrigation development.
The project would have a significant impact on the income and well being of the beneficiaries and would demonstrate to government and donors that smallholder food production, if properly supported, can contribute to income growth and to increasing the domestic supply of food stuffs, without significantly reducing labor availability in the plantations. Yields would increase of 50%, farmers' income of 180 to 197%. About 3100 households, including 750 plantation workers, 250 independent farmers and 2100 producers already supported by Mesquita, would produce an additional 350 tons of maize, 1000 tons of root crops, and 800 tons of vegetables. This would allow a gradual reduction in food aid.
The asumption was made that a broad based food sector support project would constitute a basis for a dialogue with the government on food policies.
Since 1989, the vegetable market has been saturated. The maize market has been disturbed by the WFP importations. There were a general falling of the real purchasing power of households and a rise in the price of inputs, due to the continuous devaluation of the local currency.
(a) Socio-economic study was carried out in 1989/90 and it analyzed several aspects of the smallholder household. It made several specific recommendations, most of which have not been implemented.
(b) Input Supply. IFAD funds have been used on an ad hoc basis when other sources were not available. Sales receipts in domestic currency were intended to be used for the construction of storage with farmer groups. Due to the lack of operating funds at the Centre, these funds had to be used for this purpose and no support to groups for storage materialized.
(c) Extension. This activity has been financed by the FAC and IFAD support was only marginal. In 1991, on-farm trials were initiated and at present, some 60 of such trials are ongoing.
(d) Variety trials and seed selection was the main activity of the project. A total of 7 food crop species (maize, cassava, rice, soya, igname, potatoes), 12 fruit species and 36 vegetable species, including 309 different varieties were put on trial and by 1992, a total of 400 varieties would have been tested. The required material was obtained in different countries in the region and through direct imports from Europe.
(e) Seed multiplication has remained at a level to allow further variety trials and demonstration but has not yet reached significant levels for distribution to producers, with the exception of maize and sweet potatoes.
(f) Training. A total of 62 man-months were available for overseas training, of these, three short training courses have been used: two on data processing, in relation to the socio-economic survey, in Portugal, and one on seed selection and multiplication, in France. Extension training has been realized by the AFVP technical assistance, funds for short term consultancies for group formation and credit have not been utilized, mainly because other donor's grant financing was available and because CLUSA implemented a programme for that purpose.
(g) Support to Poto Research Station was provided as planned. However, the capacity of the Poto station to provide pedological and phytopathological analyses on demand by the project is still very limited. Some of the project trials have been carried out on the station.
(h) Technical assistance in variety trials and multiplication has been in place since 1990 and has limited its scope strictly to this activity, the coordination with other activities of the Centre being difficult because of the lack of consensus on the objectives and methods. It has not taken up its role of deputy director of the Centre as foreseen.
Beneficiaries: beneficiaries of the extension and input supply activities of the Centre have been about 1200 farmers, mainly engaged in commercial vegetable p_oduction. Several farmer groups growing maize in the Centre and the North of the country have also been reached.
After only two years of effective project implementation, the project impact is limited.
Effects on beneficiaries incomes: it is obviously too early for the elaboration of an estimate of the expected project impact on national food production and on farmer incomes, the more so as the functioning of the different farming systems in place is not sufficiently known.
Effects on the environment: the trial programme has significantly increased the genetic capital in the country by the introduction of numerous species and varieties.
The institutional impact of the project includes the establishment of an applied research and multiplication service, which is a precondition for the improvement of the domestic food production. Its impact has however been limited by the lack of coordination with other services, due to weak management capacities at the Centre, but also to personality issues. The project has contributed to the institutional strengthening of the Centre by the provision of the required equipment and infrastructure.
A number of unforeseen factors have affected the project, including: a higher than expected level of productivity in existing farming systems, growing basic foods like banana, breadfruit and manioc; an early saturation of the vegetable market and a falling real purchasing power in other markets; a rise in the price of inputs, due to continuous devaluation of the local currency; and delays in the implementation of the land reform programme.
Lack of understanding of the rural sector
Because the lack of understanding of the rural situation, a socio-economic study was planned. The results would have allowed to define what were the activities and services needed by the target group and thus to orientate projects components. This study had been done and presented several usefull recommendations about extension, commercialization, credit, farmers' organizations, monitoring and evaluation unit. But, the results were not taken into account. The FAC, cooperating institution and IFAD agreed on a division of labour before results of the socio-economic study were available.
With the division of labour between representatives of the center, the FAC and IFAD, the IFAD project shift from an integrated rural development project to a seed selection and multiplication project.
Implementation of this approach has been constrained by: i) the lack of a single, well defined strategy and priority setting mechanism at the Centre, which would have allowed to orient the different donor support and apply similar implementation approaches; ii) the lack of a coordination mechanism; iii) the delay in the implementation of the land reform programme, reducing the number of potential smallholder beneficiaries.
The recommandations for the short term are:
- Trials and selection needs to give priority to crops for which farmer demand exists: tomatoes, beans, potatoes, bananas, maize and igname. Participatory research, based on farmer identified constraints, needs to be initiated. Multiplication of available material needs to be expanded.
- Support to input supply needs to be increased, focussing on regular supplies of essential inputs.
- The Centre needs to privatize the last 50 ha on which it presently undertakes crop production. The remaining 15 ha are required for trials and multiplication.
- A six month training consultancy should be undertaken to train the accounting staff and to assist them in implementing the recommendations of the most recent audit. An overall training programme for Centre staff and farmers needs to be drawn up and implemented.
- Urgent maintenance work on the existing infrastructure needs to be undertaken.
- A Monitoring and Evaluation system needs to be set up based on the informations kept on each farmer supported by the Centre and on a sample of farms designed according to the recent National Agricultural Census. Consultant support may be provided for this.
- Studies on the market potential of domestic food crops and of smallholder export crops need to be undertaken urgently. This is a top priority if a new IFAD project has to be prepared.
- Together with CLUSA, specific support to farmer groups in input supply should be defined, e.g. local storage construction, in order to prepare for increased participation of groups in input supply.
- In discussion with the government, FAC and IFAD, some measures to strengthen the extension service need to be undertaken, such as the decentralization and the provision of transport.
- A participatory research programme on farming systems (Research-Development) needs to be initiated on crop profitability, soil conservation, and fertility, integration of livestock and agriculture, storage, marketing, etc.
The elaboration of a future programme would need to be coordinated with design exercises of other donors, notably the French FAC and CCE. For this new programme, the target group will be newly settled farm households on distributed land and existing smallholders producing for subsistence. Particular attention will be given to resource poor households such as landless and female headed households. About 6000 households could be supported in a seven year period, including 4500 newly settled households. The objectives will be to promote not only productive activities in food crops but also diversified export crops and non-farm activities; to promote autonomous farmer groups, able to manage their own development, to develop complete and sustainable "filières" for input supply and agricultural products, processing and marketing, and to improve the standard of living of the poor rural households.
The proposed approach aims at integrating newly settled and existing smallholder households in economically viable activities and to improve the basic services and the social environment through self-managed structures. In priority setting and implementation, a participatory approach would be adopted.
i) The coordination with donors engaged in the same sector is very important. This coordination should be effective in project design in order to elaborate commun strategie and during project implementation to ensure a good working of the project.
ii) To ensure an operational use of initial socio-economic studies, a mechanism has to be designed to operationalize the findings, such as through a restitution mission, a workshop on the results, a programming meeting and integration in the M&E system.
iii) pilot projects need to be linked to a sufficiently developed M&E system which will improve the understanding of the sector and the socio-economic conditions.
iv) In the case of unknown situation such as Sao Tome small holder agriculture,it is essential to propose a more active beneficiary participation in the design and the monitoring of the project and even a participatory research.
v) In general, in countries undertaking structural adjustment programmes, the mobilization of the government contribution to the project is often difficult. Mechanisms may be designed, which avoid projects to stall because of delays in the mobilization of these local funds.
Southwest Region Agricultural Rehabilitation Project
Although agriculture is the dominant sector of Uganda's economy, less than 30% of the total arable area is presently under cultivation. The country suffered considerably in the 1970s under the effects of political mismanagement, and the 1980s were characterised by efforts to restore the economy, which included large successive devaluations. In 1990 the Government of Uganda (GOU) obtained a major agricultural sector credit loan from IBRD, but inflation continued at high levels, estimated at 50% in 1992 (at the time of the MTE). The Southwestern Region, which borders Tanzania, Rwanda and Zaire, had a population in the 1991 census of 2.66 million people, in about 400,000 small farming units. The terrain ranges from rolling savannah to high mountains; rainfall tends to increase with altitude, and varies from less than 900 mm to more than 1350 mm in the highlands. Mixed farming predominates in the area, and three cropping regimes can be identified, depending on altitude. In the high altitude mountainous areas, which comprise steeply contoured hillsides, double cropping is common, and crops include maize, sorghum, millet, beans, sweet potatoes, and Irish potatoes. At mid altitudes similar crops are grown, but the main food crop is bananas, and coffee is an important cash crop. In the lower areas, where rainfall is least, the soils are quite poor and this area is mostly used for extensive grazing of cattle, sheep and goats, with very small household plots of food crops (bananas, cassava, maize, groundnuts and sweet potatoes).
Project design and objectives
IFAD's involvement in Uganda began in 1981, when food supplies were still severely disrupted after years of turmoil and destructive civil strife. As a result IFAD's emphasis was on the production of food crops and food security measures. Two ongoing projects in the mid 1980s, the Agricultural Reconstruction Programme and The Agricultural Development Project concentrated on input supplies and aimed at the rehabilitation of basic agricultural services and the provision of limited credit. The IFAD-initiated Southwest Region agricultural Rehabilitation Project (SWRARP) was intended to continue and enlarge these basic themes.
The population of the Region comprises six interrelated tribal groups, all speaking the same vernacular. The average household size is seven persons, and family groups operate smallholdings of 1-2.5 ha; there is an increasing problem of land scarcity with the result that farming methods are becoming more intensive and steeper land areas are being pressed into production. Income levels in the Region are about USD 100 per caput, which is less than half the national average. Although poor, nutrition is not a major problem throughout the Region. The target group consisted of virtually the whole population of the Region, as most people would benefit from the large road component by improved public transport, better marketing opportunities, and easier access to services, however the appraisal specifically estimated that over 28,000 farm families would benefit from the extension and research component, and over 270,000 farm families from the input supply component. Food crop production is predominantly undertaken by women; other tasks are collecting water and fuelwood and marketing. Since women constitute over 70 % of the agricultural workforce, they form the largest section of the target group.
Objectives and components
The main objectives of SWRARP were to: (i) increase food security and improve nutrition through increasing production; (ii) improve the incomes and living standards of small farmers in the Southwest Region, who constitute the large majority of the population; (iii) strengthen rural institutions; and (iv) provide the technological base to improve agricultural productivity and halt environmental degradation. These goals were to be achieved through support for adaptive research and extension, procurement and sale of inputs, rehabilitation of rural access roads, and support for project management including a small community development fund with a credit component. Total project base costs were estimated at USD 23.4 mn. and contingencies added a further USD 3.8 mn. The project consisted of six components, as follows:
Rural Access Roads USD 11.19 mn (48%)
Agricultural Input Supply USD 6.95 mn (30%)
Adaptive Research and Extension USD 3.36 mn (14%)
M & E USD 0.65 mn (2.6%)
Management Support USD 0.82 mn (3.5%)
Community Devt/Small-scale Enterprise Fund USD 0.40 mn (1.9%)
The rural access roads component was to be financed mostly by IDA (64%) and the GOU (20%), IFAD was more committed to the financing of the agricultural inputs (82%), the M&E (67%) and the management support activities (53%). The project duration was expected to be five years.
The rural roads programme was intended to provide engineering and financial support for a programme of rehabilitation and repairs to critical parts of the 2000 km of rural access roads not covered by other projects, and to provide strengthen the Ministry of Local Government's (MOLG) district-level road maintenance capacity (with equipment, tools, operating expenses and training). The identification of roads to be included in this programme was to be undertaken by means of an inventory and infrastructure evaluation study as part of the project start up. Criteria for selection included socio-economic aspects, the requirements of the agricultural extension and research programmes and linkages with other road rehabilitation projects; the work was due to begin in year two and be completed by year five. The agricultural inputs supply component was concerned with the procurement and sale of hand tools, seeds, bicycles, wheelbarrows, small threshers and flour mills and agricultural chemicals, and also with equipment (vehicles, materials etc.) needed to improve the marketing facilities in the Region.
The adaptive research and extension component was intended to establish adaptive research programmes at selected stations, and included an outreach programme for farmers. Emphasis was to be placed on the major food crops of the Region, with soil conservation and fertility improvement being priority factors. The Regional Home Economics Units of the MOA would be integrated into the extension component in order to provide a channel to and from women's groups so that women's needs could be catered for in the programmes developed. Technical Assistance and training would also be provided under this component. As most institutions were moribund as a result of the civil disturbances, institutional strengthening was required in a number of ways to assist project implementation and sustainability. Management support was to be supplied to the road maintenance units of MOLG, the extension and research service, the MOA and the Monitoring and Evaluation Unit, which would be established in the Regional headquarters of the MOA. In addition community development through the formation of appropriate groups and the promotion of small-scale entrepreneurial activities (which included the provision of medium term credit) would be undertaken by seconded staff from the Ministry of Community Development; the project would support the organisation and training of these groups and would provide small equipment and materials to assist with the start-up cost of entrepreneurs.
Expected effects and assumptions
Project benefits were expected to flow from expansion of the cropped area, the increased availability of inputs, increased productivity (from extension and research activities) and improved market access as a result of road rehabilitation. Most benefits to farm families would be in the form of better food security (incremental food production was estimated to reach 120, 000 mt by year 5). Transport costs were expected to decline by between USD 0.05-0.20 per mt per km, giving the possibility of higher farmgate prices. Cash incomes were expected to rise by about USD 117 per farm family (up 74%) for food secure families and by about USD 83 (up 36%) for farm families in food insecure areas/. The most important assumptions made in the project design concerned the GOU's ability to (i) procure the large quantities of inputs needed and (ii) to complete the tendering procedures required for large (road) contracts in a timely manner.
The MTE mission took place in October and November 1992; the multidisciplinary mission met with central government agencies and other donors in Kampala, then split into four groups for field visits to cover (i) adaptive research and extension, (ii) community development and women (iii) roads, buildings and credit, and (iv) management and institutions. Discussions were held with project staff, government field staff involved in the project, farmers and other beneficiaries. Final meetings took place to discuss the findings both with the project management in the Region and also the government agencies in Kampala.
