Document o f The World Bank

FOR OFFICIAL USE ONLY

Report No: 34908-IN

PROJECT APPRAISAL DOCUMENT

ON TWO

PROPOSED CREDITS

lN THE AMOUNT OF SDR 97 MILLION (US$140.5 MILLION EQUIVALENT)

AND

IN THE AMOUNT OF SDR 41.1 MILLION (US$5 9.5 MILLION EQUIVALENT)

TO THE

REPUBLIC OF INDIA

FOR THE

NATIONAL AGRICULTURAL INNOVATION PROJECT

March 9, 2006

Agriculture and Rural Development Sector Unit India Country Management Unit South Asia Region

This document has a restricted distribution and may be used by recipients only in the performance o f their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

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CURRENCY EQUIVALENTS

Exchange'Rate Effective January 30,2006

Currency Unit = Indian Rupee

Rs. 1 = US$O.O2162 SDR 1 = US$1.44899

Rs. 46.2 = U S $ l

FISCAL YEAR April 1

ABBREVIATIONS AND ACRONYMS

APEDA Agricultural Processing and Export Development Authority

ATIC Agricultural Technology Information Center ATMA Agricultural Technology Mngt Agency CAC Consortium Advisory Committee CA Chartered Accountant CC Consortium Convener CGIAR Consultative Group on International

Agricultural Research CIC Consortium Implementation Committee CMU Consortium Monitoring Unit CN Concept Note CP Consortium Participant FP Full Proposal GEF Global Environment Fund HFNS IARC International Agricultural Research Center ICAR IDE International Development Enterprises IEC Information and Education Campaign IIM Indian Institute o f Management IPM Integrated Pest Management KVK LI Lead Institution L&CB Learning and Capacity Building NAARM National Academy for Ag. Research Mngt NAIP National Agricultural Innovation Project NAIS National Agricultural Innovation System NARS National Agricultural Research System

Household Food and Nutrition Security

Indian Council o f Agricultural Research

Krishi Vigyan Kendra (Ag. Science Center)

- March 31

NATP National Agricultural Technology Project NC National Coordinator NCAP National Center for Agricultural Economics

and Policy Research ND National Director NSC National Steering Committee O&MAG Organization and Mngt Advisory Group O&MPC Organization and Mngt Program Committee PCS P I PMC PPP RBI RPC RWC R&D R&E SAT SAU SIC SLEM SOE STEM TAG TFP USDA vc WTO zcu

Production to Consumption System Principal Investigator Project Management Committee Public-Private Partnership Reserve Bank o f India Research Program Committee Rice Wheat Consortium Research and Development Research and Extension Semi Arid Tropics State Agricultural University Specific Investment Credit Sustainable Land and Ecosystem Mngt Statement o f Expenditure Indian Society for Technology Management Technical Advisory Group Total Factor Productivity United States Department of Agriculture Vice Chancellor World Trade Organization Zonal Coordination Unit

Vice President: Praful C. Pate1 Country Director: Michael F. Carter

Sector Director: Constance A. Bernard Sector Manager: Gaj anand Pathmanathan

Task Team Leader: Wi l lem G. Janssen

INDIA National Agricultural Innovation Project

CONTENTS

Page

A . STRATEGIC CONTEXT AND RATIONALE .................................................................. 1

Rationale for Bank involvement ............................................................................. 1 1 . 2 . 3 .

Country and sector issues ........................................................................................ 1

Higher level objectives to which the project contributes ........................................ 2

B . PROJECT DESCRIPTION ................................................................................................. 2

Lend ing instrument ................................................................................................. 2

Project development objective and key indicators .................................................. 3

Lessons learnt and reflected in the project design .................................................. 8

Alternatives considered and reasons for rejection .................................................. 9

C . IMPLEMENTATION ........................................................................................................ 10

Partnership arrangements ...................................................................................... 10

Institutional and implementation arrangements .................................................... 10

Mon i to r ing and evaluation o f outcomes/results .................................................... 12

Crit ical r isks and possible controversial aspects ................................................... 13

Credit conditions and covenants ........................................................................... 14

APPRAISAL SUMMARY .................................................................................................. 14

1 . 2 . 3 Project components 3

4 . 5 .

. .................................................................................................

1 . 2 . 3 . 4 . Sustainability ......................................................................................................... 12

5 . 6 .

. . .

D . 1 . 2 . 3 . 4 . 5 . 6 . 7 .

Economic and financial analyses .......................................................................... 14

Technical ............................................................................................................... 14

Fiduciary ............................................................................................................... 15

Social ..................................................................................................................... 16

Environmental ....................................................................................................... 18

Safeguard policies ................................................................................................. 19

Policy exceptions and readiness ............................................................................ 19

Annex 1: Country and Sector Background ............................................................................... 21

Annex 2: M a j o r Related Projects Financed by the Bank and/or Other Agencies ................. 32

Annex 3: Resul ts Framework and Monitoring ......................................................................... 33

Annex 4: Detailed Project Description ....................................................................................... 45

Annex 5: Project Costs ................................................................................................................ 60

Annex 6: Implementation Arrangements .................................................................................. 61

Annex 7: Financial Management and Disbursement Arrangements ...................................... 70

Annex 8: Procurement Arrangements ....................................................................................... 75

Annex 9: Economic and Financial Analysis .............................................................................. 79

Annex 10: Safeguard Policy Issues ............................................................................................. 83

Annex 11: Project Preparation and Supervision ...................................................................... 86

Annex 12: Documents in the Project F i l e .................................................................................. 87

Annex 13: Statement of Loans and Credits ............................................................................... 88

Annex 14: Country at a Glance .................................................................................................. 93

Annex 15: Rationale for the Project and i t s Components ........................................................ 95

Annex 16: Learning and Capacity Building ............................................................................ 100

Annex 17: Proposal for Investment by GEF in NAIP through the “Sustainable Land and Ecosystem Management (SLEM)” Country Partnership ...................................................... 107

INDIA

NATIONAL AGRICULTURAL I N N O V A T I O N PROJECT

PROJECT APPRAISAL DOCUMENT

SOUTH ASIA

SASAR

Date: March 9, 2006 Country Director: Michael F. Carter Sector Director: Constance Bernard Sector Manager: Gajanand Pathmanathan

Project ID: PO92735 Lending Instrument: Specific Investment Credit

T e a m Leader: Wil lem G. Janssen Sectors: Agricultural extension and research

Themes: Rural policies and institutions (P); Rural services and infrastructure (P) Environmental screening category: B Safeguard screening category: S2

(1 00%)

Total Bank fina

Borrower: Department o f Economic Affairs, Ministry o f Finance, Government o f India, N e w Delhi, India 110001

Responsible Agency: Indian Council o f Agricultural Research, Department o f Agricultural Research and Education, Ministry o f Agriculture, Krishi Bhawan, New Delhi, India 110 001

I I

Does the project depart f rom the CAS in content or other significant respects? Does the project require any exceptions from Bank policies? Have these been approved by Bank management? I s approval f o r any policy exception sought from the Board? Does the project include any critical r isks rated “substantial” or “high”? Does the project meet the Regional criteria for readiness for implementation?

[ ]Yes [XINO [ ]Yes [XINO [ ]Yes [X]N/A [ ]Yes[X]NIA [XIYes [ ] N o [XIYes [ ] N o

Project development objective

The objective o f the project i s to contribute to the sustainable transformation o f Indian agricultural sector from pr imari ly a food self-sufficiency to more o f a market orientation in support o f poverty alleviation and income generation. The specific objective i s to accelerate the collaborative development and application o f agricultural innovations between public research organizations, farmers, private sector and other stakeholders. Project description

The project has four components: 1. ICAR as the catalyzing agent for management o f change in the Indian NARS

1.1 Information, communication and dissemination system 1.2 Business planning and development 1.3 Learning and capacity building 1.4 Pol icy and gender analysis and visioning 1.5 Remodeling financial management and procurement systems 1.6 Project implementation unit

2. Research on production to consumption systems 3. Research on sustainable rural livelihood security 4. Basic and strategic research in the frontier areas o f agricultural science

The project i s the fourth part o f a long lasting engagement between the Bank and the GO1 to support the development o f the national agricultural research system. Which safeguard policies are triggered, if any?

Environmental Assessment (OPIBPIGP 4.0 1) Pest Management (OP 4.09) Significant, non-standard conditions, if any, for: Board presentation: none Credit effectiveness: none

Covenants applicable to project implementation: Standard financial management covenants

A. STRATEGIC CONTEXT AND RATIONALE 1. Country and sector issues

In the last ten years agriculture in India has undergone considerable change. National food self- sufficiency has been achieved, although many poor households are s t i l l at risk. The demand for income elastic products, such as fruits, vegetables, meat, eggs, fish, milk, sugar and edible oils has increased and i s encouraging diversification o f production. The Government o f India (GOI) has started to reduce domestic and international trade restrictions to meet WTO obligations. Whi le agricultural development has long been production based, i t s future will be more market driven (Annex 1).

About 80% o f the 260 m people below the poverty l ine in India l ive in rural areas and depend upon agriculture for their livelihood. Most are small farmers exploiting a fragile resource base and landless people seeking to se l l their labor. Market driven agricultural development affects their poverty through effects on producer incomes, consumer prices, employment and wages, and through multiplier effects throughout the economy. I t may also reduce rural to urban migration.

In order to generate additional income and employment for the poor, the role o f agricultural R&D i s critical. A scenario analysis that was undertaken during project preparation shows that with the l imi ted scope for area expansion, enhanced productivity, profitability and competitiveness wil l be the main sources o f agricultural growth in the future. This has to be triggered by innovations and applications o f science in agriculture. In other words, Indian agriculture will shift f rom resource and input based growth to knowledge and science based growth. In this paradigm shift, the f low of knowledge and innovations plays a critical role (see Annex 15). R&D assumes greater importance because i t i s a cost-effective method for promoting sustainability and attaining competitiveness. India can avail spin-off benefits by harnessing advances in frontier sciences in selected priority areas to attain global competitiveness. Similarly, in the context o f development o f marginal and disadvantaged areas where possibility o f irrigation expansion i s very limited, productivity can only be enhanced by technological advancements complemented with institutional and policy support.

The challenges for the national agricultural research system led by the Indian Council o f Agricultural Research (ICAR) are threefold: coming to grips with the growing importance o f the market and agri-business; addressing the problems o f the many poor farm families living in disadvantaged areas; and strengthening i t s position at the frontiers o f agricultural science. The system has considerable technological capacity in place, and has gradually strengthened i ts focus on non-staple foods, i t s interaction with the private sector and i t s farmer focus (see Annex 1). To strengthen the role o f agricultural research for rural poverty alleviation, income growth and enhanced quality o f l i fe in a market context, however, innovative changes in the approach to research and technology transfer are required.

2. Rationale for Bank involvement

The proposed project aims to support the development and implementation o f innovations in agriculture through collaboration among farmers, private sector, c iv i l society and public sector organizations, in response to the new opportunities and constraints created by the transformation of Indian agriculture. The project i s a follow-up to the National Agricultural Technology Project (NATP), which aimed to increase the availability and adoption o f appropriate technologies through: (i) improved efficiency o f ICAR’s Organization and Management System; (ii) enhanced performance and effectiveness o f priority research programs and o f scientists in responding to the technological needs o f farmers; and (iii) developing models to improve the effectiveness and

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financial sustainability o f the technology dissemination system with greater accountability to, and participation by, the farming community. The N A T P led to considerable improvement in the productivity o f ICAR scientists, to a substantial amount o f production systems research, and to the establishment o f the new district-based Agricultural Technology Management Agency model for technology dissemination. Several o f the technologies that were developed in the project are starting to have very significant pay-offs; in one case (zero tillage), o f the order o f several hundred mi l l ions dollars o f benefits per year.

The proposed project responds to GOI’s objectives as expressed in India’s National Policy on Agriculture ( M A ) which accords high priority to generation and transfer o f agricultural technologies and reforms in the technology system. The policy recognizes the role o f the private sector in agricultural research, human resource development, post-harvest management and value addition. The 10“’ Five Year Plan envisages a growth rate o f 4% per annum in the agriculture sector. T o achieve such growth requires investments in research, extension, as well as interventions that improve the policy and institutional environment within which agricultural producers, traders and processors operate. A request for the project was submitted to the Bank by Department o f Economic Affairs (DEA) in November 2004. Commitment o f the executing agency, ICAR, i s h igh as evidenced by the ample stakeholder consultation in the development o f the project.

The proposed project contributes to the Bank’s objectives, as expressed in the Country Assistance Strategy (CAS) 2004, to increase i ts lending in support o f enhancing rural livelihoods and accelerating rural growth. It responds to the intentions that are expressed on pages 52-53 o f the CAS: “Increasing agricultural productivity and diversification to higher value products, including crops, livestock, and fisheries, will be instrumental to re-energizing the agricultural sector to achieve higher growth. T o achieve these goals it wi l l be essential to foster broad-based availability and adoption o f improved agricultural technologies and practices by farmers and closer integration o f farmers with input and output markets. The Bank will assist in strengthening the agricultural research and extension system, with efforts to promote demand-driven, decentralized public agricultural research and extension systems, greater public-private partnerships, and closer linkages with various domestic and international sources o f technologies and knowledge.”

3. Higher level objectives to which the project contributes

The project will contribute toward the national objectives o f increasing incomes and eradicating extreme poverty and hunger (which i s also the Mi l lennium Development Goal no.1). It will do this by accelerating the collaborative development and application o f agricultural innovations between public research organizations, farmers, private sector and other stakeholders.

B. PROJECT DESCRIPTION 1. Lending instrument

The project will be financed through two Specific Investment Credits (India’s FY 2006 allocation of hard IDA o f SDR 97 mill ion; and the balance o f SDR 41.1 mi l l ion f rom standard IDA), This allows for the necessary support for institutional development activities and the formation and operation o f research consortia that bring public sector organizations, farmers, private sector and other NGO’s together. The size o f the project i s US$250 mill ion, o f which US$200 mi l l ion will be financed by the Bank. The Bank wil l also retroactively finance eligible expenditures (see Annex 7). The project i s the fourth part o f a long lasting engagement between the Bank and the GO1 to support the development o f the national agricultural research system.

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2. Project development objective and key indicators

The objective o f the project i s to contribute to the sustainable transformation o f Indian agricultural sector f rom an orientation o f primarily food self-sufficiency to one in which a market orientation i s equally important for poverty alleviation and income generation. The specific objective i s t o accelerate the collaborative development and application o f agricultural innovations between public research organizations, farmers, private sector and other stakeholders,

K e y indicators o f success are the number o f partnerships between public research system, private sector and other stakeholders; the number of agricultural innovations by the end o f the project; the number o f knowledge products and public awareness messages that the NARS shares with others; the existence o f functioning business development units; the number o f technologies that have been jo in t l y developed between consortia partners and the target groups for strengthened production to consumption systems and enhanced rural l ivelihood security; the number o f publications in high quality journals; and the number o f patent applications. Indicators for success are detailed in Annex 3.

3. Project components

The project pursues the further evolution o f the Indian agricultural research system as supported in the past by National Agricultural Research Project 1-11 and by NATP. I t will build on the results o f the N A T P in the following ways:

The production systems approach o f NATP will be extended to production to consumption systems, which also cover processing, marketing and consumption issues. The production to consumption approach allows for better integration o f income and poverty alleviation objectives in a market context and recognizes that the competitive abil ity and income potential of commodity sectors does not only depend on production improvements. For the disadvantaged regions of the country, a rural l ivelihood improvement approach will be implemented. Constraints to sustainable improvement o f the wel l being o f rural vulnerable groups wil l be identified. Natural resource management and nutrition issues will be identified in addition to income improvements. Whi le the collaborative, multi-disciplinary research projects o f N A T P were mainly based in the public sector, the new project will harness synergies through collaboration between the public and the private sector, farmers and farmer organizations and the c iv i l society. While the N A T P covered research and extension activities largely under different project components, the new project will explicitly focus on achieving innovation on-farm, or in the production to consumption system by combining technology generation and uptake pathways within the components. While the N A T P financed some limited upstream research, the new project will have an explicit component on it. Whi le institutional development in the NATP focused on the ICAR, in the NAIP institutional development focus wil l be more on the State Agricultural Universit ies (SAUs) in order to allow them to catch up in their institutional development.

The National Agricultural Innovation Project (NAIP) has been designed to strengthen ICAR’s role as a catalyst of change in the national agricultural innovation system, and to fund partnerships in production to consumption systems and rural l ivelihood security research

3

consortia. This will strengthen the research and development networks in these areas, benefiting a l l stakeholders and contributing to the higher level objectives mentioned above.

Achieving these objectives i s clearly an enormous collective undertaking, which exceeds the scope and the timeframe o f NAP. NAP i s just one important element in the continuous evolutionary process o f the Indian agricultural innovation system and the Indian agricultural sector.

Component 1: ICAR as the catalyzing agent for management o f change in the Indian N A R S (US$46 million)

With the fast evolving globalization o f agriculture and importance o f markets increasing on the one hand and the need for sustainable productivity increases and livelihood support to many farmers on the other, the role o f and expectations o n the agricultural research system have become quite complex. The long term future o f Indian agriculture within these trends i s s t i l l very open, as shown through the scenario analysis undertaken during project preparation. ICAR, therefore, has to provide leadership and empower the N A R S and the expanding group o f other research providers (including private sector, other public sector entit ies and NGOs) to adapt to the emerging challenges.

The Indian agricultural innovation system needs to be flexible, motivated, creative and in close correspondence with a fast changing world. This will require a dynamic system with flexible modes o f operation and decision making. Innovations to manage change in the research system have to be accelerated to attain the broad objective o f higher and sustainable agricultural development. The system has to work in a partnership mode with the whole range o f stakeholders. I t s capacity for information and knowledge management, communication and visibility has to be robust, vast and innovative. The innovation system should bring together farmers, agricultural researchers, educators and extension agents to harness knowledge and information f rom various sources. K e y features o f such a system include pluralism, partnerships, decentralization, accountability, alignment with market trends, ability to learn, and visionary sk i l ls . Component 1 will create an enabling pol icy and institutional environment and will build s k i l l s and a culture to maximize benefits f rom R&D activities in terms o f supportive information, communication and dissemination systems; competitive business development and technology commercialization models; advanced learning and state-of-the-art capacity building initiatives, pol icy and gender analysis capacity; impact assessment skil ls; and streamlined financial management and procurement systems. The emphasis in Component 1 will be on SAUs where most o f the scientists work.

T o put in place the key features o f this system, Component 1 will support the following activities: 0 Strengthening information, communication and dissemination systems for greater

dialogue and interaction within the system and among the stakeholders; 0 Enhancing public awareness capacity and improved knowledge sharing; 0 Establishing business development models for technology incubation and

commercialization; 0 Assessing and adapting the current learning and capacity building (L&CB) and human

resource development (HRD) initiatives, introducing models l i ke e-learning, distance learning and developing training materials to prepare scientists and support staff with newly required sk i l ls and knowledge; Developing agricultural and research policy capacity, including the gender aspects and visioning sk i l ls , and strengthening impact assessment capacity; and

0

4

0 Remodeling and advancing financial management and procurement for the ICAR.

Innovative approaches to reform and capacity building wil l init ially be taken up in a relatively small number o f organizations so that they can be thoroughly validated before further dissemination through the system.

Component 2,3 and 4: Research consortia to support agricultural transformation

The overarching principle o f consortia formation and management i s to bring together research institutions and research users through collaborative agreements with the objective o f optimizing the usage and benefits o f research resources through an enhanced process o f innovation, value addition, commercialization and technology transfer. The program also emphasizes education and capacity building with a focus on producing new ski l ls that wi l l help carry Indian agriculture into the future. Whi le most consortia partners will be coming together because o f shared interest in the topic, they may also include specific management or communication expertise.

The partnerships established in the production to consumption systems, livelihoods security, and basic and strategic research consortia wi l l strengthen the research and development activities in these areas, benefiting al l stakeholders involved through knowledge generation, information sharing and expert collaboration. More importantly, these partnerships will also help bring new knowledge to the next level o f application, thus generating more value f rom agriculture, creating new employment opportunities, raising incomes, strengthening the competitive position o f India in the knowledge economy and contributing to the reduction o f rural poverty.

Component 2: Research on production to consumption systems (US$75 million)

The specific objective of this component i s to establish market-oriented collaborative research alliances for sustainable improvement o f selected agricultural production to consumption systems (PCS). This will be achieved by encouraging different organizations (public, private, NGOs, farmers groups, international organizations established in India, etc.), which are involved in producing, harvesting, processing and marketing of a particular product, to j o i n forces in a consortium framework and compete for funding aimed at improving the profitabil ity and the sustainability o f the product’s PCS. The system also includes the technologies used to grow and process the material, as well as the social, institutional and economic environment in which these processes operate. Partner organizations wi l l be jo int ly responsible for the governance, design and implementation o f research programs, and the application o f resulting innovations on-farm and through out the PCS.

About 15 consortia wi l l be selected from across the sub-sectors o f Indian agriculture. The concept i s that a few but wel l financed consortia wi l l be able to galvanize greater interest f rom different PCS partners, and enhance collaboration and openness which i s key to capturing integration and economies o f scale benefits. This i s also one o f the lessons learnt f rom the earlier N A T P project, where a very large number o f sub-projects were financed, resulting in resources being spread thin, sometimes with limited impact.

Production to consumption systems around which research consortia will be formed will be selected from those sub-sectors that show good productivity levels with potential for growth, value addition, competitive advantage, export potential, and opportunities for backward and forward linkages. Further these chains should help in sustaining food security, augmenting incomes and generating new employment prospects. Some of the chains identified as a suggestive

5

l i s t include medicinal and aromatic plants, bio-fuel crops, poultry, fruits and vegetables, fisheries and livestock products (see Annex 4).

Some o f the issues that should be addressed when developing a consortium o n agricultural PCS are: objectives o f the consortium; governance structure; research program guidelines (program components and activities); intellectual property rights management; knowledge management and information sharing; capacity building and human resources development; strategy for commercialization and utilization o f research outputs; benefits and costs sharing arrangements; financial management and procurement arrangements; and sustainability and withdrawal measures fo l lowing project’s completion. Information requirements in these areas will be clearly spelled out in the call for proposals; the operational manuals and guidelines for establishing, financing and operating the consortia will be developed.

There will be a two-stage competitive application process; f irst in response to a widely published “Call for proposals”, “Concept Notes” wi l l be prepared by several potential consortia. Second, after the Concept Note has been approved by the Research Program Committee as qualifying for competition, a “Full proposal” including detailed cost estimates wi l l be submitted by a more l imi ted number o f consortia. There will be two roles for consortium partners, either that o f a “Consortium Convenor” (CC), with the Principal Investigator belonging to it, or o f a “Consortium Participant” (CP).’ The CC would accept full responsibility for the operation and performance o f the entire consortium. The commitment would include executing a “base-line survey” to later measure the impact. To be eligible for consideration, in addition to the CC, adequate number o f CPs would be required for each consortium; the partners could be either from the public or the private sector and preferably f rom both.

The project will finance research and some development activities. This wil l include investment and operational costs including contractual staff, as wel l as some o f the personnel costs o f the consortia with the remainder o f the personnel cost covered by the consortia members. Funding wil l typically cover research activities undertaken by research and academic institutions which are in partnership with agricultural producers andor ago-industry. The research opportunities will be identified to improve the profitability and sustainability o f the production to consumption or to accelerate the development o f integrated PCS with benefits accruing to different economic players involved. For development activities that fo l low from earlier consortium research, support wi l l be provided for conducting feasibility studies and designing and implementing pi lot projects (up to a maximum o f 20% o f consortium funding).

Component 3: Research on sustainable rural livelihood security (US$73 million)

The core objective o f this component i s the sustained improvement in the incomes and well-being of farm families in mainly rain-fed, hill and mountain, dryland, tribal dominated and coastal areas which have so far been left behind in development. This will be achieved by encouraging different organizations, both in the public and private sector with capacity to address specific issues in the concerned agricultural production systems to collaborate through forming consortia, and make these compete for funding aimed at enhancing productivity, profitability and sustainability. These consortia wil l bring together farmers and other client groups, agricultural service providers in research and extension2, private sector companies involved in input provision, processing and marketing, NGOs, ongoing agricultural development projects3, etc.

Alternatively they may be called Lead Inst i tute and Cooperating Institute respectively. Special opportunities may arise in regions where the “ATMA” concept has been introduced. Including Wor ld Bank-supported projects.

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Through NAP they will be provided with the incremental capacity to address urgent R&D issues in a holistic and integrated fashion.

There i s a large number o f potentially rewarding R&D opportunities for consortia on l ivelihood improvement. For the N A I P support under this component to be well-focused, objective criteria wil l be developed in order to define a subset for the NAP-funded consortia within the 150 districts identif ied by the Planning Commission as backward (see Annex 4). A set o f eligibil i ty and screening criteria has been generated to assess the viabil ity o f the competing consortia and their proposals. A major consideration, however, will be whether the NAP-f inanced consortia could serve as models for livelihood improvement f rom which R&D service providers and the private sector in other areas could learn. The two stage competitive application process wil l be similar to the selection process for component 2.

Under NAP, the preference would be for competitive consortium selection. There are, however conditions, especially in disadvantaged areas where considerations o f urgency or institutional weaknesses favor putting in place sponsored (or invited) consortia. In such exceptional situations a specific (public or private sector) institution wi l l be invited to submit a proposal for a consortium without competition or several institutes will be invited to submit proposals for selection in a limited competition. I f approved, a binding contract for implementation will be signed with the Lead Institution and afterwards such sponsored consortia will operate under the same terms as the competitive ones. Sponsored consortium development will be init ially assigned, where possible and feasible to the State Agricultural Universities (SAUs).

NAP will finance both research and some development activities necessary for the uptake o f research results. These activities will l ikely focus o n improvement o f production systems, enhancing natural resource management (with special emphasis on water), empowerment o f local communities, institutional development, creation o f rural employment opportunities, enhanced household nutrit ion and food security and alleviating rural poverty. Funding wil l typically cover activities undertaken by research, academic and private institutions which are working in partnership with farmers and/or input and output agencies. The project will fund investment and operational costs as in component 2.

Up to a maximum o f 20% o f consortium funding will be provided for conducting: (i) feasibility studies, (ii) designing pi lot projects that would lead to the adoption and upscaling o f improved technologies, and (iii) implementing pi lot projects. Financing can also be provided to activities to create awareness or mobilizing local communities and where technology adoption would entail significant risk, for improving sustainability.

About 20 livelihood-oriented R&D consortia will be financed and no more than ha l f o f the available funding will be assigned in a sponsored manner.

Component 4: Basic and strategic research in the f ront ier areas o f agr icu l tura l science (US$ 56 mill ion)

The Indian N A R S not only has to find solutions to the immediate problems o f farming but also has to keep i t s scientific competence in the forefront to meet al l continuously emerging anticipated and unanticipated problems. With globalization and the ever expanding frontiers of science, the NARS not only has to remain globally competitive in i t s agricultural science base but also wi l l have to take the lead in the world in areas o f i t s demonstrated advantage. This apart, the best o f scientific capabilities wi l l be required to solve a number o f specific but critical bottleneck technological problems o f agriculture, which have been preventing or are l ikely to prevent Indian

7

agriculture f rom competing globally. Solutions to these problems will require focused and highly innovative basic and strategic research and i t s application.

Component 4 will support focused research in well-defined areas o f frontier science, with strong bearings on Indian agriculture. Possible areas o f research have been identified by an intensive process o f consultations among scientists f rom India and abroad. Collaboration o f foreign scientific institutions or individual scientists with global leadership in the relevant areas o f science will also be encouraged, provided they spend the funds in India. Management o f component 4 will be along the same l ines as the management o f components 2 and 3 (see also Annex 6). Selection o f research consortia .will follow the same two-stage process with final approval by the Research Program Committee. As a matter o f exception the RPC may decide to select single institutes or consortia l imited to two or three partners.

NAP w i l l finance principally research and capacity building activities. Funding wil l typically cover activities undertaken by research, academic and private institutions which are working in partnership. This will include investment and operational costs and a l imi ted portion o f the personnel costs as in components 2 and 3 .

While component 4 will have a less explicit development dimension, a major emphasis wi l l be on obtaining intellectual property (P; one o f the central indicators for this component). In this component a higher share o f resources will be spent on training in advanced laboratories and on procurement o f the equipment for frontier research.

About 15 consortia will be funded.

4. Lessons learnt and reflected in the project design

The following lessons pertaining to project planning, management and implementation were drawn from the just concluded N A T P and from an international workshop on Agricultural Research for Development that was held at the Wor ld Bank in 2004.

0 N A T P undertook a very large number o f independent activities across many fields, which complicated i t s management and outreach activities. A more focused project might be easier to manage in terms o f corrective action and enhancement and dissemination o f outstanding results. Whi le N A T P funded over 800 research sub-projects, N A I P will fund a much smaller number o f much bigger sub-projects. The large number o f small sub-projects in N A T P made it diff icult to obtain and observe on the ground progress. The critical mass, the partners and the momentum required for such change was often not there. This i s another reason to plan large grants in the range o f U S $ 3 to 10 mi l l ion in NAP. In N A T P some public-private partnerships were established, but the number was small. The missing elements were a lack o f adequate investment in partnership building and inadequate attention to the dissemination o f potential benefits. N A I P provides incentives for public and private partners to work together and wil l invest in facilitation and match making activities. The emerging partnerships with the private sector and NGOs in N A T P have raised issues relating to PR, contractual arrangements and benefit sharing. These wil l be addressed in the working modalities o f the consortia in component 2, 3 and 4 and in the business development units o f component 1.

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0

0

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In N A T P a direct f low o f funds from P I U to the spending unit with the approval o f the appropriate authority would have led to a more efficient fund flow and financial management reporting structure. NAP aims to achieve this by linking direct disbursement with the establishment o f a computerized on-line financial management system at the PIU that i s accessible to al l consortium leaders and partners. NATP showed that flexibility in procurement arrangements can speed up disbursement and project implementation. Centralized procurement i s not always the most appropriate method o f procurement, especially where engagement o f stakeholder organizations i s pursued. Procurement in the NAP-funded consortia wi l l be largely based on principles o f decentralization. Organizational and management changes, when not accompanied by clear communication strategies, become stand alone elements and do not necessarily increase the learning ability o f the organization. NAIP, therefore, focuses in component 1 on the process o f dialogue, interaction and communication, in addition to the achievement of concrete outputs l i ke content provision in knowledge management, business development and technology incubator units. Engaging stakeholder groups in the design o f activities improves participation, ownership, effectiveness and sustainability o f project interventions. In NAIP consortia wi l l be designed with stakeholder participation f rom the f i rs t moment onwards, and in the consortium selection process the quality o f stakeholder engagement will be an important criterion. Whi le research systems need to maintain their relevance and strengthen their demand orientation, a lack o f investment in basic research tends to reduce the long term scientific productivity and contribution to agricultural development. NAIP therefore invests in demand driven research (components 2 and 3) as well as in strengthening the basic research capacity (component 4).

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5. Alternatives considered and reasons for rejection

An alternative to NAP would have been to support the national agricultural research system with a focus on the consolidation o f gains o f NATP. While such a repeater project would have been easy to put in place, it was not pursued, as i t was unlikely to meet the new challenges of Indian agriculture that had arisen over the last five years.

