Project design and objectives

Target group

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

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

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

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

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

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

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

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

Objectives and components

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

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

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

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

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

The project components include:

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

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

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

Expected effects and assumptions

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

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

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

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

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

The basic assumptions were:

the project area is secure and stable;

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

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

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

Evaluation

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

Implementation context

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

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

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

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

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

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

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

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

Project achievements

Agriculture

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

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

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

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

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

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

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

Traditional Farming

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

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

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

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

Rural Credit

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

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

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

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

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

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

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

Targeting

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

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

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

Participation

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

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

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

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

Effects assessment and sustainability

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

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

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

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

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

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

Main issues and recommendations

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Lessons learned

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

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

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

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

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

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

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

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

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

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

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

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