Many external factors, some related to the country's efforts at restructuring and rehabilitation following 15 years of turmoil, had a delaying effect on the project. Among these were:
- the government's decentralisation programme, which required time-consuming reorganisation of the project management structure;
- the civil service reform, which prevented the realisation of certain objectives of institutional strengthening and rehabilitation;
- the varying performances of the Cooperative Bank and the Uganda Commercial Bank (UCB) over time, requiring repeated reassessment of possibilities for collaboration in the pilot credit scheme and causing delays in scheme start-up;
- the rapid devaluation of the Ugandan Shilling, from U sh 60 per USD at appraisal in 1987 to U sh 1200 per USD at the time of the MTE, with its effect on project local costs and the counterpart funding burden on GOU;
- the 1989 collapse of coffee prices (the main export crop) and consequent reduction of government revenues;
- the war in Rwanda, and its impact on the southernmost districts of the project area.
Due to excessive delays at start-up and during implementation, the project was at least two years behind schedule. The reasons for this were processing and procurement delays, delays in establishing institutional operations and snail-paced disbursement, due in part to inadequate provision of local counterpart funding. The project's largest component, rural roads rehabilitation, was yet to begin, and the most optimistic date for start-up was spring 1993, a full four years behind schedule. However, project implementation appeared to be taking a turn for the better, partly as a result of the recent arrivals of a new Financial Controller and a new Project Coordinator (PC). The new PC had already started streamlining management and coordination activities, and financial controls had improved significantly, with the management information system developed by the M&E Unit being effectively utilised for management purposes. However, under the present circumstances SWRARP could not meet the closing date of June 1994.
GOU funding has proven to be a major delaying factor in implementation; at the time of the MTE the GOU had only provided 33% of the funds required by the loan agreement for the agricultural component. The procedure for releasing funds was complex and led to considerable delays. The situation has been worsened by government cash flow problems and the continuous devaluations and high inflation experienced during project implementation. The UCB, appointed as procurement agent, proved unable to fulfil this role without the benefit of a proper procurement unit. Procurement delays, such as the late arrival of vehicles, equipment and inputs, have severely delayed project implementation. According to UCB, the procedure for ICB procurement needed at least 10-12 months, but frequently took more time (up to 25 months in one case).
Feeder Roads and Buildings. There was no physical progress on the construction of feeder roads at the time of the MTE. Without the feeder road rehabilitation component, the full potential of the input distribution, and research and extension components cannot be realised. Long delays occurred in the appointment of consultant engineers, completion of the Roads Inventory Document and preparation of tender documents. The start of the actual road rehabilitation was four years behind schedule at the time of the MTE, and as a result actual cost estimates have risen so much that the target has been reduced from 2000 km to just 763 km. With the slowness of progress in the procedures to subcontract rehabilitation works, a plan was prepared for some road rehabilitation to be undertaken directly by the project. The project was also to provide funds for the renovation and construction of offices, staff housing, research station buildings and a warehouse for inputs. However, due to GOU liquidity constraints, the building programme has been divided into two phases; the first phase was near completion now, and phase two was expected to start in 1993.
Input Supply and Distribution: The objective of this component was to provide agro-inputs to small farmers in the Region in a timely and accessible manner. By the MTE, two procurements had been completed and over 90% of the inputs procured had been sold out of rented warehousing facilities. The combined third and fourth procurements were expected in early 1993. In order to promote input supply privatisation, market-based pricing of inputs and input retailer registration were included in project design. While the registration of input retailers by itself does not represent a major contribution to privatisation, mobilising and training retailers is an important contribution to sustainability of the service. The project's most important contribution, however, will come from its effect on the expansion of input and product markets.
Adaptive Research and Extension. The activities of the adaptive research unit have been satisfactorily implemented for five seasons; the programme has been able to recommend adoption by farmers of several improved varieties of Irish potato, wheat and maize, a chemical treatment for banana weevil, the use of multi-purpose trees in agro-forestry activities and low-cost seed storage facilities. The recommendations include the alternatives of low and high-input technologies. Outreach (on-farm) trials have also been carried out to test research station recommendations. The extension sub-component has been less active and further behind schedule due to poor mobility, lack of training and shortage of operational funds. However, a training programme addressing the needs of both extension staff and farmers was in place and a supervision mechanism had been developed, although to date, extension activities have been limited. An action plan to integrate SWRARP's extension activities with the National Extension Project supported by the World Bank was being prepared.
Monitoring and Evaluation. By MTE the monitoring and evaluation system was well established. Staff has been adequately trained, the MEU has received 19 months of apparently high quality technical assistance and transport and computer facilities are satisfactory. A number of useful surveys and activities have been implemented by MEU including a baseline and a mid-term household survey (which, however, are not structured in a way that permits direct evaluation of project impact), a well-prepared mid-term evaluation report, and quarterly input and marketing surveys. Because the day-to-day monitoring system was not having the anticipated effects, an "M&E awareness seminar" was organised, which improved understanding of the purpose of the monitoring system. There appeared to be a strong collaboration between the MEU and project management, with regular meetings held to discuss MEU findings and PMU needs: both sides appear satisfied with this interaction.
Community Development. This component has two parts, a grant fund of USD 95,000 to assist 40 groups selected by the project, and a loan fund of USD 500,000 for the establishment of a revolving credit fund to finance individual income-generating activities. This component suffered from a very delayed start, which, in addition to general project implementation delays, was largely due to its hasty inclusion in the project design after appraisal. Extensive group training activities have been carried out energetically and effectively, mostly through day courses. A Pilot Credit Scheme has been added during project implementation.
The Women Organisation Unit (WOU). Although not provided for at appraisal, the PMU established the WOU to facilitate the execution of women's activities in the project. The unit is very active, having organised over 140 day courses in various subjects, mobilised women and women's groups to take part in the on-farm adaptive trials of the ARU, assisted women's groups to participate in project input distribution, and developed a network of contacts for funding of women's small-scale income generating projects. In addition, the WOU monitors all other project units to promote the involvement of women in all SWRARP activities.
Effects assessment and sustainability
In view of the delay in project implementation, it was too early at the time of the MTE, to judge the extent to which the project was achieving its objectives. However, where feeder roads had been reopened and rehabilitated (by other projects), farm-gate prices had increased significantly, inputs had become more available on the local market, in part due to project importation, and a significant network of retailers was being consolidated. This argues for the continuation of the feeder road component, even though it is now totally unsynchronised with the other project activities. The adaptive research component has assisted in the introduction of improved varieties of various food crops and the control of some diseases, although, despite considerable investments in the extension service, more efforts are needed to disseminate varieties, improve farming practices and induce farmers to use modern inputs including fertilisers. A lack of credit has constrained farmers' ability to acquire inputs or adopt improved practices. The community development component has significantly assisted in the mobilisation of community groups and provided support to limited numbers of groups.
Targeting The assumption in the appraisal that all households in the Region should form the target group, because of the low income levels, was not confirmed by the baseline survey, which identified families with very small land holdings or no land at all. No suitable targeting mechanisms were included in the project design specifically to reach such groups. The criteria for road selection for rehabilitation did include social targeting, so these roads should be in the poorer areas of the Region. Lack of GOU funds has resulted in extension workers only being able to work in the location adjacent to their houses, which could lead to penalising of more remote areas.
Comparative Indicators Comparison of relevant indicators (these covered such items as meat consumption, radios, bicycles etc.) included in the baseline and mid-term surveys suggested a rise in household incomes. Such improvements cannot solely be attributed to the effects of the project, because the overriding factor has been an improvement in the security situation in the Region, but nonetheless a positive trend is indicated.
Effects on Women The project's main effect on women has been through the group formation schemes implemented by the Community Development Support Unit and the Women's Organisation Unit. In the project area women do not have ownership or inheritance rights to any type of property. The baseline survey found that FHHs (14% of the households in the project area), had less land and were generally poorer than other households; this section of the community is especially vulnerable. The self-help groups formed by women tended to be aimed at productive activities, including communal cultivation of members' fields; the project has assisted by providing training in a wide variety of subjects, from agriculture to child care. There is evidence that women's social position has also improved as these economic activities have become accepted, and that the groups are providing a platform to give women a stronger voice in community affairs.
Environmental Effects. The Extension Unit of the project has established soil conservation demonstration plots on farmers lands, but in general these have been poorly managed and used because of inadequate technical knowledge, and shortage of transport. However there is general awareness and concern about soil conservation matters. There is also a shortage of firewood in some areas of the project, with the result that animal manure, which was used as a soil conditioner, is being used for cooking. In some areas intensive farming methods, involving multiple cropping, are leading to depletion of the soil fertility.
Agricultural Production The field distribution of inputs commenced in 1990; at the time of the MTE nearly 50% of the total quantity of project inputs had been dispersed. Despite this, there were no indications of major improvements in production, as yet. This is probably because the extension messages which might influence seed choices and use of fertilisers are so far very limited: the factor which emerged from the latest survey as being the greatest influence was farm gate prices, which directly points to the need for improved marketing. The extension service has yet to deliver to farmers the technological packages developed by the adaptive research; the majority of farmers in the project area still believe that the only way to increase production is to expand the area planted. This indicates lack of awareness of the potential of the newer varieties and practices which have been developed. No revised yield data is as yet available for the project area, hence the potential impact of this component (or changes in incomes) could not be surmised. However, the evaluation noted that newer methods of row planting and conservation were being used in some instances, along with manual methods of weevil control in bananas, indicating that some extension messages had been received.
Roads Rehabilitation. Because this component has not started, there were no reported effects.
Community Development. Group mobilisation and training under the project have had a significant effect in the project areas. Membership of groups has increased to nearly 50% of women and 24% of men (results from the mid-term survey). In addition, the project has given increased support and training to existing groups. The fact that grant were available for community groups, once formed, may have been a stimulus to this development.
The issue of sustainability cannot be over-emphasised. Several of the project's activities will have no lasting impact on the Region unless effective ways are found to: pass project management responsibilities to the appropriate government offices; sustain incentive payments to ensure continuity of government services; maintain the quality of financial management and control after the termination of the technical assistance; continue the supply of inputs to project beneficiaries; and, finance and ensure the maintenance of rehabilitated roads.
Main issues and recommendations
The major recommendations put forward by the MTE were as follows:
- At this late stage the procurement system should be retained, bu there should be much greater collaboration between the project's input supply unit and the UCB to try and expedite procurement processes.
- The ARU should continue to concentrate priority crops and farming systems only. On-farm trials should be extended to areas where extension support is adequate.
- The extension service, with its limited resources, should give greater priiority to working in selected areas and should emphasise low-input technology packages, e.g no fertilisers, animal manure composts, row planting techniques etc.
- During the final year of the project the balance of five months of M&E related TA should be used to assist MEU with the design, implementation and analysis of a completion household survey and to provide guidance on the finalisation of the sustainability study.
- Participatory evaluation techniques, in which beneficiaries (and non-beneficiaries) are asked to give their own evaluation of project activities, need to be introduced into impact evaluation exercises such as the household surveys and planned beneficiary contact surveys.
- Strong emphasis should continue to be placed on group training activities as the most effective use of limited resources and limited training and extension staff in reaching the largest number of farming men and women. Ways should be explored for using existing networks and institutional resources to increase reach and coverage of group training.
- Within the 40 selected groups, further training should be given in basic planning and management to back up the grant funding and the future credit scheme. The groups and group members should be encouraged to express their needs and constraints more freely and democratically, having a voice in project decision-making where it concerns them rather than being mainly receivers of project advice and financial assistance. For these groups and for all group training, there is a strong need to promote the concept of self-help, and to attempt to reduce the mentality of dependency on projects and free goods.
- The SWRARP Pilot Credit Scheme should coordinate with and use the experience of current credit activities of other IFAD and IDA projects in Uganda, especially the ADP pilot credit scheme and the credit component of the Hoima project.
- The World Bank rule stipulating the purchase of generic products has partly resulted in a quantity of unsold chemicals as farmers are reluctant to purchase chemicals of unknown brands. SWRARP must step up its publicity campaign to familiarise farmers with the new chemicals. The availability of credit and demonstration activities by the extension service would help to promote the use of these chemicals.
- To enhance input supply privatisation, the government should contribute positively in three ways: (i) financial intermediation at all market levels, but particularly for the importers in terms of foreign currency and credit, and for farmers in terms of rural credit; (ii) phasing out of public sector importation of agricultural inputs. (In cases where grants of inputs are donated in kind to the country, their distribution should be market-price based to avoid subsidisation. It would be appropriate to auction these commodities to private dealers); (iii) drawing up and enforcing strict regulations on the agro-input trade to ensure quality to farmers, reduce hazards and protect the environment.
- Future variety trials should place additional stress on disease resistance, (especially with respect to Irish potato), as well as shorter maturity periods, low-input technology, and the study of the impact on banana yield and quality and on soil degradation of intercropping nutrient-depleting crops, such as maize, cassava and potatoes, under banana plantations.
When the Co-operating Institution is also a co-financier, then different institutional mandates and methodological orientations can result in insufficient concern by supervision missions for the issues which are at the heart of IFAD's work in rural development. In the case of SWRARP, the World Bank's own role in the project (mainly concerned with the financing of physical infrastructure) and in Ugandan national development efforts in general (mainly concerned with macro-economic policy issues) affected the priorities given in supervision activities.
The SWRARP case shows that without detailed road design studies, the appraisal of this component is ineffective. The implementation schedule of the feeder road component was drawn up without a proper road inventory or feasibility studies, and the result has been overly optimistic planning and inappropriate phasing of other project components..
The component for women's activities was introduced by the project management, following successful group formation exercises. It is clear that women should have been a specific target group in the original design, and this points to the dangers of targeting being too general, as in this case, and missing not only an important group, but not identifying the greater development potential afforded by this group.
This project was severely affected by lack of or untimely release of local funds. It should have been clear from quite early on, by holding a dialogue with GOU, that this situation was going to affect the implementation of the project. There seems to be no point in merely stating that the government is not meeting the requirements of the loan agreement, a much more positive approach is required which might involve rescheduling project activities or agreeing to meet a larger proportion of the local funding costs.
Implementation schedules need to be based upon realistic estimates with regard to the time required for governments to complete procurements, if project phasing is not to be adversely affected. It appears that appraisals do not give this sufficient priority, or bother to check the actual procurement record with other projects or donors.
The community development component showed that the criteria for group selection for project assistance need to be developed with a clear understanding of who will be excluded. In an attempt to guarantee results, project designers tend to incorporate prohibitive conditions for group eligibility. Care must be taken to avoid excluding poorer groups which have the potential to become valid and viable organisations with the help of outside facilitators and trainers.
The most important stimulus to encourage the adoption by farmers of new crops or farming methods is the farmgate price. There is no point in developing the most complete extension messages and training extension agents unless the stimulus of prices is also correct.