A second option would have been to pursue a design similar to NAIP, but with lead agencies in the consortia confined to I C A R institutes and SAUs, and with institutional development focused on the I C A R organization. Such a design would not have provided the opportunity to stakeholder organizations and other research institutes to lead consortia, and would not have sufficiently exposed the I C A R system to innovations that are taking place.

Another alternative would have been to strengthen the innovation capacity in the private sector and among farmer organizations without supporting the ICAR system. This option would not take sufficient advantage of the scientific capacity that has already been established and would run the risk o f creating a dichotomy between public and private sectors instead o f the desired integration.

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C. IMPLEMENTATION

1. Partnership arrangements

N A I P will reach out to stakeholders in the Indian agricultural innovation system in a significant and substantial manner. Therefore, partnership arrangements wi l l ensure proper and substantial representation o f the different stakeholder groups. The main stakeholders will include public research organizations (like ICAR, SAUs), other related research departments and organizations, the private sector, NGOs, farmers organizations, etc. The partnerships for the research components will be in the form o f consortia with well defined roles and responsibilities, M&E frameworks, clear rules for, sharing resources and wel l established governance structures. The recently concluded partnership agreement between the GO1 and the U S A o n collaboration between Indian agricultural universities and American land grant universities will be dovetailed in the project, especially in capacity building elements o f component 2, 3 and 4.

The Sustainable Land and Ecosystem Management Country Partnership Program (SLEM CPP) o f the Global Environment Fund i s in the process o f considering a grant for research funding to support the establishment o f environmentally friendly production to consumption systems; resource conserving agricultural strategies that enhance watershed, biodiversity and climate change objectives; and the use o f modeling and simulation tools that enable the development o f national agricultural production strategies that minimize environmental impacts. A GEF grant in the order o f US$ 15 mi l l ion would be requested fi-om S L E M CPP. An appraisal o f N A I P activities proposed for grant funding would be conducted to determine baseline and incremental needs for mainstreaming global environmental issues in the project and thus to promote sustainable land management. Since the precise conditions and terms o f grant co-financing o f the SLEM-GEF CPP, are not yet defined, the I C A R maintains the right to consider other funding options for meeting this objective. Annex 17 provides further detail on the Sustainable Land and Ecosystem Management Country Partnership Program and on the activities that will be eligible for GEF funding.

IFAD i s considering the establishment o f a facility with annual funding o f about U S $ 0.5 mill ion, init ially for two or three years to support the participation o f International Agricultural Research Centers in NAP. IFAD i s in direct contact with I C A R to define the terms for this partnership.

2. Institutional and implementation arrangements

Governance

A “National Steering Committee” (NSC) o f key stakeholders in the N A R S will be established by the I C A R to serve as the national apex body responsible for overseeing al l aspects o f NAP. The NSC will set policies and provide guidance to ensure the timely achievement o f the main goals o f the project. The NSC will principally provide guidance to the Project Management Committee.

An “ObM Program Committee ” (O&MPC) will be a multi-disciplinary panel responsible for selecting and awarding activities proposed under component 1. O&MPC wil l also guide the effective and efficient implementation o f these activities through inputs at critical stages such as the annual workshops and mid-term reviews (MTRs).

A “Research Program Committee” (RPC) will be responsible for objective and transparent assessment and selection o f grant funding for consortia under components 2, 3 and 4. The RPC

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will also be involved at the time o f the annual workshops and consortia MTRs, and in case there i s a need for substantial modifications andor cancellation o f ongoing consortium activities.

“Consortium Advisory Committees ” (CACs) wi l l be responsible for setting priorities and local level oversight, monitoring implementation o f the approved consortia, and for approving any required modifications in the program o f each consortium during implementation under Component 2, 3 and 4. There will be a C A C for each consortium. The CACs wil l principally provide guidance to the Consortium Implementation Committees.

Management

A “Project Management Committee ” (PMC) will have direct executive responsibilities for sanctioning the proposed NAP-f inanced activities and for the overall management o f NAIP, in- cluding the effective and efficient implementation o f the entire project, resource management and use, and monitoring and evaluation (M&E) o f all NAIP-supported activities. The P M C will also serve as the link with the Subject Matter-related Divisions o f I C A R - for technical liaison, and for resolving any management issues. The P M C will be supported by the Project Implementation Unit (PIU)~.

A “Project Implementation Uni t ” (PIU), headed by the National Director (ND) wil l be responsible for the coordination and facilitation o f implementation o f the entire NAIP. The P I U includes 4 National Coordinators (NCs), one for each component. The PIU also comprises expertise in administration, finance, procurement, M&E, social and environmental aspects.

The “OdiM Advisory Group ” (O&MAG) wil l be a multi-disciplinary advisory panel responsible for organizing the screening and evaluation o f activities proposed under component 1 before final consideration by O&MPC. O&MAG may appoint consultants for in-depth review and assessment o f the proposed component 1 activities.

Three “Technical Advisory Groups ” (TAG2, TAG3, and TAG4) will be responsible for facilitating and synthesizing “peer reviews” involving scientific and technical assessment for final consideration by RPC o f proposals under component 2, 3 and 4, respectively, TAG members wil l participate in the annual workshops; they will also assist in monitoring progress and quality o f implementation especially during MTRs, and in case substantial modifications (or cancellation) are required. The TAGS will frequently call on referees to examine and assess consortium proposals to be supported under component 2, 3 and 4.

“Consortium Implementation Committees ” (CICs). Most, i f not all, consortia will establish an implementation committee which wil l be responsible for day-to-day coordination and management of the preparation and implementation o f each RPC-approved and PMC-endorsed consortium under component 2, 3 and 4, including M&E.

The P I U i s a unit within ICAR that i s staffed with ICAR personnel o n open-ended contracts, assigned to N A I P for the duration o f the project, and led by a National Director who i s equivalent t o a Deputy Director General o f I C A R and in this function participates in the Council’s decision making and management processes. While N A I P i s the principal responsibility o f the PIU, i t i s not the only one. In this respect i t i s not a P I U in the sense o f an independent organization, established for purposes o f project implementation only, and it might have been called more appropriately the “project management desk”. The term “PIU” was inherited within ICAR f r o m N A T P and i s n o w fully accepted and understood within the organization. The t e r m has therefore been maintained for reasons o f internal acceptance and recognition.

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The organizational chart o f the proposed governance and management structure i s shown in Annex 6.

3. Monitoring and evaluation o f outcomeshesults

NAP will develop a results-based M&E system that will monitor project processes using the fol lowing methods and tools:

A w e l l defined Results Framework that i s derived from clearly defined goals, objectives, outputs and activities with corresponding indicators, means o f verification and key assumptions;

0 A w e l l defined M&E strategy regarding information requirements, tools and methodologies for data collection, analysis and reporting;

0 A comprehensive M&E plan with clear roles and responsibilities with respect to data gathering and reporting; and

0 Internal and external periodic assessments and evaluations which include baseline studies, beneficiary assessments, mid-term evaluations, ex-post evaluations and impact assessments.

0

An M&E specialist at the national level wi l l be responsible for the overall M&E effort within the project and vis-a-vis partners, plus providing timely and relevant information to the NAP management team and stakeholders. The specialist will operate in close coordination with the people in charge o f M&E in the consortia, the National Steering Committee and the National Director, external consultants and field staff where appropriate, as wel l as members o f external M&E missions.

Each consortium wil l be required to establish i t s own M&E capacity and to design i t s own M&E plan, This wil l be laid out in the “Guidelines for Consortium Development”. Issues that wi l l be addressed by a l l consortium M&E groups are: consortium formation and management; research program preparation and implementation; knowledge management; capacity building; product development and technology transfer; financial management; procurement; and impact assessment. In addition, consortia can add further indicators as required by their own unique nature. The M&E unit o f each consortium will report to both the Consortium Leader and the Consortium Advisory Committee.

NAP will commission external evaluation studies and impact assessments to complement the internal monitoring arrangements. NAP will promote participatory monitoring to ensure that project implementation processes are executed in a satisfactory manner and that benefits are sustainable.

4. Sustainability

NAP i s envisaged as an integral part o f the agricultural R&D system o f the country. It will not build a parallel system but rely on the existing institutions and organizations in and around the sector. Hence, sustainability o f most o f the outcomes o f the activities o f NAP i s ensured. Furthermore, at the level o f each component and consortium plans will be drafted on how results will be internalized and sustained once the project closes. The activities planned in component 1 form a continuum in the ongoing overall reform process o f GO1 in general and ICAR in particular. Therefore, these activities and outcomes by their very nature will be sustainable,

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The approach o f working though consortia in components 2, 3 and 4 o f the project i s relatively new though the system has considerable experience with other forms o f collaboration such as the All India Coordinated Research Projects. The sustainability and likelihood o f mainstreaming this approach can b e judged partly on the basis o f the number o f consortia established outside NAP by I C A R or other agencies by the end o f the project period and partly by how consortium partners continue to w o r k together beyond the project period. As the major opinion makers and decision makers f rom both private and public sectors will be involved in the implementation structure o f the NAP, it i s highly likely that successful consortia will be sustained and that the approach, if proven successful, will be mainstreamed. T o put this into practice the project wi l l have two interim evaluations, after 18 and 36 months. If these evaluations are positive, ICAR and the Bank wil l discuss the possibility o f I C A R starting establishment o f consortia outside the NAP. Then I C A R would start providing funds from i t s own resources to maintain successful consortia during the subsequent Five Year-Plan.

Risks

5. Critical risks and possible controversial aspects

Risk Mitigation Measures

ICAR i s not able to quickly respond to the rapidly changing socio-economic

Composition o f the National Steering Committee; simultaneous emphasis on M market-driven development, poverty alleviation and strengthening o f basic

and policy environment

new NAIP concepts Inadequate capacity o f PIU staff on

science capacity Capacity building and sensitization activities; addition o f new staff M

Concept o f production to consumption

Difficulty o f financial management of

Incompatibility of procurement and

system i s not clear to R&D staff

a decentralized project

other management standards between

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Development o f training courses; exposure obtained in consortium

Computerized on-line financial management system, linked with direct fund

Adoption of decentralized procurement guidelines, linked with a continuous

M development; learning by comparison

S transfers to participating organization;, certification o f financial management capacity of consortia before first release o f funds; and capacity building

audit system; capacity building program on procurement M

Overall Risk Rating M

6. Credit conditions and covenants There are no conditions for Board Presentation or for Project Effectiveness.

D. APPRAISAL SUMMARY 1. Economic and financial analyses

Past returns to investment in the Indian public agricultural research system have been high (Annex 9), and there i s no reason why efforts supported through this project should not bring high rewards through a more market-driven research agenda, if indeed the private sector can be effectively engaged, to the mutual advantage to both private investors and the public good. I t i s anticipated that investment in NAP can generate returns f rom investment in public agricultural research with an Economic (Internal) Rate of Return o f around 40% to around 60%. The returns to investment in the project itself will depend on the specific research activities supported and thus constitute a framework-type analytical task, but i t i s anticipated that such returns (Annex 9) wil l greatly exceed those available in most other forms o f public investment in India, as have past agricultural research project interventions, in India and many other countries.

Some o f the impact assessment (IA) work ahead i s rather more complex than that undertaken on Indian agricultural research in the past, and accordingly, considerable strengthening o f capacity for undertaking the work i s required, as well as revitalization o f the PME implementation arrangements set up under NATP. IA arrangements (including base-line data collection) should be spelled out in al l new consortia, as wel l as being further mainstreamed within ICAR research entities more generally. Such work can be coordinated by NCAP, building on past skill development as wel l as developing new analytical capacity.

The new analytical tasks to be faced are surely as diverse as the themes to be taken up in the novel consortium-based arrangements and, to the extent that new agreements on sharing intellectual property produced through public-private partnerships (PPPs) must be forged, new frameworks for measuring benefits along different parts o f the value chains must be developed. While challenging, such work will be critical throughout project implementation, f rom the outset o f consortia selection, through the MTRs, and especially at completion, in order to describe convincingly and quantify the achievements o f the modernized approach.

All research i s inherently uncertain in i t s outcome, so when assessments o f programs are made ex ante, i t i s the overall effect, averaging over diverse successes and failures among specific research initiatives, that i s being sought. For the Project as a whole, these returns are high and robust, notwithstanding the various r isks set out in section (2.5. In the extremely unlikely event that several o f the mentioned downside r isks should eventuate, however, project performance would o f course be seriously compromised and economic effect much reduced relative to expectations.

2. Technical

It i s well accepted that a strong science and technology system can make important contributions to sustainable and equitable agricultural development. The principal reason i s that development i s very knowledge dependent and that a l o t o f this knowledge needs to be generated and applied within the national context. Investments in science and technology have therefore been a steady component o f most development strategies. But while strengthened research systems wil l increase the availability of new knowledge and new technologies, they do not necessarily increase the number o f innovations that wil l be implemented in the sector.

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In addition to generating new knowledge, the conditions must be put in place to assure that this knowledge actually leads to accelerated development. This i s where the concept o f a national innovation system arises. A national innovation system i s made up o f the institutions, enterprises and individuals that demand and supply knowledge and technologies, and the ru les and mechanisms by which these different agents are interacting. In this concept the focus i s not on the science suppliers but on the totality o f actors that are involved in innovation. Fol lowing the lessons f rom the industrial applications, the effectiveness o f the agricultural innovation system depends on three main elements:

0

0

An institutional environment that i s conducive to the f low o f knowledge, to collaboration, experimentation and implementation o f innovations. A wel l articulated demand for new knowledge and technology. Producers, traders and others must be able to express their demand and must be in a capacity to adapt and adopt new knowledge and technology. Often the “demand side” i s poorly developed. Effective supply of new knowledge and technology, f rom the public research system, but also from other sources, such as indigenous knowledge, private sector research and transfers f rom abroad.

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NAP will assist in putting these elements in place. In the context o f the emerging Indian agricultural innovation system, the limited ability o f partners to interact and transact with each other was identified as a key constraint to streamlining the generation and use o f new knowledge. This led to the choice o f the consortium as the principal implementation modality o f the project (in components 2, 3 and 4). In support o f these components, Component 1 will allow I C A R and the SAUs to strengthen their role as the catalyzing agent o f the system. The consortium concept i s central to facilitating knowledge flow, collaboration, experimentation and implementation, and to articulate demands for knowledge and technology. The consortia to be supported by NAP wil l p lay a key role in more efficient use o f scarce resources in national agricultural research, and in enhancing synergies among research and development actors.

By making competitive grants available for large projects, incentives are created to build partnerships and share knowledge and information. The competitive nature o f the project allows successful and innovative models to arise f rom the bottom, rather than imposing a design from the top, the success o f which was shown in Australia and other countries.

3. Fiduciary

Financial management. Financial management arrangements for the project are detailed in Annex 7. The Finance function i s headed by an experienced finance professional f rom the ICAR System. The current manual system o f recording and reporting expenditures, which i s considered adequate to meet the basic reporting requirements during the project, i s proposed to be enhanced by an online off-the shelf web-enabled accounting software to facilitate easy and timely access to financial information and i t s consolidation. This i s being done keeping in view the highly decentralized structure o f the project.

I t has been agreed that the PIU will maintain a roster o f Chartered Accountants (CA) f i r m s empanelled with the Comptroller and Auditor General (C&AG) o n a regional basis. As and when a consortium i s formed, the consortium members will have to get their financial management systems assessed and certified by one o f the C A f i r m s f rom the roster or by the finance wing of the PIU. The C A fidFinance wing o f the PIU wil l certify that the financial management systems o f the consortium members are compliant with the project requirements.

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The accounts of the project wi l l be audited by the C&AG in case o f I C A R and other Government institutes and Private Chartered Accountants f rom the roster maintained by PIU in case o f other consortia members. The SAUs will have an option o f getting their accounts audited by the local fund auditor who does statutory audit o f SAUs or by a Chartered Accountant Firm from the roster maintained by PIU provided they meet the deadline o f submitting the audit report to PIU within the stipulated time. The annual project financial statements, duly audited and a compiled audit report wil l be submitted to the Association within six months o f the end o f each financial year.

In addition to the external audit, a quarterly internal audit will be conducted by a C A f i d F i n a n c e wing o f the PIU. The sample for audit in each quarter will be selected in consultation with P I U based on factors such as amount o f expenditure incurred, perceived r isks etc. The internal auditor will assess the operation o f the project’s financial management system, including a review o f internal control mechanisms. Issues arising in the external and internal audits would need to be promptly addressed and acted upon in a timely manner by the project authorities.

Retroactive financing wil l be provided up to US$ 800,000 to meet preparation expenditures incurred after June 30,2005.

Procurement. The project envisages implementation o f research activities through consortia comprising public and private sector organizations, NGOs, farmer organizations, etc. The procurement for the research activities wi l l be carried out by the consortia that are not familiar with procurement procedures under the Bank financed projects. The I C A R wil l need to put in place a capacity building program to ensure that the procurement i s carried out as per agreed procedures. The I C A R wil l also need to periodically conduct reviews o f the actual procurement processes carried out by the consortia and take corrective actions. The Bank o n i t s part will conduct a post-award review program for the procurement under NAP, including consortia.

4. Social

The project’s strategy i s underpinned by two key elements: ‘consortium’ and ‘competition’. The concept o f consortium i s rather new to the country and hence many o f them wil l need to come into existence anew and compete (among several consortia) to obtain project support. Partners in a consortium necessarily have to be from different sectors - public, private, non-government, and interest groups - each having strengths o f their own. Some may generate technologies, but others are required to carry them to producers, ensure supply o f inputs as wel l as marketing o f outputs, contribute towards value addition through storage, packaging, processing etc. Success o f these components, hence, depends on several factors such as the project’s ability to: (i) design a Information, Education and Communication (IEC) campaign to create interest and attract several organizations to form a consortium and demand project support; (ii) support the prospective consortia to prepare result oriented proposals; (iii) create an enabling environment for the consortia to accomplish the tasks including resolving conflicts (if any); and (iv) ensure systematic and wider dissemination o f the results. Therefore the social assessment enquiry has identified the following as key social development issues/ principles which should underpin the project’s strategy and implementation: (i) participation, (ii) inclusion, (iii) poverty, (iv) gender, (v) capacity building, and (vi) IEC campaign.

Participation and inclusion. Mobi l iz ing people for group action underpins the entire project intervention. I t occurs at different levels - (i) at the grassroots level, involv ing the local communities (in particular, for component 3); (ii) at the intermediate consortium level, involving i t s partners; and (iii) the apex level, involv ing project management functionaries f rom ICAR and

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the other associated governance and management entities. To ensure grassroots participation stakeholder analysis will be an essential part o f consortium preparation. This involves: (i) identifying different subgroups in a community based on differences in endowment, gender, ethnicity etc.; (ii) assessing their expectations as well as concerns and issues; and (iii) formulating the proposal t o address these issues. This wil l ensure that the project reaches and includes all the sub-groups, particularly the poor and vulnerable.

At the intermediate level, the project has developed eligibility criteria and a selection process to assess the capacity o f a consortium as well as to review the relevance and utility o f the proposal. I t i s wel l recognized that the framework for participation o f each consortium wil l be situation specific. It depends on the nature and extent o f involvement o f different partners and the level o f interactions among them, as well as between partners and local community. Hence, after selection, each consortium wil l be trained to develop a framework for participation. The framework wil l also contain M&E outputs. Apex level participation i s addressed as a part o f the overall institutional arrangements (see Annex 6).

Poverty, All consortia in component 3 wi l l have a poverty focus. Targeting selected disadvantaged regions ensures this. I C A R wil l adopt the 150 disadvantaged districts in the country identified by the Planning Commission as the base. As a second step a stakeholder matrix will be developed to further zero in on the poor. Baseline information will be generated on the current l ivelihood status. The matrix and baseline information will serve as benchmarks to measure income enhancements and track poverty.

Gender. As a part o f project preparation I C A R established a sub-group to review gender issues. The group recognized that rural women perform over 60% o f farming operations and recommended that al l project interventions be designed to increase women’s participation in decision making. A case was made to recognize women from the farming households as ‘farmers’ in their own right and accordingly, the project has designed interventions aimed at sensitizing and building the capacity o f the scientific community on gender, as wel l as a series o f interventions to strengthen the role o f women in NAP.

For sensitizing and capacity building in the field o f gender the project wil l finance two major analytical action initiatives: (a) creating an information base with disaggregated data on rural women’s demographic, economic, political, cultural and social status along with time-use studies; and (b) gender focused impact assessment activities in component 1.4. These wil l help in defining policy requirements for enhancing the status o f women as wel l as understanding and addressing gender related occupational hazards. ICAR’s National Research Center for Women in Agriculture (Bhubaneshwar) will spearhead this work.

Specific interventions to strengthen the role o f women in NAP are: Involving women agricultural workers f rom local farming communities, self help groups and NGOs in farm based activities o f the consortia; Capacity building o f consortia members, in particular NGOs, for conducting gender analysis and identifying opportunities for intervention; Promoting women groups for agricultural and marketing activities, particularly in component 3; Attempting that at least a fifth o f the members o f al l governance and executive bodies of the project wi l l be women.

0

0

0

0

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Information, Education and Communication (IEC). The IEC campaign wil l be implemented in three categories: (i) publicizing the project including the detailed ru les o f engagement to attract prospective consortia. As this i s ICAR’s f i rs t ever attempt at such a large scale outreach program, i t wi l l have to equip itself appropriately for this, i t needs to dispel apprehensions on the part o f potential project partners (private sector, NGOs) and it needs to create an enabling environment for participation; (ii) undertaking an electronic as well as print media based campaign and establishing a platform for discussion, information exchange and dissemination; and (iii) establishing an information warehouse with easy accesses to off-the shel f as well as prospective technologies o f the NARS.

5. Environmental

Key environmental issues in the context o f the project are those identified in the country for the agricultural sector as a whole. They relate chiefly to:

(i) groundwater - decline in the water table as a result o f inappropriate exploitation, and quality problems due to increase in fluorides, iron, nitrates, sulfides, arsenic and salinity; (ii) drainage - lack o f due attention to surface as well as sub-surface drainage affecting water flows, soil characteristics as wel l as pollutant transfers and the associated health hazards; (iii) bio-diversity - flora and fauna, in general, and the forests and protected areas, in particular; (iv) agro-chemicals - effects o f excessive use o f fertilizers and pesticides on soils, plants, animals and human beings and the implications for pest and nutrient management; (v) livestock - increased demand for fodder vis-A-vis the decline in agricultural area and the resulting pressure on forests and protected areas; (vi) food safety - phyto-sanitary conditions necessary for maintaining safety standards; (vii) fisheries - combined effects o f irrigation, drainage, agro-chemicals and safety standard related issues on the nature o f production and post production aspects particularly for inland fisheries; and (viii) genetically modified species and the need to put in place a long term monitoring mechanism to address possible adverse impacts.

These issues will be addressed as a part o f the safeguards management framework

Safeguard issues

The project i s not expected to have significant adverse environmental and social impacts and has been classified as a Category B project. Given that the interventions essentially relate to the development and dissemination o f appropriate agricultural technologies, the impacts are expected to be mostly positive. However, in a few cases, adverse effects may emanate rather inadvertently. However identifying and addressing al l likely impacts during the project preparation i s not possible as the nature o f interventions will become known over time, as and when sub-projects will be established. Therefore, generic safeguard measures have been designed which include: (i) an Environment and Social Safeguards Management Framework (ESMF); and (ii) a checklist o f impacts likely to occur. ESMF covers rationale and approach; the country’s regulatory framework outlining social and environmental legislative provisions; general social and environmental settings and profiles; district-wise composite l ivelihood indices based on more than 50 parameters and grouped into 6 sub-indices; an impact matrix, listing as exhaustively as possible impacts likely to occur and mitigation measures; and institutional arrangements, reflecting role and responsibilities o f different actors, including the provisions for capacity building and M&E.

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ESMF and checklists wi l l provide guidance to the prospective consortium applicants on how to prepare a Social and Environmental Safeguards Management note, similar to the Bank’s ISDS, as a part o f the overall proposal. The approval o f sub-projects wi l l be subject to satisfactory safeguard compliance.

The E S M F contains a clear, unambiguous and comprehensive l i s t o f activities that will not be financed by the project. I t also contains a l i s t o f activities that wi l l not be funded until implementation experience demonstrates that the local capacity exists to adequately manage environmental and social impacts.

6. Safeguard policies

Policies on Environmental Assessment and Pest Management have been triggered and the Environmental and Social Management Framework has been prepared to take care o f these safeguard triggers.

Safeguard Policies Tripgered by the Project Yes N o Environmental Assessment (OP/Bl’/Gl’ 4.0 1) [x 1 Natural Habitats (OPIBP 4.04) [I Pest Management (OP 4.09) [x 1 Cultural Property (OPN 1 1.03, being revised as OP 4.1 1) [I Involuntary Resettlement (OPIRP 4.12) [I Indigenous Peoples (OD 4.20, being revised as OP 4.10) 11 [XI

Forests (O€’/BP 4.36) [I [XI

Safety o f Dams (OP/I31’ 4.37) [I [XI

Projects in Disputed Areas (OP/BP/GP 7.60)* [I [XI

Projects on International Waterways (OP/BP/GP 7.50) 11 [XI

[XI

7. Policy exceptions and readiness

The proposed project does not require any exceptions f rom Bank policies; and meets the Regional criteria for readiness for implementation. The P I U i s functional and fully staffed with a National Director, 4 national coordinators, a deputy director for finance, a senior finance and accounts officer, an under secretary, a section officer and six support staff members. ICAR has recently appointed a new National Director who has been in-charge o f project preparation. All staff i s on long term tenure. A governance and management structure, with clear terms o f reference and agreed membership for the different committees has been developed (see Annex 6).

Preparations for a help desk that will facilitate consortium formation and proposal development have been concluded. Draf t proposals for two consortia (bio-fuel and meat products) have been completed and wil l be used as examples. Through the application o f a scenario planning process, N A P has obtained a series o f visions o n the future that wi l l help consortia to define long t e r m objectives within the context o f each component. The scenario analysis also provides background information for sub-component 1.4.

The following indicators for agreeing on satisfactory performance in the f i r s t 24 months o f the project were agreed upon:

’ By supporting theproposedproject, the Bank does not intend to prejudice the f inal determination ofthe parties‘ claims on the disputed areas

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At 6 months: 0 5 consortia have been sanctioned and operationalized. 0 Private sector/NGOs/women groupdfarmer organizations/ICARiSAUs/Govt.

organizations are adequately represented as consortium members/leaders. 0 FMS software is operational for NAP. 0 Baseline data collection has been completed for impact assessment.

0 50% o f funding for consortia has been awarded. 0 Sanctioned consortia are running smoothly without any management problems. 0 Private sector/NGOs/women groups/farmer organizations/ICAR/SAUs/Govt.

organizations are adequately represented as consortium membersileaders. 0 Procurement i s progressing smoothly. 0 Locations for Business Development Units have been defined; leaders have been

appointed; business plans are under development.

0 80% o f the funding for consortia has been awarded. 0 Sanctioned consortia are running smoothly without any management problems. 0 Private sector/NGOs/women groups/farmer organizations/ICAR/SAUs/Govt.

organizations are adequately represented as consortium membersileaders. 0 Procurement i s progressing smoothly. 0 Consolidated audit report for FY 1 has been submitted to the Bank. 0 Review o f financial, procurement and delegation processes (in component 1.5) has been

completed. 0 First Annual Workshop o f NAP has been organized. 0 20% (US$40 million) o f credit resources have been disbursed. 0 Business plans for Business Development Units are in place.

0 100% o f the funding for consortia has been awarded. 0 Sanctioned consortia are running smoothly without any management problems. 0 Private sector/NGOs/women groups/fanner organizations/ICA€USAUs/Govt.

organizations are adequately represented as consortium memberdeaders. 0 Procurement i s progressing smoothly. 0 25% (US$ 50 Mi l l ion) o f credit resources have been disbursed.

At 12 months:

At 18 months:

At 24 months:

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Annex 1: Country and Sector Background

INDIA: National Agricultural Innovation Project

A. The Agricultural Sector’

Supported by wide-ranging reforms, India has experienced rapid growth over the past decade (averaging about 6%/year between 1992/3 and 2003/4). In parallel with this faster growth, i t has made impressive progress towards reducing poverty, an important element o f the MDGs. Continued progress has also been made on many social indicators, particularly literacy, which rose f rom 52% in 1991 to 65% in 2001. However, India’s development pattern over the last decade has had a strong urban bias, with the rural and agricultural sector staying behind. It can be said that India comprises two worlds. The first, where economic reform and social changes have begun to take hold and where growth has had an impact on people’s l ives and opportunities-and the other, where citizens appear almost completely l e f t behind by public services, employment opportunities and brighter prospects. Bridging the gap between these two worlds i s perhaps the greatest challenge faced by Go1 today and one o f the reasons to support investments in agricultural innovation.

Agricultural Sector Performance

Weakening agricultural performance i s a national concern. The marked slow-down in growth rates in the traditional green revolution states and bread basket o f the country, namely, Punjab, Haryana and Uttar Pradesh i s a major concern. As these states account for 74% and 26% o f production o f wheat and r ice respectively, these lower growth rates are raising food security concerns. At the same time, in the states o f Bihar and Orissa, where rural poverty and dependence on agriculture are high, agriculture shows limited improvement. The challenge o f sustaining growth over the longer te rm i s reaffirmed by several recent studies that find total factor productivity (TFP) in agriculture declined between the 1980s and 1990s. Kumar reports that while Total Factor Productivity (TFP)6 grew by 2%/ year between 1981 and1990, it became negative during 1990-96 in the Indo-Gangetic Plains, which i s spread over the states o f Punjab, Haryana, Uttar Pradesh, Bihar and West Bengal. These and other studies attribute the deceleration in TFP growth to the slow-down in productivity gains f rom the earlier adoption o f high-yielding varieties, the decline in public investments in the agricultural sector, and increasing natural resource degradation due to the existing incentive framework.

Crop Sector Performance

Average yields o f several major crops in India have room to improve to other major producing- country levels. For example, Indian rice yields are approximately ha l f o f Vietnam’s and Indonesia’s, and one- third o f China’s (table 1). With the exception o f sugarcane, potato and tea, the same i s true for the other commodities. There i s considerable room to raise productivity further, but doing so wil l require appropriate policies and programs.

Extracted from: World Bank. 2005. India: Re-energizing the Agricultural Sector to Sustain Growth and Reduce Poverty, Oxford University Press, New Delhi, and from: Draft Implementation Completion Report for NATP

TFP measures the amount o f increase in total output that i s not accounted for by increases in total inputs.

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Table 1: Comparison of Average Yields of Major Crops in India (1998-2000) with Other Major Producing Countries

Agriculture Input Use

The intensity o f agricultural input use shows limited connection to recent growth performance. Punjab, Haryana, and Uttar Pradesh show some o f the highest rates o f use o f fertilizers and other agrochemicals, improved seed varieties, and irrigation, notably primarily for rice and wheat use. By contrast, the southern and western states display a slightly lower intensity o f use o f purchased inputs, in addition to more limited access to irrigation. Nevertheless, these states achieved better growth performance in the 1990s. The difference i s driven in major part by the pace o f agricultural diversification, especially the move out o f food grains.