Arable Lands Development Project
Interim evaluation report
Despite an estimated real GDP growth of 10% an outcome of expansion on mining, 50% of the population live at below subsistence level. Agriculture remains the dominant sector, though by 1980 its share of GDP dropped from 40% to 20%. At appraisal time over 80% of the population still depend on agriculture for employment and subsistence. Yet due to semi-arid climate and erratic rainfall, arable land is limited to about 5% of the total area of the country; hence, the country relies heavily on food grain imports. The Arable Lands Development project (ALDEP) is designed within an overall programme in which other multilateral donors participate e.g., AfDB. The programme aimed at raising the production of food grains by small farmers and make the economy less dependent on imported food.
Project design and objectives
The project was based on the Arable Lands Development Programme originally conceived by the Government of Botswana as early as 1977. Within the context of this Programme a pilot phase was initiated in 1979. IFAD programming Mission (August 1979), ADB/IFAD/Identification and IFAD Preparation missions drew up the design for ALDEP from the experiences of this pilot scheme as well as from other research projects in Botswana.
Within the project area all farm families, except those with more than 40 head of cattle, constituted the target group of ALDEP. Targeting was articulated around cattle ownership because the number of cattle was taken as an indicator for access to draught power (and obviously cattle would be a proxy for wealth in such communities). Draught power is the single greatest non-physical or non-climatic constraint to arable farming in Botswana because of the bearing it has both on the total area a farmer can plough/plant in a season and on the timeliness of those operations. "Access" to draught power was therefore used to categorize the traditional arable farmers.
On the basis of cattle ownership and access to draught power the farmers of the target group were ranked into:
- Model I - "No draught power" farmers - defined as those owning no cattle; 3 000 farmers (27%), each with an average total land area of 7 ha, cropping 5 ha annually.
- Model II - "Inadequate draught power farmers" - defined as those owning 1-20 head of cattle; 3 000 farmers (27%) with an average holding of 9 ha, cropping 6 ha annually.
- Model III - "Adequate draught powers farmers" - defined as those owning 21-40 head of cattle; 4 000 farmers (36%) with an average holding of 10 ha, cropping 7 ha annually.
- Model IV - "Molapo" - dryland crop farmers;1 000 farmers (molapo, 9%) with an average holding of 4 ha cropping 3 ha annually.
Objectives and Components
Objectives. The principal objective of the ALDEP was to assist small subsistence farmers to increase the production of basic food grains (sorghum and maize) and legumes and sunflower in order to achieve self-sufficiency at household and national levels and raise rural revenues and improve income distribution.
Components. The project would comprise the following components: (a) on-farm investment; (b) seasonal inputs; (c) strengthening of the extension service; (d) strengthening of the credit service; (e) strengthening of the marketing input supply and distribution system; (f) project management and coordination; and (g) monitoring and evaluation.
Expected effects and assumptions
The incremental food grain production (maize, millet, sorghum) and pulses by these farmers would be about 18 500 tons annually a full development. Additionally, there would be incremental production of about 3 000 tons of cash crops (mainly sunflower) that would be directly marketable. At full development farmers would not only be self-sufficient in basic food grains but would also realize substantial marketable surplus to improve their income. The project would make a significant contribution to the GOB's goal of redistributing wealth from the mining sector to the poor segments of the rural population. Furthermore, the project would contribute to an improvement in national food self-sufficiency. The project's contribution through external and on-the-job training to institutional building would be considerable and would strengthen the extension service and agricultural credit institutions beyond the project life.
The benefits expected from the project are likely to be adversely affected by several conditions. These conditions relate to the level of subsidy to farmers and to measures designed to provide relief to farmers and credit institutions in the event of severe drought resulting in crop failure.
A team consisting of IFAD Senior Evaluation Officer and five IFAD consultants in the fields of extension, agronomy, credit, sociology, livestock, and monitoring and evaluation visited the project during January/February 1992 for a period of three weeks approximately. The objectives of the interim evaluation mission were to review project implementation, evaluate the extent to which project objectives were met and to review design and implementation of research policy and output of relevant agricultural technology. The mission reviewed extensively the project activities in the field, had extensive discussions with project and government officials, analyzed data on project impacts and beneficiaries participation. It consulted vast literature relevant to Botswana and the project as well as project reports.
The period during which the project was implemented had six years of consecutive droughts and eight years of drought out of ten. As a result, on-farm investment component was seriously impeded and the extension activities were mainly limited to input distribution and drought relief programme. In response to drought the Government of Botswana (GOB) initiated the Drought Relief Programme (DRP) and the Accelerated Rainfed Arable Programme (ARAP) through which GOB distributed subsidized inputs and grants to the project target groups jeopardizing project activities, particularly the input supply distributed through credit.
The GOB had windfall income from mining and has continued disbursement on project activities without requesting reimbursement from the financiers. For example, at interim evaluation the project disbursement from IFAD components have been estimated at 30%, but only 8% were requested for reimbursements. For AfDB loan disbursements were negligible prompting a cancellation of the loan, and the redesign of the project and its scaling down to about 50%. However, in terms of local counterpart fund the project experienced no problem.
Production effects. The project in many ways has performed well in institution building but expected production effects were not achieved, largely because of external factors. The immediate goal of ALDEP was to increase production among the low-income households, but firm data with which to determine positive effects are not available.
Raising potential food security on-farm. A very substantial physical participation of farmers in the adoption of implements and a building up of a reservoir of equipment among Botswana's poorest farmers. Some 43 000 packages were distributed to 32 000 farmers compared to planned 23 470 packages, i.e., an over-achievement of more than 80%
(a) A strengthened extension system with the position of the extension work (AD) in the village being reinforced.
(b) The conduct of national tillage trials whose results show promise for the future, but also confirm the difficulty in disseminating standardized recommendations for farmers in situations with pronounced location-specific variations in climate, moisture and socio-economic conditions.
(c) A management system that has grown in strength during implementation and has established, not without difficulty, satisfactory relations with other parts of the MOA.
Adoption of Draught Power. Draught power available immediately at the onset of rains for the typical range of 10-15 days of ploughing/planting is a primary requisite in arable farming. But a foremost concern has remained the low adoption of draught power; only 14% of the ALDEP beneficiaries adopted draught power compared with the appraisal objective of 54%.
Limited Adoption of Equipment. Less than 20% of households without cattle received packages compared with 27% envisaged at appraisal, and the 40% set out in the Reformulated Programme (there is now some evidence that adoption is rising among these farmers).
Credit and Stores. The credit component and the construction of the nine lock-up stores did not perform. This was not a fault in implementation, rather the capability of the National and Cooperative Development Banks was assessed too optimistically at appraisal.
Monitoring and Evaluation. The establishment of an M&E system which has been extremely valuable in monitoring the project in spite of limited computer support. If strengthened, it would be able to conduct useful in-depth evaluations.
Effects assessment and sustainability
Without the necessary statistical data, the mission itself compiled and processed data from some 400 available questionnaires. Analysis of these data for the years 1989, 1990 and 1991 (including a separate 1991 sample of female-headed households) does not attest clearly to difference in production achieved by ALDEP farmers compared with those who did not participate in the project. Nor could production increases be universally attributed to particular types or sequences of equipment.
The majority of rural households persist with their traditional methods - broadcasting the seed and ploughing it in - rather than adopting the ALDEP-recommended double ploughing and row-planting.
Beneficiaries. Model II farmers were the largest group to take up ALDEP packages. Model I participation remained low especially in the southern region where there are fewer such farmers. The Francistown region recorded slightly higher than average participation by Model I farmers.
Area cultivated was not a primary targeting variable and for all the three years of the impact surveys, more than half (52%) of farmers had land areas in excess of 10 ha. Less than one-third (28%) had fields below 6 ha. In 1991, 37% of all farmers fell within the appraisal target ceiling of up to 7 ha for Models I, II and III.
Food Self-Sufficiency. According to Impact Survey (1991), half of the sample (48%) produced no cereals in 1991. Of the cereal-producing households, only 16% produce more than 200 kg of cereal grain per resident member. Most of the remainder produce about half of the resident members' needs per season but 40% produce roughly a mere 15% of annual cereal needs. The food security situation at the household level is precarious. Farmers have to depend on other sources of food - either purchased or obtained from other sources. There is a dire need to look carefully at production systems and to develop sustainable income sources such as goats or small stock.
Specific Effects on Women. About 20% of the participating households are headed by females. This percentage is consistent across years and regions except for the Southern (7%) and Maun (9%) regions where a lower than average female participation was observed in the 1989/90 survey. Most female households are in the Model I category whose participation was low. An increase in Model I participation in the project would mean an increase in female household participation.
Credit. The credit component of the project failed and was abandoned unilaterally by the Government in October 1983. The high cost of servicing a large number of small loans. The National Development Bank (NDB) and the Botswana Cooperative Bank (BCB) were not staffed or structured to deal with small-scale rural credit; they had a poor network of branches and long distances were involved in reaching farmers, creditworthiness, and hence the rate of repayment by recipients was very poor.
Nevertheless, the NDB did in fact make olans for some 2 464 packages under ALDEP indicating that there was a considerable interest in credit amongst the farmers at the beginning of the project. It is also notable that the uptake of packages obtained on credit was better balanced (more draught power and planters than ploughs) than under the down-payment scheme. Subsequently, many of these loans were converted into grants less down-payment.
Extension. The project has been partially successful in implementing its extension component. The construction, early in the implementation period, of 130 houses with adjoining offices for extension workers has made a positive contribution to their morale and sense of job satisfaction. Many people under-estimate the difficulty facing extension workers in the ALDEP project. They are not dealing with progressive farmers keen to adopt new technologies and risk changes in their farming practices.
It may not be feasible for farmers to respond to the main extension messages. For example, since the mid-1970s, recommended practice has been to plough in spring and row-plant - sorghum at 50-70 000 plants per ha and maize at 35-40 000 plants per ha. Recommended fertilizer application is 250 kg of single super phosphate per ha. Recommendations on planting and fertilizer application have not been widely adopted by farmers, largely because they require more draught power and labour than the traditional plough/broadcast method and yields are not much higher. Farmers perceive little net benefit in changing from a well-understood traditional method.
Environmental Effects. The project has been gravely affected by the adverse climatic conditions, rather than the opposite. Consistent with the rainfall pattern, the number of farmers planting was on the decline. While 88% of farmers were able to establish a crop in any given year. However, only about 68% harvested their crop in 1991, because crops failed to reach their maturity. In 1989, because of good rains the harvest was particularly good, about 80%.
Sustainability. Given the competition from other government programmes, which have large grant elements, the sustainability of project activities is questioned. Indeed, the whole strategic orientation of the project would be seriously impaired, unless GOB reverses the grant-based rural interventions. Credit institution sustainability has been further undermined by this policy, in addition to the common perils which rural financial institutions are familiar: with lack of appraisal of rural enterprises; collaterals and creditworthiness; low repayments etc.
Some project activities were given significant assistance in physical terms, such as office buildings and housing to extension staff. Given that GOB does not have serious problems with funding at the time of the evaluation, extension service sustainability hinges on the availability of the technical messages, and on the mobility which the project and GOB put at their disposal. In the previous years, drought conditions did not allow extension to demonstrate its potential.
Main issues and recommendations
Target Group classification. The present target group classification based on number of cattle is simple, reasonable and equitable and should be maintained. Since draught power is the limiting factor in poverty alleviation, the case for shifting to livestock units including small stock is not supported.
Food security. It could be argued that there is little or no rationale for further assistance to the ALDEP target group through production support if food security is already guaranteed, but there is insufficient evidence to confirm this supposition. Indeed, the data suggest that household cereal production is not sufficient to obtain food security. The vast majority of farmers require outside sources of income to meet cereal consumption requirements. Although farmers have access to additional resources, there is no statistical base for the assertion that these resources are sufficient for a minimum standard of household food security. Furthermore, remittances from RSA have likely fallen over the last two years.
Development and dissemination of appropriate technical packages. The farm budget analysis confirms that at present technology levels donkey draft is superior to oxen draft for cash- and labour-constrained households, i.e., especially for the FHHs. Hence, a strong case can be made for credit provision for such households to purchase donkey draft. At the same time, efforts should be made to furnish donkeys to FHHs outside of the Maun area, where donkeys are in ample supply.
The National Tillage trials have yielded valuable information and should continue and be extended: (a) technology generation and refinement need continued support and should be viewed as an ongoing process; (b) with the technology tested to date, smallholders are more likely to see greater productivity gains during periods when rainfall is below rather than above average; and (c) tillage trials should also explore the possibilities inter alia of: reducing production cost through the use of a smaller number of better trained draught animals; and using alternatives to the mould board plough.
The demonstration farms represent worthwhile interventions but need to be supplemented by the setting up of a network of farmer-managed on-farm trials. In such trials, a representative selection of farmers is essential, and farmers, not researchers, should be in command. The reward structure should be neutral to the cultivation method used and farmers should not receive free or subsidized ploughing services. They should be encourage to adapt and improve upon available extension recommendations.
Diagnostic assessments are needed in order to better target project interventions. The project should support the setting up of diagnostic teams with the extension system to provide the in-depth feedback to the project management that is all too often missing. The diagnostic teams would also provide the information base for more effective research-extension linkage.
The evaluation report recommends a review of present extension policy. In part, such a review is predicated by the mismatch between the old and illiterate farmers and the mostly young and inexperienced extension workers (ADs).
Rural credit. There has always been a demand for credit amongst ALDEP target farmers; but the two main rural credit institutions (NDB and BCB) are not in a position to administer small farmer credit schemes. Local NGOs have particular advantages in the implementation of credit schemes. They are: (a) community based; (b) have local knowledge (for example, of the creditworthiness of groups and individuals); (c) have a self-interest in promoting the development of their areas; (d) often have management structures already involved in provision of small-scale credit; and hence, (e) have an even stronger self-interest in ensuring that any credit arrangements they operate are properly administered. Credit under a pilot scheme should therefore be administered through the same outlets that currently provide inputs to the farmers, i.e., the ALDEP/BCU-supported NGOs. The role of the AD and DAO would be to determine the eligibility of applicants and to make recommendations to the NGO. It is important that the extension staff not become debt collectors.
Credit should also be considered for the acquisition of small ruminants. The ownership of goats represents a security- and risk-reduction strategy, especially for poorer households. The feasibility of providing credit for the acquisition of small ruminants, not only for high-risk arable production, needs to be pursued.