Diversification as a Potential Source of Agricultural Growth

The agricultural sector in India ranks as the third most diversified in the South Asia Region. This ranking i s driven mainly by the shift to high-value crops, livestock, and fisheries. This shift, in turn, i s influencing agricultural growth patterns across states. During the 1990s, the increased diversification in the crop sector came primarily as a result o f crop substitution (63%) rather than increased cropping intensity (36%). Within India, the Southern and Western Regions posted the highest degree o f crop diversification. Notably, during the 1990s, the Southern Region also recorded faster agricultural growth rates than the national average. In contrast, the Northern Region continues to specialize in food grains, particularly rice and wheat, encouraged by favorable government price support policies.

The livestock sector i s emerging as an important sunrise sector in the country. In 2001102 livestock accounted for 25% o f agricultural GDP, or 5.6% o f national GDP (Ministry o f Finance and Company Affairs 2003). During the 1990s, milk output grew 4.3%/year, egg output by 4.2%lyear, fisheries output by 4.4%/year, and meat output by 2.3%lyear. Rising incomes and increased export opportunities were important drivers o f demand and output. The sector employs approximately 11 mi l l ion workers (Department o f Animal Husbandry and Dairy ing 2003).

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Because most livestock in India i s owned by small and marginal farmers and landless households in rural areas, the sector’s rapid growth benefits the poorest households.

Several factors are driving agricultural diversification in the country. These include rising incomes, changing relative prices between cereals and high-value agriculture, increasing urbanization and access to infrastructure, and more open trade policies. Over the last decade, the composition o f per capita consumption and expenditures shifted f rom cereals toward a variety of other food products. Demand-side factors such as rising incomes and increased urbanization and export opportunities helped boost demand for non-cereal higher value crop and livestock products. Supply side factors such as the slow-down in rice and wheat productivity growth, accompanied by increased access to improved planting materials and livestock breeds resulting from increased liberalization o f these markets facilitated farmer’s ability to respond to changing demand. Increased access to infrastructure (roads, electricity, and telecommunications) and market support services (markets, storage, cold chains) also reduced transaction costs, facilitated marketing, and improved the competitiveness o f these products both locally and internationally.

However, in some states, the success o f agricultural diversification programs i s leading to seasonal “problems o f plenty,” compelling government to intervene. In recent years, seasonal gluts and price crashes for maize and various fruits and vegetables have occurred in Maharashtra and Karnataka. The GO1 and state governments’ response to this crisis was to introduce market intervention schemes for horticultural crops and other agricultural commodities not covered by GO1 minimum support prices. While the government’s market intervention efforts are intended to assist farmers to weather sharp seasonal price declines and ensure reasonable incomes, the experience with rice and wheat illustrates how they can easily distort incentives and exacerbate the supply situation. In the longer term, measures to encourage the improved functioning of markets (for example, investments in rural infrastructure) and value-addition (agro-processing, cold chains) could offer a more efficient, cost-effective and sustainable method o f dealing with seasonal gluts.

Public Expenditures in Agriculture

Government expenditures in the agriculture sector amounted to approximately 8% o f GDP in India in the early 2000s. This percentage varied considerably by state. Total investments in the agricultural and allied sectors as measured by the gross capital formation (GCF) increased over time, but since the mid-l980s, GCF was driven largely by the private sector. By the late 1990s, private investments accounted for approximately three-quarters of total investments in the sector. These investments primarily were in the form o f farm equipment, minor irrigation, and land improvements. Notably, the increase in private investments in minor irrigation, specifically electric pumps, whose numbers increased from 1.5 mi l l ion in 197017 1 to 1 1.9 mi l l ion in 1998199, was made possible by public investments in power. During the 1990s, incentives for increased private sector investments also could be traced to improving agricultural terms o f trade.

The decline in public sector investments i s a major cause for concern, because o f i t s likely adverse impact on agricultural growth over the longer term. Public investments in the agricultural and allied services sector have declined systematically since the mid-1 980s - i t s share declined from 44% in 1985186 to 23% in 2000101. Indeed, public investments in research and development, irrigation, roads, and education have been shown to significantly contribute to TFP growth and the reduction o f rural poverty in India.

The agricultural sector’s growing subsidy requirements are crowding out public investments in the sector. These subsidies include those to food, fertilizer, power and irrigation. The GO1 food

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subsidy continues to increase and amounted to Rs 212 b i l l ion ($4.3 billion) in 2002103, which i s equivalent to 0.8% o f the national GDP. In 1999100, public investments only amounted to approximately 13.6% o f the subsidies to food, fertilizer, power and canal irrigation.

R u r a l Non-Farm Sector

Whi le for most rural households, agriculture remains the main source o f income, the rural non- farm sector i s increasing in importance as a source o f supplementary income. According to the most recent estimates, based o n a 1993/94 survey, the non-farm sector on average accounted for one-third o f rural household incomes (34%). Given these high rates o f poverty, more rapid growth o f the rural non-farm sector can offer an important vehicle for generating greater opportunities for higher paying employment in rural areas. In particular, the more rapid growth o f the agro-industrial sector will be important not only in expanding markets for primary agricultural products and adding greater value, but also in generating additional employment in rural areas.

Agro-industry remains an important segment o f the industrial sector in India. In 1994195, agro- industrial enterprises accounted for 65% o f total units and 63% o f employment in the manufacturing sector in India. In rural areas, they accounted for 71% o f the units and employment. However, they account for only approximately 35% o f the value-added o f the total manufacturing sector. Notably, the agro-industry sector i s dominated by the unorganized segment, which i s composed largely o f micro- and small enterprises.’ They account for 87% o f employment. Forward linkages between the agricultural and manufacturing sector increased considerably between 1994195 and 2000101. The number o f ago-industrial units grew by 4.5 mill ion, thus expanding agro-industry’s share in the manufacturing sector f rom 65% in 1994195 to 82% in 200010 1.

The role o f agricultural research and innovation programs

Despite the shrinking share (23%) o f the sector in the economy, the majority o f the labor force continues to depend on agriculture. About 75% o f India’s poor people l ive in rural areas. Hence, the National Agricultural Policy and the Tenth Five Year Plan place high priority on raising agricultural productivity as a means to achieve more rapid agricultural growth and reduce rural poverty. Stagnatingidecelerating productivity growth in the sector and declining total productivity in agriculture, have cast doubts on resilience o f the sector to meet the challenges o f a more market driven, competitive regime. Related to the issue o f stagnating productivity i s the obvious l imited connection between input use and productivity growth performance. Unsustainable current land and water use practices will lead to lower agricultural productivity in the future. Finally, ensuring access to food to every Indian in a more competitive regime while conserving traditional resources and wisdom i s yet another challenge.

Some o f the challenges and concerns emanate from the context in which Indian agriculture i s placed. First, the majority o f land holdings (over 70%) are small and marginal, requiring appropriate technology. Second, the Indian research system focuses strongly on crop production. Third, the differentiated and polarized agricultural growth performance across regions and farm groups i s very wel l documented. Fourth, there i s a high concentration o f poor in rainfed areas, the dominance o f which will continue for years to come. Fifth, there i s a huge untapped potential for augmenting value chain through crop diversification, forward and backward linkages

’ Establishments that use power and have 10 or more workers and those that do not use power and have 20 or more workers are classified part o f the organized sector. Those outside o f these two groups are considered to be in the unorganized sector.

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including post-harvest handling, value-addition and processing. Sixth, rural women play a pivotal role in improving the prospect o f household food security, both as individuals at household level and as producers o f food at the farms.

While India’s agriculture faces many challenges it also has great technological opportunities. First, the r i ch diversity o f agro-ecosystems forms a source o f sustainable growth for the sector. The diversity o f farmers’ traditional varieties prevalent in several pockets o f the country constitutes an invaluable reservoir o f genes for sustainable utilization and development o f superior varieties. Second, jo int ventures between public research institutes and private sectors are being seen more favorably today. These partnerships would be a great strength for augmenting the R&D efforts in the country. Third, agriculture can develop value chain processing activities in rural areas so as to meet the changing pattern o f food demand in the country and to tap the international markets. Fourth, crop diversification has emerged as one o f the potential sources o f agricultural growth, and this has opened up new avenues for export and employment opportunities. Fifth, the livestock, fishery, and horticulture sectors are emerging as important sunrise sectors in the country. Because, most livestock i s owned by small and marginal farmers and landless households in the rural areas, i t s rapid growth benefits poor households. Sixth India has one o f the world’s largest agricultural research systems and if management reforms are institutionalized, sustained and deepened, the system i s a large source o f sustainable growth.

In order to generate additional income and employment for the poor, the role o f agricultural R&D i s critical. Given the limited scope for area expansion, increase in productivity, profitability and competitiveness would be the main source o f the agricultural growth in future and this should be led or triggered by advances, innovations and applications o f science in agriculture. In other words, Indian agriculture wi l l shift f rom resource or input based growth to knowledge or science based growth. In this paradigm shift, the f low o f knowledge and innovations plays a critical role. R&D assumes more importance because i t i s a cost-effective method for promoting sustainability and attaining competitiveness. Harnessing advances in frontier sciences in selected priority areas to attain global competitiveness with larger spin-off benefits to India has to be given focused attention. Therefore support to basic and strategic research i s critical. Similarly, in the context o f development o f marginal and disadvantaged areas, productivity can only be enhanced by technological advancements complemented with institutional and policy support.

The recently ’concluded National Agricultural Technology Project (NATP) pursued technology- led-pro-poor growth, and facilitated the public sector reform for accelerating the f l ow o f agricultural technologies. I t targeted the rural poor, and promoted judicious use o f public resources for areas which are unlikely to get attention o f the private sector. N A T P largely achieved i t s overall objective o f increasing the availability and adoption o f appropriate technologies. The project has been effective in making the Indian agricultural research system more efficient and responsive to the country’s agricultural technology needs, particularly through reorienting research on (i) high priority farming systems in the poorer areas o f the country where poverty levels are high, and (ii) sustainable use o f resources especially land and water. The extension component successfully piloted institutional reforms for farmer-centered market-driven extension systems and i s already taken up for replication on a wider scale throughout the country. The implementation Completion Review Mission o f the FA0 for N A T P has conservatively estimated the project Economic Rate o f Return (ERR) at 29%.

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B. A Brief Overview of the Indian Agricultural Research system

Project Directorates National Research Centres All Coordinated Research Proiects

The Indian Council o f Agricultural Research (ICAR) was established in 1929 to guide and coordinate agricultural research, education and extension. In the 50s and early 60s a consensus developed regarding the need to strengthen technical and human resource backstopping for education, research and extension at the state level through the state agricultural university (SAU) system. A massive set up was created over the next decades. Table 2 presents the current status o f public R&D efforts in the country and Table 3 shows the evolution o f public institutions at central and state levels since Independence. In addition, there are other institutions in central departments o f agriculture, CSIR, biotechnology, fertilizer and chemicals, commerce, etc and in the states which also contribute through dedicated institutions or research programs.

12 31 91

~

Table 2: Institutions in ICAR and SAU’s, 2004 -2005

Central Agricultural University Krishi Vigyan Kendras

I Institution 1 Number 1

1 499

I CENTRAL I

Zonal Coordination Units

National institutes (deemed universities) Other institutes National Bureaus

8

State Agricultural Universities 39

The private sector has been a late entrant. I t s entry began with liberalization o f the seed sector in mid-80s and gained momentum in the late 90s as incentives for private (both domestic and foreign) investment in R&D improved. Already the number o f private players has become significant and accounts for more than 12 percent o f total investments in agricultural research. This i s expected to accelerate.

Resources for Agricultural Research

From Independence till about the end o f the Seventh Five Year Plan, agricultural R&D was o n an expansion path and resources could be generated with ease. The ‘green revolution’ generated support at national as well as international levels. Investment and scientific human resources grew substantially and research institutions and programs proliferated at the central as wel l as state levels.

The fiscal crisis o f the nineties changed the investment scenario. Evidence o n faltering TFP and stagnating production potential prompted a more critical stance on the part o f policy makers and managers o f public funds. The dominant state R&D sector suffered substantial setback in education, research, as wel l as extension components. Ideas l ike prioritization, resource generation, privatization, resource sharing, economizing, and efficiency, swamped the resource

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environment for public R&D. In the wake o f worsening finances, the state system has become critically dependent on I C A R and external grants. The former has resorted to reallocation, economizing, inter-institutional collaboration, external assistance, and severe restraint on recruitment.

I t has been estimated that R&E expenditures grew in real terms (1 999 constant rupees) f rom Rs. 2.7 b i l l ion in early 1960s to Rs. 20.8 bi l l ion by the end o f 1990s. Research intensity also increased significantly. Contrary to the expectation that state (local) institutions would gain more importance over time, there appears to have been increasing centralization-the share o f the states in total R&E investment has fallen f rom 69 percent in 1971 to 50.5 percent in 2000. Local (state) institutions have failed to emerge as the major champion and supporters o f R&D. Table 4 shows that while central investments have stayed more or less on course, the pattern o f investment has been more irregular for the states.

A significant development over the last decade has been the growing importance o f private sector. I t now accounts for nearly 13 percent o f all agricultural R&D expenditure. This i s expected to grow rapidly. The implications o f this have so far been discussed in terms o f complementarity and partnership.

Scientists and institutes

Table 4 presents the total numbers of institutions and scientists. I t puts the total number o f scientists in the country at about 22 thousand in 2001-02, o f which nearly 97 percent are in the public sector. The SAUs account for 62 percent, and with nearly 50 percent share in total R&E expenditure, the I C A R accounts for one-fifth o f the scientific manpower resources. 23% percent o f a l l R&E institutions in agriculture belong to the ICAR-SAU system. These account for 83 percent o f agricultural scientists.

Off ic ia l estimates of the number of agricultural scientists in the country are not available. Recent assessment suggests that while the central system (ICAR) has been able to ho ld on, the SAUs have lost scientific strength since the nineties. Between 1992 and 2002, the number o f scientists in agricultural universities has declined by about 24 percent (estimate), but the number o f agricultural (and allied) universities has grown from 28 in 1990 to 34 in 2004. The new units have largely been occupied through redeployment and this has often undermined the critical-mass needed for effective teaching and research.

The ‘other’ public category includes not-for-profit organizations, NGOs and voluntary organizations. Private agricultural colleges, KVKs, research-oriented NGOs and agricultural research institutions supported by other ministries are included here. Because these are narrowly mandated, the average number o f scientists per institution i s very small. In the private sector too the number o f institutions was large but the share in human resources was only 4.3 percent. This i s expected to change as private R&D institutions, after building organizational and physical infrastructure, direct their expansion through human capital. It should be noted that these accounted for about 13 percent o f total financial investment by the early nineties.

Accordingly, Table 5 shows that more than 82 percent o f institutions account for only 14.3 percent o f the scientific manpower; in fact, one-fifth o f the institutions average only one scientist per institute. These have obviously yet to establish their viability. The table also shows that while the institutional structure i s overwhelmed by small units, most o f the scientists are concentrated in a few large units. Only 15 institutions (14 in the S A U group) account for nearly 47 percent o f the scientific manpower.

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4

-r 3 - If 3

Table 4: Agricultural Research Institutions and Scientists in NARS: 2001-02

SAU Other Public

Private

Category No. o f

Total Public 2092 1

32 13633 426 317 2749 9 117 94 8 8

Total

I Total(1ndia) I 556 I 21869 I 39 1

556 (100.0) 21773" (100.0) 39

Table 5: Distribution o f Institutions by Size Categories: 2001- 2002

INSTITUTIONS

I 10 (1.8) I 7817 (35.9) I 782 I

Nearly 65 percent of the scientists in the country are placed in 29 institutions-26 o f these are state universities. Other ICAR institutes have modest and viable numbers in most cases. The average size in the 'other' public and private categories i s significantly lower. Nearly 95 percent o f the miniscule units belong to the NGOs and private group. In fact, 263 units (about 47 percent) employing 3.5 percent scientists had less than 5 scientists each.

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Attributes of Scientists

Table 6 shows that the average age o f scientists i s 44 years8. The core component o f NARS- ICAR and SAUs, i s older and the private research system i s the youngest. Near ly 3 1 percent o f a l l scientists are above 50 years o f age. With this age structure, the average rate o f attrition through 2010 works out to be 3.5 percent per annum. The high average age for N A R S scientists has been attributed to faltering recruitment.

Table 6: Qualitative Attributes o f Scientists

*Estimated from age partitioning o f current data.

T w o important trends emerge from this. Firstly, the NARS wil l get smaller, i f recruitment rates are not jacked up. Technological challenges and opportunities are increasing and even with rapid growth in private sector efforts, manpower needs will continue to rise. Secondly, induction o f younger scientists will be necessary to maintain and raise research productivity. The average age i s approaching the level at which productivity as wel l as enthusiasm starts declining. B o t h these factors have long-term implications and need positive policy response.

Gender sensitivity and affirmative action have become important in recent times. The table shows that despite this, women scientists barely account for 12 percent o f the total scientific strength. The proportion i s even smaller in the private sector. The proportion o f women scientists in the public systems has more than doubled over the last 25 years; in private sector too the trend i s rising.

Ski l l and experience levels o f scientists are presented in Table 7. More than two-third o f a l l agricultural scientists hold doctorate degrees and have 17 years o f experience o n an average,

This was by the year 2002. Given low recruitment rates the average i s most probably two or more years higher in 2005

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Description

# 48 scientists have not mentioned their experience * 38 Scientists o f SAU have not ment ioned their degree

ICAR SAUs Other Public Private Average

The private sector, which i s relatively young, lags significantly behind in this regard, It has apparently taken a more flexible and market oriented approach.

Tables 8 gives an idea o f the disciplinary mix in the agricultural research system. In all, 116 disciplines are represented in the system. In the above tables, these have been grouped in eight categories. Crop sciences, resource management, and animal sciences related disciplines are dominant, and account for nearly 70 percent o f agricultural scientists in the country. Their share i s two-thirds or more in all public institutions. In the private sector, the distribution i s narrower: crop sciences account for more than 54 percent and, together with resource management, these account for nearly 83 percent o f the total scientists in the sector. Animal science disciplines are not favored in this sector, and so are fisheries, engineering, and social sciences.

Table 8: Disciplinary M i x o f Scientists (Percent)

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Annex 2: Major Related Projects Financed by the Bank andlor Other Agencies

INDIA: National Agricultural Innovation Project

Project category

Latest supervision (ISR) Ratings

Project Title (Bank Financed Implementation

1 Ongoing

iculture Competitiveness

S M S

lrojects only) Development

Objective

S

MS

-- I

I I Knowledge and Information System - 1

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Annex 3: Results Framework and Monitoring

INDIA: National Agricultural Innovation Project

Overall Coordination of Monitoring and Evaluation activities

Project monitoring and evaluation (M&E) will be carried out as three separate but distinct efforts. First, concurrent monitoring wi l l be the responsibility o f a Project M&E Consultant who wil l be charged with responsibilities o f the day-to-day M&E operations. Second, project monitoring and evaluation cells (PME cells) wi l l regularly monitor and report on the project’s physical and financial inputs and outputs, at the consortia level. Third, an independent entity wi l l be charged to carry out comprehensive outcome focused impact evaluations o f N A I P at three stages - baseline, second mid-term review and project completion.

The institutional structure o f the M&E process will fo l low the overall organizational and governance structure o f NAP. The primary responsibility for M&E will be with the PIU, led by the ND and assisted by the national coordinators (NCs), and the finance and procurement officers. The PIU wil l report to NSC and P M C on M&E issues and wil l inform O&MPC and RPC. The monitoring effort wi l l lend support to: management in i t s day-to-day operations; developing a project monitoring and tracking system (PMTS); development o f information networks, provide support to the overall N A I P communication dissemination effort; business development and planning; learning and capacity building; and consortium activities in developing concept notes into full proposals. The M&E system wil l identify problem areas at national and consortium level, help management to administer project processes, aid project design and implementation, help make mid course corrections, and help the project achieve i t s overall development objective.

At the National level. The primary responsibility for monitoring evaluation and reporting will rest with the P M E Consultant, who will report to the N C o f component 1. The M&E Consultant’s f i rs t charge will be the design o f a PMTS for NAP implementation within the overall management framework for NAIP. The M&E Consultant will also be responsible for assisting the NSC, PMC, P I U and to help coordinate the M&E related information needs o f the four NCs. The M&E Consultant will have hisiher work program cleared by the Chairman o f the National Steering Committee. Specific other responsibilities include:

-Conducting the benchmark survey for NAIP as a whole Coordinate with PIU staff reporting processes Consolidate reports and contribute to the overall NAIP reporting requirements Provide guidance to monitoring and evaluation activities o f the consortia Contribute to the further development o f management information systems in NAIP Ensure gender-oriented monitoring at national and consortium level

At the Consortium level. A Consortium Monitor ing Unit (CMU) will be established in each funded consortium. The C M U will report directly to the Consortium Leader. The work program o f the C M U will be developed in consultation with the National Coordinator 1 at the PIU and approved and cleared by the chairman o f the CAC.

M&E officers in the consortia will be responsible for (but not be restricted to): 0

0

e

Preparing an M&E work plan and budget; Preparing ha l f yearly and annual reports; Undertaking regular f ie ld tr ips to introduce and document key M&E practices;

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0

0

0

0

0

Preparing and submitting hal f yearly and annual monitoring and supervision reports; Planning and developing P M E related training programs; Designing and conducting M&E exposure sessions; Assisting the consortium leader in al l matters relating to M&E planning; and Supporting and assisting in World Bank and NAP supervision visits.

Monitoring and Evaluation o f Outcomes and Results

NAP wil l develop a results-based M&E system that wi l l monitor project processes using the following methods and tools:

A well defined Results Framework that i s derived from clearly defined goals, objectives, outputs and activities with corresponding indicators, means o f verification and key assumptions;

0 A w e l l defined M&E strategy regarding information requirements, tools and methodologies for data collection, analysis and reporting;

0 A comprehensive M&E plan with clear roles and responsibilities with respect to data gathering and reporting; and

0 Internal and External periodic assessment and evaluations which include baseline studies, beneficiary assessments, mid-term evaluations, ex-post evaluations and impact evaluations

0

M&E and Performance Indicators. Monitoring indicators will be consolidated by the P I U and used to update the key performance indicators for the project. These benchmarks would be developed during the baseline study and further refined as necessary by the PIU and consortia advisory committees during project implementation. Field level implementation would be independently monitored by CMUs, in consultation with PIU, by: (a) intensive regular periodic monitoring; (b) regular visits to project sites. As part o f the work plan, the CMUs would also be engaged in impact evaluation studies, including beneficiary assessments, under the guidance o f NCAP. In the disadvantaged areas, farmers, farmer organizations and NGOs assisting with implementation o f the project would also be involved with monitoring and evaluation activities. Private sector participation in consortium activities would also be monitored by the CMUs.

A wel l equipped and suitably trained central unit at the national level will be responsible for guiding the overall M&E effort within the project and vis-a-vis partners, plus providing timely and relevant information to NAP management team, stakeholders and project partners. This will require close coordination and communication with those in-charge o f M&E in the consortia, the NSC and the ND, external consultants and f ie ld staff where appropriate, as wel l as members o f external M&E missions.

Each consortium wil l be required to establish i t s own M&E capacity and to design i t s own M&E plans. This will be la id out in the “Guidelines for Consortium Development”. Issues that will be addressed by a l l consortium M&E groups are: consortium formation and management; research plan preparation and implementation; knowledge management; capacity building; product development and technology transfer; financial management; procurement; and impact evaluation. In addition, consortia can add further indicators as required by their own unique nature. The CMU wil l report to the Consortium Leader and the Consortium Advisory Committee,

Institutional Arrangements. The operational responsibility for planning and coordinating M&E activities would rest with the PIU, with one NC responsible for overseeing this activity. The P I U would utilize a computerized project tracking system to monitor progress and to link with

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monitoring activities within the participating entities at the national level as we l l as at the consortium level. At the consortium level, P I U would be assisted by the CMUs.

Reporting Arrangements. The P I U would submit to the Bank: (a) up-to-date physical and financial expenditure data compared to annual and end-proj ect targets; (b) updated indicators o f project performance compared to annual and end o f project targets; (c) successes and problems encountered during the reporting period with suggested remedial actions; and (d) social and environmental impacts o f the project

Half-yearly assessment o f the progress for each consortium will be undertaken by the CAC. The responsible N C will consolidate the reports f i om the CACs in the component under his supervision and send them to the concerned TAG which in turn will submit these to the RPC. A Peer Review Team comprising external experts will subject each project at the consortium level to a mid-term review and an evaluation at the end o f the project.

The C M U s would submit to the PIU: (i) quarterly financial and procurement reports summarizing concurrent monitoring observations; (ii) six-monthly reports summarizing project M&E o f preceding six months, cross-cutting issues and recommendations, and updated project indicators and; (iii) three comprehensive reports - the baseline survey and two consortium evaluations (at the project mid-tern review and project completion).

Hal f Yearly Reports. H a l f yearly reports would be prepared by Consortium Leaders and submitted to the CAC. Once approved the C A C would then transmit this report to PIU and make i t available o n the NAP websites. Under the guidance o f the N C 1 the M&E consultant would prepare a consolidated report to include the four components. The final compiled version including the financial and audit reports will be made available to the RPC and to the Wor ld Bank.

Annual reports. Draft annual reports would be prepared by consortia in the following manner. The C A C would appoint a Project Review Team that may include a representative or designate from the PIU. The PRT would then prepare a report and submit i t to the Consortium Leader and the Chairman of the CAC. The C A C would then organize an annual workshop to discuss the report to be attended by the PRT, and members o f the Technical Advisory Group. Afterwards the Consortium Leader will prepare the annual report and submit this through the C A C to the PIU. For each component the responsible N C would then compile an overall annual report. At the same time the M&E consultant under the guidance o f the N C 1 would prepare a report that covers a l l N A I P operations.

At the release o f the overall annual reports, an annual N A I P level workshop wil l be organized. This would be a two day event. The f i rs t day’s program would consist o f concurrent component discussions. Participants at this event wil l include the C A C Chairmen, TAG and O&MAG members, the NC, and the consortium leaders. The second day would consist o f two separate sessions. Session I would focus on technical issues while session I1 would deal with administrative issues. The technical sessions would cover M&E operations, work program issues and reporting effectiveness. Based on this session and the sessions o f the day before, a comprehensive annual report will be compiled by the ND and submitted to the P M C for review and comments. The report wi l l then be made available on relevant web sites ( I C M S A U ) and submitted to the Wor ld Bank. The workshops for the third and last year o f the project will coincide with the second MTR and end o f project review missions.

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Implementation arrangements for monitoring o f components 2,3, and 4

M&E will focus on the measurement o f outputs and outcomes as well as the quality o f the management processes in the consortia. Output categories concern the new technologies that have been made generated through the consortia (improved varieties and breed; management practices), the new knowledge that has been generated (publications and reports) and the knowledge sharing and capacity building that the consortium i s engaged in (training events, dissemination events, website development). Outcome categories concern how the activities o f the consortium are affecting their target domains (the availability and use o f new technologies and o f other mechanisms to improve the production to consumption systems or the rural livelihoods; the capacity to collaborate and engage in partnerships, the scientific capacity o f the agricultural research system). The monitoring o f management processes will concern decision making procedures in C A C and CIC, the extent o f inclusiveness the consortium, the internal procedures for overcoming differences o f opinion and conflict management, and the quality and timeliness o f financial management and procurement.

Data Collection and System Development Efforts. Consortium members would assume the primary responsibility for collecting data to update the inputioutput indicators. The data would be consolidated and managed by PIU. The CMUs would assist the PIU to develop a computerized plan for the project. For the concurrent monitoring and impact evaluation studies, the CMUs would be primarily responsible for data collection and collation, using independent surveys, and for report preparation. Preparation o f evaluation studies for different components would be an ongoing process culminating in one major interim review o f the project (just prior to the second MTR) and a final project completion review. A baseline survey would be carried out by an M&E consultant in coordination with the implementing entities. The survey would be completed and a draft report prepared within six months o f project effectiveness. Questionnaires and formats for this survey should be prepared within one month o f the award o f the M&E contract, pre-tested in the field, and cleared with the P I U pr ior to any actual data collection efforts.

An on-line Project Monitoring & Tracking System (PMTS) wi l l be developed to collect and process M&E related information. The proposed system will be used to facilitate the capture, storage and retrieval o f a clear, quantified and operational baseline data; to track the progress of various projects under components 2, 3 and 4 on an on-going basis; to monitor the progress o f the overall NAIP project; to regularly assess the performance o f project staff; and to evaluate the output and outcome at mid-term and pr ior to completion. The PMTS would be developed in house and will include modules for outreach and dissemination information, activity profiles, monitoring and evaluation and performance measurement.

A score card will be developed for the purpose o f comparing the performance o f the consortia on an annual basis. The score card results wi l l be made available o n the NAIP website.

M&E process. Each consortium will go through roughly three phases: (i) An ini t ia l phase of six months for pre-project activities in which the focus wil l be on needs analysis, orientation and sensitization o f people, and identification o f targets and suitable output and outcome indicators; (ii) project implementation per se; and (iii) a final phase o f six months for post-project activities in which reports containing information o n outputs, outcomes, dissemination, and success are brought out; and in which planning for follow-up activities (continuatiodfurther expansiodcommercialization) i s finalized.

36

PDO The specific objective i s to accelerate the collaborative development and application o f agricultural innovations between public research organizations, farmers, private sector and other stakeholders Component 1: I C A R as the catalyzing agent for management o f change in the Indian N A R S

Component 2: Research on production to consumption systems

Component 3: Research on sustainable rural l ivelihood security

Component 4: Basic and strategic research in the frontier areas o f agricultural science

Table 1: Results Framework Outcome Indicators

The number o f partnerships between public research system, private sector and other stakeholders Increase in agricultural innovations by end o f the project

A substantial increase in the number o f knowledge products and public awareness messages that the system shares with others Business development units wi l l be established in five ICAR institutes/State Agricultural Universities (SAUs) The I C A R system has an enhanced capacity for pol icy analysis, planning and advice ICAR has enhanced financial and procurement management capacity

Number o f technologies that have been jo in t ly developed between consortia partners

mechanisms in the selected production to consumption systems

developed

Improved quality management

Number o f public-private partnerships

Number o f technologies developed and tested in interaction with target groups Increased rural employment opportunities The number o f farmer organizations engaged in defining and implementing collaborative research

Number o f publications o f Ind ian agricultural scientists in high quality journals Number o f patent applications

Use of Outcome Information PY2: Make adjustments to pol icy re form agenda

b PY3: Address capacity bui lding issues

b PY4-5: Determine success o f project and make recommendations for future interventions PY2: Review decision making structures while addressing component strategy PY 3: Identify newer models that wou ld increase sharing information across the network PY 4 - 5: Address capacity issues and provide guidance o n research strategies, market linkages

PY1-2: Determine progress by consortia for improvement o f value chains, strategy and interventions.

amongst institutions can be increased

PY3: Determine if collaboration

PY 1 : Determine progress and address issues to overcome slow progress Determine if interaction with target groups i s effective PY2: Determine if strategy needs to address inadequacy o f supply and services. PY2: Determine progress to address issues related to scientific publishing.

management strategy needs to be re adiusted

PY2-3: Determine if IP

37

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Annex 4: Detailed Project Description

INDIA: National Agricultural Innovation Project

Project objectives

The general objective o f the project i s to contribute to the sustainable transformation o f the Indian agricultural sector from a food self-sufficiency to a market orientation in support o f poverty alleviation and income generation. The specific objective i s to accelerate the collaborative development and application o f agricultural innovations between public research organizations, farmers, private sector and other stakeholders.

The project design responds to the rapidly changing conditions in and around Indian agriculture. While Indian agriculture remains the mainstay for many poor people who are dependent upon agriculture for their livelihoods, the constraints and opportunities are changing quickly. Rapidly evolving urban demand provides opportunities to increase incomes and reduce poverty through diversification and value addition opportunities. Changing trade regimes require enhanced competitiveness. The agricultural resource base (water availability, land quality) i s under threat. The Indian agricultural research system has contributed largely to agricultural development in the past, but lately i t s impact i s coming under scrutiny. There i s a feeling among many players in the agricultural sector that the system requires different ways o f working that emphasize wider partnerships to realize impact.

Component 1 : ICAR as the catalyzing agent for management of change in the Indian NARS (approximately U S $ 4 6 million)

The objective o f component 1 i s to create an enabling environment for the management o f change in the Indian Agricultural Innovation System. The major road blocks for meeting the objective o f this component are: (i) institutional rigidity in terms o f outdated decision making structures; (ii) absence o f institutional and policy arrangements for participatory development and management models; (iii) inadequate capacity and policies to guide research; (iv) l o w visioning ability o f the system; and (v) absence o f models for sharing information and knowledge with the vast network o f stakeholders.

The innovative approaches to reforms and capacity building o f the N A R S wil l be taken up in a limited number o f organizations so that the models that w i l l be buiit can be thoroughly validated before mainstreaming throughout the NARS. Component 1 will be implemented through 6 sub- components.

Sub-component 1.1 Information, communication and dissemination system. ICAR, under NATP, has created an estimated 5000 internet connected nodes in about 300 institutions/centers including I C A R institutes, National Research Centres (NRC), Project Directorates (PDs), Regional Research Stations, State Agricultural Universities (SAUs), Zonal Research Stations and Colleges o f SAUs with connectivity ranging from 128 kbps to 2 Mbps. Making them fully functional w i l l require major attention. The following thrust areas have been identified for strengthening Information and Communication Technology (ICT) and communication activities.

Strengthening ICT infrastructure and its application. Hardware at the nodal points o f the I C A R network will be upgraded. The security system o f the network wi l l be strengthened. Training programs will be implemented to ensure an effective use o f the system. A program will be put in place to further develop databases, data warehouses, expert systems, web-based extension and

45

public awareness systems, and search engines. A knowledge management system will be put in place that integrates Agricultural Technology Information Centers (ATICs), district agriculture science centers (KVKs) and village knowledge centers. A centralized data center and national portal will be established. Virtual class room systems plus the required human support for distance learning wil l be established at five places. 42 libraries o f SAUs and ICAR will be converted into fully electronic libraries connected over the ICAR network. Consortia wi l l be established for centralized and negotiated e-journal subscriptions. I C A R and S A U libraries will be l inked with international and other national library systems to obtain access to their collections. L ibrary staff will be trained in e-library management.

Strengthening of communication and public awareness capacity. I C A R wil l develop platforms through which it can collect information on problems in agriculture f rom farmers, extension experts and other sources. These same platforms w i l l then be used to provide answers to these problems. ICAR’s capacity to produce information for different types o f media (digital video, digital audio, multimedia CDs, radio and television programs, audio-visuals, e-journals) will be strengthened. A series o f journals that I C A R i s currently producing only on paper will be made available on the web. ICAR’s websites (at the center and at the institutes and SAUs) will be further developed and integrated. T o enhance the dialogue and interaction with the public at large and with the farming community in particular I C A R will start contributing on a regular basis to .semi-technical journals, will revamp i ts own in-house journal ( ICAR Reporter) and will increase i t s engagement with audio-visual media. In all these initiatives major emphasis will be placed on interaction with the public, rather than dissemination per se. Finally, ICAR wil l develop information sharing mechanisms for commercially viable technologies and for the outcomes o f i t s policy research (websites, direct mailing lists), and will engage actively in identifying new research demands from these groups.

Sub-component 1.2 Business planning and development. With a view to promoting partnerships for new technology with entrepreneurs and start-up companies, the capacity for business planning and development will be strengthened. Enterprise development cells will be established in 5 places in ICAIUSAUs. These cells will also contain incubator units. The idea i s to encourage, nurture and support technologists and scientists with potential to turn their innovative research ideas into sound commercial ventures.

One apex technology management and enterprise development cell (at ICAR) and 4 regional cells w i l l be established. The apex cell will be adequately empowered to cany out intellectual assets validation, valuation, protection and management. The cell will be headed by a person o f high seniority and standing in the agricultural research community with adequate expertise in IPR. The regional cells will be headed by competent technology management professionals well trained in the area o f IP review, IP registration, technology valuation, licensing processes, royalty audits, communication and outreach efforts, dispute resolution and enterprise incubation. In al l centers the Enterprise Development Cell will contain an incubator. In these cells major emphasis will be put on developing procedures for validating and up-scaling technologies to commercial use. The cells wi l l organize and participate in international, national and regional business promotion meetings, and will facilitate consultancy services

Formulation of policies and guidelines. Standard models for partnerships wi l l be developed in collaboration wi th private sector and other organizations and wil l be revised and improved upon during the course o f the project. Intellectual Property Right modalities will be explored in collaboration with STEM (the Indian Society for Technology Management). A national information network for technology dissemination and a central pool for storing technology

46

profiles will b e created. Institutional manuals and policy documents to guide the operation o f the business development units and the incubators will be developed.

Human resource development on legal, IPR and business management issues. In collaboration with organizations like the Indian Society for Technology Management (STEM) training courses on technology transfer and business development will be designed, focusing on topics such as marketing, business acumen, economic technology valuation, licensing, and management o f business development units. About 100 scientists, experts, senior managers and lawyers will be trained in India in collaboration with organizations such as and the Indian Institutes o f Management. About 20-25 technology managers will be selected for internships o f 4-5 months with leading organizations l i ke U S D A and Cornell, Wisconsin, Purdue and Wageningen universities. Up to 20 senior technology and policy managers will be sent for short orientation or exposure visits.

Sub-component 1.3 Learning and capacity building. Learning and capacity building (L&CB) i s proposed for all participants in the institutional development, research and innovation activities that will be undertaken in NAP. L&CB activities will be concentrated across al l 4 components and in most o f the sub-components. The training in this sub-component concerns: (i) the specific needs to support the development o f the ICAR system to be the catalyzing agent o f change in the Indian agricultural innovation system; and (ii) The training needs that cut across al l the consortia, The following activities will be undertaken:

Training needs assessment for supporting institutional change and for the effective operation of the NAIP consortia. Strengthening the ability o f the ICAR system as a catalyzing agent of change will require major skill and attitude changes among staff. A preliminary assessment suggests that i t will be essential to complement scientific sk i l l s and attitudes with managerial and communication sk i l ls and attitudes. A training needs assessment wi l l be undertaken to identify specific fields that require attention. In similar vein the sk i l l s and attitudes required for the proper functioning o f the consortia will be assessed. In addition to training needs in the fields of procurement and financial management, topics such as consortia management, multi-disciplinary research management and conflict management may be selected for training programs in NAP.

Development of training materials and trainingprograms. In collaboration with external partners the National Academy for Agricultural Research Management (NAARM) and other I C A R organizations will develop training materials and training programs and wil l plan an N A I P training schedule.

Implementation of training courses and of individual training plans. Through a series of classroom, distance learning, e-learning and individual training plans 3000 to 4000 persons will be targeted. While a majority o f the people will be trained in classroom and distance learning modes within India, selected persons may pursue individual training in India or abroad (for example, by participating in a management course o f an IIM), while selected groups may receive training abroad.

Follow-up. With the leadership o f NAARM an approach will be established to follow-up on the utility o f the training and on the application o f the new sk i l l s in the workplace.

Sub-component 1.4 Policy and gender analysis, and visioning. Sustainable food security and agricultural income enhancement i s critically dependent on an appropriate long-term pol icy framework. Through NAIP, I C A R wil l strengthen i t s position in India’s agricultural policy arena, with three intents to: (i) influence policy making towards decisions that favor the dissemination

47

and adoption o f agricultural innovations; (ii) ensure that ICAR's program o f research i s understood by policy makers and i s compatible with the policy objectives that the country pursues; and (ii) strengthen the role o f women in research decision making and as target beneficiaries o f agricultural research. A scenario analysis on the future o f Indian agriculture that was undertaking during project preparation will provide this subcomponent with a head start. Major activities in this sub-component are:

Visioning. The main focus o f this program w i l l be on developing long term perspectives and long term research goals in the context o f a rapidly changing global environment. Capacity for developing vision for agriculture and agricultural science and for sharing i t with stakeholders wi l l be strengthened. The ability to plan and implement research programs to realize the vision will be developed.

Impact assessment. To participate in the policy arena, I C A R must strengthen i t s understanding o f what research and technology are contributing to agricultural development. For this purpose capacity building activities for agricultural research evaluation and impact assessment will be undertaken. The impact o f ICARiSAU schemes and frontline technologies will be assessed, and policy and institutional support measures to accelerate the impact o f technologies will be identified. Many o f these activities wi l l have a specific gender dimension.

Technology forecasting. Rapid developments in other fields o f science l ike space, telecommunication, computer science, molecular biology, etc have profound applications on agricultural science and technology. There i s a need for assessing their impacts on agricultural R&D system. For this purpose the project will support the assessment o f technologies in the pipeline, the review o f developments in other fields o f science for agricultural R&D, the estimation o f human capital needs and the development o f forecasts on the technological requirements for sustainable agriculture.

An information system on women in agriculture. An information base wil l be created with disaggregated data on rural women's demographic, economic, political, cultural and social status as wel l as with data on their participation in agricultural, household and other activities.

Assessing the decentralization of agricultural research. W h i l e the central I C A R system has strengthened over time in terms o f institutions, human resources and funding, the state systems may have grown in number o f institutions and activities, but have withered in terms o f resources. There i s a need for exploring and developing role models for both national and state partners and for defining the modalities o f their interface. Stakeholders will be sensitized about the roles o f the central and state systems, and policy measures to strengthen their respective roles and foster the interface will be identified.

Sub-component 1.5 Remodeling financial and procurement systems. The Government o f India has initiated changes in the regulations o f financial, banking, trade and public sector institutions. The philosophy i s slowly changing to one o f partnership in development and growth, trust and mutual respect, delegation and accountability, transparency o f operations and responsibility sharing, away from suspicion, distrust, unnecessary bottlenecks and complicated rules and procedures. I C A R wil l gear up i t s administrative and financial machinery to effectively and efficiently enhance the delivery systems to this new context, using i t s statutory freedoms while recognizing i t s public accountability. NAP will support an in-house initiative within I C A R to review financial, procurement and delegation rules and procedure in order to increase the agility o f i t s operations. The initiative will focus on the framing o f financial, and procurement rules and delegation o f power; the development o f a ProgrardProj ect Based Budgeting system;

48

and the training a large number o f administrative and financial staff o f N A R S for their effective support in research organizations, along these new principles o f management

This activity will then be complemented by the implementation o f a Financial Management Software System. A web based Financial Management System having broad coverage o f the I C A R system will be developed. An o f f the self-software will be identified and will be customized according the needs o f the ICAR. The system wil l be developed on a universally tested software platform l i ke S A P or Oracle. The system will be an integration o f an accounting system with a procurement management system. The system will allow retaining a full set o f accounting data in standard accounting format. The FMS wil l be f i rs t implemented for NAP at the P I U and in the consortia and after that it will be expanded to I C A R Headquarters and i t s institutes. Capacity building activities to prepare finance and administration staff for the new system wil l be designed and implemented. In the second stage the system will integrate the Pay Role Package, Inventory management, Research project management, Personal information system, Library information system, M&E system and knowledge management related modules.

Sub-component 1.6 Project implementation unit. The management and the activities o f the Project Implementation Unit and the project’s governance and management activities are incorporated as sub-component 1.6.

Component 2: Research on production to consumption systems (approximately US$75 million)

The specific objective o f this component i s to establish market-oriented collaborative research centers for sustainable improvement o f selected agricultural production to consumption systems (PCS). This will be achieved by encouraging different organizations (public, private, NGOs, farmers groups, international organizations, etc.), which are involved in producing, harvesting, processing and marketing of a particular product, to j o i n forces in a consortium framework and compete for funding aimed at improving the profitability and the sustainability o f the product’s PCS. The system also includes the technologies used to grow and process the material, as well as the social, institutional and economic environment in which these processes operate. Partnered organizations will be jo int ly responsible for the governance, design and implementation of research programs, and the application o f resulting innovations on-farm and through out the PCS.

About 15 consortia will be selected from across sub-sectors o f Indian agriculture. The concept i s that few but wel l financed consortia will be able to galvanize greater interest f rom different value chain partners, and enhance collaboration and openness which i s key to capturing integration and economies o f scale benefits.

Indicative subject matter fields. Four criteria have been considered in the identification of subject matter fields for research consortia for the improvement o f production to consumption systems: (i) changing preferences o f consumers; (ii) government’s priorities for enhancing food security, increasing income, and generating employment; (iii) export promotion and import substitution; and (iv) potentially important new agricultural activities.

An indicative l i s t has been prepared, with five subject matter fields and (purely) indicative examples o f potential subjects for PCS consortia development:

Food security and income augmentation Sorghum in the semi-arid tropics Rice in rainfed and flood-prone areas

49

Agro-processing 0 Potato 0 Tomato 0 Dairy products 0 Citrus f ru i t s (orange)

0

0 Peri-urban dairy 0

0

0 Marine fish

0 Organic rice 0

0

0

0 Gherkin 0 Flowers 0 Aromatic & medicinal plants

0 Bio-pesticides 0 Organic farming 0 Bio-fuel

Income augmentation and employment generation Milk and milk products in rainfed areas

Poultry in southern and eastern India Small ruminant meat in Arid & SAT

Export Promotion

Fruits viz, mango, grapes etc. Spices & value added products High-value fish (lobsters, pomfrets, tunas, crabs) and mariculture

Resource use eflciency (Innovative environmentally friendly PCSs)

vis-a-vis milestones Comprehensiveness o f the mechanism for dealing with a l l legal issues including benefit and knowledge sharing and dispute settlement Documentation and commercialization and sustainability plans

Scoring system for consortium selection. The following weighted scoring sheet (Table 1) or an improved version o f it may be used by the Research Program Committee to rank proposals for the improvement of production to consumption systems and to come to a final judgment. Practicality and measurement considerations may lead to some further simplification o f the scoring system. The scoring sheet will be made available on the NAP website.

0.05

0.05

environmental and gender equity issues Clarity and comprehensiveness o f the deliverables I 0.10

50

Relevance and reasonableness o f demand for the items under different heads o f expenditures and the respective costs Human capacity building plan in the proposal Total

Component 3: Research on sustainable rural livelihood security (approximately US$73 million)

0.05

0.05 1 .oo

The core objective o f this component i s the sustained improvement in the incomes and wellbeing of farm families in mainly rain-fed, hill and mountain, dryland and coastal areas which have been left behind in development. This would be achieved by encouraging different organizations both in the public and private sector with capacity to address specific issues in the concerned agricultural production systems to collaborate through forming “Consortia”, and make these compete for funding aimed at enhancing productivity, profitability and sustainability. These consortia would bring together farmers and other client groups, agricultural service providers in research and extension, private sector companies involved in input provision, processing and marketing, NGOs, ongoing agricultural development projects, etc. Through N A I P they would be provided with the required incremental capacity to address urgent Research and Development (R&D) issues in a holistic and integrated fashion. About 20 livelihood-oriented R&D consortia would be financed and no more than hal f o f the available funding would be assigned through invitation or direct sponsorship.

State Andhra Pradesh

Arunachal Pradesh Assam

Bihar

Chhattisgarh

Gujarat

Selection o f disadvantaged areas. Selection o f disadvantaged areas i s in i t ia l ly based on a l i s t o f 150 districts selected by the Planning Commission based on three criteria: agricultural productivity per worker; agricultural wage rate; and scheduled casts and tribes population (see Table 2).

Districts Adilabad, Mahbubnagar, Rangareddy, Khammam, Warangal, Nalgonda, Anantpur, Cudappah Upper Subansiri. Kokrajhar, North Cachar Hills, Karbi Anglong, Dhemaji, North Lakhmipur Araria, Vaishali, Gaya, Madhubani, Muzaffarpur, Nawadah, Samastipur, Sheohar, Katihar, Jamui, Lakhisarai, Monghyr, Pumea, Supaul, Darbhanga Bastar, Dantewada, Kanker, Koria, Sarguja, Jaspur, Dhamtari, Raigarh, Bilaspur, Rajnandgaon Dangs, Dohad, Panch Mahals, Sabarkantha, Narmada, B anaskantha

Table 2. L i s t o f 150 disadvantaged districts identified by the Planning Commission, Govt. o f India

Haryana Himachal Pradesh Jammu & Kashmir Jharkhand

Karnataka Kerala

Satyamev Puram Chamba Doda, Kupwara Saraikela, Singhbhum West, Godda, Simdega, Gumla, Chatra, Garhwa, Palamau, Latehur, Lohardagga, Dumka, Jamtara, Sehebganj , Pakur Chitradurga, Davanagere, Bidar Wayanad

51

1 Madhya Pradesh

Maharashtra

Manipur Meghalaya Mizoram Nagaland Orissa

Punj ab Rajasthan Sikkim Tamil Nadu Tripura Uttaranchal Uttar Pradesh

I Hamirpur, Barabanki I Purulia, Malda, West Midnapur, Bankura, West and North Dinajpur, West Bengal

Jhabua, Mandla, Umaria, Shahdol, Barwani, Khargone, Shivpuri, Sidhi, Tikamgarh, Balaghat, Chattarpur, Betul, Khandwa, Seopur, Dhar Gadchiroli, Gondya, Chandrapur, Dhule, Nandurbar, Hingoli, Nanded, Aurangabad, Ahemdnagar, Yawatmal, Bhandara Tamenlong South Gar0 Hills Siaha M o n Koraput, Malkangiri, Nabarangpur, Rayagada, Mayurbhanj, Sundergarh, Keonjhar, Phulbani, Boudh, Nuapada, Kalahandi, Sambalpur, Ganjam, Deogarh, Jharsuguda, Sonepur, Bolangir, Dhenkanal Hoshiarpur Banswara, Dungarpur, Udaipur, Sirohi, Karauli North Sikkim Tiruvannamalia, South Arcot/Cuddalore, Villupuram, Nagapattinam Dhalai Champawat, Tehri Garhwal Sonabhadra, Unnao, Raebareli, Sitapur, Hardoi, Fatehpur, Lalitpur, Lakhmipur Kheri, Banda, Chitrakoot, Mirzapur, Kushinagar, Mahoba,

- _ _ I Murshidabad

Within these 150 districts there are large numbers o f potentially rewarding R&D opportunities for consortia on livelihood improvement. In order for the NAP support under this component to be well-focused, a procedure has been developed to further identify areas where consortium activities are eligible for funding by means o f and Integrated Livelihood Index. The Integrated Livelihood Index i s based on six sub- indices, each with a number o f relevant parameters. The six sub-indices are:

Infrastructure Index. This includes the percentage o f inhabited villages having different types o f communication facilities, percentage o f inhabited village having poor approach roads; percentage villages not linked with roads; percentage o f inhabited villages having post and telegraph offices and telephone connection and percentage villages having different government development programs/ schemes. Agricultural Status Index. Includes productivity o f rice, wheat, pulses, oilseeds, cotton, sugarcane, fruits vegetables per hectare. Other parameters included were productivity o f meat, milk and eggs per animal. Cropping, irrigation and fertilizer intensity are also considered. Nutritional Status Index. This includes the consumption o f rice, wheat, cereals, pulses, eggs, fish, milk and milk products per capita. Economic Status Index: The parameters are per capita income and percentage o f population below poverty l ine. Health and Sanitation Status Index. Indicators considered are per capita expenditure on health, water supply, sanitation and family welfare, and the health sector infrastructure in the district. Food Availability Status. Parameters included are per capita availability o f rice, wheat, pulses, oilseeds, sugarcane, fruits, vegetables, meat, milk and eggs.

Indicative subject matter fields. For this component, subject matter fields have been defined less precisely since the principal focus i s regional. NAP would finance both research and development activities that will focus on improvement o f production systems, enhancing natural

52

resource management (with special emphasis on water), empowerment o f local communities, institutional development within the focus regions, creation o f rural employment opportunities, enhanced household nutrition and food security and alleviating rural poverty. Water and soil management problems may merit special attention in the light o f the worrying trends in water and soil use.

visit b; a designated team) Scientific, technological economical merits o f the proposal

benchmarks Clarity and quantitative rigor o f the benchmark and outcome

Comprehensiveness o f the targets fixed vis-a-vis the

Scoring system for consortium selection. The following weighted scoring sheet (Table 3) or an improved version o f it will be used by the Research Program Committee to rank proposals for rural l ivelihood enhancement in disadvantaged areas and to come to a final judgment. Practicality and measurement considerations may lead to some further simplification o f the scoring system. The scoring sheet will be made available on the NAP website.

0.15 0.10

0.10

Table 3: Scoring system for consortia submissions in Component 3. 1 I t em 1 Weight 1 Score I Weighted 1

I (out o f 10) I Score Strength o f lead institution and the partners (based on site I 0.10

indicators Ex-ante analysis o f the l ike impact on sociological, I 0.05

ough diversification and

Sponsored consortia. The objectives o f the sponsored consortia in Component 3 are two-fold. First, certain identified backward areas may not be represented by the responses to the calls under the competitive program. Secondly, high priority areas o f research for certain locations and problems have been identified which must be addressed with urgency. Priority based sponsored consortia wi l l be taken up under the leadership o f State Agricultural Universities (SAU) because o f the location specific nature of the issues and to create awareness and capacity in the SAUs for responding to later competitive calls. Sponsoring in Component 3 can also work in a l imited competitive mode where, for an identified research area a certain number o f potentially capable institutions are identified and requested to come forward with proposals and partners. Then onwards the rest o f the process i s the same as for the competitive component.

Some sponsored consortia can be initiated almost as soon as the NAP becomes effective. The sponsored consortia will thus generate experience and allow corrective processes with regard to working in consortium mode. Except for the selection o f the problem and the partners, sponsored consortia will follow the regular guidelines, ru les and procedures o f NAP. In case o f deviations, they will be specified in the sanction letters at the moment o f establishing the consortium.

53

Component 4: Basic and strategic research in the frontier areas o f agricultural science (approximately US$56 million)

The Indian NARS not only has to find solutions to the immediate problems o f farming but has also to keep i t s competency in technology development in the forefront to meet a l l continuously emerging anticipated and unanticipated problems. The best o f scientific capabilities will be required to solve a number o f specific but critical bottlenecks, which have been preventing or are l ikely to prevent the Indian agriculture f rom competing globally for certain commodities despite i t s inherent advantages. Some o f these are long outstanding and some have been emerging. Solutions to these problems will require focused and innovative basic and strategic research.

Component 4 will support focused research in these identified and well-defined areas o f frontier science, which will have a bearing on Indian agriculture. The areas o f research have been identified by an intensive process o f consultations among those scientists f rom India and abroad who are the best in their fields o f science and relevant stakeholders. Collaboration o f foreign scientific institutions or individual scientists with global leadership in the relevant areas o f science in the form o f support in human capacity building or direct participation in research will be encouraged. Around 15 consortia in component 4 w i l l be funded.

Indicative subject matter fields. Research consortia wi l l be funded in four subject matter fields that were identified by means o f a scientific consultation process including internationally outstanding scientists. These fields, and examples o f research activities that can be funded in these fields, are:

Genetic enhancement ofplants 0

0

0

0

0

0

0

0

0

0

0

0

Gene discovery, genetic enhancement and allele mining in coarse cereals, oilseeds and pulses, mango, cucurbits, medicinal and aromatic plants, Targetted integration o f genes and organelle transformation Proteomics/ transcriptomics for response to biotic and abiotic stresses Molecular diagnostics for plant pathogens Q T L identification, cloning and/or use in Market Assisted Selection Farmer friendly diagnostic tools for testing purity o f transgenics.

Gene discovery, genetic enhancement and allele mining) in farm animals and fishes Proteomics/ transcriptomics for response to biotic and abiotic stresses Q T L identification, cloning and/or use in Marker Assisted Selection Bioprospecting the marine biota for novel genes, bioactive molecules and products. Stem cell research in fishes and animals Molecular diagnostics and vaccines for farm animals

Genetic enhancement of animals

Natural Resource Management and Integrated Pest Management Research into methods to control the availability and release o f nutrients and carbon pool conservation & enhancement using strategic combinations o f soil and organic & inorganic sources o f nutrients. Research into GIS and l o w cost electronic control systems for taking precision agriculture to small farms and multiple cropping systems in India. Multiple use o f l o w and degraded quality water for agnculture & allied activities Understanding the effects o f climate change on agriculture through an integrated approach to air, water, soil and plants

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0

0

Enhancing nutrient use efficiency in buffaloes and cattle by manipulating rumen microbes and enhancing nutrient qualities o f l ow value fodders. Strategic research into overcoming long standing non-tariff barriers against major Indian agricultural exports, plants animals and fish products

Novel value addition, processing and storage methods for agricultural products and byproducts. Development o f state o f the art animal disease surveillance and control systems

Other important topics 0

0

Scoring system for consortium selection. The following weighted scoring sheet (Table 4) or an improved version will be used by the Research Program Committee to rank proposals for basic and strategic research at the scientific frontier and to come to a final judgment. The scoring sheet wi l l be made available on the NAP website.

Scientific merits o f the proposal including novelty o f

T h e consortium concept common to component 2,3 and 4

A Consortium i s a formal group o f like-minded partners that will carry on a given task by sharing a research agenda and research resources as per an agreed work plan. The success o f the consortium depends on the active involvement o f all the major players involved in i t s field o f agri-business and a harmonious coordination among the members with a high degree o f transparency. The consortium should be need-based and accordingly appropriate partners should be identified to manage a given task. The identification o f the partners for the consortium wil l be dependent on the target groups, socio-economic background o f farmers and participants in the value chain, available infrastructure facilities and the current problems that they are working on. The potential core consortium activities are identified as but not l imited to: 0 Diagnosis: determining livelihood and value addition activities among the target

beneficiaries. 0 Development o f production technologies, e.g., dry-land agricultural practices, IPM, IPNM,

horticulture, livestock, fisheries etc. (components 2 and 3) and the development o f scientific methodologies and new knowledge at the frontiers o f science (component 4).

0 Technological empowerment and transfer o f proven (appropriate) local agricultural technologies.

0 Research on natural resource management: improving water, land and forest management systems, and generating participatory models o f resource management.

0 R& D o f agricultural processing, storage and marketing, e.g., to generate rural employment 0 Research on nutrition and health to improve welfare and human development possibilities.

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0

0

0

0

0

Contributing to build-up o f social capital by organizing farmers in order to obtain feedback on research programs and in order to disseminate results. Pilot scale commercialization o f innovations generated and tested by the consortium. Participation and support to full-scale commercialization and dissemination o f innovations. A large array o f knowledge management activities to share results o f the consortium with the target beneficiaries, the scientific community and the public at large. Implementing training programs for consortium members and for selected target beneficiaries or their representatives.

Consortium partners. The l i s t below i s neither an exclusive nor a compulsory l i s t o f consortium partners, but indicates the range o f partners that may be engaged in a consortium. Research Institutes from in and outside the ICAR system. The role o f the R&D institutes wil l be to identify technologies for value addition in production or post-harvest activities, conservation and efficient use o f natural resources, reduction o f the cost o f production and enhancement o f yields, sustainability, household food secur i ty and profit. International research institutes and research organizations f rom other countries may also participate in the consortia. Financial Institutes: Role o f the financial institutions i s to assess the financial needs and develop efficient lending products for supporting the investments required to implement innovations. Apart from developing financial strategies, these institutes can also develop suitable instruments for providing insurance against crop failures, calamities and personal accidents and health. Farmers and farmer organizations. Farmers w i l l be strongly involved in the governance and orientation o f the consortia. Most production related and primary ago-processing related research wil l be done on farm. Farmer organizations will also be involved in training and knowledge sharing activities. Private enterprises and associations and federations of private enterprises. They will be strongly involved in the governance and orientation o f the consortia and wil l participate in the development and commercialization o f innovations in the fields o f input supply and distribution, processing o f agricultural commodities and marketing, and possibly contract farming. Private research organizations wi l l also be involved in technology generation. State development and extension departments. Many line departments are engaged in supporting agriculture directly or indirectly. They wil l be members o f the consortium on a need basis, principally to develop and support the transfer o f technologies and promotion o f innovative agricultural development, but also to facilitate and participate in on farm research or in processing and marketing experiments. Their participation also contributes to ownership and sustainability after the project period. Voluntary Organizations and NGOs. Many voluntary organizations and NGOs are engaged in natural resource management at the grass-root level, principally by motivating farmers, creating awareness, establishing linkages with information centers and marketing outlets, supplying micro finance, promoting micro enterprises and establishing linkages with the various government schemes. They may be facilitators for transfer o f technology and linkages with various members o f the consortium as well as the development departments. Simultaneously, voluntary organizations can also be entrusted with the responsibility o f organizing the weaker sections of the society to form self-help groups, their federations and various other user groups to make best use o f the technologies and resources, made available by the consortium.

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Description of the call, submission and approval process for competitive grants under components 2,3 and 4.

This section outlines the procedures for developing and submitting research proposals for N A I P funding. They also provide insight into how a proposal will be handled under NAP, i t s submission, examination, review, selection, sanction etc.

The PIU will pursue various means to bring the competitive grant scheme under the attention o f a wide range o f possible target participants. This may include workshops, seminars, electronic media, press and public media especially regarding information on the consortium concept, the NAIP components and scope and the required dimension o f consortium formation.

The formal cal l for research project proposals will then be in two stages:

0

0

Submission and screening o f Concept Note (CN) Development o f Full Proposal (FP)

Staggering of Calls for Inviting Concept Notes and Full Proposals. The calls will be staggered in two rounds and wil l be advertised in the leading news papers, scientific journals, electronic media and through circulars in various leading inst i tutes & organizations viz. public, private, N G O & financial institutions. In the first round the a im i s to approve a l imited number o f 6 consortia and to learn f rom the experience. T o reduce the number o f applications the call will be limited to a few specific topics in each component. The second round will be used to select and approve consortia for the remaining funds. A third round may be called if after the second round there are s t i l l funds available.

Call for Concept Notes. The call for concept notes will be widely disseminated and accompanied by major publicity. A helpdesk wil l be opened at NAARM, Hyderabad, to assist possible candidates in the development o f proper concept notes (both in terms o f form and content) and to assist them in identifying possible partners for their consortium. The helpdesk can be reached by e-mail and by telephone.