Access to land and water resources. Meanwhile, as complementary activities, the project should target its interventions on the basis of availability of local micro-catchments and boreholes so as to ensure a minimum of drinking water for humans and animals. Government policy on groundwater use and boreholes should be reviewed to determine whether it can be amended to stem primary causes of rural poverty and better support GOB and IFAD objectives. There may even be a case for a temporary subsidy for borehole development that favours Model I and II farmers to offset climatic risk (instead of subsidy on-farm investment).
The broader conclusion emerges that government policy needs to be examined to see how it may be shaped to improve entitlements of small farmers-livestock owners and their access to common grazing and water resources; what are the trends with regard to their access to drinking water (boreholes) and to pastures for draught animals. Government policy on groundwater use and boreholes should be reviewed by a consultant to determine whether it can be amended to stem primary causes of rural poverty, and better support GOB and IFAD objectives.
Complementarily of project. The continued involvement of IFAD has assisted in promoting technology generation with a better focus on the risks involved in arable farming. The competing programmes, ARAP and DRP, have been closed. The GOB is intent on reducing and better targeting subsidies to alleviate poverty and wants to shift to a credit programme to achieve this objective. But at present productivity, the scope for reaching this objective is limited.
IFAD's experience with ALDEP demonstrates the need for continuing involvement in order to obtain a lasting effect from technology generation and diffusion. A project that aims at poverty alleviation in fragile environments needs to have at least a 15- to 20-year perspective.
The Government's intention to reduce subsidies and shift towards the provision of implements and inputs on credit requires a finely orchestrated programme design based on data which are not yet available. The risk in such programme design is high. Pilot and phased projects are essential. The rationale for further IFAD support would have to rest in support for a shift in policy direction that serves to reduce costs associated with poverty alleviation and obtaining improved food security at the farm level. Hence, the rationale or economic justification should be clearly presented in terms of "cost savings", or "cost minimization" to achieve a given policy objective over a specified period of time.
Need of diagnostic studies. IFAD needs to pursue more in-depth the mechanisms and processes of rural poverty and regional and social mobility. It is especially important to understand the implications of present Government land tenure policy affecting access to drinking water, boreholes and the commons IFAD's mandate would be well served by such an analysis, in order to review with the GOB the primary causes of poverty and how to address them.
Household demand for on-farm investment is related to several factors. They comprise the need to acquire a minimum of basic food staples on-farm for household consumption, employment opportunities in non-agriculture in general and in the RSA in particular, risk in production, the availability and affordability of draft power, the availability of improved technology, and evolving GOB policy on subsidies. It is impossible to weigh in all these variables and to foresee production risk and location-specific variations so as to design in detail necessary technology and project interventions in advance.
For this reason, prior to passing from a small to a larger scale project, the technology proposed and generated needs to be based on a number of farmer-managed on-farm trials in representative sites to verify the improved technology generated. Such verification is essential since so many factors influence household demand for on-farm investment. The farmer managed trials become a natural point for extension meetings and demonstrations.
Implements as well as extension messages should only be disseminated if confirmed by financial and economic analysis. This has not been the case. The costs associated with the additional labour required for double ploughing and row planting should have come to the forefront at an earlier stage. A series of indicative farm budgets should have been prepared on an annual basis and been discussed with the extension service; they should have been specific to the different types of IFAD target groups and to regional variations, and then they should have been updated on an annual basis.
Smallholders Credit and Marketing Project
The Kingdom of Swaziland is a small land-locked country situated in the south-eastern part of the African continent and almost entirely surrounded by the Republic of South Africa (RSA). The economy is strongly dependent on that of RSA. The country is sub tropical, with wide variation in annual rainfall between 760 and 1 140 mm. Most of the precipitation occurs in summer (October-March). Supplementary irrigation is needed either to grow vegetables and perennial tree crops and/or to reduce uncertainties of rainfall. The agricultural sector is dualistic in nature, with the modern plantation export subsector, covering 45% of all rural land and the subsistence or traditional sub-sector occupying 55% . Mean farm size varied in 1987 between 1.6 and 2.5 ha. Most homesteads grow subsistence crops, principally maize, and cotton as cash crops and about 65% own cattle.
Project design and objectives
An estimated 22 900 homesteads comprising 226 000 people in the Rural Development Areas (RDAs) and about 700 homesteads growing vegetables on the Vuvelane and Magwanyane private irrigation schemes outside the RDAs were to be taken as the target group. From this group, 8 000 homesteads or about 80 000 people were expected to benefit directly from the project.
Objectives and component
Objectives. The project aims at assisting the Government of Swaziland (GOS) in its efforts to achieve food self-sufficiency and to improve farm incomes and standards of living among the rural population, in particular for low income smallholders. The main focus of the project was to be on institutional development, in particular the strengthening of the smallholder marketing and credit support services. The project also included the rehabilitation of twelve irrigation schemes.
Components: (a) Irrigation: rehabilitation of 12 smallholder-group irrigation schemes for the production of rice and vegetables; (b) Marketing: creation and establishment of a National Agricultural Marketing Board (NAMB); provision of market facilities for fruits and vegetables, and maize; and establishment of a Market Intelligence Office under the Ministry of Agriculture and Cooperatives (MOAC) Marketing Advisory Unit; (c) Smallholder Credit: improvement in the lending policy of and provision of funds to augment and sustain Swazi Development and Savings Bank (SDSB) smallholder Agricultural Advisory Credit Scheme; (d) Smallholder Inputs Distribution and Maize Purchases through strengthening the Central Cooperative Unions (CCU): provision of working capital and/or credit facilities to improve CCU's smallholder farm inputs distribution and maize purchase activities; (e) MOAC Tractor Hire Pool: provision of tractors and other facilities and improvement in the organization and management of the operations and services of the unit; (f) Technical Assistance and Staff Training; (g) Special Trial and Studies; (h) Monitoring and Evaluation.
Expected effects and assumptions
Expected Effects. The project intervention would increase significantly yields from year 3 onwards of all winter and summer crops, in particular maize (40%), rice (50%) while vegetables vary between 20% and 50%. Based on the yield projections and on the phasing of farmers participation and land utilization, it is estimated that incremental output would be about 2 780 tons of assorted vegetables and 583 tons of paddy rice. At the point of full development, 491 vegetable producers will be direct beneficiaries of the project. Farmers will benefit from enhanced levels of real and money income. The estimated increase in farm surplus of farmers will vary between 40% and 89% . The provision of marketing and communications facilities will reduce price and market uncertainties, and should enhance the bargaining power of farmers vis-a-vis larger traders, retailers, and institutional buyers.
Assumptions. The expected benefits of the irrigation component depend on timely implementation of the rehabilitation of the physical structures and the effective organisation of the farmers. It was implicitly assumed that the project would receive adequate counterpart funding (borrower's contribution is 25% of project costs) for the execution of these works. The availability and quantity of surface water was not considered a constraint to the development of the irrigation schemes. In marketing, it was assumed that remunerative prices will be obtained by farmers through the rationalization of imports by NAMB. Equally in the case of maize, it was assumed that a ready market exist and that CCU's functions will ensure the provision of inputs for maize and its marketing.
An Interim evaluation mission comprised of four experts on credit and marketing, water management, socio-economics and monitoring and evaluation visited the project for a period of about three weeks. The Mission used information from three sources: (a) national and project authorities (MOAC, CCU, SDSB, NAMB), international organizations (UN agencies), AfDB, bilateral aid agencies and NGOs; (b) project documents; MTE, MTR, supervision mission, progress and monthly performance reports and (c) field observations and undertaken a Rapid Farm-Homestead Survey. The objective of the survey was to develop a preliminary impression of the socio-economic characteristics of project area rural population, their access to project services and benefits.
The SCMP was designed to complement the Rural Development Area Programme (RDAP) then under execution by MOAC. Its unexpected termination in 1985 had led to retrenchment of MOAC staff and construction workers who were needed for the irrigation rehabilitation work under SCMP. Re-employment of MOAC construction workers did not occur until 1989. The RDAP, was also expected to assist Land Use Planning (LUP) financed by USAID, in the design of irrigation rehabilitation. But due to the termination of LUP funding, the Technical Assistance (TA) was terminated prematurely, and the anticipated land development equipment was consequently unavailable. These factors, which were beyond the control of the project, coupled with the slow release of counterpart funds and the lack of an effective full time project management, all contributed to an implementation context leading to delays.
Project implementation gained momentum after the mid-term evaluation in 1988. IFAD intensified efforts to put the project on track and closer supervision by AfDB, the Cooperating Institution was helpful. The eventual appointment of a full-time project coordinator in 1989 was instrumental in improving implementation environment.
The rehabilitation of irrigation schemes had not followed engineering procedures resulting in poor design and low quality construction works. There were diffusion of institutional responsibilities, with many differing lines of authority, in the rehabilitation work. Three separate MOAC departments were responsible for different aspects of the work of planning/design and implementation of rehabilitation work; while assistance to farmers organization was provided by staff from other foreign aid missions. Furthermore, in trying to compress all the rehabilitation works in two years (before loan closing) and execute construction simultaneously in all 12 schemes without adequate supervision, quality has suffered.
The delay in implementation of irrigation rehabilitation has adversely affected the farm-level organization and production. Land use rates estimated by IE and production in these 12 irrigation schemes are very much below appraisal estimates. This has, in turn, affected negatively the full utilization of other facilities and services, including the wholesale market and packing sheds.
Marketing. The impact of the market structures established by NAMB has been limited since smallholders had made little use of these facilities. Farmers have preferred to sell to private traders in the field against cash and not through the wholesale market and commission agents. The establishment of a subsidized wholesale market has primarily benefitted imports of fruits and vegetables, while its merit for smallholder marketing has not been proved.
For maize production in rainfed areas, the objective was to increase yields through improved marketing of inputs and purchase of maize. For this purpose the CCU, has been strengthened through the provision of working capital and funds to build two maize transit stores. The grants provided have facilitated the operations of CCU.
Credit. Financing has been provided to SDSB to strengthen its credit services to smallholders. The project is aiming to disburse loans to 7 000 smallholders. In spite of efforts made regarding improvement of operations by the bank, the number of smallholders who received credit amounted to only 750 in 1990/91. High collateral requirements, high transaction costs on the part of borrowers, the limited staff capacity, and the use of EC funds to serve smallholders are part of the explanation. Repayments rates were about 80% at the beginning of the project but declined to 74% in 1989/90. Most of the loans disbursed were for maize production and only a small number was for the production of vegetables in the irrigation schemes. There has been limited demand for vegetable production credit due to the delay in the rehabilitation of the irrigation schemes and to the fact that farmers use their own funds to finance a production process with a rapid turnover.
Monitoring and evaluation. While the monitoring of the physical and financial progress of the individual project components by the respective institutions has in general been adequate, the activities of the Monitoring and Evaluation Unit (MEU) have proved to be unsatisfactory. The main responsibilities of MEU with regard to the project, were a socio-economic survey of the irrigation schemes and the compilation of quarterly progress reports until 1990, when this was taken over by the Project Coordinator. A delayed draft report of the socio-economic survey was produced in March 1991. The main weakness of the survey design was the lack of a clear concept that could have sharpened the focus of the survey and increased its usefulness.
Effects assessment and sustainability
In the absence of a beneficiary contact monitoring system, there is hardly any quantitative or qualitative information available on the effects of the project on the target group. From field observations, it appears that the impact so far has been limited due to delays in irrigation rehabilitation, low input use, labour constraints, inclement weather, pests and diseases.
Beneficiaries and incomes. To have an idea about the impact of the project on the household income, the Mission attempted as a proxy, to measure the changes (improvements or losses) on crops cultivated. In maize, for example, the survey carried out in June 1991 found that the average maize yield among the sampled farmers was about 3 120 kg/ha. While this result from a small sample should be interpreted with care, the yields are considerably above the 2 000 kg/ha or less normally expected from smallholders. Although the gross margins for maize appear to have reached a satisfactory level, the extent to which it has improved as a result of improved project services cannot be quantified. In case of vegetables, the SAR projected that the cropping intensity would reach or even exceed 200% in the twelve irrigation schemes 5 years after implementation of the SCMP. Field observations supplemented by the sketchy and incomplete data available on vegetable productions on these twelve schemes suggest that this is unlikely to be achieved without major reorganization and further investment in these schemes. Net income from rice after deducting charges for irrigation operation and maintenance, repairs and depreciation of farm machinery and imported costs of household labour would be negligible. Rice production will not be a profitable undertaken, except with heavy subsidies.
Nutrition. The National Nutritional Survey undertaken in 1983, identified stunting as the most chronic nutritional problem in the country. Stunting is found to be closely linked to poverty and subsistence farming. Though SCMP lacked any specific focus on nutrition, its focus is on the poorest and most vulnerable groups in the country. The SCMP aims at reaching these people and is locationally well directed in terms of the most nutritionally-deprived groups. Further support in the provision of training in income-generating skills, for women's groups in particular could indirectly assist household nutrition.
Specific effects on women. Despite the omission of women as an explicit target group the Mission observed that a substantial part of the benefits from the rehabilitation of the schemes appears to be accruing to female farmers and their families. In fact, an estimated 80% of the labour on the irrigation schemes is provided by women on farms operated by themselves and in which they control the decisions. This has emerged as an important secondary benefit of the project with considerable developmental potential for income- generating activities and improving nutritional status.
Environmental Effects. The physical environment in the twelve irrigation scheme areas have not improved, and might actually have deteriorated over the project life. The irrigation rehabilitation did not incorporate any water protection or erosion control works in the catchment area. The river diversion structures were inadequate to prevent also inflows and sedimentation of dams and conveyance systems. None of the silted reservoirs in four schemes have been cleaned. Cattle grazing and felling of trees were continuing in the reservoir catchment areas. Though, increased farm incomes could lead to a higher stock of cattle, overgrazing and soil erosion, there is no evidence that the project has, so far, contributed to this.
Credit. No assessment have so far been carried out on the impact of the credit component on the target group's income due to the absence of an adequate M&E system. It can, however, be assumed that the maize farmers have not benefitted for a number of reasons: (a) the delay in irrigation rehabilitation; (b) vegetable growers appear to prefer financing from their own resources, since the turnover is fast; and (c) the main vegetable growers are women who have no direct access to credit. Furthermore, potential poorer borrowers had no access to credit because they could not meet the collateral requirements, i.e. cattle, or that access costs to credit were considered by them too high.
Participation and group formation. Despite the existing potential, groups in the irrigation schemes did not organise savings clubs and savings and credit unions which could improve rural financial services and reduce transaction costs. The groups did not administer their own irrigation schemes, nor provided for adequate water management, maintenance of irrigation infrastructure and charging of appropriate fees for water use. There is scope for encouraging support from qualified and low cost NGOs. The promotion of small voluntary groups could later contribute to the rehabilitation of the primary cooperatives. The IE found that in none of the project implementation institutions (PCC NAMB, SDSB) are the beneficiaries adequately represented. Although the CCU serves primary cooperatives, it has not held a general assembly in recent years. Project participation and implementation would be strengthened if beneficiaries were adequately represented at the district and national levels.
Sustainability. Sustainability of the irrigation systems is in question. The design of the irrigation structures and the quality of construction are such that they will need further rehabilitation in the near future. Farmers groups have not been adequately formed and trained for sustaining the schemes. Production of rice and vegetables is at present heavily subsidized, without which it is not profitable to the scheme farmers who are mostly women with only limited labour and other resources. Further investments and major reorganization of the production systems are needed for sustainability. By IE the project had insufficiently focussed on the sustainability and cost effectiveness of the support services. The credit programme is not sustainable and requires reorientation focusing more on self-help and joint liability groups administering their own savings and credit programmes. The grants provided to CCU have improved the quality of its operations. But, its financial viability and sustainability would be enhanced by charging import levies on marketing agents.
Main issues and recommendations
To improve the design of irrigation component.
a) Design and/or modify the existing river diversion structures to improve diversion efficiency and eliminate sediment inflow into the conveyance canals.
b) Clean and desilt storage reservoirs, improve system layout, distribution network, and field drainage to enable intensive cultivation.
c) Harness small-scale hydro-electric power for domestic use and processing of farm produce.
d) Establish in the irrigated schemes community-managed woodlands for watershed protection, erosion control, and production of scarce firewood and lumber.
e) Introduce in the irrigation schemes a "garden-style" farming system, incorporating fruit trees and inter-cropping of a variety of vegetable crops.
To enhance Marketing Processes.
a) Strengthen the vegetable marketing extension service.
b) Establish the Fresh Wholesale Market at Nokwane as an autonomous commercial operation which should not be eligible for any further subsidies.
c) NAMB should change payment procedures so that farmers can be paid cash upon delivery.
d) NAMB should earmark adequate funds from levies collected from wholesale agencies as well as importers to the smallholder production and marketing development.
e) CCU accounting system should be reformed to reflect its contribution to the development activities associated with smallholders.
To improve Credit services to smallholders and enhance the viability of credit system.
a) Establish a viable rural financial system for smallholder and improve their credit worthiness through the promotion of joint-liability groups, saving clubs and savings and credit unions.
b) Strengthen the collaboration between extension and loan officers to provide integrated services to smallholders.
c) Reduce the transaction costs and improve loan recovery rates through a performance/incentive system to its loan officers and/or cooperation with credible NGOs.
d) Replace the commission fee received by SDSB for administering the loans on behalf of the project to a system in which the Bank shares the risk of lending, so as to improve loans administration.
e) Adopt procedures that would allow women access to savings mobilization, working capital and credit extension.
To increase the Effectiveness of Monitoring and Evaluation.
a) Introduce a system of beneficiary contact monitoring.
b) Assess the scope for a system of self-evaluation of the irrigation scheme farmers.
c) Review the reporting system.
Project Management. Complex rural/irrigation development need a highly coordinated management system because of the interdependencies between components. The SCMP lost valuable time at the beginning because in the absence of a full-time project coordinator and without an active PCC, the project lost the sense of direction. If anything had been achieved, it was because of its perceived value to the agency involved and not necessarily to the project or its beneficiaries.
Irrigation rehabilitation. Irrigation development and rehabilitation without assessing a priori the conditions of the watershed and the availability of water resources, and without making provisions in the project for their protection and conservation cannot be expected to be sustainable. Watershed degradation, erosion, and sedimentation are the major factors which impinge on the performance and sustainability of the irrigation systems. Standard engineering procedures for review and quality control of scheme preparation, design, construction and acceptance of completed works should be built into project design and insisted upon before loan disbursement. In no case should loan disbursement be made without the project providing a proper description of the irrigation scheme, the works required, cost estimates, and the design document including technical, economic and financial feasibility studies.
Marketing. Marketing is a process which is very much linked with the import/export, subsidies and pricing policies at the macro-level for all tradables. To achieve project objectives, implementation of project components designed to serve marketing purposes need to be synchronized with the national policy. The construction of a wholesale and packing sheds and provision of subsidies on their services proved counterproductive to the smallholder marketing prospects. The strengthening of the market information service has proved an effective instrument from the beginning of the project since it contributed effectively to improved market transparency and strengthened the bargaining position of smallholders.
Credit. The assumptions made in the SAR on the demand for credit among smallholders and their repayment rate (98 - 518), were unrealistically optimistic. There was insufficient awareness in the SAR of the high transaction costs of smallholder credit. More emphasis should be given to the promotion of voluntary savings and credit groups which have been operating in Swaziland over the last 30 years. Rigorous monitoring and evaluation of these programmes would prove essential for their success.
Participation. A participatory development approach is essential to ensure the involvement of the beneficiaries and their training to plan, design, construct, operate and maintain the project investment. Efficient operation and sustainability of the investment can be enhanced by imparting these skills and a sense of ownership to the beneficiaries. The involvement of beneficiaries in project activities form the design stage to their future maintenance and sustainability is a very specialized and skillful exercise. It needs not only highly trained and motivated staff, but also an accumulation of experience in the technical as well as the social aspects of the project investment. It also requires continuity, monitoring, evaluation, and follow-up. Such attributes are not likely to be readily found in bureaucratic government departments. In Swaziland, like elsewhere in the world, a large community of NGOs have accumulated experiences and could provide the service.
Yemen Country Portfolio Evaluation (1992)
Responding to an Executive Board request, it was decided that Country Portfolio Evaluations (CPEs) be carried out in countries where a substantial amount of experience has been accumulated. The purpose of CPEs is to contribute to better project design and implementation in the light of IFAD's actual experience in a specific national context. While this CPE could not be a substitute for individual projects evaluations, it aimed, however, at rapidly providing solid comparative information on the most essential aspects of project performance as well as of their relevance to IFAD's concerns.
The selected methodological approach gave priority to understanding how the projects interacted with their environment taken in a broad sense (natural, institutional, socio-political, etc.). This approach helped to put IFAD's intervention into perspective.
The assessment of project experience in Yemen started during the last quarter of 1991 with a desk review, the result of which provided relevant focus as well as background information for the field work. The latter took place in December 1991 during which the 11 project areas were visited. Time-wise, the CPE came at an opportune moment as the country was reviewing its development policy in the light of the new situation created by the unification of the country.
The evaluation report consists of ten chapters grouped into three sections. The first section provides an overview of the IFAD country programme since its inception, putting it into perspective with the evolution of the national context (Chapters II and III). Project performance is subsequently described from an operational and financial point of view (Chapter IV). Chapter[V concludes this Section by analysing in depth the project's contribution to institution-building. Particular attention is paid to the various forms of project organisation and their effects on project performance.
The second part of the report (Chapters VI to VIII) assesses project experience in the major fields of IFAD intervention in Yemen: irrigation and rural infrastructure, generation and dissemination of improved technology and agricultural credit. Essential facts on project achievements are presented together with the relevant issues involved.
On the basis of the above, an attempt is made, in the last section of the report, to look at past experience from the specific standpoint of IFAD (Chapter IX). Beyond providing some indications on the contribution of the projects towards poverty alleviation, this Chapter discusses the specific issue of targetting approaches and instrumentalities in Yemen, as revealed by actual experience.
Whereas the former South Yemen inherited educational and administrative structures which helped in the management of rural development projects, North Yemen, which was by far the most populated, had to build these capacities from scratch. Yemen, particularly the North, has nevertheless experienced rapid growth during the last 15 years, which in turn, deeply transformed a country and a society which only recently opened to the modern world (1962). Growth soon created new problems or exacerbated existing ones, particularly with the ever-increasing pressure on the narrow natural resources base. Hence, the lack of sustained achievements witnessed by many projects regardless of their source of financing. As in many countries which followed a similar pattern of growth, there are clear indications that equity issues were given insufficient attention.
In this context, marked by the high priority given to institution-building, the Government and its major development assistance partners used rural development projects to create the nucleus of future development authorities at a regional level. This strategy involved, by its very nature, less attention being given to both community level and national level development programmes. As a result of the weakness of internal resources mobilisation, institution-building has been greatly dependent on external financing. Hence the succession of project phases in the same area which is one of the salient characteristics of the Government's portfolio of rural development projects.
IFAD has financed a total of 11 projects in Yemen starting in 1979 in the North and 1980 in the South for a total project cost of US$[371[million. The share of IFAD amounted to about 25% of the total cost of the projects (US$[91.1[million), with a lower percentage contribution in the North. Eight of these projects were initiated by other donors and cofinanced by IFAD. IFAD-financed projects dealt with a wide range of projects and agro-ecological zones, whose objectives included: the establishment and rehabilitation of rural infrastructure; the development and dissemination of technical packages; and institution-building.
Projet de Développement Rural Intégré de M'bour et Louga (1991)
Proyecto de Desarrollo Rural para las Comunidades Guaymí (1991)
Resumen estructurado del informe de evaluación
El proyecto se encuentra localizado en la región central del oeste de Panamá, al norte de la carretera panamericana y en la falda de la Cordillera Central. El área total comprende 239 000 ha., y abarca una población aproximada de 30 000 habitantes.
El área que cubre el proyecto es reclamada por los grupos indígenas guaymíes como parte de la Comarca Guaymí. Los indígenas son dos tercios de la población que reside en el área del proyecto. El resto es población no indígena. Sin embargo, para seleccionar a los beneficiarios de los diferentes componentes no se exigía la condición de indígena, ni eran prioritarios. El proyecto en su diseño es de desarrollo regional.
Terreno sumamente accidentado en gran parte del área, mala calidad de los suelos y creciente erosión.
Objetivos del proyecto y diseño
La mayoría de los componentes del proyecto, en particular los sociales (salud y educación) están claramente orientados a los sectores más carenciados aunque no se encuentren criterios explícitos en la Evaluación Ex-Ante (SAR).
El SAR señala que el proyecto mejoraría las condiciones de vida de 3 000 familias campesinas en condiciones de subsistencia. Adicionalmente las carreteras, escuelas, clínicas rurales y reforestación podrían beneficiar a más de 6 000 familias residentes en el área.
Es decir, la población objetivo era, genéricamente, los pobres de una parte de la región Guaymí, pero en el SAR no se establecieron criterios específicos para seleccionar a los beneficiarios. Esta indefinición trajo ciertos sesgos en la posterior implantación, particularmente en los componentes productivos.
La mayor parte de la población afectada por el proyecto se encuentra en un nivel de vida inferior al de subsistencia, con bajas condiciones de salud y alta dispersión de la población. El promedio del ingreso familiar era de USD 700 anuales, lo que constituye el nivel más bajo del país.
Los objetivos fueron los siguientes: 1) integrar a los campesinos a la economía formal, 2) aumentar la producción de alimentos para el autoconsumo, 3) mejorar la salud y la educación, 4) reducir la erosión, y 5) fortalecer la capacidad institucional.
Componentes productivos: 1) servicios agropecuarios, 2) crédito agropecuario, 3) reforestación y 4) caminos y senderos. Posteriormente, a través de las sucesivas modificaciones del proyecto, y principalmente en la reformulación realizada en 1988, se incluyó un subcomponente de educación no formal. Componentes sociales: 1) salud, y 2) educación.
Los efectos esperados eran los siguientes: 1) integrar a los campesinos a la economía formal, 2) aumentar la producción de alimentos para el autoconsumo, 3) mejorar la salud y la educación, 4) reducir la erosión, y 5) fortalecer la capacidad institucional.
La ejecución del proyecto tubo lugar durante un período particularmente difícil para la economía y sociedad panameña. En la década de los ochenta el Producto Interior Bruto (PIB) 'per cápita' panameño no sólo no aumentó sino que incluso cayó un 84% de su nivel en 1980. En estos años se produce un estancamiento en los ingresos generados por el Canal de Panamá y en el sector terciario como consecuencia de reordenamientos en el comercio mundial y la crisis de las economías latinoamericanas. El sector público no pudo continuar con su papel como motor del desarrollo, dada la precaria situación fiscal.
La inestabilidad política fue muy aguda, con diez cambios de gabinete durante el período de ejecución del proyecto, con las consiguientes implicaciones en términos del movimiento del personal.
El entorno del proyecto también se vio influido por la presencia de otros programas de desarrollo en el área, por parte de otras agencias de Naciones Unidas y organizaciones no gubernamentales.
Aunque el componente de crédito fue subejecutado, ello no fue perjudicial para el proyecto, sino -hasta cierta medida- una ventaja. La incapacidad del MIDA, sobre todo en los primeros años del proyecto, para ofrecer paquetes tecnológicos adecuados a las necesidades y posibilidades del productor del área y su débil sistema de extensión hubieran provocado, en el caso de atenderse a estos clientes con créditos masivos, creciente dificultad para la recuperación, causando un alto perjuicio a los beneficiarios al endeudarse en actividades no rentables.
Las cifras de morosidad y eficiencia de la recuperación sugieren que el componente de crédito fue manejado con una alta responsabilidad desde el punto de vista bancario y con una eficiencia comparable a los mejores proyectos.
Se instalaron diez acueductos (estaban programados 18) y un 30% de las letrinas previstas, beneficiándose a unas 4 600 personas. Se realizaron 28 giras médicas (de las 131 programadas), que tienen buena aceptación entre los indígenas. Pero la falta de asistentes de salud y recursos (medicinas e implementos médicos) afectó el funcionamiento del componente salud.
En el componente de educación se construyeron 20 escuelas de dos aulas (50% de lo previsto) y se realizaron dos de los seis eventos programados para la capacitación de maestros. Por otra parte, se lograron resultados no programados, como la capacitación a 42 madres indígenas en cuidados y atención a los niños, y la construcción de dos cocinas comedor para proporcionar alimentos a los estudiantes. Se construyeron y se pusieron en funcionamiento cinco de los siete centros parvularios programados para la atención de niños de dos a cinco años. La falta de incentivos económicos para el personal involucrado en la educación fue un factor crítico en el nivel de resultados alcanzado.
A principios de 1989 se contrató un consultor que trabajó 11 meses en el rediseño del sistema de seguimiento y evaluación, con un enfoque de administración por objetivos, sin tomar en consideración lo establecido en un valioso anexo sobre seguimiento y evaluación incluido en el SAR. El sistema tuvo utilidad para la gestión, mientras se lo aplicó. Pero no sirvió para la evaluación.
El sistema de seguimiento y evaluación en el proyecto estuvo institucionalmente mal ubicado, con un elevado sesgo burocrático, sin participación de los beneficiarios, sin utilidad para la evaluación y de algún valor para la gestión (durante 1989).