The Research Call will address themes that are relevant to the subject matter o f component 2, 3 and 4 respectively and will invite CNs from all possible candidate consortia. The C N shall be submitted on a predefined electronic format (available on the N A I P website) by e-mail. Each C N application wi l l be entered in a register. All C N applications shall be treated as confidential. The call will be accompanied with the results o f the scenario analysis undertaken during project preparation to encourage long term, out o f the box thinking by consortia candidates.

Evaluation of the Concept Note. Each C N will be examined by three peer reviewers and the Technical Advisory Group (TAG) in relation to prescribed criteria. O n the basis o f the marks obtained in the score sheet for the concept note, each concept note wi l l be graded as excellent, very good, good & unsatisfactory. The proceedings o f the TAG meeting on the C N wil l be discussed in the Research Program Committee (RPC) meeting and a decision on i t s approval or rejection will be taken. The Consortium Leaders o f rejected concept notes will be informed that their proposal was not selected. They will receive the comments o f the peer reviewers in case they wish to submit a revised proposal in the second round. Twice the number o f consortia that wi l l be funded will be approved in the f i rs t round and 1.5 times the number in the second round,

Development o f Full Proposal. For approved concept notes, the P I U wil l support and facilitate the development o f consortia by providing travel and per diem funds and facilitating workshops

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as per NAP-ICAR norms. Some additional persons who were not listed on the concept note, but have the capabilities to contribute may also be invited to the workshop. The workshop’s objective i s to arrive at a further elaboration o f the consortium proposal and to identify the contribution o f each and every participant. In the workshop presentations on the general concept o f NAP, i t s structure and goals, research, funding arrangements, monitoring & evaluation indicators, procurement and financial management rules and environmental and social safeguard measures are mandatory items o f the agenda. The availability o f the help desk wil l be brought to the attention o f the consortia. A course may be organized for candidate consortium leaders to explain the requirements and the expectations for the FPs.

In drafting the FP, the team must make a critical assessment o f capabilities o f each collaborating center, technical program proposed and equally important, the requirements o f funds and facilities proposed by individual centers before finalizing the details. Training needs at various levels need to be assessed. The proposal should be developed using the electronic format prescribed on the NAP website.

Submission of Full Proposal. The Consortium Leader will compile proceedings o f the workshop that wi l l include comments, cr i t ic ism & suggestions given by various participants on each proposal. These comments wi l l be considered for modifications, improvement & strengthening o f the proposal by each consortium partner. H e will forward an electronic copy o f the full proposal along with the proceedings o f the workshop by e-mail to the PIU.

Evaluation of the Full Proposal. Full proposals will be evaluated on their expected socio- economic and environmental impact, their degree o f inclusion o f stakeholders, and their multiplier or replication potential. The criteria also include the strength o f the proposal with respect to monitoring and evaluation, impact assessment framework, knowledge management, and capacity building. A third set o f criteria concerns the strength o f the partners in the consortium. A fourth set of criteria concerns the scientific merit o f the proposal. Here the TAG must look for logic, evidence of the proposal’s ability to address a high priority problem, innovativeness, critical gaps and the fe l t need.

The P I U wil l scrutinize the proposal with particular reference to the technical program, i t s relevance to NAP, reasonability o f demands made and overlaps if any, and prepare an information note for the RPC meeting. The Finance and Procurement Officer o f PIU-NAIP wil l also examine the proposal f rom their respective angles The P I U wil l send the full proposal to five peer reviewers (preferably three should be the same reviewers who examined the CN). The peer reviewers examine the suitability o f the complete proposal covering al l the essential and desirable criteria. The peer reviewers will submit their report within one month f rom the date o f receipt o f the FP. A team comprising o f the concerned P I U member along with at least two members o f TAG may make a site visit to the consortium lead center. The concerned N C will f inally prepare a package (including Referees Reports) for consideration o f TAG, who wil l prepare a recommendation for the RPC.

The proposal along with the package prepared by the P I U and the recommendation o f the TAG will be discussed in RPC. The Consortium Leaders o f rejected proposal will be duly informed and will be provided with the comments obtained in the review process. If it concerns the f i r s t round they may be invited to revise and resubmit their proposal in the second round. Table 5 summarizes the procedure and establishes approximate dates for the different steps in the f i rs t call.

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59

Annex 5: Project Costs

INDIA: National Agricultural Innovation Project

Project costs by component and subcomponent

A. Strengthening ICAR 1. Information, Communication and Dissemination System 2. Business Planning and Development 3. Learning and Capacity Building 4. Strengthening NARS for Policy and Gender Analysis 5. Remodeling Financial and Procurement System 6. Project Implementation Unit

Local Foreign Total us us us

$million $million $million

14.67 1.48 16.15 7.41 1.46 8.87 1.88 1.84 3.72 2.92 0.16 3.08 3.14 0.13 3.27 5.20 0.26 5.46

35.22 5.33 40.55

B. Sustainable Improvement in Value Chain 63.60 2.21 65.81

C. Collaborative Research for Livelihood Improvement 62.86 0.70 63.56

D. Basic and Strategic Research 41.17 8.77 49.94

Total Baseline Costs 202.85 17.01 219.86

Physical contingencies 0.82 0.03 0.85 Price contingencies 28.08 1.21 29.29 Total Project Costs' 231.75 18.25 250.00

Total Financing Required 181.75 18.25 200.00 ' Identif iable taxes and duties are US$2.5m , and the total Project cost, net o f taxes, i s US$247.5m.

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Annex 6: Implementation Arrangements

INDIA: National Agricultural Innovation Project

A. Introduction

NAP will be implemented in a decentralized manner and the effective implementation o f competitively financed activities by consortia o f service providers f i om both the public and private sector will require well developed accountability systems: once the implementation agreement has been signed, the parties involved assume faithful implementation according to the letter o f the contract unless proven otherwise through retro-active accountability; under NAP, “control i s traded for accountability”.

Successful implementation o f NAP will require frequent and intensive interaction with a broad array o f N A R S clients and stakeholders, including those from the farm and private sector. The structure and bodies that will be set up to facilitate this and to ensure smooth and effective project implementation are discussed in brief below. Because openness, transparency, rapid communications and feedback are of crucial importance to achieving the project’s multi-faceted objectives, internet-based linkages between all project entit ies and stakeholders wi l l be put in place from NAP start-up.

B. NAIP Governance and Selection Bodies

A “National Steering Committee” (NSC) o f key stakeholders in the N A R S will be established by the I C A R to serve as the national apex body responsible for overseeing a l l aspects of NAIP. The NSC will set policies and provide guidance to ensure the timely achievement o f the main goals o f the project. The NSC will principally provide guidance to the Project Management Committee.

The “O&M Program Committee ” (O&MPC) wil l be a multi-disciplinary panel responsible for selecting and awarding of activities, and oversight o f implementation o f Component 1. O&MPC wil l also guide the effective and efficient implementation o f activities in component 1 through inputs at critical stages such as the Annual N A I P Workshops and “Mid-term reviews” (MTRs).

The “Research Program Committee ’’ (RPC) wi l l have the responsibility for objective and transparent assessment and selection of activities proposed for grant funding by consortia under Components 2, 3 and 4. The RPC will also be involved at the time o f the N A I P Annual Workshops and MTRs and in case the need for substantial modifications and/or cancellation o f ongoing activities has been confirmed.

“Consortium Advisovv Committees ” (CACs) will be responsible for setting priorities and local level oversight, monitoring implementation o f the approved consortia, and for approving any required modifications in the program o f each consortium during implementation under Component 2, 3 and 4. There will be a C A C for each consortium. The CACs wil l principally provide guidance to the Consortium Implementation Committees.

C. NAIP Implementation Entities and Advisory Bodies

A “Project Management Committee ” (PMC) wil l have direct executive responsibilities for sanctioning the proposed NAP-f inanced activities and for the overall management of NAIP, in- cluding the effective and efficient implementation o f the entire project, resource management and use, and monitoring and evaluation (M&E) o f al l NAP-supported activities. The P M C will

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also serve as the link with the Subject Matter-related Divisions o f I C A R - for technical liaison, and for resolving any management issues. The P M C will be supported by the Project Implementation Unit (PIU)~’.

The “Project Implementation Unit” The PIU, i s fully integrated within ICAR. I t i s headed by the National Director wi l l be responsible for the coordination and facilitation o f implementation ofthe entire NAIP. The P I U will report to the PMC. The P I U includes 4 National Coordinators (NCs), respectively for Component 1 activities**, production to consumption R&D chains (Component 2), livelihood systems R&D (Component 3), and frontier agricultural science research projects (Component 4). The P I U will also comprise expertise in Administration, Finance, Procurement, M&E, MIS and SocialiEnvironmental aspects.

The “O&M Advisorv Group ” (O&MAG) will be a multi-disciplinary advisory panel responsible for the screening and evaluation o f activities proposed under Component 1 before final consideration by O&MPC. O&MAG may appoint consultants for in-depth review and assessment o f proposed Component 1 activities.

Three “Technical Advisory Groups” (TAG2, TAG3, and TAG4) wi l l be responsible for facilitating and synthesizing “peer reviews” involving scientific and technical assessment for final consideration by RPC of consortium proposals under Component 2, 3 and 4, respectively, TAG members wi l l participate in the Annual NAIP Workshops; they will also assist in monitoring progress and quality o f implementation especially during MTRs and in case substantial modifications (or cancellation) are required. The TAGS will frequently call on referees to examine and assess proposals to be supported under Component 2,3 and 4.

“Consortium Imulementation Committees ” (CICs). Most, if not a l l consortia will have an implementation committee which will be responsible for day to day coordination and management o f the preparation and implementation o f each consortium under N A I P Component 2, 3 and 4, including for M&E.

Structures for NAIP Governance and Implementation, and K e y Functions

National Steering Committee: The NSC will be responsible for policy guidance and oversight of N A I P and wil l advise on conflict resolution; it will also approve the NAIP Annual Work Program and Budget. The NSC wil l have 15 members; Director-General (DG), ICAR will be the chairperson. I t s other members will be: Secretary ICAR, Financial Adviser (DARE), a Deputy- Director General (DDG) o f the I C A R (on a rotating basis), one o f the four (rotating) Commissioners for Agriculture, Horticulture, Animal Husbandry and Fisheries o f the Govt. of India (GOI), the Chairperson o f the Agricultural Processing and Export Development Authority (APEDA), one V ice Chancellor (VC) o f a State Agricultural University (SAU), one State Agricultural Production Commissioner, two representatives each o f the private sector and

2 ’ The PIU i s a unit within ICAR that i s staffed with ICAR personnel on open-ended contracts, assigned to NAIP for the time of the project, and led by a National Director who i s a Deputy Director General o f ICAR and in this function participates in the Council’s decision making and management processes. While NAIP i s the principal responsibility o f the PIU, i t i s not the only one. In this respect i s not a PIU in the sense of an independent organization, established for purposes of the project only, and i t might also have been called the “project management desk”. The term “PIU” was inherited within ICAR from NATP and i s now fully accepted and understood within the organization. The term has therefore been maintained for reasons of internal acceptance and recognition. 22 NAIP Component 1 wi l l be overseen by a person with special ski l ls in the areas supported.

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o f farmers and two o f the CAC chairpersons. The ND, NAIP, wil l be the ex-officio member- Secretary o f the NSC. The NSC will meet twice a year to monitor NAP progress and resolve any outstanding issues.

Project Manaaement Committee: This committee, o f which the DG, I C A R i s the chairperson, will have the main executive responsibility for the overall management o f N A I P and for monitoring implementation by the consortia that have received grants according to the agreed contracts. The P M C will have 14 members comprising Secretary, Department o f Agncultural Research and Education (DARE) and Secretary ICAR, Additional Secretary & Financial Advisor, ICAR, one o f the four Commissioners for Agriculture, Horticulture, Animal Husbandry and Fisheries (on a rotating basis), four o f the DDGs, I C A R (on a rotating basis), two VCs o f the SAUs, a Chairperson o f one o f the Consortium Advisory Committees (selected from Components 2, 3 and 4), one representative of private sector and one progressive farmer. The ND, NAP will be ex-officio member. The P M C will meet regularly to review project progress, approve NAIP's annual work program and budget, and provide the necessary information and guidance to the ND, P I U and the RPC for the execution o f the project. The P M C will also (through the PIU), organize Annual National Workshops on N A I P progress, impact and constraints to which all stakeholders and participants in project implementation will be invited. With some of the key senior staff o f the I C A R as i t s members, it i s expected that the P M C will help to internalize and, in time, expand coverage o f new approaches being introduced under the project to other entit ies and activities of the I C A R and to some extent the entire NARS .

Consortium Advisow Committees fCACs): The RPC will, based on a recommendation by the CIC, establish a CAC for each consortium that has been granted NAP funds. The responsibilities o f the C A C will be to contribute to the dialogue on setting priorities for the consortium to address, endorsing the Full Proposal, mobilizing the broad community o f clients and beneficiaries to contribute to implementation, monitoring effectiveness o f implementation and adherence to the agreed objectives, evaluating outcomes and impact, approving re-allocations o f funding between consortium activities, and i f necessary, o f consortium re-orientation, and facilitating the dissemination and up-scaling o f replicable results. The C A C will have a membership o f about 10 which will include representatives o f major stakeholders involved with and/or affected by the activities o f the consortium including the private sector. C A C will comprise at least two scientists and the N C o f the concerned NAP component wi l l be an ex- officio member of CAC. However, the actual size and composition o f each C A C will depend on the numbers o f institutions and stakeholders that are substantially involved in the consortium and this may vary. The C A C will select i t s own chairperson and meet half-yearly or more frequently if required. The Consortium Leader wi l l function as the ex-officio member-Secretary o f the CAC. The C A C may at any time call on contributions and/or inputs by any staff member o f any o f the institutions and organizations collaborating in the concerned Consortium or on consultants, The C A C wil l meet at least twice a year.

B. NAIP Implementation

Project Implementation Unit: The Project Implementation Unit i s fully integrated within the I C A R structure and i s staffed with I C A R personnel on open ended contracts. The P I U will coordinate and facilitate implementation o f NAIP under the direction and supervision o f the PMC. It will, with inputs from implementing units and consortia, O&MpC, RPC, O&MAG and the TAGS, consolidate NAIP annual budgets and work plans for the different components for approval by the PMC. However, to provide for a decentralized and efficient mechanism for implementation the principal interactions

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between participating agencies and institutions will be delegated to the CICs andor Consortium Leaders. The responsibilities o f the P I U will include:

Providing logistic support for the NSC, PMC, O&MPC, RPC, O&MAG and TAGS, and preparing the respective meeting schedules and agendas (developed in consultation with the chairs o f the respective committees); Reviewing relevant reports and other materials, and developing recommendations, draft minutes o f meetings, and contracting and administering special studies, reviews, etc. as advised by the NSC, O&MPC and RPC; Technical, financial, procurement and administrative management o f NAIP, including issuing “Calls for Proposals” with the powers as may be delegated by PMC; Overseeing the implementation o f N A I P activities as approved by the PMC, including on the basis o f O&MPC and RPC inputs; Preparing, collating and tracking implementation o f all training activities. Organizing the Annual N A I P Workshop; Requesting withdrawals f rom the N A I P Special Accounts and release funds for authorized expenditures under NAIP; Submitting to the Wor ld Bank, N S C and PMC, s ix m o n t h l y and annual progress reports within one month, and audit reports within six months o f the close o f fiscal year; Liaising with the Wor ld Bank concerning operation and management o f the NAIP as and when required for the execution o f the NAP-supported activities, and organizing Wor ld Bank review missions; and Preparing all reports, documentation and information on NAP including on consortium progress and impact evaluation for O&MPC, RPC and Wor ld Bank Missions, respectively, and any other reports required by various authorities.

The PIU with approval o f the PMC, may arrange for expert advice f rom consultants in any subject matter area related to N A I P implementation.

National Director: The PIU wil l be headed by a ND o f the status o f a DDG ICAR. The ND, under the direction o f the P M C will coordinate and facilitate implementation o f the entire NAIP; heishe will be responsible for and empowered to direct all the activities o f the PlU as summarized above. The ND will be the ex-officio Member-Secretary for the N S C and PMC. The ND wil l be supported by a suitable complement o f staff, including the following:

NAIP Director Finance: He/she would be overall responsible for the financial management o f N A I P including the estimation o f fund requirements for different purposes, the timely disbursement o f funds, proper accounting and audit, the establishment of separate bank accounts and the timely receipt o f bank reconciliation statements by/from each implementing agency.

NAIP Procurement Officer: He/she will be the nodal point for all procurement-related matters in NAP and function as the main resource person to guide and advise implementing agencies on NAP and World Bank procurement procedures and guidelines.

National Coordinators: There will a N C for each N A I P component fo l lowing responsibilities:

To process and track all proposals and activities under the O&M and Consortium research grant components that are submitted for funding under NAIP. This will

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include arranging for consortium proposal evaluation and strengthening the quality of proposed consortia and their implementation with the help o f O&MAG and TAGs in accordance with the applicable NAIP guidelines, and monitoring output, outcome and impact indicators. They will also facilitate any training required for preparation and implementation; T o facilitate and participate in consortium identification, selection and review, and in M&E systems set up under NAIP to ensure efficient and high quality preparation o f consortia and the effect ive implementation of activities in order to enhance the magnitude o f results and overall N A I P impact. This wil l include serving as the ex- of f ic io member-Secretary o f the O&MAG and the TAGs and the organization o f the N A I P Annual Workshop with wide participation o f the stakeholders and beneficiaries; T o facilitate fund releases to various Consortia; T o facilitate and oversee hiring & execution o f consultancies and special studies; T o assist in execution and implementation o f activities o f the P I U as directed by the ND; and T o collate and synthesize reports pertaining to their respective areas o f responsibility and execute such administrative and financial responsibilities and powers as delegated by the P M C and the ND.

0

0

0

0

0

The N C Component 1 will in addition be responsible for: (i) NAP-related Monitoring and Evaluation (M&E) and the Project Management Trackmg System (PMTS); and, (ii) NAP’S special effort in Learning and Capacity Building (L&CB). In M&E, heishe will be assisted by a consultant (firm) who would provide support in information systems development, networking and software development services. The M&E consultant’s f i rs t charge wil l be the design o f a Project monitoring and tracking system (PMTS) for NAP implementation, a sub-system within the overall M I S of NAIP. When these systems have become effective, the M&E specialist will take on a wide range o f M&E and information systems-related responsibilities. The M&E consultant will also be responsible for assisting the NSC, PMC, the ND and the NCs in al l their information needs. Heishe will be the major source o f timely and relevant information on N A I P for the I C A R and the broader stakeholders in the project and heishe will be a link person for all concerned. The M&E consultant will be responsible for coordinating Consortia-level M&E functions and report directly to the N C 1.

Environment and Social Assessment Suecialist: This responsibility i s with the NC3; heishe will be assisted by an expert in Environmental and Social assessment who will oversee environmental compliance and be responsible for environmental and social analysis and if needed, the design of mitigating actions. This will be done in close interaction with Consortium Leaders and within the NAP Environmental and Social Management Framework.

C. The screening and approval o f NAIP-supported activities for funding

N A I P Component 1 :

O&M Program Committee: The O&MPC members, which will be proposed by the P I U and endorsed by the PMC, will be a (part-time) advisory panel of about six senior specialists with main responsibility for endorsing major NAIP Component 1 activities, overseeing and monitoring the progress of these at the time o f mid-term reviews and for recommending corrective actions on the basis o f O&MAG reports. A distinguished R&D manager o f national stature will chair the Committee and the Secretary ICAR, the Financial Advisor o f the

65

Department o f Agricultural Research and Extension, one V C o f an SAU, one Director o f an I C A R National Institute and one representative o f the private sector will be members; the ND o f NAIP wil l be a member and the N C for N A I P Component 1 wi l l be the ex-officio member- Secretary. The O&MPC w i l l meet quarterly (initially more frequently).

O M Advisow Gvoup: The O&MAG will be responsible for ensuring appropriate review and assessment o f activities and sub-programs proposed under NAP Component 1. Staff development and training related to the needs of the entire NARS, selection o f trainees and approval o f related training activities will be an integral part o f the O&MAG’s review and decision process. The O&MAG will meet quarterly to approve activities, to monitor progress, decide on financial and management issues and activity completion reports. The O&MAG wil l have about five members; i t s chairperson and members wi l l be selected by P M C on the basis of h idher eminence and national stature in agricultural research management and agricultural R&D issues. O & M A G membership will comprise expertise in organizational development, public/private partnerships, information management, human resource management, M&E, communication technology, intellectual property rights, quality assurance, technology dissemination, environment and gender. O&MAG membership (except ex-officio) wi l l be for at least three years with some staggering o f appointments starting at the end o f the f irst three years to allow for continuity. The N C for NAP Component 1 will be the ex-officio member-Secretary o f O&MAG and be responsible for organizing expert reviews and required inputs. The O&MAG reports to the O&MPC and P M C through the PIU.

N A I P Components 2, 3 and 4:

Research Program Committee: The RPC will be a broadly composed panel o f very h igh stature which has responsibility for approving the research consortia proposed for financing through N A I P (components 2, 3 and 4). RPC will be composed o f about 12 members in addition to the senior-most N C for Component 2, 3 or 4 who wil l function as the ex-officio member-Secretary to RPC. The ND, 4 DDGs and Director Finance, P I U wil l be the ex-officio members. The stature o f the RPC wil l be such that i t s decisions wil l be widely and strongly respected. The RPC wil l also be responsible for endorsing the broad R&D priorities to be financed under N A I P and for approving the identification o f competent institutions for sponsored activities. The RPC’s mandate wi l l include responsibility for approving any significant changes in consortium activities during the implementation period, especially at the time o f MTRs and advise the P I U and the P M C on the need for adaptation or cancellation, if necessary. The RPC wil l meet quarterly to review and take decisions on the selection o f consortia. Once all the consortia are in operation, the RPC wil l meet as frequently as necessary for monitoring the progress o f consortia and other related activities such as granting additional funds or endorsing major modifications for ongoing activities. The RPC chairperson would be selected on the basis o f h i s h e r pre- eminence in the field o f agriculture and allied sciences and would be consulted by the DG ICAR on the further composition of the RPC. Members o f RPC, other than those ex-officio, will be eminent scientistsiagriculture development specialists and will serve for three years. In order to ensure continuity, memberships terms will be staggered.

Technical Advisow Groups: The TAGs (one each for NAP components 2, 3 and 4, respectively) will have major responsibility for the transparency and fairness o f the peer review o f Concept Notes and Full Proposals submitted as part of the competition process. The TAGs, together with the CACs wil l be responsible for N A I P quality assurance through scientific and technical evaluation o f proposals under N A I P Component 2, 3 and 4, on the basis o f the agreed guidelines, and for monitoring implementation o f sanctioned activities at key times such as MTRs and activity completion to assess progress and performance. Each TAG also wil l take

66

account o f the broad priorities to be financed under the particular N A I P Component and assist in the identification of competent institutions for “sponsored” projects in Component 3. They wil l also review mid-term status reports and assess the completion reports including recommending the mainstreaming of strategies and outcomes o f successful activities.

Each o f the TAGs will comprise an inter-institutional multi-disciplinary (part-time) group o f about f ive scientists and development specialists with sk i l l s and experience in bio-physical, economic and social sciences (from both the public and private sector). The NCs for N A I P Components 2, 3 and 4 will be the ex-officio member-Secretaries for the respective TAGs. TAG membership will be for three years with some staggering o f new appointments to allow for continuity. In case a TAG does not have adequate capacity for the subject matter areas o f a proposed consortium, the P I U (NC) may be requested to make arrangements for contracting additional peer reviewers. HRD and training related to the needs o f individual consortia, the proposed trainees and the approval o f training activities will be an integral part o f the review and decision process for specific proposals submitted to TAGs for evaluation; this will include support for strengthening of international linkages to improve the quality o f human resources. The RPC will select the TAG chairpersons and members on the basis o f their eminence and national stature in agricultural research and agricultural R&D issues. The TAGs will meet at least quarterly. The TAGs, through the respective NCs, report to the RPC and PIU.

Consortium Implementation Committee (CIC): For most Consortia that have been funded under NAP Components 2, 3 and 4, there will be a Consortium Implementation Committee. The size and composition of CIC will be decided by CAC. The CIC wil l be chaired by the Head o f the Consortium’s Lead Institution and i t s membership will include the Principal Investigators (PIS) at the LI and at a l l partner institutions, and senior administration and finance staff o f the LI. The membership o f the CIC and i ts responsibilities will be approved by C A C and endorsed by PMC. The responsibility of the CIC wil l be to ensure smooth and efficient implementation, to monitor and oversee execution of the concerned consortium activities and report to the C A C and PIU, according to the schedules set out in the NAIP Project Implementation Plan (PIP). The CIC wil l also make recommendations to the C A C copied to the P I U on implementation and pol icy issues, approve i f necessary, the reallocation o f funds within the approved limits, set strategies for implementation and communication, etc.

Responsibility for M&E will be assigned to a Unit at the Consortium’s Lead Institution (either existing or being established with NAP support). On consortium activities the Unit would report directly to CAC. The Unit’s work program would be cleared by the N C who i s responsible for NAP M&E at national level and approved by the CAC.

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National Steering

Committee

~

c Project

Management Committee

Research Program I -

Committee National O&M Program Committee

Director and Project

I Implemen- I I

Advisory Group

T

T Consortium Advisory

Committee

Consortium Advisory

Committee

Consortium Advisory

Committee

Consortium Consortium Consortium I

Advisory

Consortium

Fig. la . NAIP Governance and Implementation Bodies

68

Consortium Advisory 1 Committee

ND and NCs

+ Consortium

Implementation Committee and

Consortium Leader (PI)

Project Implementation

Unit

1

M&E Environmental and Social

Assessment

Fig. lb. NAIP Governance and Implementation Bodies at Local level

Fig. IC. NAIP Project Management at National Level

69

Annex 7: Financial Management and Disbursement Arrangements

INDIA: National Agricultural Innovation Project

Executive Summary

NAIP i s the successor to the National Agriculture Technology Project. The main stakeholders include public research organizations l i ke ICAR, SAUs, other related research organizations, the private sector, NGOs, farmer organizations etc. The main challenge i s that the project has a highly decentralized structure. Therefore mere collection o f financial information from the various units, consolidation o f the same and making them available to the management in a timely manner for decision making, maintaining uniformity and implementation o f the internal control framework will be a challenge. In order to meet this challenge, certain key tasks are being undertaken: (a) preparation o f a finance manual to bring uniformity in procedures and reporting; (b) customization o f a web enabled off-the shelf accounting software that will be a module o f the M I S software which will be a customized standard Enterprise Resource Planning (ERP) package; (c) certification o f the financial management arrangements o f each consortium member before fund starts flowing to the consortium; and (d) Internal audit by the Finance wing o f NAP or an independent Chartered Accountants’ Firm under agreed terms o f reference. With the above arrangements in place, the Project will have an adequate financial management system commensurate with the nature and size o f the Project.

Disbursements and Fund Flow

The total project cost i s U S D 250 million. O f this, the Bank’s support i s U S D 200 mi l l ion in the form o f two IDA Credits. A uniform 80% disbursement rate will apply across al l project components and activities i.e. for every $100 worth o f eligible expenditure incurred in the project, the Association will reimburse $80.

The funds for the project will be budgeted for in ICAR’s budget, including counterpart funds, as an identifiable single-head budget i tem each year.

GO1 would open a Special Account with RBI to receive the init ial deposit and thereafter funds wil l be made available through reimbursements o f expenditure incurred under the Project. Funds will be made available to I C A R through the Ministry o f Agriculture under the Plan Budget. I C A R wil l then pass on funds to the bank accounts o f Project Implementation Units.

A national bank having country-wide electronic network will handle transfer o f funds. I t i s proposed that P I U and al l other spending units open account with the same bank wherever possible or with any other bank which has a t ie up with the selected banker to facilitate f low o f funds in areas where the selected bank does not have any branch. PIU will send an advice to i t s banker listing the various spending units and the amount will be transferred to the account o f each unit. The banker will provide a terminal at the P I U which will give the status o f the account o f each spending unit on a daily basis. PIU has identified the lead bank for this purpose.

Under component 1, based on fund requirements as per approved annual work plan funds will flow to the ICAR Institutes and SAUs, participating in the Project. With respect to components 2, 3 & 4, funds wi l l f low to the consortia members. (Approximately 15 consortia under component 2, 20 under component 3 and about 15 under component 4). Funds wil l be released by the P I U

70

directly to each spending unit o f the consortium. However, the lead agency o f the consortium will have to approve the release before P IU releases the fund. Release o f funds to each consortia member will b e as per the M O U between ICAR and the lead agency o f the consortium which will specify the schedule o f payments (initial advance and the subsequent installments) and the milestones to b e achieved to qualify for each next installment. Unutilized amount will be adjusted while making the next remittance. As and when a consortium i s formed, each consortium member will have to get their Financial Management Systems assessed and certified by one o f the C A f i r m s f rom the roster maintained by P I U or by the finance wing o f I C A R before funds start f lowing to the consortium. The C A f i d f i n a n c e wing w i l l certify that the Financial Management System o f the consortium members i s compliant with the requirements la id down in the financial management manual. This condition will be documented in the M O U .

Bank statements will be provided by the nationalized Bank to every spending unit for i t s withdrawals on a monthly basis. Spending units will reconcile the same with their books on a monthly basis.

Disbursements from the credits would initially be made in the traditional system (reimbursement with full documentation and against statement o f expenditure) and could be converted to the Financial Management Report (FMR) based disbursement at the option o f GO1 and I C A R after the project successfully demonstrates generation o f quality FMRs. Consolidated quarterly claims wil l be submitted by PIU to the Association for reimbursement.

Retroactive financing o f up to U S D 800,000 will be provided to meet the expenditures incurred after June 30, 2005 up to the date o f signing o f the credit agreements. The activities to be covered by retro-active financing are consistent with the project’s financing category as agreed with the Association.

Staffing

NAP will have a finance wing in the PKJ led by a Director o f Finance. A chartered accountant wi l l be hired as a consultant to assist the Director Finance. The finance wing o f the PIU will facilitate smooth and timely f low o f funds to al l spending units and provide overall guidance in respect o f the financial management issues including monitoring o f expenditures, internal controls, audit and providing timely financial reports to the stakeholders including the Association. Currently, Deputy Director Finance and one Senior Finance and Accounts Officer are working in PIU. PIU has obtained the EFC approval and i s in the process o f getting the needed staff through recruitment / redeployment for the duration o f the project. Finance staff in each member agency o f the consortia (as and when they are formed) will have to be identified and trained in financial management procedures o f the Project.

Financial Management Manual

A Financial Management Manual will be prepared for the Project t o ensure uniformity o f financial management practices and procedures across implementing units. It will document a uniform set o f policies, procedures and financial reporting formats which will have to be followed by al l implementing units. I t wi l l lay down procedures for budgeting, f l ow o f funds, delegation o f financial powers, the Chart o f Accounts, formats o f various financial reports and the reporting framework, internal control framework, and the auditing arrangements for the project.