La institución cooperante llevó a cabo la supervisión internacional del proyecto con escasa participación del FIDA. En algunas misiones de supervisión de 1987, 1988 y 1989 las misiones del Banco Mundial incluyeron consultores especialistas en el análisis de los aspectos sociales del proyecto, y en 1988 se realizó un análisis en profundidad de la temática agropecuaria, planteándose una significativa y adecuada reprogramación del proyecto. Pero las misiones de supervisión no llamaron suficientemente la atención sobre la inconveniencia de concentrar los recursos de la Coordinación del Proyecto en la ciudad de Panamá, en lugar de hacerlo en el área del proyecto (tal como lo establecía el SAR). Tampoco fue suficientemente enfatizada la importancia de promover la participación de los beneficiarios. Tampoco se mencionó la amplia utilización de los recursos aportados por el proyecto (especialmente vehículos y personal) para fines ajenos al proyecto, afectando seriamente la ejecución.
Recién en 1990 tiene lugar una reorientación en la propuesta tecnológica del Ministerio de Desarrollo Agropecuario (MIDA), desarrollándose nuevos paquetes tecnológicos basados en prácticas agronómicas sencillas. La tasa de adopción de la tecnología recomendada pasa de un 5% entre 1988 a niveles superiores al 75% en 1991. Este paquete tecnológico sencillo, si bien tiene límites, permitió aumentar los rendimientos en un 20% sin aumentar los costos de producción. El resultado ha sido un notable incremento en la tasa interna de retorno del modelo de finca más característico en el área.
Los Centros Comunitarios para el Desarrollo (CECOPADE) no estaban originalmente previstos en el proyecto. Fue en la reformulación de 1988 que se los incorporó formalmente (en los primeros años se los apoyó mediante materiales, capacitación y servicios). Los CECOPADE han fomentado la formación de grupos comunitarios, que -en forma paulatina- asumieron la autogestión de la comunidad, abarcando campos más amplios que los originariamente programados. Además, brindaron una oportunidad de educación a jóvenes que no tienen acceso a la enseñanza formal, capacitándolos en el trabajo comunitario y en la implementación de programas de producción en finca. Este programa ha formado a jóvenes varones y mujeres, con un bajo costo anual por alumno.
Si bien el proyecto tuvo en cuenta algunas especificidades del área del proyecto y de las características de la población beneficiaria, hubo importantes omisiones en relación con el análisis de la organización socio-política de la población Guaymí, particularmente en lo que respecta a su organización de base, a las condiciones agro-ecológicas y a los sistemas de producción vigentes, a la (in)existencia de paquetes tecnológicos apropiados para las necesidades y posibilidades del área, al marco institucional del país (público y privado), a las condiciones de comercialización y a las fuentes de ingresos extra-prediales.
En un área como la del proyecto el manejo de microcuencas debía ser uno de los pilares de la estrategia productiva, y esto se menciona en el SAR, pero en el diseño de los componentes no tiene un papel importante.
La capacitación del personal ha sido muy limitada. Se orientó básicamente a transferir a los técnicos un conjunto de paquetes tecnológicos sin promover su discusión y evaluación. Los técnicos no recibieron capacitación en métodos de trabajo y en el modo de llevar a cabo sus actividades con las comunidades indígenas y campesinas. Tampoco se desarrolló un programa de capacitación en sistemas de producción que permitiera a los técnicos comprender la integralidad de la producción de las fincas campesinas.
El componente de crédito fue marcadamente subejecutado. Se otorgaron 136 préstamos, en tanto se habían programado 3 000. El componente fue ejecutado independientemente de los demás. Se construyó una sucursal bancaria y comenzó a operar un banco móvil. El porcentaje de la cartera en mora es del 4% y los fondos han sido otorgados principalmente para ganadería. Si bien los préstamos fueron orientados a la población de mayores recursos en el área, la mayor parte de los productores realizaban trabajo agropecuario asalariado fuera de la finca, lo cual significa en este contexto que no eran grandes productores. Finalmente, cabe señalar que dada la orientación de los pobres rurales en el área hacia la producción para el autoconsumo, las necesidades y posibilidades de la población del área del proyecto con respecto al crédito fueron claramente sobreestimadas.
En cuanto al componente forestal, las actividades se redujeron básicamente a la siembra de árboles, sin dar manejo a las plantaciones realizadas (poda, raleo). No se fomentaron las iniciativas de forestación entre los productores, y su participación se ha reducido al papel de trabajadores asalariados, sin ninguna intervención en la gestión del componente ni en la programación de actividades.
El componente de caminos es uno de los que más problemas ha presentado en la ejecución del proyecto. Una programación deficiente en la ejecución de los trabajos llevó a que se iniciaran varias obras al mismo tiempo, sin tener asegurado el presupuesto para concluirlas, quedando la mayor parte de los caminos inconclusos. Esto, unido a la falta de mantenimiento, limita notablemente el valor del trabajo realizado en el marco de este componente, ya que las escasas obras concluidas se han ido deteriorando, a punto tal que prácticamente se requiere una reconstrucción en la mayoría de los tramos.
Las vías de acceso a los puestos de salud (dos de los cuales fueron construidos con recursos aportados por el proyecto) se encontraban en malas condiciones, lo que dificultaba las giras de salud y la concurrencia de la población a dichos puestos. Además, se carecía del equipo básico y de los materiales para la atención de los pacientes. Por otro lado, los sábados y domingos, que son los días más apropiados para la atención de la población, los puestos de salud permanecían cerrados.
El diseño del sistema de seguimiento y evaluación era inadecuado: falló en su ubicación institucional, carecía de claridad conceptual y operativa (confundía, por ejemplo, supervisión con seguimiento y combinaba seguimiento con evaluación en una misma oficina independiente de la Coordinación del proyecto), no preveía actividades de capacitación, ni la participación activa de los beneficiarios, concentraba su trabajo en generar informes (sin otorgar importancia a la circulación informal de la información) y descuidaba la evaluación propiamente dicha.
La participación de los beneficiarios en el proyecto fue muy reducida. El SAR preveía algunos mecanismos que resultaron inoperativos. En ocasión de la reformulación (1988) comenzaron a crearse canales para la participación, pero ésta estuvo principalmente limitada a consultas con la cúpula de la dirigencia Guaymí. La falta de participación generó desconfianza y una cierta apatía, afectando negativamente la implementación del proyecto.
El análisis y caracterización de la población beneficiaria que se encuentra en el SAR adolece de dos carencias que afectaron al diseño de la estrategia y a la implementación de varios componentes: 1) la falta de criterios para seleccionar o para priorizar las familias campesinas que se pretendían integrar a las actividades del proyecto, y 2) un escaso conocimiento de las estructuras socio-económicas que predominan en la región. Además, no fueron explícitas las razones para excluir un considerable sector de indígenas guaymíes.
Los cinco objetivos del proyecto, planteados en el SAR, son de carácter muy general, poco utilizables para orientar efectivamente las actividades y dar un marco preciso a la estrategia. Estos objetivos serían también aplicables a proyectos de desarrollo rural en otros contextos diferentes. No están suficientemente explicitados y enmarcados en el contexto particular de la sociedad guaymí.
La tradición de paternalismo y asistencialismo que han caracterizado a las intervenciones en la región constituyeron un obstáculo para la ejecución apropiada del proyecto.
La amplia cobertura del proyecto no se valoró suficientemente. Tradicionalmente la población guaymí ha vivido de manera dispersa y en áreas de difícil acceso, por lo que proveerle de servicios resulta bastante intrincado y a veces imposible debido al alto costo que esto representa.
Se recomienda que no se lleve a cabo una segunda fase del mismo proyecto. En cambio, se recomienda que sea formulado un nuevo proyecto para la población del área Guaymí, en el cual se capitalice la experiencia adquirida, consolidando los logros alcanzados y aplicando las lecciones de la experiencia. Un nuevo proyecto en el cual los guaymíes participen activamente desde la fase de formulación y, particularmente, en su ejecución, seguimiento y evaluación.
Para una población como la guaymí es particularmente importante que un proyecto de desarrollo sea altamente participativo. Que la población pueda identificarse y comprometerse con el proyecto en vez de percibirlo como una propuesta ajena. Para ello es necesario crear oportunidades que permitan involucrar a la población desde el proceso de formulación del proyecto. Se recomienda que la próxima misión de formulación incluya un equipo guaymí, coordinado por una experta panameña en esta temática, bajo la supervisión de RUTA. la participación de los expertos locales es importante tanto para crear una buena imagen del proyecto desde su gestación como para aprovechar esta fundamental fuente de información.
Dada la localización de las comunidades guaymíes en tres provincias, con tres caciques distintos, sería conveniente la formulación de proyectos pilotos en cada una de ellas.
Además de la inclusión de la mujer en el conjunto de las actividades que integren un nuevo proyecto, deberá hacerse un esfuerzo especial para identificar actividades rurales no agrícolas que constituyan opciones apropiadas para las mujeres del área.
Podría incluirse un componente de protección de recursos naturales, con fondos no reembolsables. Esto no sólo reducirá el costo total de los recursos para Panamá, sino que -además- permitiría aprovechar la reconocida actitud positiva de los indígenas en relación con la protección del medio ambiente, integrándola con un conjunto de actividades productivas.
Con relación a las instituciones de contraparte, se recomienda adoptar un "enfoque abierto", sin comprometerse al inicio de la formulación con ninguna institución en particular. La identificación de las instituciones adecuadas es una de las tareas básicas, y es fundamental que la población del área guaymí no perciba un nuevo proyecto como una continuación del proyecto de desarrollo rural integrado Guaymí.
En los aspectos relacionados con salud, educación y nutrición las carencias son tan importantes que no es posible omitir su consideración. En un futuro proyecto FIDA, con énfasis en el desarrollo de la capacidad productiva, sería posible adoptar uno de los dos siguientes enfoques: incluir componentes sociales, o proponer uno o más proyectos paralelos, involucrando agencias con competencia en estos campos.
En educación y salud es necesario focalizar las acciones para ampliar la efectividad del proyecto. Esto podría llevarse a cabo mediante: 1) el asesoramiento de especialistas conocedores de la cultura guaymí para la definición de la estrategia, 2) la incorporación de beneficiarios y personal operativo en la definición de algunas fases de la estrategia, 3) la incorporación de grupos voluntarios universitarios interdisciplinarios al proyecto, dándoles facilidades para su trabajo en la zona, 4) la creación de instancias de discusión y análisis para los funcionarios, voluntarios y beneficiarios en torno a la ejecución del proyecto, y 5) el favorecimiento de un clima organizativo que estimule la mística de trabajo alrededor del proyecto.
En el área de salud es necesario asegurar el suministro de medicinas y recursos para los puestos de salud. Además es importante que los puestos de salud estén abiertos los sábados y domingos, ya que son precisamente estos días cuando los campesinos van al pueblo para sus transacciones y gestiones.
La escasez de alternativas productivas en la región torna altamente conveniente explorar las posibilidades de la pesca artesanal en el área guaymí, y especialmente en la provincia de Boca del Toro.
Una posible solución al problema de la falta de difusión de las actividades del proyecto, y como forma de llegar a una población dispersa como la guaymí, es la utilización de la radio. La misión de formulación podría contratar a un experto local con experiencia en el tema para diseñar un componente o subcomponente de medios de comunicación masivos, el cual también podría cumplir un papel en relación a la transmisión de información sobre mercados, acciones programadas por el proyecto, recomendaciones técnicas, etc. Sería importante que este programa se diseñe teniendo en cuenta los gustos de la población y su propio idioma.
Deben especificarse claramente los criterios para seleccionar a los beneficiarios. Criterios claros y explícitos pueden evitar que la implementación se sesgue hacia los campesinos menos necesitados de los insumos que provee el proyecto. En el área guaymí es poco útil aplicar los parámetros más frecuentes, como el tamaño de la parcela, por el sistema de "posesión" con base en complejos vínculos familiares y la permanente rotación de las parcelas que se cultivan, lo que hace inaplicable el criterio de área. Tampoco es práctico aplicar algún criterio de ingreso familiar por las enormes dificultades que tendría una medición adecuada de esta variable en cada familia. Además, en un considerable sector de la población indígena es difícil individualizar el núcleo familiar. Parece aconsejable elegir comunidades y no familias con criterios sencillos, como la distancia de la carretera interamericana y/o el tipo de recursos naturales al cual puede acceder la comunidad. Es importante tener presente que la población de esas regiones es relativamente homogénea, particularmente en las comunidades, y las diferencias entre las comunidades están determinadas principalmente por dos variables: el acceso a las vías de comunicación (y -en consecuencia- a los servicios que se suministran en centros semiurbanos) y la calidad de los recursos naturales (en la parte baja o alta, acceso a terrenos planos o con menor pendiente, etc.).
Un problema complejo al cual hay que prestar particular atención es el diseño de la estrategia productiva: 1) La tecnología que se pretenda promover en los cultivos de granos básicos deberán prestar particular atención a la minimización de los costes monetarios. Se debe buscar tecnología muy sencilla y adecuada al sistema de producción local. 2) El manejo integrado de microcuencas está bastante probado en la región y puede ser un modelo que posibilite aumentos considerables en la disponibilidad de alimentos. 3) Considerando el terreno sumamente accidentado de gran parte del área, la mala calidad de los suelos y la creciente erosión, los programas de reforestación deben tener una elevada prioridad. 4) Será necesario rediseñar los servicios de apoyo a la producción. Por ejemplo mejorar y extender la experiencia del "campesino colaborador". 5) Diseñar un componente específico para generar una oferta de tecnología realmente adecuada al contexto agroecológico y socioeconómico de la región.
Considerar la incorporación de un componente de apoyo a la comercialización. Crear estructuras mínimas donde el campesino pueda vender los productos y obtener los bienes básicos que necesita.
El crédito no debería ser un componente importante en un futuro proyecto guaymí. La experiencia indica que el crédito tiene un papel considerablemente menor al que se le asignó en este proyecto. Dado que la gran mayoría de los campesinos indígenas producen casi exclusivamente para el consumo familiar y con ínfimos costos monetarios, casi no hay espacio para el crédito en dinero. Si se determina la necesidad de incorporar un componente de crédito, en lugar de canalizarlo a través del Banco de Desarrollo Agropecuario sería conveniente explorar la posibilidad de involucrar a organizaciones no gubernamentales cuyas metodologías de trabajo se adapten más a los requerimientos y posibilidades de la población objetivo.
En un futuro proyecto sería conveniente contemplar una activa participación de los CECOPADE. Sin embargo, existen algunas recomendaciones para su funcionamiento: 1) que el programa dependa de un solo ministerio o institución, 2) que tenga autonomía presupuestaria, 3) que la coordinación, el comité de administración y los beneficiarios participen en la selección de personal, 4) que el personal técnico sea debidamente capacitado antes de incorporarse al servicio, 5) que se otorgue personería jurídica al consejo de administración, para que pueda canalizar directamente el apoyo internacional recibido, y 6) que se asegure la aplicación del convenio con el Banco de Desarrollo Agropecuario, a fin de que el joven egresado reciba apoyo crediticio que garantice la puesta en práctica de los conocimientos adquiridos.
Debe darse asistencia técnica en medición, catastro y cartografía. Incluir un componente específico de apoyo a las comunidades guaymíes para la regularización adecuada de la tenencia de sus tierras.
La supervisión a nivel local debe ser realizada por el equipo técnico de la coordinación, que podría contar con un fondo par la contratación de consultorías que complementen su trabajo y capacidad. Por otra parte, las misiones de supervisión internacional (MSI), además de sus funciones de rutina, verificarán si el equipo técnico de la coordinación toma en consideración -y cuenta con- el documento del proyecto (SAR). Consultarán a las instancias organizativas de los beneficiarios, no sólo a sus caciques. Todos los informes de la MSI deberán incluir una sección específica relativa a seguimiento y evaluación, indicando los eventuales problemas que se estuvieran presentando, señalando si el seguimiento apoya de modo efectivo a la coordinación del proyecto y si la evaluación está llevándose a cabo. También deberán indicar el grado en que los beneficiarios del proyecto están participando en las diferentes actividades del proyecto (incluyendo el seguimiento y la evaluación). Por último, en caso de utilización de los recursos aportados por el proyecto para usos ajenos al mismo, la MSI deberá recomendar la suspensión (o la posibilidad de suspensión) de los desembolsos si la desviación no es corregida en un determinado plazo. La supervisión deberá ser flexible pero enérgica.
Con respecto al seguimiento y la evaluación, el equipo técnico de la coordinación localizado en el área del proyecto deberá tener la responsabilidad principal (y los recursos) para el seguimiento de las actividades del proyecto, globalmente y a nivel de cada componente. Para la evaluación del proyecto se identificará una institución del sector público, con experiencia en áreas indígenas y que no tenga carácter sectorial, cuyo trabajo podría complementarse con la participación de organizaciones no gubernamentales.
En las actividades de extensión debe tenerse presente la estructura organizativa y el sistema de producción del grupo objetivo para poder desarrollar un trabajo adecuado a la realidad agroecológica, social y político-económica del área. Los patrones y valores culturales deben ser conocidos por los técnicos, para realizar una labor más efectiva y acorde con el grupo, de manera que nuevas tecnologías puedan ser introducidas, aceptadas y practicadas por los beneficiarios.
En proyectos con áreas de difícil acceso, es recomendable la contratación de personal cualificado y nativo del área, que cuenta con la ventaja de conocer el terreno, la población y sus costumbres y -muchas veces- sus expectativas, cosas que no puede aportar un no nativo del área.
Al planificar un proyecto, es importante tener presente el patrón de residencia de los grupos, para evitar que se programen acciones imposibles de cumplir por falta de vías de comunicación y por las dificultades que representa llevar diferentes servicios a cada uno de los caseríos si se encuentran muy distantes unos de otros, además de representar un alto costo.
Los proyectos productivos deben estar íntimamente ligados al aspecto de salud y nutrición, especialmente en áreas donde existen problemas de desnutrición y un alto índice de enfermedades. Una persona saludable está en capacidad física para producir y no a la inversa.
El proyecto en su ejecución debe contar de suficiente autonomía, pero con los controles fiscalizadores correspondientes, para poder resolver problemas inmediatos y generar resultados sin el entorpecimiento que conllevan los aparatos burocráticos institucionales.
Atolls Credit and Development Baning Project (1991)
The project was designed to cover 15 out of 19 outer atolls in the Northern and South-Central regions. The project area comprised: Haa Alifu, Haa Dhaalu, Shaviyani, Noonu, Raa, Baa and Lhaviyani, in the Northern atolls; and Vaavu, Meemu, Faafu, Dhaalu, Thaa, Laamu, Gaafu Alifu and Gaafu Dhaalu in the South-Central atolls.
The project atolls contain 16 800 households with 97 700 inhabitants. This represents not less than 73 % of the total population in the outer atolls.
Project objectives and design
The project aimed to assist 3 250 atoll households directly from credit access and to benefit 6 000 indirectly through improved earning opportunities. The target group comprised households with a per capita income below Rf 2 000 per annum, equivalent to Rf 1 000 per month for a family of six persons. This poverty line was based on the average household income in the outer atolls derived from the various surveys. In 1993, the income ceiling for the target group was raised to Rf 2 000 per month reflecting the trends in economic and social change.
The project was designed as the first phase of a long-term program to build up the Bank of Maldives (BML) as a development finance institution and help it to widen its geographic coverage to provide financial service to the population in outer atolls. The project was costed at USD 6 million with IFAD contributing 3 million and GOM 2.5 million and UNDP 0.5 million.
The project set out to: (i) lay the foundations of development banking in the Maldives and develop a credit delivery capability in the outer atolls; (ii) reduce income disparities between the outer atolls and Male by increasing the employment opportunities and income levels, with a particular focus on the lower income groups; and (iii) develop a framework for supporting future programs to improve nutritional standards in the outer atolls.
The project comprised five components:
- Creation of a Development Banking Cell (DBC) in BML to establish credit delivery mechanism and mobilise savings in the outer atolls;
- Credit to individuals and groups to finance investment in fishing boats, fish processing, agricultural activities, trades and cottage industries;
- A pilot nutrition education program in an atoll to initiate a process of nutrition demonstration an education integrated with agriculture and extension;
- Training of the project beneficiaries, assistance to NGOs for training in agriculture, handicrafts and other income generating activities; and
- Provision of consultants for setting up a monitoring and evaluation system and to assist in design and analysis of baseline and impact evaluation surveys.
Ministry of Finance and Treasury (MOFT) was the co-ordinating agency. BML through DBC was the implementing agency. Ministry of Atolls Administration, the Ministry of Fisheries and Agriculture and the Department of Women's Affairs were designated as co-operating agencies to implement the training and nutrition components.
The Project was designed to establish the Project Co-ordinating Committee with the Minister of State for Finance as the Chair and officials from the Ministry of Planning and the Environment, Atolls Administration, Fisheries and Agriculture as members. The Project Co-ordinating Committee was expected to co-ordinate co-operating agencies, set policy guidelines for the project, review the project progress and approve the annual lending program.
The project design reflected a series of assumptions about constraints affecting production and trade in the outer atolls in the Maldives archipelago. Limited access to credit and extension services was considered as the main obstacle impeding income generation. Due to insecurity, irregular transportation and perceived high transaction costs, existing financial institutions were not ready to operate outside of Male. Furthermore, the outreach of public sector extension services in the outer atolls and islands was very limited. The project assumed that access to credit services would enhance support for islanders to initiate income-generating activities. Implicitly, the project design assumed that empowerment coupled with the provision of agricultural credit would contribute to women's income generating opportunities. Empowerment and training of low-income producers at least implicitly was considered a prerequisite for credit uptake for the most vulnerable or most resource poor households.
Methodology of evaluation
Evaluation purpose and scope
An IFAD mission conducted a completion evaluation (CE) of the Atolls Credit and Development Banking Project in the Maldives from 28.2.1999 to 29.3.1999. This CE set out to analyse the final performance of the project compared to the objectives set out at the time of project design. Further, its lessons should be used to improve the performance of the current Southern Atoll Development Project (383-MV) as well as future similar IFAD projects.
Approach and methodology
The mission used several sources of data to analyse the performance of credit and other components. The data used by CE were: BML financial data, economic indicators of the Government of Maldives, and the Poverty Assessment Data collected by UNDP Maldives. The mission conducted the Rapid Impact Assessment Survey (RIAS) with the co-operation of MOFT and Bank of Maldives (BML) to measure the social-economic impact and target focus of the project. The mission designed three questionnaires, for beneficiaries, non-beneficiaries (control group), and to capture island socio-economic profile. The survey was conducted with 114 households in 18 islands representing all the 15 atolls serviced under the project. Fifty-eight beneficiaries and fifty-six non-beneficiaries were interviewed.
The project loan agreement became effective in January 1990 with a project duration of four years. Project activities were initiated towards the end of 1990, ten months after the loan agreement signed. During the first year no disbursements were made. Disbursements exceeded appraisal targets except for the first year of project implementation. The project was closed in December 1996. By this time, 96% of the total loans had been disbursed.
The total value of DBC loan disbursements exceeds the SAR estimates. At the end of the project period, a total of Rf 116 million was disbursed, while the estimate of credit disbursement in SAR was Rf 77 million. The target group loans accounted for 43% of the total loan amount disbursed and 80% of the number of loans disbursed.
By the end of the project, the total target group loans amounted Rf 51 million in 2 515 accounts. In other words, 2 515 households, representing 70%-80% of the total number of households in the project area would have obtained credit. These households would not have been able to access credit without the project intervention.
The economic activities funded by DBC comprise fishing, small enterprises, trade/transport (boats) and agriculture. Lending to fisheries related activities was considerably lower than expected. The share of agriculture, small enterprise, trade and transport increased significantly reflecting growing importance of tourism related activities.
BML in 1990 established a Development Banking Cell (DBC) to provide outer atoll banking services. This was the first step in a long-term process engineered by the project to provide sustainable financial services to the low-income population in the outer atolls. In 1996, DBC was re-named as North Central Atolls Regional Unit (NCARU). DBC was set up as an autonomous operation within BML with separate accounting and reporting formats. This separate accounting and reporting system was an important precondition for measuring progress and contributed to successful performance.
The project successfully implemented the institutional strengthening component to undertake development-banking activities. DBC/BML established four branches and started mobile banking services for islands in the outer atolls.
In the original project design, DBC/BML was to open three branches (Kulhudhufushi, Naifaru and Mulee) and one sub-branch (Hihadoo) during the first year of the project. DBC/BML wisely decided to proceed more cautiously. It opened branch offices only when it was assured that it would have trained staff in place. It opened four branches over four years in Kulhudufushi, Naifaru, Mulee, and Fonadoo. The DBC/BML head office in Male has also extended development-banking services to Alifu and Kaafu atolls. DBC/BML built all branches on own premises using IFAD funds.
To provide financial services to some 50 islands, each branch office started mobile banking operations. Yacht dhonis equipped with safes were provided to each branch. The mobile banking staff was expected to visit islands periodically, collect loan applications, sanction loans and receive deposits and repayments.
Presently, the branches use the mobile banking service only to deliver and recover loans. The exception is the Naifaru branch; it collects savings from two near-by islands through the yacht dhoni banking service. Almost all savings at branch office level, or about 80%, are collected within the same island where the branch office is located.
The yacht dhoni operation turned out to be expensive. Operating and maintaining the yacht dhonis is expensive. A new dhoni costs around RF 1.2 million; it may have to be replaced every five years. To curtail costs, DBC/BML reduced the frequency of visits by the dhonis. It also withdrew the mobile loan officers (MLOs), who were based in atolls; instead, the MLOs were located at each branch office.
The credit furnished under the project is associated with significantly higher income of beneficiaries. The average initial monthly income of the target group beneficiaries was Rf 1 670; with or after the loan, it rose to Rf 3 990; this represents an increase of 138%. The median income for the target group beneficiaries before and after taking the loan was
Rf 1 700 and Rf 3 000, respectively; this reflects an increase of 76%.
DBC/BML has consistently moved towards attaining sustainability of operations. The credit recovery of DBC/BML is excellent. The recovery performance hovers around 90%. Non-performing assets constitute less than 1% of the total loan disbursement. All branches mobilise savings though at a limited rate and make profit.
The interest rate on loans was negative in real terms, or minus 1.5%, during the initial phase of the project. But in 1994, DBC/BML raised the lending interest rate to 12% for its development banking lending; profit margins improved further since the inflation rate declined from 10% in 1994 to 6% in 1996; this meant a positive interest rate on lending of 6%.
The DBC/BML employed two credit delivery systems. In the first, in line with common commercial lending practice, loan applications are screened and sanctioned based on the bankable collateral. Borrowers provide collateral security equivalent to 200% of the loan value. Hypothecation of assets acquired with the loan is to form a part of the security. Assets such as boats, boat engines, and houses were accepted as collateral.
In the second system, credit is not collateral based. In most countries, for non-collateral credit, banks adopt group lending or joint liability approaches to cover risks. Instead, DBC/BML policy was to sanction loans up to Rf 15 000 without collateral or a group guarantee; but it carefully screened loan applications and the DBC central office controlled the approval process.
The recovery rate of loans under both systems of these credit delivery systems has remained high (around 90%) and it is important to understand the reasons. Four factors explain the high recovery rate: (i) the "graduation principle" built into the lending policy and procedure: the loan size is determined by economic activity as well as trustworthiness of the client; (ii) the "incentive" mechanism: prospect of receiving a new possibly larger loan, and with a longer repayment period; (iii) the rigorous credit recovery procedures; and (iv) the "sanctions" in the form of restrictions on further borrowing and legal actions resulting in auction of assets.
DBC/BML has encouraged savings mobilisation and the performance reflects trust and the building up of social capital. Yet, saving mobilisation has not progressed as projected. Saving mobilisations in the outer atolls is associated with high transaction costs explained by saving promotion efforts and transport to collect savings in outlying islands. Maldives Monetary Authority (MMA) decrees that the interest rate on savings be 7 percentage points lower than the interest rate on loans (or 5%). At this rate, the interest rate on savings is negative. The public has little or no incentive to save apart from " the security aspect". Moreover, islanders already find cash availability for withdrawal to be restricted, since DBC/BML yacht dhonis visit islands occasionally and unpredictably. In short, DBC/BML find it easier to mobilise savings from commercial branches in Male rather than from outer atolls.
Factors explaining performance
Four factors stand out in explaining the performance of DBC/BML. First, it has rigorously screened the loan applications. Second, it has carefully monitored the portfolio and loan recovery. Third, the DBC/BML has inculcated a propensity for the islanders to save in financial instruments. Fourth, and finally GOM should be praised since it has provided BML the necessary autonomy, and independence of operation, for the latter to conduct its day-to-day operations without interference. In combination, this institutional setting has raised confidence and created trust among its customers.
This record contrasts sharply with the typical setting for credit projects attached to financial institutions that are controlled by governments. Internationally, development banking operations for government controlled banks have a record of poor profitability. Typically, such banking operations lend at subsidised rate of interest and incur high delivery and recovery costs. Loan recovery is mostly neglected. However, in this project, the DBC/BML operations have generated solid profits. DBC/BML has maintained its progression in outreach and the current level of operations. There is no upward trend in the cost of credit delivery. With current interest rates for loans and deposits, and cost of funds, the DBC/BML operation is institutionally sustainable.