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Financial Management Software

A customized off-the-shelf web-enabled accounting software will be put in place for NAIP. This software will be one o f the modules o f the M I S which will be developed under this Project. The M I S wil l be an off-the-shelf standard ERP package customized to suit the requirements o f the Project. This software w i l l be first piloted in the Project Units and thereafter rolled out in the whole I C A R system. The accounting module o f the M I S will be made operational for the Project within 6 months o f the credit effectiveness.

Financial Management Sub-component: Under component 1 o f the Project there i s a subcomponent o f remodeling of the financial management and procurement systems o f I C A R and i t s Institutes. Under this a study w i l l be undertaken on the Financial Management and Procurement system o f I C A R and i t s institutes. The purpose o f this subcomponent i s to remove bottlenecks and introduce best practices to facilitate operational efficiency. A draft manual has been prepared by the P I U and reviewed by the Bank. The manual w i l l be finalized by M a y 3 1, 2006.

External Audit

In N A T P submission o f audit reports within due dates was initially a problem. However, as the Project progressed, this problem was overcome. In NAIP, since it i s envisaged that the number o f sub-projects and the number spending units will not be as many as in NATP, and with the lessons learnt in NATP, submission o f audit reports within six months f rom the end o f the financial year i s fully feasible. T o ensure this, P I U will form a roster o f A Category Audit Firms empanelled with the C&AG. The members o f the consortia (i.e. the public or private agencies, other than I C A R and i t s Institutes, implementing the project) will have to get their accounts audited annually by one o f the C A f i r m s from the roster maintained by the PIU. The ICAR and i t s Institutes will continue to be audited by the C&AG as was done in NATP. The SAUs wil l have an option to get their accounts audited by the local fund auditor/State Accountant General (Audit) who does statutory audit o f SAUs or by a Chartered Accountant Firm from the roster maintained by P I U provided they meet the deadline o f submitting the audit report to P I U within the stipulated time as la id down in the financial management manual.

The C&AG, the Private Audit Firms and the Local Fund Auditor will conduct external audit under agreed terms o f reference satisfactory to the Association. The P I U will also prepare a consolidated financial statement. The P I U will obtain a single audit opinion on the consolidated financial statement. This opinion will be based on the audits undertaken by the C&AG, Local Fund Auditor and the Private Auditors. The consolidated annual project financial statements, duly audited, and a single audit report will be submitted to the Association within six months o f the end o f each financial year. The Audit Report Compliance system will be used to monitor the Consolidated Project Financial Statement and Audit Report, which wi l l be handled by the PIU and will be due within six months o f the end o f the Government o f India Financial Year (September 30).

Internal Audit

Considering the large size o f the operation and multiplicity o f spending units, management oversight will be strengthened by quarterly internal audit. A quarterly internal audit will be conducted by a C A f i d F i n a n c e wing o f the PIU. The Association recommends appointment of a reputed audit firm acceptable to the Association under agreed terms o f reference. Audit in each quarter will be done on a sample basis. Coverage can be decided by the management based on

72

r i sks perceived, magnitude o f expenditure incurred by each unit etc. The internal auditor will assess the operation o f the project’s financial management system and review o f internal control mechanisms. This w i l l assist the management to identify issues and take corrective actions in a timely manner. Issues arising in the external and internal audits would need to be promptly addressed and acted upon in a timely manner by the project authorities.

Reporting and Monitoring

Financial reporting from implementing units to the PIU will be on-line. The FMR formats will be agreed and provided in the Finance Manual. PlU wil l furnish consolidated FMRs on a quarterly basis to the Association within 45 days o f the end o f each quarter. The f i r s t such FMR will be due at the end o f the f i rs t calendar quarter after effectiveness.

Risk Analysis

Risk Flags

Project Complexity

The Project structure i s highly decentralized. Implementation rests with various agencies spread all over the country and the number of spending units are likely to be many. Coordination and oversight function wi l l be a challenge.

Fund Flow

Due to the multiplicity of spending units fund flow management wil l be a challenge.

Uniformity

As number of implementing units are many and wide spread comprising organizations both in the public and private sector, ensuring uniformity in Financial Management procedures wi l l be a challenge.

Risk Mitigation

The existence o f PIU in as a coordinating agency wil l make implementation easier. The Financial Management Software wil l ensure that information i s readily available for decision-makers. Internal audit wi l l also strengthen the oversight function of the management. Financial Management Systems o f the consortia wil l be certified.

Funds wil l flow directly from PIU to the spending unit and not through intermediaries. Managing fund flow wi l l be made easy by availing the service of a national bank having a network a l l over the country which can handle fund transfer as per instruction from PIU.

Development of financial management manual which wi l l lay down financial and accounting policies and procedures, standard reporting formats, etc. The financial management software which wi l l be adopted by a l l units wil l ensure uniformity in accounting and reporting. Periodic training of staff i s wi l l be done to address this issue.

Risk Rating after Mitigation

High

Medium

Medium

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I Timely submission of audit reports As number o f implementing units are many and wide spread and many auditors are involved; getting a l l audit reports within the stipulated time will be a challenge. OVERALL RISK RATING (High, Medium or Low)

Aggressive follow-up by PIU wil l be required.

Medium

High

Financial Covenants

Besides the usual conditions o f external audit and FMRs, the following will be required:

(i)

(ii)

(iii)

(iv) (v)

PISJ and the consortia should maintain throughout the project period staff in key positions for handling finance functions. The financial management software should be made operational within 6 months after effectiveness. The roster o f audit f i r m s empanelled with the C&AG should be identified within 3 months o f credit effectiveness. The internal auditor should be appointed within 3 months o f credit effectiveness. The Financial Management Manual will be completed by M a y 3 1,2006.

Supervision Plan

The project would require intensive supervisions in the initial stages for ensuring successful implementation o f the agreed financial management arrangements in the implementing units. The other focus areas during the supervision will be on meeting the training needs o f the project’s finance personnel.

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Annex 8: Procurement Arrangements

INDIA: National Agricultural Innovation Project

Assessment o f Borrower’s Capacity to implement procurement:

An assessment of borrower’s capacity to implement procurement under the project i s carried out by Mr. D. J. Baxi, Senior Procurement Specialist, South Asia Regional Procurement Hub, Delhi. This project i s a follow-up to the National Agricultural Technology Project (NATP). The assessment i s therefore mostly based on the performance o f the borrower during the implementation o f N A T P and interaction with the project officials during the months o f August- December 2005. The lessons learnt from the earlier project are considered in the procurement arrangements proposed for the project.

The project implementation involves partnership arrangements with stakeholder groups in Indian Agricultural Innovation System. The main stakeholders will include Public Research Organizations (like ICAR, SAUs, other related research departments and organizations, the private sector, NGOs, farmers’ representatives etc.). The partnerships for the research components (which i s the main objective o f the project) wi l l be in the form o f consortia with well defined roles and responsibilities. The other component i s capacity building within the I C A R institute which itself i s a large system.

The procurement would be carried out by consortia for the respective research activities undertaken by them and for the capacity building component by the I C A R institutes spread throughout the country. As such, the procurement i s decentralized in view o f the design o f the project and the experience gained during NATP. Majority o f the implementing entities, except the P I U have l i t t le exposure to the Association’s procurement procedures. It i s therefore necessary to adopt twin strategy; build up capacity and monitor the actual procurement carried out by the consortia and the I C A R institutes. Following action plan i s drawn out for this purpose.

0 A full time Procurement Officer in the P I U wil l be the nodal point for a l l procurement

I C A R would appoint a Procurement Consultant by April 2006 with the following Terms

related matters in the N A I P and will function as the main resource person to guide and advise the implementing agencies on procurement procedures and Guidelines.

o f Reference 0

o

0 Prepare a Procurement Manual. 0

0

0

0

Review o f Procurement Plan for the f i rs t 18 months prepared by ICAR. Preparation o f Generic Specifications for common items to be purchased by different entities.

Implement capacity building plan. Training workshops at ten locations are planned during the f i rs t year. Post award review o f selected contracts. The Procurement Consultant will assist the Procurement Officer in the PIU who wil l act as nodal point for a l l procurement related matters.

The above strategy will be reviewed after the f i r s t year o f implementation o f the project.

Procurement Guidelines and Bidding Documents

Goods & Works shall be procured in accordance with the provisions in the “Guidelines for Procurement under IBRD Loans and IDA Credits” published by the Association in M a y 2004.

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Services o f Consultants shall be procured in accordance the provisions in the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency ' I

published by the Bank in M a y 2004. Standard Bidding DocumentsRequest for Proposals documents as finalized by the Government o f India Task Force, as amended from time to time will be adopted for the procurement under the project.

Procurement Plan

The project seeks to achieve i t s objectives through the consortium concept common to component 2, 3 and 4 (Le. except the capacity building component). The selection o f activities proposed for grant funding by consortia would be based on transparent assessment and wel l defined procedures. As such, the procurement for component 2, 3 and 4 can be known only after consortia are in place. The Procurement Plan for the first 18 months i s prepared for component 1 on capacity building only. This plan will be reviewed and updated annually or as required. The procurement requirements for component 2, 3 and 4 will be identified in the respective research grants approved by the Project.

Frequency of Procurement Supervision

In addition to the prior review supervision to be carried out from the Bank's office, the capacity assessment o f the implementing agency leads to the recommendation o f two supervision missions to visit the field to carry out post review o f procurement actions.

Category-wise Procurement Arrangements

Civil Works, Goods and Equipment. Civ i l works in the project will consist mainly o f renovation/refurbishment o f existing offices and laboratories; construction o f some additional facilities, farm building renovation and development. These are small and scatted works and the largest contract i s likely to be less than U S $ 500,000 equivalent. As such, I C B i s not proposed for c iv i l works. However, bids from foreign contractors would not be precluded i f they participate in N C B procedures.

International Competitive Bidding. Goods estimated to cost U S $ 1 m i l l i on and above wil l be procured following I C B procedures.

National Competitive Bidding. Works and goods estimated to cost above U S $ 50,000 equivalent will be procured following N C B procedures. See attachment 1 below.

Shopping. Works and Goods estimated to cost up to US$ 50,000 equivalent may be procured following Shopping procedures. Rate contracts o f Director General Supplies and Disposals (DGS&D)] are acceptable as substitute for shopping procedures. The threshold for procurement of vehicles would be U S $ 100,000 for adopting shopping procedures.

Direct Contracting. Satellite Imagery, aerial photographs, maps and research data, books, periodicals, manuals, software, proprietary items, seeds, plants, fertilizers etc. and petty items costing less than U S $ 100 may be procured following direct contracting procedures. Items costing US$ 50,000 or more proposed under direct contracting procedures would require prior approval from the IDA.

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Force Account. Small works which meet requirement o f Para 3.8 may be carried out following force account procedures. Farm development works are expected to be carried out following force account procedures. The works estimated to cost US$ 10,000 or more proposed under force account procedures would require prior approval from IDA.

Consultancies and Training. The following methods wil l be adopted: Quality and Cost Based Selection (QCBS). Except as otherwise provided, this will be the preferred method. Shortlist for consultancy proposals estimated to cost up to US$ 500,000 equivalent or less may comprise entirely o f national consultants. Selection under a fixed budget. Services for assignments which the Association agrees meet the requirements o f paragraph 3.5 o f the Consultant Guidelines may be procured under contracts awarded on the basis o f a Fixed Budget in accordance with the provisions o f paragraph 3.1 and 3.5 o f the Consultants Guidelines Least-cost Selection. Services for assignments which the Association agrees meet the requirements o f paragraph 3.6 o f the Consultant Guidelines may be procured under contracts awarded on the basis o f Least-cost Selection in accordance with the provisions o f paragraph 3.1 and 3.6 o f the Consultants Guidelines Selection Based on Consultants QualiJcation (CQ). For small assignments costing US$ 200,000 or less, selection based on consultants’ qualification wi l l be adopted. Single Source Selection (SSS). Single Source Selection may be adopted in cases where the conditions specified in Para 3.9 and 3.10 are satisfied. Assignment above US$ 100,000 will require clearance from the Bank before adopting single source method o f selection.

Consortia and Research Sub-projects. The NAP wil l be funding various consortia under the components 2, 3 and 4 o f the project. These consortia will come into being through a formal arrangement (by signing an MOU) among the partners. The draft M O U for such partnership i s agreed before appraisal. After approval o f the consortidsub-projects a participation agreement/contract with the NAP will be signed by the consortium. The format for this agreement i s agreed before the appraisal. The selection o f consortia will be regulated by guidelines agreed for this purpose in the PIP. However, the following four broad criteria will cover their working and procurement arrangements in the project.

(i) (ii) (iii)

(iv)

The consortia will be selected on the criteria agreed in the PIP The consortia must meet the reporting deliverables as agreed in the PIP; The financing plan setting out the benchmarks/milestones against which funds will be released must be respected The procurement procedures agreed for NAP will be followed.

Procurement Information. Procurement Information would be collected and recorded as follows: (a)

(b)

prompt reporting o f contract award information by P I U on website (all contracts under ICB/NCB, single source consultancies and consultancies above US$lOO,OOO) Comprehensive semi annual reports by PIU indicating (i) revised procurement plan (ii) revised procurement schedule (iii) status report o n procurement.

Review Requirements

The thresholds for prior review o f contracts will be reflected in the procurement plan. The init ial thresholds are U S $ 1 mi l l ion and above for goods and equipment, US$200,000 equivalent and

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above for works and US$200,000 for consultancies involving f i rms . The threshold for individual consultants i s US$50,000 equivalent or more.

Risk Assessment

With the implementation of capacity building measures and a post award review strategy in place, the risk i s considered average/medium.

Attachment-1

Agreed Procedures for National Competitive Bidding (NCB)

i)

i i)

iii)

iv)

4

vi)

vii)

viii)

Only the model bidding documents for N C B agreed with the GO1 Task Force (and as amended for time to time), shall be used for bidding; Invitations to bid shall be advertised in at least one widely circulated national daily newspaper, at least 30 days prior to the deadline for the submission o f bids; N o special preference will be accorded to any bidder either for price or for other terms and conditions when competing with foreign bidders, state-owned enterprises, small- scale enterprises or enterprises from any given State; Except with the prior concurrence o f the Association, there shall be no negotiation o f price with the bidders, even wi th the lowest evaluated bidder; Extension o f bid validity shall not be allowed without the prior concurrence o f the Association (i) for the f irst request for extension i f it i s longer than eight weeks; and (ii) for all subsequent requests for extension irrespective o f the period (such concurrence will be considered by Association only in cases o f Force Majeure and circumstances beyond the control o f the Purchaser / Employer); Re-bidding shall not be carried out without the prior concurrence o f the Association. The system of rejecting bids outside a pre-determined margin or “bracket” o f prices shall not be used in the project; Rate contracts entered into by Directorate General o f Supplies & Disposals, will not be acceptable as a substitute for N C B procedures. Such contracts wi l l be acceptable however for any procurement under National Shopping procedures; T w o or three envelop systems wil l not be used.

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Annex 9: Economic and Financial Analysis

INDIA: National Agricultural Innovation Project

Measure

Mean Median Minimum

Context

Aggregate analysis Analysis for individual All

75.4 69.9 71.8 58.5 53.0 57.5 46.0 6.0 6.0

crops

Several studies have documented the high returns in terms o f contributions to Indian agricultural growth with estimated marginal internal rate o f return (IRR) o f the order o f 50%, and with considerable reduction o f poverty. A summary o f such economic rates o f return (ERRS) i s presented in Table A9.1. More detailed documentation o f this history i s set out in a separate Project Note (see Annex 12 Documents in the Project File).

Maximum 218.2 174.0 218.2 Number of studies

Have the easy gains been won and thus are the prospects for continued investment in such activity diminished? The answer would seem to be a definite “No”. Public agricultural research investment intensity (now at around 0.5% o f AgGDP [World Bank 20051) continues to be low, by any standards, including across developing countries, and analysts have argued that, as due attention i s paid to relatively disadvantaged areas as i s proposed under Component 3, returns should be even higher than the marginal returns to further investment in more favored areas.

10 18 28

Improved understanding o f the consequences o f investment in agricultural research was a focus o f NATP, and several cogent innovations in this domain were strengthened and broadly institutionalized since the mid 1990s, particularly through the creation o f Planning, Monitoring and Evaluation (PME) cells in many institutes. The methods adopted generally follow international best practice. I t i s proposed to strengthen these further in Component 1 o f NAIP with work taking place within al l the supported components.

The logic in the evaluation o f the impact o f research conducted through consortia i s that there will be benefits along the value chains generated that are additional to those that emerge only in the primary production system, and that there has been insufficient public (and probably also private) investment in these post-production research opportunities. I t i s thus speculated that the social returns to public investment in Indian agricultural research might be lifted from o f the order of 40% IRR to something o f the order o f 60% IRR, and as wel l there will be added returns to the private investors too.

Boosting returns to Indian public agricultural research investment through NAIP involves several mechanisms in addition to the value addition aspects just noted. These include those elaborated elsewhere in the PAD, such as coordinating better with enlarged partnerships to put identified new and improved technologies in place, ensuring generated improvements respond to market demands, bringing improved rural resource-using practices to disadvantaged areas, and so on.

The need for case-by-case analyses o f prospective consortia in the context o f competitive selections means that, in project-analysis terms, this project can best be considered as a

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“framework”-type project rather than a “blueprint” type. The analyses will be demanding in several dimensions, from assembly o f baseline data on the pre-proj ect situation, to conceptualizing the nature o f the innovation processes to be tracked, to market-parameter- intensive empirical estimation o f research benefits to be aligned with relevant costs, To bring some o f this analysis forward to assist in competitive selection among consortium proposals, some simplif ied indicators wi l l need to be formulated. The dimension o f overall economic importance might be approximated by an index of, say, final value o f a chain (PQ) times a measure o f research opportunity such as expected proportion o f value (k) to be added if research i s successful. For innovations consisting primarily o f cost-saving changes to production or processing, such added net value will be largely expected cost savings, which would be analogous to the “PQk” index often noted in the literature as an element o f benefit measurement, For the more basic and strategic research o f component 4, the “PQk” index will often be hard to establish and consequently the selection will become more based on the scientific merit o f the proposed research.

Illustrative Research Consortia

Research action programs with a business development approach are emerging in response to increasing complexity o f the agricultural technology system. Several examples are described in the Project Note. For purposes o f illustration, one i s briefly described here. The success stories surrounding the widespread adoption o f conservation tillage pursued by I C A R and others through the Rice-Wheat Consortium (RWC) have been widely reported. The impact pathway adopted by the RWC-NARSs-supported research emphasized the participatory processes and multi- disciplinary and multi-institutional partnerships involving key stakeholders, including the private sector, This approach enhanced the relevance o f research and accelerated the pace o f transfer and adoption o f new technologies by farmers. To address the sustainability issues, the N A R S partners and the CGIAR Centers focused research on resource-conservation technologies. The sustainability-enhancing technologies resulting from this work have included: several positive changes but perhaps none more important than the substitution o f conventional tillage involving repeated soil cultivation, planking and pulverization o f topsoil with zero or minimal tillage for direct drilling of wheat in the rice-wheat system. Participation o f small-scale private entrepreneurs helped in development and manufacture o f direct-drills suited to local conditions.

Other changes included: innovations in water management through adaptation o f laser land- leveling equipment to improve water use efficiency by up to 25%; improved targeting o f crop improvement and management research o f NARS and IARCs through feedback provided from systems-based research of R W C to the component commodity research programs, especially those related to crop improvement, which helped to shift priorities in rice breeding towards earlier maturing varieties to allow more timely planting o f wheat after rice and development o f short- season pulses and potatoes; improved nutrient management through matching o f site-specific capacities o f the soil to supply nutrients to better match the demands o f crops in the system,

The shift to no-ti l l systems o f wheat planting i s a major achievement o f RWC-NARS collaboration, especially under N A T P in India. The technique has been rapidly adopted by farmers. During the 2004-05 planting season, it has been estimated that nearly 1 mi l l ion ha of wheat was direct drilled in North-West India. Farmers are reporting higher wheat yields (about 5- 15%), under direct drilling due mainly to more timely planting, reduced weed competition and improved fertilizer efficiency. Other important benefit has included a significant reduction in the cost o f production (around US$150/ha in North-West India) due to higher yields and reduced cost o f cultivation under direct drilling. The drivers o f rapid adoption have included direct benefits observed by farmers due to technological change and improved socio-economic circumstances of

80

farmers, leading to increased mechanization o f agriculture. Other facilitating factors have included close research-extension-farmer linkages, collaboration with the private sector, and strong support provided by the national partners.

Each o f the research consortia to be implemented in the project will provide not a blueprint for subsequent projects but a heuristic framework that will guide I C A R in adapting i t s research to changing contexts and needs. The key wil l be openness to unconventional approaches to R&D, responsiveness to possibly yet uncertain market signals, and above all a flexible approach to considering novel technological advance. Benefits o f such a paradigm shift would be manifold as compared to the proposed investments, and as evidenced by the illustrative experience highlighted above.

The approach towards assessing the impacts o f NAIP and other ICAR schemes

Objectives. This part outlines a framework to obtain a systematic assessment o f the impacts o f NAP and ,subsequently, other I C A R schemes. Through the efforts within this framework I C A R will demonstrate how the research programs and products o f NAP and the I C A R Schemes are contributing to national development objectives and are making l i fe better for the common folk. The work should clearly illustrate in a simple, objective and unbiased manner whether the investments made to support NAP and the I C A R Schemes have paid the intended r i ch dividends in terms o f strengthening household welfare and nutritional security, conserving natural resources and environment, increasing income and welfare o f the rural population, particularly o f women, and alleviating poverty, and providing competitive advantage at the global level. I t should also address whether apcul tura l research i s an efficient and sustainable way o f achieving the national objectives, and that payoffs f rom investment in agricultural research are higher than those realized in other development programs.

The scope o f the proposed effort will include other I C A R Schemes as well as NAIP. The effort wi l l also encourage SAUs and provide technical backstopping to assess impact o f their programs.23

Impact assessment work under NAP will assess the following aspects:

0

0

0

0

0

0

Documentation of important outputs in terms o f scientific and technological advancements and comparison with other systems; Impacts in terms o f institutional development and HRD; Demonstrate the measures taken to improve the system’s efficiency and their impact in terms o f enhancing the system’s effectiveness; Efficiency, sustainability and equity impacts made at the economy, sector and farm level, i f possible, over time; Demonstrate these impacts with the case studies o f major technologies developed by different I C A R Schemes pertaining to the post-Green Revolution era; and Assess efficiency and impact o f NAP, in order to help to revitalize the research system and contribute to Indian agriculture being more market-driven.

Organization. A committee of senior I C A R research managers and research evaluation specialists under the chairmanship o f a high-level official will be constituted to steer the impact

23 Undertaking impact assessment of SAUs per se would be a huge task, beyond the capacity and responsibility o f the proposed team.

81

assessment work. An NCAP team (Technology Policy group) will coordinate the work and also wi l l provide technical backstopping. About 4-5 scientists will devote part (nearly 25%) o f their time for this work.

Cooperating teams: Cooperating teams, one each for each different theme, wi l l be constituted to work in close collaboration with the NCAP team. The cooperating team would consist of two economists (full time) and 2-3 ago-bio-physical scientists (part time, one-third o f their time) who can work f rom their respective organizations. These teams will have links with the P M E cells of I C A R institutes, especially for documenting research outputs. The cooperating teams will be for the following six different areas: crop value chain; horticulture value chain; livestock value chain; fisheries value chain; NRM systems; and social sciences (trade, regulations, extension, etc.).

Consortia and impact assessment: IA can be contemplated at several stages and levels o f NAP activities, and will properly develop in scope during the project as experience expands. There should be some ex ante work done as part o f the preparation o f each consortium, (and ideally even some back-of-the-envelope assessment made as part o f the preparation on concept notes). This aspect o f expected economic impact can then be one o f the criteria used in making choice about which proposals should be accepted and supported. There would thus be (a) a demand for advice on conducting such ex ante impact analyses, which could presumably be provided by N C A P and the P M E units, as well as (b) a need for critical scrutiny o f such analyses that are made. Engineering such scrutiny wi l l be an ongoing evaluative aspect o f Project management, so that the P I U must somehow find sources o f competent independent professional scrutiny, perhaps as necessary f rom foreign sources, which can, through independent professional review, add to quality o f the analyses, increase credibility o f the process, facilitate evaluation o f the Project and thereby help to ensure accountability in general.

Training. A number of training programs have been organized by N C A P o n agricultural research evaluation and impact assessment. I t i s considered that considerable capacity i s developed for research impact assessment, although it i s in need o f further strengthening so that there i s a more robust set o f specialized sk i l ls in this area. Depending upon the requirement, a specially designed training program can be organized through N C A P for the cooperating teams. The hands-on training program wil l cater to the needs o f the impact case studies and will be organized with support f rom international experts.

Costs. The cost of putting in place an impact assessment scheme over a six-year period i s estimated at US400 thousand dollars at NCAP, and at around U S 1.1 mi l l ion at the level of the participating institutions. A minimum o f some U S $ 5 0 thousand (within the N C A P allocation) would be required for external technical assistance. Total cost for an effective impact assessment system i s thus about US$1.5 mill ion. This i s an important element o f NAP Component 1.5, along with other social and environmental assessment activities, but will also be covered from the budgets o f the consortia that will operate with NAP funding.

82

Annex 10: Safeguard Policy Issues

INDIA: National Agricultural Innovation Project

The project i s not expected to have significant adverse environmental and social impacts and has been classified as a Category B project. Safeguards management gain significance particularly in the context o f the project’s second and third components. In these components research consortia wi l l be established for: (i) sustainable improvement o f agricultural value chains (component 2); and (ii) sustainable income-oriented rural livelihood improvement in disadvantaged areas (component 3). The interventions essentially relate to the development and dissemination o f appropriate agricultural technologies and the impacts are expected to be mostly positive. However, in a few cases, adverse effects could emanate rather inadvertently. But, identifying, and addressing, a l l l ikely impacts during the project preparation i s not possible as the nature of interventions become known, over time, as and when consortia are grounded. This in view, generic safeguard measures have been designed which include: (i) A Safeguards Management Framework; and (ii) A Checklist o f Impacts likely to occur. Safeguards issues are not viewed in isolation, but integrated with the overall project implementation which has paved way for offering substantial opportunities to further environmental and social development objectives. Safeguards Management Planning has been done mostly with ICAR’s in-house efforts,

Stakeholder Participation and Consultation:

Project’s participatory framework has evolved over time and will continue to do so. The strategy for stakeholder participation in the project preparation has been unique. Instead o f the normal practice of relying upon external contractual partners (consultants), I C A R established a Working Group (WG) comprising 15 members, drawn from different spheres (Scientists, Academia, Non-Government and Private) and headed by an eminent Agricultural Scientist. The WG, in turn, created as many as 11 Sub-WGs (2-5 members), each o f whom deliberated on a particular theme. This way, project preparation has been enriched by contributions f rom a large number o f subject matter specialists. Findings o f the sub-groups were discussed iteratively in 4 meetings, all o f which, cumulatively contributed towards designing o f the project including elaborating on the institutional/ implementation arrangements. Towards developing a checklist o f impacts l ikely to occur, I C A R identified some 10 experts from different spheres who developed special technical notes. These were shared with a wider audience, discussed and finalized in 2 meetings. Simultaneously, making use o f the results emanating from the deliberations, I C A R conducted 5 stakeholder consultation meetings throughout the country - Bangalore (south), Pune (west), Bubaneshwar (east), Shillong (North East) and Delhi (North India). ICAR had chosen eminent scientists/ administrators to chair these workshops which in a l l had about 200 participants. In addition to these, three special stakeholder consultations were arranged in Guj arat, Tamil Nadu and Kerala which were attended by Bank Missions. In the end, I C A R deployed an external consultant to assist them in consolidating al l these efforts.

Key Environmental and Social Issues:

Environment. The project has a broad understanding o f the issues l ikely to emerge in the environmental sphere. Examples of those relate to: the use o f agro-chemicals; water management, ground water depletion and conjunctive uses; water quality; land degradation and soil erosion; biodiversity and natural habitats; phyto-sanitary conditions and related safety measures; carbon financing/ sequestration; and bio-prospecting o f biologic products including genetic enhancement and transgenic products.

83

Social. K e y social development issues in project implementation are: (i) participation by local communities (whose livelihoods are to be enhanced) as consortium members, individually as well as collectively, and in ICAR’s governance and management entities; (ii) inclusion, in particular, of the poor and vulnerable sections at the grassroots level, women and young scientists o f I C A R as well as other non-ICAR public and private sector entities in project activities; and (iii) gender sensitizing as well as mainstreaming.

Safeguards Management Framework

The selection o f all consortia will be subject to satisfactory safeguard compliance. For this, each consortium will be required to prepare a safeguards management note as a part o f their overall proposal. This note will contain, broadly:

(i)

(ii)

(iii)

Baseline information - covering social, economic, demographic, cultural, ecological and other related environmental aspects; Stakeholder analysis - identifying key stakeholders and ascertaining their views as we l l as acceptance; Impact assessments -- identifying social and environmental impacts l ikely to occur as a result o f the interventions, categorizing the impacts into positive and negative, drawing measures to fructify positive and mitigate the negative impacts; and Monitoring and evaluation arrangements along with indicators. (iv)

Exclusion Criteria. T o ensure that the project meets i t s overall objectives, and that the national legal as well as the Bank’s safeguards requirements are met, activities wi l l be excluded from the project if the proposed interventions:

(i) require involuntary land acquisition; (ii) (iii)

(iv) (v)

(vi) (vii)

cause damage to wildlife, forests and other natural habitats; would exclude or impact adversely the local people in general, and vulnerable sections such as tribes, landless, marginal/ small farmers; could cause flooding and land slides; promote use, storage, manufacture and distribution o f banned hazardous agro- chemicals; result in eliminating/ replacing indigenous varieties o f species; would impact religious places and cultural sites.

Impact assessments will be done, particularly, in the light o f the following safeguard policies of the Bank - (i) OP 4.01 --Environmental ; (ii) OP 4.09 - Pest Management; (iii) OP 4.04 -Natural Habitats; (iv) OP 4.36 - Forestry; and (v) OP 4.10 - Indigenous/ Tribal People. Other aspects receiving attention will include livelihoods, in general, and that o f the poor and vulnerable, in particular; gender; land alienation & marginalization; employment; nutrition; drinking water and sanitation.

Monitoring and Evaluation

A strong monitoring program has been designed to monitor various environmental and social parameters and to promote their use for adaptive management. The monitoring on environmental and social issues wi l l be part of the overall sub-project progress monitoring. Indicators will be of two types: Generic, reflecting on the project as a whole; and specific reflecting on a particular sub-project, as emanating from the safeguards management framework. I C A R will enlist the services o f an external consulting agency to conduct a safeguards assessment twice during the project implementation, during the two mid-term reviews. Six sub-proposals, the f i rs t two Erom

84

Components 2, 3 and 4, w i l l be shared with the Bank for comments before approval. Public disclosure arrangements have been made for making available information related to all consortia individually, as wel l as the project as a whole.

Institutional Arrangements

I C A R has demonstrated during the recently concluded N A T P project that i t can effectively mainstream environmental and social opportunities and risk management into project activities. In NAP, safeguards management has been integrated with the overall project’s governance and management institutions. National Steering Committee will play an apex role in overseeing the safeguards management. National decisions related to safeguard assessments wi l l rest with the Research Program Committee and the Technical Advisory Groups. Operational responsibility for managing safeguards for the project as a whole will rest with one o f the National Coordinators who wil l arrange for advising and reviewing the different consortia. Local level consortium monitoring will rest with the Consortium Advisory Committee. A help desk wil l be established at the National Academy for Agricultural Research Management (NAARM) that will be accessible on l ine and through telephone.