One fundamental flaw in implementation – reflecting inadequate efforts also during design - affected negatively impact in poverty alleviation. GOM and the project authorities gave very limited attention to measures to empower, mobilise and train the most vulnerable households so as to permit also them to avail themselves of credit. The most vulnerable population was expected to become "aware" and receive sufficient training so as to link them to the emerging financial services. Although, the "lower" or "middle" poor households benefited from the project, the majority of the "bottom poor" or "most vulnerable" households were not assisted by financial services. Their loan demand remained limited for income generating activities.
The training component was only partially implemented for three reasons, first GOM's limited capacity to co-ordinate co-operating agencies; second, the target group definition was not precise. In turn, the absence of analysed socio-economic data contributed to the insufficient understanding of the extent of social and economic deprivation. Finally, the BML was not provided with financial incentives with which to compensate the higher transaction costs associated with reaching out also the poorer or most vulnerable households.
The modalities of co-financing are vital for success of the project but these modalities were not sufficiently developed at the time of design. The project was appraised and approved with merely an "in principle agreement" with UNDP. The project design allocated important components vital for assisting the "poor/vulnerable" households with limited entitlements, such as beneficiary training and pilot nutrition programme. But UNDP in consultation with GOM deleted the pilot nutrition component and prepared a separate project for technical assistance, training and beneficiary training. UNDP utilised the funds allocated for technical assistance and training. Beneficiary training was not conducted.
Sustainability of Development Banking
Non sustainable elements in design
The absence of a proper policy context has caused immense damage to the sustainability of development-banking institutions and financial services across developing countries. Across development banking projects, two negative features stand out that have precluded financial sustainability and consequent institution building. First, development loans commonly have continued to be provided at low or negative rates of interest in real terms. The implicit or prevailing assumption was that a lower interest rate would increase the demand for credit and uptake by the poorer sections of the society. But this meant that financial margins have remained negative or insufficient to cover interest rates. Second, as a corollary, the already low or negative interest rates set for lending have provided little or no scope for positive interest rates with which to provide incentives for savings mobilisation. Conversely, the support for savings mobilisation is non-existent or weak. The banking institutions have not mobilised savings. Nor have they contributed to building up social capital through inculcating incentives in support of a behaviour among their clients towards regular savings and a longer term continuous transactions with the banking institution built on trust.
This adverse policy context, by and large, set the stage at the outset also for the current project. This project design following the custom at the time endorsed lower interest rates for target group lending in general and for agricultural loans in particular. At the time of project start-up, the lending rate in real terms (net of inflation) was even negative at a rate
of –1.5%, since at the outset the interest rate was 10.5%, whilst the inflation rate was 12%.
On the other hand, the design represented an improvement compared to other projects in that the DBC/BML would operate a weekly mobile banking service to outlying islands to deliver and recover credit as well as to mobilise savings. But the transaction costs of this mobile banking service were high.
Engineered shift towards sustainable financial services
The most important lesson learned from this project is the need of ensuring financial sustainability of banking operations at the time of project design. Most projects fail in this regard. Those in charge of design typically overlook sustainability aspects and the need for the development bank to generate positive financial profits. They accept the populist arguments for continued credit delivery credit at artificially low interest rates that do not cover total costs (fund cost, transaction cost and cost of bad debt).
The performance over time of this project amply demonstrates that the benefits of charging positive interest rates far outweigh the hypothetical negative effects such as public resentment and low growth in credit uptake. For smaller producers, access is more important than a subsidised cost of credit. It is necessary at the outset to build in critical features that will ensure sustainability, foremost charging rates of interest to cover total financial costs of development banking operations. DBC/BML took three measures in the right direction. First, it rigorously monitored the profitability of individual branch offices. Second, interest rates were raised. Third, it reduced the supervision and transaction costs for the mobile banking service.
Rigorous branch monitoring
DBC/BML established an unusually rigorous branch monitoring system. Its branches have continued to report on a monthly basis disbursements, recovery performance and profitability. To wit, this reporting system demonstrated the costs of providing loans at negative real rate of interest and of providing weekly mobile banking services.
Changes in interest rate policy
DBC/BML initial interest rate of loans was 2% less than the commercial rate of interest charged on loans granted by the commercial branches. The DBC/BML, in 1996 raised its interest rates, charging a uniform rate of interest across all types of loans. This was the first major step in introducing sustainability dimension into development banking.
Rationalising outreach and mobile banking service
DBC/BML improved the cost-effectiveness of its outreach services. First, it reduced the frequency of visits of the mobile dhonis from weekly to monthly. Second, it withdrew atoll based loan officers and posted them in the branch offices. The Loan Officers start from the branch office and return to the branch after completing their field trip. Costs of operation were cut and profitability improved.
Strategy for outreach
Analysis of lending and savings mobilisation
DBC/BML has followed a cautious policy of expansion and plans with which to establish volume of lending with which to cover costs of operations. To begin with, branches have been established first to cover the regional level, and second to cover atolls and islands with a minimum level of population and economic activity. At present, the four DBC/BML branches cover 13 atolls. Each branch covers three to four atolls and about 50 islands. The level of activity in the islands with branches and with close proximity to the branch office is high.
The data that have been analysed by the CE show that one third of the islands covered by the branches contribute not less than 80% of the target group lending and 70% of that to the non-target group. Savings are exclusively generated within the atoll in which the branch is situated. These findings have important implications for formulating the future strategy for expansion of branches and mobile banking.
Strategy for branch office expansion
First, DBC/BML has established branches at the regional level and these operations should now be consolidated. The next step is to open branches at the atoll level. But DBC/BML cannot afford to open branches in each and every island. Instead, a strategy is required with which to establish criteria for decisions to open low cost branches in the islands that have already possess a substantial client base. To this end, the break-even size of loan volume needs to be derived with which to generate a minimum level of revenue. The CE with actual data for the portfolio of the Kulhudufushi branch pursued this analysis. This analysis shows that a loan portfolio of Rf 4.2 million generates the minimum revenue for a branch to break, or about Rf 500 000.
The Kulhudufushi branch at present serves three atolls. The portfolio in each of these three atolls exceeds Rf 5.0 million, which is higher than the break-even portfolio volume of Rf 4.2 million. Opening branches in each of these atolls is viable. Similarly, it is possible to locate those atolls that are already served by other branches, and which have attained a minimum portfolio equal to or exceeding Rf 4.2 million.
Strategy for Mobile Banking with Dhonis (faster boats without branch expansion)
The benefits of mobile banking are more limited than first understood. The main thrust in outreach is based on the opening of new branches and developing manpower capabilities with which to expand the branch network. The mobile banking service is an effective complementary tool in providing financial services to islands located in the geographical proximity of the branch office. It is not effective in delivering financial services to islands located far away. Mobile banking with dhonis generates savings only within the atoll in which the branch is situated. It will not assist the branch office to mobilise savings in the more distant atolls, which is essential in the long term when the soft loan sources dry up. Finally, the costs of mobile banking need to be contained. The DBC/BML is considering buying faster boats. But faster boats are expensive to procure and also to operate.
Testing instruments for outreach
Maldives has 200 inhabited islands and most of these islands only comprise about 100 households. The DBC/BML cannot open branches in all the islands to provide financial service and mobile banking has its own limitations. Other complementary instruments need to be tested in the delivery of financial services to islands with a limited number of households. This project is now closed but any future support to the DBC/BML or similar programmes should contain incentives in the form of grants to experiment with new approaches.
Credit union or savings and credit society
A case can be made for establishing credit unions or co-operative societies in the more distant islands that are located far from the branches of DBC/BML. Most islands visited by the mission have women's committees, which undertake income-generating activities. These committees could form a nucleus for a financial service organisation. Any new organisation to be developed needs to come under the umbrella of DBC/BML for the latter to provide necessary backstopping including audit of account. DBC/BML will have to pilot test and then adjust this approach to suit Maldivian conditions. Three pre-requisites for implementing this approach emerge. They are: (i) preparing a legal framework for establishing a credit union/co-operative society; (ii) defining linkages with DBC/BML; and (iii) capacity building at DBC/BML to pilot test this approach.
Self-help groups / rotation savings and credit groups
In islands with a limited number of households it is appropriate to test the concept of self-help groups and rotation savings and credit schemes. This would help the islanders to access credit from their own savings that they mobilise. Such mechanisms are important in assisting food insecure households to develop coping mechanisms to overcome periods of temporary distress. This approach does not require a legal framework to begin with. But capacity building is required at the level of DBC/BML to operationalise the importance of this instrument to assist the "bottom poor/vulnerable". The methodology need to be defined for creating and supporting the self-help groups / rotation savings and credit groups. The next step is to train the staff.
The Government holds a majority equity position in BML, yet it has in no way misused this position of financial control. Contrary to the situation in many other countries, the Government has not used its position to intervene in decisions on lending and in day-to-day banking operations. BML was permitted the necessary autonomy: it enforced sanctions by auctioning the assets mortgaged, suspended disbursement to under-performing sectors and inculcated a habit of repaying the loans. The DBC/BML provided successively larger loans to clients who repaid promptly. The legal environment was supportive of the BML's actions to repossess and auction assets of the defaulters. The strict monitoring of branch office operations contributed to this excellent record.
MOFT and MAA remain the GOM's regulators to oversee banking activities of BML. The regulators allowed BML full autonomy in its operations. GOM did not seek to enforce any populist or ill-conceived agenda to seek to lower DBC/BML lending interest rates or to ask it to provide loans to favoured clients. As a result, despite being a government owned bank, the general public considers it as a commercial bank. It is reported that BML even refused granting loans to island electrification under government guarantee once a few island committees defaulted. GOM did not put any pressure on BML to sanction these loans. This autonomy is currently an unwritten understanding between MOFT and BML.
The need for financial and development banking institutions to have full autonomy in providing financially profitable and sustainable services is a must. This is one of the necessary preconditions for success. Such best practices related to autonomy of the financial institution will have to be codified and incorporated as conditions for funding future financial services projects. This is lesson learned from the Maldives Atolls Banking Project.
Improving targeting modalities in financial services projects
Identifying target group and the "bottom poor/vulnerable"
An overall broad target group definition is a not an effective tool to reach the bottom-poor in a financial services project context. Future projects need to sharpen the poverty focus in identifying target groups. Targeting criteria need to be simple and location specific. Generally, four sequential steps will have to be followed to sharpen poverty focus in targeting. They are: (i) a community-based wealth ranking to identify the resource poor households; (ii) a diagnostic survey mapping the resource endowments of these households, and the causes to their poverty; and (iii) selecting a set of indicators associated with/or explaining poverty (household size, number of working members, material used to construct walls, receipt of "zakaath" etc.). Four income strata should be distinguished: bottom-poor, lower, middle and upper income groups.
In a financial service project context, the upper income group will have to be excluded from the purview of IFAD assistance. On the other hand, the financial institution need to serve also this clientele from its other resources, or the savings mobilised. The income strata consisting of the "bottom poor/vulnerable" and the lower and middle income groups form the overall target group in a financial service project. The project needs to have separate target group definitions for three socio-economic strata that fall under the overall target group of IFAD. This is essential so as to design precise interventions oriented to reach and assist the "bottom poor/vulnerable".
Complementarity of instruments to reach the "disadvantaged or vulnerable" households
The project at the outset used a narrow target group definition of Rf 1 000 per year and set out that lending to this group should represent 70%. In 1993, this proportion was reduced to 45% of total DBC lending. The earlier too narrow target group definition excessively restricted lending to the non-target group, overall lending and the profits with which to break even and permit sustainable outreach services to be set up. This narrow definition was coupled with the absence of effective measures and funding with which to empower and provide training to the target group and of incentives for staff to accelerate lending to this group.
DBC/BML revised the target group definition. The income ceiling was raised by 518; after this adjustment, the target group represented about one fourth of all households. But the other complementary measures, i.e. social mobilisation and skill training were not instituted. These interventions were to have been provided through the abortive UNDP funding. This was a missed opportunity: the project because of this omission did not reach the most vulnerable households.
Set of interventions to assist the "bottom poor/vulnerable" households in financial services projects
The "bottom-poor/vulnerable" households face many constraints and provision of credit is not sufficient to improve their standards of living. They have few economic activities and their demand for credit is limited. A low standard of education and few skills worsen their situation. This is evident even in this project, which is one of the most successful credit projects in the region. Targeting the "bottom poor/vulnerable" households requires a fuller complement of empowerment and support services. GOM support is necessary for identifying profitable activities and for conducting skill development training. Once such a platform is created, the demand of this group for financial service will increase. This in turn requires capacity building at BML and other development partners and also provision of assistance in the form of budgetary support or grants to shoulder the development responsibilities.
Incentives coupled with targets
Defining the target group alone with not be of much use to ensure flow of assistance to the "bottom poor/vulnerable". Financial institutions in general tend to give less attention to the "bottom poor/vulnerable" and the low-income groups. This is on account of the perceived high risk and cost of delivering financial service to these groups.
Most projects do not design incentives to the participating financial institution to reach the "bottom poor/vulnerable". But development finance theory certainly would permit practices to be introduced where incentives can be designed to cover at least initial costs and induce the financial institutions to reach the "bottom poor/vulnerable" and low-income groups. GOM should provide a lower on-lending rate to the DBC/BML on loans to the "bottom poor/vulnerable". Moreover, DBC/BML costs should be covered for appointing a person to exclusively deal with the "bottom poor/vulnerable" and to co-ordinate with other development agencies. Temporary grant funding for this purpose should be considered. Finally, precise targets need to be defined for lending to this socio-economic strata. Targets should be reviewed based on the experience gained during implementation.
Modalities of co-financing that are fully owned by stakeholders so as to become operational are vital for successful project implementation. In this project, co-financing modalities were not finalised prior to the project appraisal. The project was appraised and approved with a mere "in principle agreement" with UNDP. The project design allocated important components vital to "bottom poor/vulnerable" such as beneficiary training and pilot nutrition programme. But UNDP in consultation with the GOM deleted the pilot nutrition component and prepared a separate project for technical assistance, training and beneficiary training. UNDP utilised the funds allocated for technical assistance and training. Beneficiary training was not conducted. The activities funded by IFAD and UNDP were undertaken as stand-alone activities; an integrated service delivery was not achieved. Integrating the activities funded by the co-financier into the core components of the project requires joint preparation, joint appraisal, explicit agreements formulated at the time of loan negotiations and close consultation during project implementation.