Disclosures. Detailed reports, including minutes o f stakeholder consultation meetings and technical notes are available with the PIU, and on the project portal. The ESMF report i s also available on the portal. The executive Summary has been translated into Hindi language and will be disseminated widely across the country through the I C A R institutes as wel l as State Agricultural Universities. In accordance with the Bank’s disclosure policy, environmental and social safeguards management notes prepared as a part o f each consortium proposal will be discussed with the stakeholders and made available on ICAR’s portal. They will also be disclosed through the Public Information Centre o f the Bank’s Country office.

85

Annex 11: Project Preparation and Supervision

INDIA: National Agricultural Innovation Project

Planned Actual P C N review February10 2005 March 3 2005 Ini t ia l P ID to PIC April 14 2005 Init ial ISDS to PIC April 23 2005 Appraisal December 9,2005 December 20,2005 Negotiations January 20,2006 February 13,2006 BoardiRVP approval March 14, 2006 April 13, 2006 Planned date o f effectiveness Planned date o f mid-term review

Planned closing date June 30,2012

July 1, 2006 January 3 1 2008 January 3 1,20 10

Bank staff and consultants who worked on the project included:

Name Title Unit Willem Janssen Task Team Leader SASAR Paul Singh Sidhu Co-Task Team Leader SASAR Rabih Karaky Agricultural Economist SASAR S. Satish Social Development Specialist SASES

Papia Bhattacharya Financial Management Specialist SARFM Thao L e Nguyen Senior Finance Officer L O A G 2 Philip Beauregard Legal Counsel LEGMS Jacqueline Julian Program Assistant SASAR Deborah Ricks Program Assistant SASAR Jacob Kampen Agricultural Research Management Consultant Jock Anderson Impact Assessment Consultant Zenete Franca Capacity Development Consultant Ghazali Raheem Monitoring and Evaluation Consultant Ranj an Samantaray Environmental Management SASES

Jai Mansukhani Team Assistant SASAR Theodosia Karmiris Program Assistant SASAR Jonathan Woolley Agricultural Research Specialist Consultant

Dhimant J. Baxi Procurement Specialist S A R P S

Ei ja Pehu Advisor ARD

Bank funds expended to date on project preparation: 1. Bank resources: US$507.000 2. Trust funds: U S $ 75.000 3. Total: US$582.000

Estimated Approval and Supervision costs: 1, Remaining costs to approval: US$ 30.000 2. Estimated annual supervision cost: U S $ 150.000

86

Annex 12: Documents in the Project File

INDIA: National Agricultural Innovation Project

Environmental and Social Assessment and Environmental and Social Management Framework for the National Agricultural Innovation Project Volume I: Environment (ERM, 2005)

Environmental and Social Assessment and Environmental and Social Management Framework for the National Agricultural Innovation Project Volume 11: Social Issues (ERM 2005)

NAP Project Implementation Plan (ICAR, February 2006)

Manual for Accounting Auditing and Reimbursement Procedures: National Agricultural Innovation Project (ICAR, 2005)

Background and support to strengthening ICAR’s role as the catalyzing agent o f the emerging Indian Agricultural Innovation System in Component 1. (World Bank, 2005)

Background and support to the establishment o f value chain oriented consortia in Component 2 (World Bank, 2005)

Background and support to the establishment o f livelihood oriented consortia in Component 3 (World Bank, 2005)

Background and support to the establishment of Competitive Grant Schemes and Selection procedures for Consortia in Component 2 and 3 (World Bank, 2005)

Minutes o f the Working Group for the Component 4 (Basic and strategic research in the frontier science areas of agriculture) o f the National Agricultural Innovation Project (ICAR, 2005)

Background and support to Capacity Building activities (World Bank, 2005)

Capacity building for NAIP proposal writing includes provision o f a helpdesk facility (World Bank, 2005)

Working definitions of farming systems, production to consumption systems and value chains (World Bank, 2005)

Recommendations on N A I P competitive grants and consortia formation (World Bank, 2005)

Scenario planning to guide investments in the Indian agricultural innovation and policy system: an invitation to the conversation (NAP Scenario team)

Detailed cost tables by component (World Bank)

Proposal for a new Web-Based Financial Management System and Management Information system In N A I P & ICAFUInstitutes (ICAR-PIU, 2005)

Project Note: Economic and Financial Analysis (World Bank)

87

Annex 13: Statement o f Loans and Credits

INDIA: National Agricultural Innovation Project

Project ID

PO86414

PO93720

PO83780

PO79708

PO73370

PO73651

PO75058

PO77856

PO77977

PO94513

PO865 18

PO84792

PO84790

PO84632

PO55459

PO73369

PO79865

PO73776

PO82510

PO50655

~078550

PO75056

PO76467

PO73094

PO721 23

PO71272

P 0 6 7 6 0 6

PO50649

PO50647

PO406 10

PO50653

PO69889 PO71033

PO74018

PO50668

FY

2006

2006

2006

2006

2005

2005

2005

2005

2005

2005

2005

2005

2005

2005

2004

2004

2004

2004

2004

2004

2004

2003

2003

2003

2003

2003

2003

2003

2002

2002

2002

2002

2002

2002

2002

Purpose

Third Power System Development

Mid-Himalayan (HP) Watersheds

TN Urban 111

TN Empwr & Pov Reduction

Madhya Pradesh Water Sector Restructurin

DISEASE SURVEILLANCE

TN HEALTH SYSTEMS

Lucknow-Muzaffarpur National Highway

Rural Roads Project

India Tsunami ERC

IN SME Financing & Development

Assam Agric Competitiveness

M A H A R WSIP

Hydrology I1

ELEMENTARY EDUCATION PROJECT @SA)

MAHAR RWSS

GEF Biosafety Project

ALLAHABAD BYPASS Kamataka UWS Improvement Project

RAJASTHAN HEALTH SYSTEMS DEVELOPMENT Uttar Wtrshed

Food & Drugs Capacity Building Project

Chatt DRPP

AP Comm Forest Mgmt

Tech/Engg Quality Improvement Project

AP RURAL POV REDUCTION

UP ROADS

TN ROADS

UP WSRP RAJ WSRP

KARNATAKA RWSS I1

MIZORAM ROADS

KARN Tank Mgmt

Gujarat Emergency Earthquake Reconstruct

MUMBAI URBAN TRANSPORT

Original Amount in US$ Millions

IBRD IDA SF GEF Cancel.

400.00 0.00 0.00 0.00 0.00

0.00 60.00 0.00 0.00 0.00

300.00 0.00 0.00 0.00 0.00

0.00 120.00 0.00 0.00 0.00

394.02 0.00 0.00 0.00 0.00

0.00

0.00

620.00

99.50

0.00 120.00

0.00 325.00

104.98

0.00

68.00

110.83

0.00 300.00

465.00

0.00 154.00

0.00 0.00

500.00

0.00 0.00

0.00

0.00 0.00 0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00 0.00

0.00 0.00 0.00 0.00 0.00 0.00

0.00 20.06

0.00

0.00 0.00

0.00 0.00 0.00 0.00

0.00

0.00 181.00 0.00 0.00 0.00

0.00 0.00 0.00 1.00 0.00 240.00 0.00 0.00 0.00 0.00

39.50 0.00 0.00 0.00 0.00

0.00 89.00 0.00 0.00 0.00

0.00

0.00

0.00 0.00 0.00

0.00 488.00

348.00

0.00

0.00

0.00

0.00

0 .oo 0.00

69.62

54.03

112.56

108.00

250.00

150.03

0.00

0.00 149.20

140.00

151.60

60.00

98.90

442.80

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 20.06

0.00 0.00 0.00 0.00 0.00 40.11

0.00 0.00 0.00

0.00 0.00 0.00 0.00 0.00 0.00

0.00 0.00 40.11

0.00 0.00 15.04

0.00 0.00 15.04

0.00 0.00 0.00 0.00 0.00 25.07

0.00 0.00 80.23

463.00 79.00 0.00 0.00 0.00

Undisb.

400.00

59.84

284.25

107.68

371.58

62.41

81.38

616.90

337.58

394.37

19.40

137.35

293.38

104.98

98.45

167.51

0.84

190.88

34.36

80.93

63.72

46.07

90.58

69.61

195.44

70.16

390.27

291.84

103.44

97.98

100.98

38.47

68.13

154.22

429.23

Difference between expected and actual

disbursements

Orig. Frm. Rev'd

0.00 0.00 0.00 0.00 0.00 0.00

-6.64 0.00 6.16 0.00

5.55 0.00 -0.38 . 3.13

-3.10 0.00

0.67 0.00

67.00 0.00 -15.60 0.00

1.26 0.00 -28.63 0.00 15.91 0.00

-105.68 0.00

24.62 0.00

0.54 0.00 68.48 0.00

16.35 0.00

29.42 0.00

-1.66 0.00

18.06 0.00

22.56 0.00

-0.13 0.00

61.50 -11.43

10.99 0.00

147.47 0.00 53.54 0.00 95.47 0.00

52.21 0.00

54.37 0.00

6.13 0.00 45.13 -4.91

166.15 1.10

158.67 0.00

PO72539

PO55455

PO55454

PO50658

PO35173

PO10566

PO59242

PO71244

PO70421

PO672 16

PO38334

PO10505

PO45049

PO49770 PO09972

PO50657

PO50667 PO55456

PO59501

PO50646

PO45051

PO38021

PO10496

PO35827

PO49385

PO 10473

2002

2001

2001

2001

2001

2001

2001

2001

2001

2001

2001

2000

2000

2000

2000

2000

2000

2000

2000

1999

1999

1998

1998

1998

I998

I997

PROJECT KERALA STATE TRANSPORT

RAJ DPEP I1

KERALA RWSS

TECHN EDUC 111

POWERGRID I1

GUJARAT HWYS

M P DPIP Grand Trunk Road Improvement Project

KARN HWYS

K A R WSHD DEVELOPMENT

RAJ POWER I

RAJASTHAN DPIP

AP DPIP

REN EGY I1 NATIONAL HIGHWAYS H I PROJECT

UP Health Systems Development Project

UP DPEP I11 1N-Telecommunications Sector Reform

TA IN-TA for Econ Reform Project

UP Sodic Lands I1

2ND N A T L HIVIAIDS CO

DPEP Ill (BIHAR and Jharkhand)

ORISSA HEALTH SYS

WOMEN & CHILD DEVLPM

AP ECON RESTRUCTURIN

TUBERCULOSIS CONTROL

Total

255.00

0.00 0.00 0.00

450.00

381.00

0.00 589.00

360.00

0.00

180.00

0.00

0.00 80.00

516.00

0.00

0.00

62.00

0.00

0.00 0.00

0.00 0.00

0.00 301.30

0.00

0.00

74.40

65.50

64.90

0.00 0.00

110.10

0.00

0.00

100.40

0.00

100.48

11 1 .oo 50.00

0.00

110.00 182.40

0.00

45.00

194.10

191.00

152.00

76.40

300.00

241.90

142.40

0.00

0.00

0.00

0.00 0.00 0.00

0.00

0.00

0.00 0.00 0.00

0.00 0.00

0.00 0.00 0.00 0.00 0.00

0.00

0.00 0.00

0.00 0.00

0.00 0.00 0.00

0.00

0.00

0.00

0.00 0.00 0.00

0.00 0.00 0.00 0.00

0.00 0.00

0.00 0.00 0.00 0.00

0.00

0.00

0.00 0.00

0.00 0.00

0.00 0.00

0.00

0.00

0.00 155.28

0.00 35.10

12.27 24.84

0.00 17.97

0.00 82.88

61.00 112.92

20.06 34.37 0.00 283.14

0.00 141.04

20.06 62.79

2.02 44.15

0.00 45.36

0.00 24.88

18.00 48.69

0.00 184.24

30.09 42.94

0.00 29.16

20.00 11.45

12.03 19.88

0.00 16.78

0.00 9.80

30.09 15.79

0.00 12.27

25.07 49.91

0.00 53.27

13.04 9.48

12.28

19.93

18.75

8.38

67.28

161.04

33.94 254.14

86.19

69.10

46.17

36.76

10.52

63.28

184.24

64.01

30.50

3 1.45

25.77

13.25

7.22

36.90

6.94

63.95

51.26

27.37

0.00 0.00

2.78

-0.82

35.56

145.04

18.85

0.00

0.00 0.00

-0.66

25.34

0.00 59.28

-15.76

-3.14

30.50

9.34

-0.48

-13.38

-1.59

10.87

-4.80

17.42

-5.97

-0.23 : 6,716.30 6,225.55 0.00 1.00 519.45 7,222.59 2,397.01 296.04

INDIA STATEMENT OF IFC’s

Held and Disbursed Portfolio In Millions o f U S Dollars

Committed Disbursed

IFC IFC

Equity Quasi Partic.

2005 ADPCL 40.03 7.00 0.00 0.00 0.00 0.00 0.00 0.00 2006 AHEL 0.00 5.08 0.00 0.00 0.00 5.08 0.00 0.00 2005 AP Paper Mills 35.00 5.00 0.00 0.00 0.00 5.00 0.00 0.00

2005 APIDC Biotech 0.00 4.00 0.00 0.00 0.00 1.24 0.00 0.00

F Y Approval Company Loan Equity Quasi Partic. Loan

0.00 10.77 15.50 0.00 0.00 10.77 2002 A T L 15.50 0.00

89

2003

2005

2003

2004

2001

2003

2001

2005

1984

2001

2003

I990

I992

2004

2004

2002

2005

1995

2005

2005

2003

2005

2003

200 1

I994

1998

2003

1995

2000

1998

1998

2005

2001

1990

1993

1998

1992

I995

1996

2001

1996

1992

2005

2005

2003

1990

1993

ATL

ATL

BHF

BILT

BTVL

Balrampur

Basix Ltd.

Bharat Biotech

Bihar Sponge

CCIL

CCIL

CESC

CESC

CGL CMScomputers

COSMO

COSMO Centurion Bank

Centurion Bank DCM Shriram

DQEL

Dabur

Dewan

EXB-STG

GTF Fact

GVK

Global Trust

HDFC HENKAL LTD

HENKAL LTD

HENKAL LTD

IAAF

IDFC

IDFC

IIEL

IL & FS

IL & FS

IL & FS

IL&FS VC IL&FS VC

India Direct Fnd

Indian Seamless

Indus I1

Indus VC Mgt Co

K Mahindra INDIA

KPIT

L&T

M&M

M&M

1.01

9.51 10.44

0.00

11.86

13.70

0.00 0.00

6.04

6.75

1.50

7.75

11.45

15.00

10.00 5.00

0.00 0.00 0.00

30.00

0.00

0.00 10.56

0.31

0.00 0.00

0.00 100.00

0.00

0.00 0.00

0.00

0.00 50.00

0.00 0.00 0.00

0.00

0.00

0.00

0.00

6.00

0.00

0.00

22.00

11.00

50.00

0.00

0.00

0.00

0.00

0.00

0.00 5.00

0.00

0.98

0.00 0.00

0.00

0.00

0.00

0.00

0.00

10.00 0.00 4.20

0.69 0.07

0.00

1.50

15.10

0.00 0.00

1.20

5.00

0.00 0.00 0.29

0.24

0.79

0.47

10.82

0.00 3.14

0.49

0.84

0.84

0.14

0.18

1.10

0.00

0.42

0.01

0.00 0.00 0.00 0.07

0.01

0.00

0.00

10.44

15.00

0.00 0.00

0.00 4.50

0.00

0.00

0.00

0.00

0.00 0.00

2.50

0.00

0.00 0.00 0.00 0.00

1.50

0.00 0.00 0.00

0.00 0.00

2.00

0.00 0.00 0.00 0.00

0.00

0.00 0.00

0.00 0.00

0.00

0.00 0.00 0.00

0.00 0.00 0.00

0.00

0.00 0.00

0.00

0.00

0.00

0.00 0.00

0.00 0.00 0.00

0.00 0.00

0.00

0.00 6.71

0.00 0.00

25.53

0.00

0.00 0.00 0.00

0.00

0.00

0.00

0.00

0.00 0.00 0.00

0.00 0.00

0.00

100.00 0.00

0.00 0.00

0.00

0.00 0.00

0.00 0.00

0.00

0.00 0.00 0.00

0.00

0.00

0.00

0.00

0.00 0.00

0.00

0.00

0.00

0.69

0.00

10.44

0.00 11.86

13.70

0.00

0.00 6.04

6.75

0.59

7.75

11.45

8.00

10.00 5.00

0.00

0.00

0.00

15.00

0.00

0.00

10.56

0.31

0.00 0.00 0.00

100.00

0.00

0.00

0.00

0.00

0.00 0.00

0.00 0.00 0.00

0.00 0.00

0.00

0.00

6.00 0.00

0.00

22.00

0.00

50.00

0.00 0.00

0.00

0.00

0.00

0.00 5 .oo 0.00 0.98

0.00

0.00

0.00

0.00 0.00 0.00

0.00

0.00

0.00 4.20

0.69

0.07

0.00

1.50

15.10

0.00

0.00 1.20

5.00

0.00 0.00 0.29

0.24

0.79

0.30

10.82

0.00 2.06

0.49

0.84

0.84

0.14

0.18

0.64

0.00 0.42

0.01 0.00

0.00

0.00 0.07

0.01

0.00

0.00

10.44

15.00

0.00

0.00 0.00

0.00 0.00 0.00

0.00

0.00

0.00 0.00

0.00 0.00

0.00 0.00 0.00 0.00

1.50

0.00

0.00

0.00

0.00

0.00 2.00

0.00

0.00

0.00 0.00

0.00 0.00

0.00

0.00 0.00

0.00

0.00 0.00

0.00 0.00 0.00

0.00

0.00

0.00 0.00

0.00 0.00 0.00

0.00

0.00

0.00

0.00 0.00

0.00 0.00

0.00 0.00 6.7 1

0.00

0.00

25.53

0.00 0.00

0.00

0.00 0.00 0.00

0.00

0.00

0.00

0.00 0.00

0.00 0.00

0.00

100.00 0.00 0.00

0.00 0.00

0.00 0.00 0.00

0.00

0.00 0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00 0.00 0.00

0.00

2002

2003

2001 1996

1999

2000

I997

2001

2003

2004

2003

2001

1997

2004

1995

2004

1995

2004

2005

2001

1997

2000

1995

2004

2001

2003

2004

2000

2002

1998

2005

2004

1996

2005

2002

2001

2005

1997

1997

MMFSL

MSSL MahInfra

Moser Baer

Moser Baer

Moser Baer

NICCO-UCO

NIIT-S LP

Nevis

NewPath

NewPath

Niko Resources

Orchid

Owens Coming

Powerlinks

Prism Cement

RAK India

Rain Calcining

Rain Calcining

Ramky

SBI

SREI

SREI

Sara Fund

SeaLion

Spryance

Spryance

Sundaram Finance

Sundaram Home

Sundaram Home

TC W/ICICI

TISCO

UPL

United Riceland

United Riceland

Usha Martin

Vysya Bank

Vysya Bank

WIV

Walden-Mgt India

9.06

0.00

0.00 0.00

1.96

14.64

1.88

8.22

0.00 0.00

0.00 31.12

0.00 7.71

73.96

9.03

20.00

0.00

10.00

3.79

50.00 4.29

7.50 0.00

4.68

0.00

0.00

43.51

0.00 8.16

0.00 100.00 17.50 6.88

8.50

19.43

0.00 0.00

0.00 0.00

0.00

2.29

10.00

0.39 6.24

9.68

0.00

0.00 4.00

9.31

2.79

0.00 2.68

0.00

0.00

0.00

0.00

2.70

0.00 10.42

0.00 0.00

0.00

3.71

0.00 1.90

0.95

0.00 2.18

0.00 0.80

0.00

0.00 0.00 0.00 0.72

3.66

3.51

0.57

0.01

7.61

0.00

0.00

0.00

0.00 0.00

0.00 0.00

0.00 0.00 0.00

0.00

0.00

0.00

0.00 0.00 0.00

0.00

0.00

0.00 0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00 0.00 0.00

0.00 0.00 0.00

0.00

0.00

0.00

0.00

0.00

0.00 0.00

0.00 0.00 0.00 0.00 0.00 0.00

0.00 0.00 0.00

0.00 0.00 0.00

0.00

0.00

0.00 2.45

0.00

0.00

0.00 0.00 0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00 0.00 0.00

0.00

300.00 0.00 0.00

0.00 0.00

0.00 0.00

0.00 0.00

9.06

0.00 0.00 0.00 1.96

14.64

1.88

0.00

0.00 0.00 0.00

31.12

0.00 7.71

5 1.72

9.03

20.00

0.00

10.00 0.00

0.00 4.29

7.50

0.00 4.68

0.00

0.00

43.51

0.00

8.16

0.00 0.00

17.50

6.88

3 .oo 19.43

0.00

0.00 0.00

0.00

0.00 2.20

0.79

0.39

6.24

9.68

0.00 0.00

4.00

8.31

2.49

0.00

2.68

0.00 0.00 0.00

0.00

2.70

0.00

0.00

0.00 0.00

0.00

3.71

0.00

1.90

0.95

0.00

2.18

0.00

0.80

0.00 0.00

0.00

0.00

0.72

3.66

3.51

0.57

0.01

7.61

0.00

0.00

0.00 0.00 0.00 0.00

0.00 0.00 0.00

0.00 0.00 0.00

0.00 0.00 0.00

0.00 0.00

0.00 0.00

0.00 0.00

0.00

0.00 0.00 0.00

0.00 0.00

0.00 0.00

0.00 0.00 0.00

0.00

0.00 0.00

0.00 0.00

0.00 0.00

0.00 0.00

0.00 0.00 0.00 0.00

0.00 0.00 0.00

0.00

0.00 0.00

0.00

0.00 0.00 2.45

0.00

0.00 0.00

0.00 0.00 0.00

0.00

0.00

0.00

0.00

0.00

0.00 0.00

0.00 0.00 0.00

0.00 0.00 0.00

0.00 0.00

0.00

0.00

0.00

Total portfolio: 942.23 163.18 43.55 445.46 583.71 120.69 36.55 145.46

Approvals Pending Commitment

FY Approval Company Loan Equity Quasi Partic.

2004 CGL

2000 APCL

0.01 0.00 0.00 0.00 0.01 0.00 0.00 0.00

2005 KPIT 0.00 0.00 0.00 0.00

2004 CIFCO 0.00 0.00 0.02 0.00

2001 Vysya Bank 0.00 0.00 0.00 0.00 2001 GI Wind Farms 0.01 0.00 0.00 0.00

2004 Ocean Sparkle 0.00 0.00 0.00 0.00 2005 Allain Duhangan 0.00 0.00 0.00 0.00

Total pending commitment: 0.03 0.00 0.02 0.00

92

Annex 14: Country at a Glance

INDIA: National Agricultural Innovation Project

ECOnOmic r a t i o s *

Trade

T

r +-e Investment Domestic

savings

Indebtedness

~ -India - Low-mcomegroup * -

P O V E R T Y a n d S O C I A L

2004 Po puiat io n, mid-year (millions) GNI per capita (Atlas method, US$) GNI (Atlas method, US$ billions)

A v e r a g e a n n u a l growth, 1998.04

Population (%) 1.6

M o s t recen t e s t i m a t e ( l a tes t year avai lable, 1998-04)

Poverty (% ofpopulation belownationalpoveriyline) 29 Urban population (%of totalpopulation) 29 Life expectancyat birth (years) 63 Infant mortality(per l,000live birihs) 65

84 39

Male D7 Female 90

India

1,079.7 620

672.8

Labor force (%) 2.1

Child malnutrition (%ofchildren underli) 47 Access to an improvedwatersource (%ofpopulation) Illiteracy (% of population age 75+/ Gross primaryenrollment (%of school-age population) 99

KEY E C O N O M I C R A T I O S a n d LONG-TERM T R E N D S

I ECOnOmic r a t i o s * 1984

GDP (US$ billions) 206.5 Gross domestic investmentiGDP 216 Exports o f goods and servicesiGDP 6.5 Gross domestic savingsiGDP 18.8 Gross national savingsiGDP 29.4

Current account balance/GDP -14 interest paymentsiGDP 0.5 Total debt/GDP 6 .5 Total debt serviceiexports 18.3 Present value o f debtiGDP Present value o f debtlexports

1984-94 1994-04 (average annual growth) GDP 5.4 5.8 GDP percapita 3.3 4.1 Exports of goods and Services 9.0 P.8

Trade

1994

322.6 23.4 a.0

24.8 26.0

-1.2 1.3

31.8 26.6

2003

8.6 7.0 4.9

I

South L o w - A s i a i n c o m e

T

r +-e Investment Domestic

savings

Indebtedness

~ -India - Low-mcomegroup * -

1,448 590 860

1.7 2.1

26 63 66 48 84 41 97 a 5 92

2003

600.7 23.0

15.1 28.1 30.8

1.4 6 .4 8 .2 P.9 6 . 7

89.3

2,336 5 0

1.184

1.8 2.1

30 58 79 44 75 39 94 a1 88

2004

668.7 24.6 6 . 2

22.8 24.9

0.3 6.9 l7.6 8.7

2004 2004-08

6.9 6.1 5.4 4.8 8.0 15.8

D e v e l o p m e n t d iamo nd*

Life expectancy

GN i Gross per + -- primary capita enrollment

Access to improved water source

India . _ Low-income qroup

S T R U C T U R E o f t he E C O N O M Y

(%of GDPJ Agriculture Industry

Services

Private consumption General government consumption Imports o f goods and services

Manufacturing

"

352 304 22 8 212 1'0

262 271 264 270

387 425 507 518 6 4 6 9 6 6 6 1 1 5

99 00 01 02 03 04 690 662 667 645 a8 a 7 11 3 P 7 7 9 a 3 6 1 180 GDI -GDP -

1984-94 1994-04 2003 (average annualgrowth) Agriculture 3 4 2 0 9 6 Industry 6 3 5 6 7 0

Manufacturing 6 2 5 6 6 9 Services 6 7 8 2 8 9

Private consumption 5 7 4 7 11 3

Gross domestic investment Imports o f goods and Services

General government consumption 4 8 5 9 3 7 99 00 01 02 03 04

9 0 7 3 - # - - b p o r t s d l q o r t s 1 5 0 6 9 8 4 9 6 11 2 11 0

Note: 2004 represents 2004-05 and data are preliminaryestimates and staff projections. 'Thediamonds showfour key indicators in thecountry(in boid)comparedwith its income-groupaverage. If data aremissing,thediamondwill

be incomplete.

93

India

75 000

50 000

25 000

0

PRICES and GOVERNMENT FINANCE

Domestic prices (% change) Consumer prices Implicit GDP deflator

Government finance (% of GDP, includes current grants) Current revenue Current budget balance Overall surplusideficit

TRADE

(US$ millions) Total exports (fob)

Tea Iron Manufactures

Total imports (cif) Food Fuel and energy Capital goods

Export price index (1995=100) Import price index (1995=1001 Terms of trade (1995=100)

BALANCE of PAYMENTS

(US$ millions) Exports of goods and sewices Imports of goods and services Resource balance

Net income Net current transfers

Current account balance

Financing items (net) Changes in net reserves

Memo: Reserves including gold (US$ millions) Conversion rate (DEC, local/US$)

EXTERNAL DEBT and RESOURCE FLOWS

(US$ millions) Total debt outstanding and disbursed

IBRD IDA

Total debt service IBRD IDA

Composition of net resource flows Official grants Official creditors Private creditors Foreign direct investment Portfolio equity

World Bank program Commitments Disbursements Principal repayments Net flows Interest payments Net transfers

1984 1994

4.3 7.6 7.4 9.7

.. 18.0

.. -3.7

.. -7.5

1984 1994

10,061 26,855 321 1,126 453 988

5,614 20,404 15,715 35,904 1,384 1,144 4,596 5.928 2,546 7,638

99 109 119 104 83 105

1984 1994

13,508 32,990 18,065 41,437 -4,557 -8,447

-838 -3,431 2,496 8,093

-2,899 -3,785

2,516 9,526 383 -5,741

5,952 25,186 11.9 31.4

1984 1994

34,036 102,483 1,688 11,244 8,545 17,758

2,973 10,951 257 1,641 109 325

483 416 1,363 970

0 983 0 3,824

1,895 1,438

2,651 2,064 1,114 1,783

129 1,062 985 721 237 904 748 -183

2003

3.7 3.2

18.7 -4.9 -9.3

2003

62,952 1,321 2,341

47,616 79,658

3,059 20,570 17,132

93 100 94

2003

90,568 96,590 -6,022

-4,703 18.885

8.160

8,820 -16,980

11 1,648 46.0

2003

11 5,277 4,126

22,351

14,469 2,079

771

559 2,231 8,565 3,137

11,355

1,600 1,717 2.468 -751 381

-1,133

2004

6.6 4.9

19.9 -5.8

-10.6

2004

76,345

57,898 99,836

20,915

104 113 92

2004

108,948 121,250 -12,302

-4,800 19,243

2,141

19,655 -21,795

133,441 44.9

2004

121,456 4,865

23,662

11,337 288 755

646

4,020 8,996

2,705

784 1,051

259 792

i ,835

1 " QQ DO 0 3 02 03 dl GDP deflator - D " C P I , r u ~

1 Export and Import levels (US$ mlll.)

1125.000 I

1 O4 I 1 98 QQ W 01 02 03

E X ~ O ~ ~ S Imports

[Current account balance to GDP (%)

/ ' T I

IComposition of 2004 debt (US$ mill.)

1 G 4,819 A 4@35

21.988

A - IBRD B - IDA D -Other multilateral F - Private C - IMF

E - Bilateral

G - Short-term

Development Economics 6/1/05

94

Annex 15: Rationale for the Project and its Components

INDIA: National Agricultural Innovation Project

From supporting technology generation to generating innovation

I t i s well accepted that a strong science and technology system can make important contributions to sustainable and equitable agricultural development. The principal reason i s that development i s very knowledge dependent and that a lot o f this knowledge needs to be generated and applied within the national context. Investments in science and technology have therefore been a steady component o f most development strategies. One o f the conclusions however, o f a June 2004 workshop on “Development o f Research Systems to Support the Changing Agricultural Sector” organized by the World Bank was that strengthened research systems wil l increase the availability o f new knowledge and new technologies, but not necessarily the number of innovations that will be implemented by the producers.

Several interrelated developments have led to this conclusion: f i rs t o f all, agricultural development i s increasingly market rather than production driven. With fall ing staple food prices and rising urban incomes, the pay-off has slowly improved to strategies that enhance agricultural diversification and increase the value added o f agricultural production. Secondly, it i s increasingly realized that the generation, diffusion and application o f new knowledge often takes place through the private sector. A substantial part o f the technology package that farmers use has been designed by and supplied through private businesses (e.g., fertilizers, machinery, pesticides, seeds). With increasing intensification, the role o f the private sector as technology supplier grows. Thirdly, through the ICT revolution (particularly the internet), the ability to take advantage o f knowledge that has been developed in other places, or for other purposes, has grown. H o w to take advantage of new knowledge has become a question that i s as important as how to generate and diffuse new knowledge.

Thus, in addition to generating new knoyledge, the conditions must be put in place to assure that this knowledge actually leads to accelerated development. This realization has led to extensive changes in the research systems o f the developed world. Many o f these changes have been implemented to ensure that new knowledge i s relevant in the market context and that the role o f the private sector in the development and diffusion o f new knowledge i s explicitly recognized.

This i s where the concept of a national innovation system arises. A national innovation system i s made up o f the institutions, enterprises and individuals that demand and supply knowledge and technologies, and the rules and mechanisms by which these different agents are interacting. In this concept the focus i s not on the science suppliers but on the totality o f actors that are involved in innovation. The role of the private sector and as wel l as o f the Intellectual Property Rights associated with the innovation are more explicitly recognized, end-market demands are more integrated and the conditions that need to be fulfilled for innovations to become successful are better spelled out. Following the lessons from the industrial applications, the effectiveness o f the agricultural innovation system depends on three main elements:

0 An institutional environment that i s conducive to the f low o f knowledge, to collaboration, experimentation and implementation o f innovations.

95

0 A we l l articulated demand for new knowledge and technology. Producers, traders and others must be able to express their demand and must be in a capacity to adapt and adopt new knowledge and technology. In the earlier mentioned Wor ld Bank workshop o f June 2004 it was noted that the “demand side” i s often poorly developed. The effective supply o f new knowledge and technology, f rom the public research system, but also f rom other sources, such as indigenous knowledge, private sector research and transfers f rom abroad.

0

Changing conditions in India’s agricultural sector and NAIP’s response

Agricultural innovations and diffusion o f new technologies are important factors in the country’s quest for food, nutrition and environmental security. Agricultural research in India has generated outstanding productivity increases in the past and shall continue to play an important role. However, rising population and per capita income are significantly pushing up the food demand, which needs to be met through enhanced productivity per unit area, input, time and energy. At the same time, issues o f decreasing factor productivity and resource use efficiency have emerged. Furthermore, many promising research findings have not reached the producer, due either to the inadequacies o f research design or research results or to the deficiencies o f delivery systems. This i s particularly evident in complex environments and in less favored areas. In order to attack poverty and hunger, i t i s critical to redirect and augment resources devoted to agricultural research to the farming and livelihood systems o f the poor rural communities.

T o meet the new, diverse and complex challenges that l ie ahead and to avail the technological breakthroughs that are now available for commercial use, agricultural research priorities and strategies will have to be revisited and new system-wide approaches will have to be developed and adopted.

NAP will assist in overcoming the shortcomings through a combined effort on changing content and process. Policy and technology options wi l l be checked or tested by the end-user for applicability and for economic, social and environmental sustainability. In applied and adaptive research, the end-user o f innovations will be involved f rom the start o f programs and projects. Both indigenous knowledge and new or frontier technologies will be used to generate satisfactory products.

Component 1, ICAR as the catalyzing agent for management o f change in the Indian N A R S aims to create an enabling environment for the management o f change in the Indian Agricultural Innovation System. The major road blocks for meeting the objective o f component 1 are i) institutional rigidity in terms o f outdated decision making structures, ii) absence o f institutional and policy arrangements for participatory development and management models, iii) inadequate capacity and policies to guide research, iv) l o w visioning abil ity o f the system, v) absence o f models for sharing information and knowledge with the vast network o f stakeholders, and (vi) legacy o f o ld bureaucratic culture and absence of techniques o f modern management. The innovative approaches to reforms and capacity building o f the National Agricultural Research System (NARS) will be taken up in limited numbers o f organizations so that the models that will be built can be thoroughly validated before further broadening and deepening throughout the NARS. Component 1 will be implemented through 6 sub-components.

The consortium concept i s central to facilitating flows o f knowledge collaboration, experimentation and implementation and to articulate demands for knowledge and technology (conditions 1 and 2 o f effective innovation systems). Collaborative research networks and consortia have been more effective than simple information exchange networks. The consortia to

96

be supported by NAP will have to play a key role in more efficient use o f scarce resources in national agricultural research, and in enhancing synergies among research and development actors. NAP will enhance the potential and tackle the limitations o f these partnerships, contribute to a better utilization o f limited resources, and enhance synergies among participating institutions.

By making competitive grants available for large projects (USD 3 to 10 million), incentives are created to build partnerships and share knowledge and information. An additional reason for the competitive nature i s that it allows successful and innovative models to arise f rom the bottom, rather than imposing a design fi-om the top, as convincingly shown in Australia and other countries. The consortium mode wil l then be applied to three main development challenges that the Indian agricultural research system faces.

Production to consumption system (PCS) in component 2 concern the entire set o f actors, materials, activities, services, and institutions involved in growing and harvesting a particular commodity, transforming it into higher value product and marketing the final product. The system includes the technologies used to grow and process the material, as wel l as the social, institutional and economic environment in which these processes operate.

The emphasis on production to consumption systems in Component 2 i s a simple reflection o f the fact that agricultural growth in India i s increasingly market driven and that the challenge to raise income and welfare to the agricultural community can only be met in a market context. The production to consumption systems implies a higher priority to among, others, post-harvest processing, quality management and nutritional issues. The importance o f the market wi l l also imply a shift in attention to products with large market and income growth potential.

Sustainable livelihood security in disadvantaged areas in component 3 reflects the fact that many mi l l ion people in the country remain largely untouched by the green revolution and modem agricultural practices. A large proportion o f these people and o f the rural poor live in less favored, marginal or more complex environments. Long-term social, political and environmental stability require that attention be given to these areas. The relevance o f less endowed areas to decentralized development, to resource conservation, to water harnessing and biodiversity i s being increasingly recognized. In component 3 emphasis will be given to improving the sustainability o f the farming systems and natural resource management in less favorable environments. Particular attention will be given to rainfed agriculture, to hill and mountain agriculture, and to dryland and coastal eco-regions.

Basic and strategic research in the frontier areas o f agricultural science in component 4 i s required to sustain innovation, and to generate new knowledge and new findings that can later on be tumed into the next generation o f innovations. Recent research shows that the capacity o f the Indian agricultural research system to produce high quality science was higher in the past than at present. Especially for a large country such as India it i s important to be at, and contribute to the scientific frontier. Component 4 therefore addresses the looming basic knowledge gap that might appear in the absence o f h igh quality basic and strategic research.

Thrust Areas

The NAP wil l not predefine the research agenda that i t wishes to pursue in components 2, 3 and 4 but will allow the agenda to be evolved from the bottom through the competitive process that will guide most o f the resource allocation. The t rus t areas below are merely indicative o f what NAP projects may address.

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Agricultural Diversification (mainly components 2 and 3, but also component 4). For making Indian agriculture sustainable and competitive, agricultural diversification will have to be intensively promoted. Attention towards precision farming, small farm mechanization, resource conservation technologies, use o f sprinkler and drip irrigation systems, fertigation, protective cultivation o f flowers and vegetables, and adoption o f high-value and low-volume crops will be certainly rewarding. This warrants a multifaceted approach with a greater appreciation o f the various site-specific needs and compulsions o f the farming systems, agro-climatic conditions, endowment o f land and water resources and the market demand both within the country and outside.

Livestock and Fisheries Production (components 2, 3 and 4). The livestock and fisheries sectors are emerging as important sunrise sectors in the country. Since most livestock in India i s owned by small and marginal farmers and landless in rural areas, the sector’s rapid growth benefits the poorer households. Focused attention to genetic upgradation, nutrition, management, disease surveillance and control, production o f feeds, diagnostic kits and vaccines, post-harvest handling and processing o f livestock and aquaculture poduce and wastes will be certainly rewarding. W o r k on monitoring and control o f trans-boundary livestock diseases has important implications for human health, international trade and compliance with importing country requirements.

Genetic Resources and Bioprospecting (mainly component 4). Sustained growth in agricultural productivity wi l l depend upon continued improvements in germplasm and improved nutritional value of staple foods, besides crop and livestock disease and pest control. The traits required include improved yield potential, increasing yield stability through resistance to biotic and abiotic stresses, and enhancing adaptation to high stress conditions l ike drought, water-logging and salinity, Genetic resources (plant, animal and microbial) constitute one o f the most important and invaluable natural resources and their effective documentation and utilization i s an important endeavor. The importance o f undertaking such an activity with the help o f local communities, NGOs, etc. cannot be overemphasized. Identification o f resistance genes in wild relatives, molecular marker mapping and marker-assisted transfer to the elite germplasm may be pursued. Bioprospecting wi l l have to lay the foundation for effective mining and transfer o f genes for specific traits. The vast microbial gene pool has to be explored and utilized for crop and animal improvement. Such efforts are not only capital- and knowledge-intensive, but also warrant strong public-public and public-private partnerships. Interactions between research institutes and the industry need to be strengthened for realizing the full potential o f frontier sciences.

Natural Resource Management (mainly component 3). Enhancing farmers’ capacities to use natural resources (ago-biodiversity, land and water) in a sustainable manner i s an important issue in Indian agriculture. This includes enhancement o f crop and livestock productivity in intensified and more sustainable farming systems. Farmer participation i s decisive for this approach. In view o f the water scarcity and the growing competition for water for agricultural, household and industrial use, efficient and sustainable management o f water resources, with a focus at the watershed and local level i s another important topic. Through i t s consortia NAP wil l aim to combine short- and possibly long-term economic benefits (farmers’ interests) with longer-term environmental benefits (public interest) and favorable institutional development.

Integrated Pest Management (mainly component 3, but also component 2). Pesticides are often not accessible to small-scale farmers, and training in the sound use o f pesticides i s lacking. Pesticide misuse i s therefore a significant health risk to producers, consumers and the environment. The evolution o f new races, pathotypes, strains and biotypes o f the pathogens and

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insect-pests i s a continuous process. In this context, to manage such biotic stresses, efficient and effective integrated approaches are required. Consortia within N A I P may take up the elaboration of IPM policies for the minimal ecologically tolerable and economically necessary use o f pesticides.

Value Addition and Post-harvest Processing (principally component 2). An area o f immense importance to enhance the international competitiveness o f Indian agriculture i s value addition and post-harvest processing. At present, value addition i s only practiced on 7% o f the output o f the agricultural sector and agro-processing i s only practiced on 2% o f the volume o f perishables. In view o f the small and scattered farm holdings and resource-poor position o f majority o f farmers, strengthening o f co-operatives, self-help groups, and contract farming assume significance. Reduction o f post-harvest losses will become increasingly important. This also concerns processing technologies, to follow changing consumption patterns. In component 2 N A I P will address the production to consumption system, improving knowledge on post-harvest losses and tackling the most critical elements in the production to consumption system, including quality assurance mechanisms to meet domestic needs and international trade requirements.

Information access (all components). NAP i s aware o f the growing importance o f access to information in the global competitive economy. Competitiveness and access to information wi l l be o f particular relevance to poor population groups if they are not to be further disadvantaged. The amount o f new information and the increasingly rapid outdating o f existing information may pose a threat to traditional and indigenous knowledge. Traditional knowledge must therefore be validated, documented and disseminated. NAIP may support efforts to do this wherever they are related to proper information systems and the utilization o f such knowledge. Thus, NAP shall strive for a better balance between utilization o f existing or indigenous knowledge, creation o f new knowledge and adequate documentation, validation, dissemination and utilization o f knowledge.

Capacity Building (all components). India’s agricultural sector i s composed o f a large number o f individual entrepreneurs. Farmers depend increasingly on other entrepreneurs for services, inputs, implements, marketing and processing. The capacity o f these various entit ies to adjust to rapid change in the political, institutional and economic environments, and mutual collaboration among them, are decisive for the success o f agricultural development. Capacity building and strengthening o f partnerships will be taken up in al l components o f NAP. Capacity building refers to individual farmers, farmers’ groups, organizations, agrarian institutions and businesses which support them. Partnerships include public sector institutions, farmers’ organizations, self- help groups, NGOs and private sector. NAP i s wel l aware that women farmers have to be addressed particularly. Participatory technology development and participatory learning and action shall be essential ingredients in capacity building.

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Annex 16: Learning and Capacity Building

INDIA: National Agricultural Innovation Project

Introduction

The proposed NAP has four components: (i) I C A R as the catalyzing agent for management o f change in the Indian NARS; (ii) research on production to consumption systems; (iii) research on sustainable livelihood security; and (iv) basic and strategic research in frontier areas o f agricultural science. In the context o f NAIP, i t i s recognized that people are the most important asset o f any research or innovation endeavor and that the success and sustainability o f the project depend on the development of adequate national capacity to translate NAP’S goals and objectives into actions to change people’s l i f e on the ground. Project preparation has therefore identified institutional learning and capacity building24 (L&CB) initiatives as an important element to strengthen local institutional capacity to help achieve the project’s goals. L&CB under NAP wil l encourage the use and/or creation o f appropriate learning strategies, approaches and processes to support long-term institutional learning and capacity building.

How the L&CB initiatives will support NAIP

The results-oriented purpose o f the L&CB initiatives integrated into the four components o f NAP would be “enhanced capacity for agricultural innovation systems both in the I C A R and within the scope o f several identified R&D consortia.” To achieve this strategic purpose, the L&CB initiatives will need to deliver the following results during NAP implementation:

ICAR has institutionalized a “learning organization ” mode. This means that the I C A R would have applied several methods and approaches and would have learned f rom these activities through diverse strategies (including action learning and/or action research, workshops, seminars, e-learning, internships, etc.) to develop systemic visioning and strategizing sk i l ls at individual, team and institutional level. The learning organization process would have strengthened ICAR’s ability as the catalyzing agent o f the entire Indian NAIS .

There is enhanced RbD operational, adaptive and generative capacity in a market-driven and competitive environment among the project participants. This would mean that the participants and stakeholders in the Indian N A I S are wel l prepared with a range o f knowledge, attitudes and sk i l l s to face the challenges o f the real world. Special learning strategies (including relevant methods and approaches) would have been designed and implemented to maximize the capacity to respond to evolving circumstances and conditions and to envisage and create the most appropriate and effective institutional structures.

Enhanced capacity created for inter-disciplinary and inter-institutional work. This would be true among I C A R institutions and with a wide range o f partners in R&D both in the public and private sector, and in the context o f several consortia supported under NAP. Methods and approaches to mobilize innovative partnerships for complementary interventions would be created and institutionalized.

24 Capacity building i s defined as the process by which individuals, groups, organizations, institutions and societies increase their abilities to; (i) p e r f o m core functions, solve problems, define and achieve objectives; and, (ii) understand and deal with their development in a broad context and in a sustainable manner (UNDP, 2000).

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4. Enhanced knowledge, attitudes and skills available among professionals in all constituent parts of the NAIS. The development and strengthening o f the capacity o f individual actors would have been taken into consideration in the light o f clearly defined goals to promote social learning within, between and among consortia.

I t i s envisaged that NAARM, an I C A R Institute focused on agricultural research management and human capacity development, in close collaboration with other learning institutions wi l l take significant responsibility for designing, overseeing and mentoring the L&CB methods, approaches and processes within I C A R and NAP supported consortia.

Guiding principles and approaches to implement L&CB activities in NAIP

L&CB activities will not be concentrated in a single component or sub-component o f the project, but will be found across all four components, and in most o f the sub-components. In order to ensure that the large number of widely spread L&CB activities are comparable in nature and based on the same ideas, a series o f guiding principles and approaches have been formulated.

L&CB are an integral part of any institutional development or research and development activity. Within any o f the innovation oriented consortia o f components 2, 3, and 4 and within al l o f the institutional development activities o f component 1, L&CB will be essential to make sustainable progress and to ensure a continued evolution after the project finishes.

Partnerships w i l l be mobilized to enable complementary interventions. The identification of effective partners wi l l be a key factor for forming consortia under NAP. I C A R - N A A R M will provide partners with the opportunity to meet and discuss the principles and values that wi l l guide the process o f working together

Social learning w i l l be generated to foster collective action. Through social interactions, people with different values, tools and perspectives learn to negotiate complementary perspectives and behaviors that lead to concerted actions. The N A P - L & C B reinforces social learning principles and proposes to undertake research and learning programs with other I C A R Divisions and stakeholders as a learning process.

A holistic approach w i l l be employed to human development by integrating various domains of learning. Learning objectives are based on competences (behaviors and skills). N A P - L & C D proposes to integrate affective (attitudes and behavior) and cognitive (intellectual) learning in i t s projects to encourage team members to be open to new ideas, establish trust and develop relations with colleagues and other actors involved in the research.

Research-based capacity building wi l l be combined with the experimental learning cycle approach. L&CB activities propose to apply an integrated project approach based on action research and experiential learning methods. The approach involves collaborative inquiry and action to develop a common understanding about a specific problem in order to build capacity to design and implement actions to deal with the problem. This approach will build the capacity o f collaborating institutions while at the same time producing high-quality research results.

Learning and capacity building activities w i l l be followed-up f ie ld level case studies. This approach requires a thorough plan to guide the implementation, follow-up and evaluation of results. The resul ts will be incorporated into learning modules and materials or e-learning programs so as to reach a wider audience.

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A database of a l l activities w i l l be maintained to improve the management of L&CB projects. NAIP-L&CB proposes for ICAR-NAARM to build and use a database to market the learning events, manage the applications to the workshops, monitor the income generated by participants’ fees, monitor the downloading modules, and record and follow-up the implementation o f action plans (by the consortia participants). This database also provides means to obtain a range o f different reports to manage the L&CD activities as a whole. In addition, the database offers information and tools to undertake an impact studies on several areas o f interest for ICAR- NAARM and NAIP.

Integrating L&CB into the four NAIP components and activities

L&CB i s an integral part o f NAP’S four components. I C A R staff and al l NAIP consortia participants are expected to develop new capacities and attitudes to face the ongoing technological, economic and socio-economic changes. L&CB in N A I P w i l l use a research-based “learning by doing” approach to learn and generate knowledge on how to integrate, adapt and/or use diverse capacity building strategies. The integration o f L&CB into the NAP components wi l l to take place in the following ways:

Component I : ICAR as the catalyzing agent for management of change in the Indian NARS

Opportunities will be provided for I C A R staff to: i. Broaden and deepen the organization and management reforms initiated under NATP. ii. Develop systemic visioning towards the future o f Indian agriculture (medium and long

term) to respond to the emerging global and trade scenarios (e.g. technology spill-ins, intelligence systems).

iii. Develop analytical, synthesis and advisory sk i l ls concerning policy issues for agricultural development and innovation system.

iv. Manage IPR and set up a “National Patents Bank” for agriculture.

For this purpose the following L&CB activities are proposed in component 1 : 0 Assessment o f HRD needs in the I C A R and the SAUs eligible for support under NAIP. 0 Promotion o f inter-disciplinary orientation and inter-institutional collaboration in the

0 Providing policy support for strengthening the capacity to work in multi-partnership

a Capacity building in developing appropriate proposals to be supported under NAIP. a Capacity building o f the NAARM, NCAP, etc. for taking up a lead HRD, PME & pol icy

0 Capacity building in the use o f ICTs for agricultural research, education and rural

0 HRD for agricultural policy, market research and forecasting. 0 General awareness creation among researchers, research managers and senior

0 Creation o f core competence in IPR issues in the N A R S and for Intellectual Property

0 Developing policy support based on futurological research in agriculture. 0 Training o f researchers and managers on taking social and equity issues into account in

agricultural technology generation, technology dissemination and to develop appropriate attitudes in agricultural R&D.

N A I S .

consortium modes.

development role in the NARS.

development for all scientific or non-scientific staff in the NARS.

administration personnel in IPR-related issues & implications for agricultural research,

Management through partnerships.

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0 Training on environmental issues and bio-safety vis-a-vis agricultural technology generation & dissemination.

0 Development o f professionalism, efficiency & ethical attitudes in agncultural research & management.

0 Capacity building in the NARS for bringing in professionalism, developing skil ls, and encouraging attitudinal changes at the executive & managerial levels to support agricultural researchers and research managers to work in synergy and to own the research system Enhance the ability o f the technical and para-scientific staff to support agricultural R&D activities

0

Component 2: Research on production to consumption systems

This N A P component would facilitate the formation and operation o f consortia o f public and private organizations, farmer organizations, NGOs and others. Several types o f learning and capacity building programs and approaches are envisaged to develop knowledge, attitudes and sk i l l s to:

(i) Facilitate the establishment o f collaborative research models for sustainable improvement o f agricultural value chains. This includes design and implementation o f R&D programs and the application o f the results on-farm and in the value chain.

(ii) Manage consortia and develop conducive governance structures including concerning membership, lead and partner institutions, etc.

(iii) Enhance IPR management. (iv) Improve financial management and procurement systems. (v) Etc.

Component 3. Research on sustainable livelihood security

The a im o f this component i s to build a participatory approach towards development in areas that are agriculturally backward and represent disadvantage groups/communities.-Several types o f L&CB programs and approaches wil l be used to develop knowledge, attitudes and sk i l ls to:

(1) Strengthen participatory R&D approaches. (ii) Improve information technology application. (iii) (iv) Apply remote sensing techniques. (4 (vi)

(vii)

(viii) Etc.

Enhance sk i l l s in processing and value addition.

Understand the implications o f international property rights. Improve enterprise management including financial, administrative, human and physical resources. Enhance methods and approaches to facilitate and manage linkages among the consortia members.

Component 4. Basic and strategic research in frontier areas of agricultural science

L&CB programs and approaches will be used to provide opportunities to develop knowledge, attitudes and sk i l ls to:

(i) (ii) (iii) (iv) Etc.

Undertake research at the frontiers o f agricultural science. Manage the IP dimensions related to possible scientific breakthroughs. Manage collaborative frontier science projects and programs.

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Types o f L &CB to be offered under NAIP

NAP plans to achieve i t s L&CB purpose-oriented results through both short learning and long- t e r m learning programs and such programs will be implemented through face-to-face, distance, and e-learning and through a combination o f diverse approaches.

Short-term programs under N A I P would be needs-based, specific and goal-oriented. They wil l take a variety o f forms, ranging from formal structured courses to informal activities such as study tours, special assignments and visits to other institutions. The duration o f short-term programs may ranges from a few hours to several weeks or months. The topics to be addressed will be identified and prioritized based on information obtained from continuous learning needs assessments in NAP Consortia. All training will be subject to a systematic planning, monitoring and evaluation process to facilitate impact assessment.

Learning wil l take place locally, nationally and internationally. I t i s anticipated that several types o f short-term learning programs wil l be used to achieve the goals o f NAP such as: technical and scienti f ic events; management and leadership workshops and meetings; post-doctoral studies and internships; scientific exchange programs; study tours and conferences; and, special induction courses. A l i s t o f possible topics for short-term training in the field o f research management i s given below; some o f these could also be taken up under NAP component 1.

Technical and scientific events. These types o f events will enable N A I P participants to acquire practical knowledge and skills, techniques and methods that will be identified under the four N A I P components during the planning and implementation phases. N A I P wil l sponsor the project participants to attend programs already offered on a regular basis at local training and education centers and/or will make arrangements with such institutions to plan and organize special technical and scientific programs to fulfill the needs o f staff involved in the NAP components.

NAP will also utilize technical and scientific events available at overseas universities, international agricultural centers and other relevant institutions that offer continuing education programs to cover the areas o f NAP interest that are not available locally.

In addition to the technical and scientific learning, NAP will provide opportunity for i t s project participants to undertake learning programs to develop specific knowledge and ski l ls that will support and enhance their performance. These sk i l l s (for example in computer applications and research methodology) are usually inadequately covered in other types o f formal training,

Learning events to develop specific ski l ls may take a few hours to several weeks. To keep abreast o f rapid technological changes, regular “refresher” programs are expected to be designed when the needs are identified within the NAP components by the N A I P O&MPC. NAARM has already identified and prioritized overall skill development needs based on the N A I P components objectives.

Management and leadership workshops and meetings. In general, agricultural researchers and administrators are invited to take management and leadership positions in their organizations without having been trained on managerial and leadership ski l ls. However, capacity for working as part o f an inter-disciplinary team and fostering innovative partnerships for complementary interventions to respond to the new challenges i s part o f the most important managerial and leadership ski l ls to deal with in today’s complex world.

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NAP’S L&CB program will therefore promote the opportunity (through workshops and/or dialogues) to develop managerial and leadership capacity among ICAR staff and Consortia participants.

NAP aims t o develop the capacities o f the staff involved in implementing the different components through well-designed and carefully targeted programs. These programs will be undertaken locally and/or internationally. NAARM and i t s partner institutions are expected to lead these learning programs throughout the NAP implementation period, while also arranging for mechanisms for continuous needs assessment and program evaluation. I t i s envisaged that NAARM would involve locally-based management institutes and universities and takes advantage o f “training o f trainers” approaches to strengthen local capacity and to promote the multiplier effect o f this program.

Post-doctoral assignments, internships and exchange programs. NAP will facilitate concerned staff to take advantage o f post-doctoral assignments, internships and exchange programs to improve specific knowledge, technical sk i l l s and professional contacts in the relevant areas o f the NAP components. These programs are expected to take place at local institutions or at overseas centers and universities, international agricultural centers o f excellence, private institutions, in the context o f development projects, etc. They would be expected to add to participants’ knowledge and experience in order to strengthen the NAP results and outcomes, The duration o f such programs wil l vary from a few weeks to one year.

Study tours and conferences. Under NAP there will be recognition o f the importance for concerned staff to participate in study tours and conferences within and outside the country. The main objective i s to broaden the experience o f the staff involved in NAP and to allow them to exchange views on areas related to the implementation o f the N A I P components, such as, establishment of value chain models, consortia governance, PR, enterprise management, managing linkages, etc.

Induction courses. Induction courses are recommended to facilitate fast integration and assimilation o f the different players into the NAP consortia. This program should be prepared in advance and delivered by the L&CB team o f the NAP PIU (possibly in collaboration with NAARM). The duration will vary based on the specific needs o f each Consortium.

Creating local capacity for L&CB programs.

The need to sustain the strategies and mechanisms created by the project beyond i t s lifetime i s recognized. N A I P expects to achieve this through (i) establishment and maintenance o f an L&CB teams within the NAP consortia; and (ii) developing relationships with relevant local institutions.

Establishment and maintenance of L&CB capacity within the NAIP Consortia. With the support o f NAARM and/or other organizations, each Consortium will form an L&CB “team” or “task force” responsible for L&CB planning, implementation, monitoring and evaluation, and impact assessment. The participation o f the universities in these teams would be crucial to sustainability. NAARM will mentor and strengthen capacity among these L&CB teams through learning events on how to assess learning needs; how to plan, monitor, evaluate, organize and develop learning events; and how to maintain the Consortium in a continuous learning process. Each Consortium will design a five-year L&CB Plan and include this in i t s Annual Work Plan. It i s recommended that a Task Force o f faculty members (and consultants) be created to foster institutional capacity within the Consortia on a continuous basis through short-term programs, possibly with NAARM leadership.

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NAARM may use: (a) “training o f trainers” (TOT) approaches to promote a multiplier effect; (b) identification o f suitable resource persons for training programs in different partner organizations; (c) create a strategy to improve interest and motivation o f the resource persons to participate in NAIP and (d) maintain a “living” database to manage information on training and training resources.

Establishment o f relationships with relevant local institutions. It i s envisaged that the P I U with the support o f NAARM would foster the establishment o f relationships with relevant local institutions (universities, NGOs, private organizations, extension services, diverse research centers, professional colleges, etc.) and locally-based international agricultural research centers (IARCs) to support L&CB initiatives in the context o f NAP-supported activities. NAARM would maintain a database to record the variety o f short-term learning programs related to NAP contents in order to share these with Consortia members in a systematic way. It would be also advisable for NAARM to team up with education institutions to facilitate the tailoring o f courses to meet NAP-related learning needs. Such arrangements would be expected not only to result in relevant and effective learning programs but also to strengthen India’s national L&CB capacity in agriculture in the long run.

Management and Coordination o f L&CB under NAIP

As indicated earlier (section B), in order to achieve the L&CB results-oriented purpose, the Project Implementation Unit (PIU), would need to play an important role. Specialized adult education and training Institutes would be responsible for mentoring the L&CB methods, approaches and processes within I C A R and the NAP-funded consortia. PIU would therefore also mobilize a Task Force to manage, oversee and coordinate the overall NAP-related L&CB plan,

Criteria and Procedures for Staff Selection for L&CB programs

The selection o f candidates for various types o f L&CB programs wil l be based on a set o f criteria developed by the PIU and the O&MPC. These criteria should be reviewed and if necessary adjusted regularly to respond to changing situations and the evolving needs o f NAIP. The consortia would have flexibility to prepare more comprehensive set o f criteria based on: (i) the local gaps in knowledge, attitudes and sk i l ls (for short-term programs) being identified in the Training Needs Assessment; and, (ii) a gap-analysis related to staff holding BSc, MSc and PhD degrees that will be engaged in the consortia. This will require the identification o f capacity building requirements and the setting o f priorities among those needs.

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Annex 17: Proposal for Investment by GEF in NAIP through the “Sustainable Land and Ecosystem Management (SLEM)” Country Partnership

INDIA: National Agricultural Innovation Project

Introduction

NAP recognizes that increasing agricultural productivity and diversification to higher value products, including crops, livestock, and fisheries, wi l l be instrumental to achieving higher growth in the agricultural sector. To re-energize agriculture NAP will foster the broad-based availability and adoption o f improved agricultural technologies and practices by farmers and the closer integration o f farmers with input and output markets. NAP wil l assist in strengthening the agricultural research and extension system; i t will promote demand-driven, decentralized public agricultural research and extension systems, greater public-private partnerships, and closer linkages with various domestic and international sources o f technologies and knowledge.

NAP wil l be implemented in a decentralized manner, competitively selected consortia o f service providers f rom both the public and private sector will report against agreed contracts. Whilst N A I P recognizes that the natural resource base (water availability, land quality) i s under threat and that the development anticipated by this project crucially depend on the sustainable management o f these resources, the GEF funded Sustainable Land and Ecosystem Management (SLEM) Country Partnership Program for India goes further by proposing to support environmentally sustainable agricultural practices in order to enhance local and global environmental benefits .

The global environment objective o f SLEM i s “ to maintain and restore globally signiJicant ecosystem functions and services through enhanced local capacity to prevent further degradation, to restore degraded areas and to disseminate, replicate and scale up successful SLEM practices within and across individual Indian states”.

SLEM recognizes that while there i s l i t t le scope for expansion o f the cultivable area, there are significant opportunities for improving land management practices in order to improve productivity and reduce degradation. Profitable and sustainable land use and ecosystem practices are the principal means for protecting India’s significant environmental assets and alleviating poverty in the largest and poorest segments o f Indian society. The S L E M Country Partnership seeks to achieve these aims by establishing partnerships that will enable mainstreaming o f GEF priorities and activities in selected projects. Such partnerships offer both the potential to reduce the transactions costs o f accessing GEF resources and a mechanism to leverage the investment,

SLEM wil l develop and support locally adapted land use and water management practices, as well as technologies l i ke crop rotation, ago-forestry, conservation agriculture, water harvesting and participatory water management in balance with profit, environmental and community needs. In addition, policy reforms for improving incentives for enhanced productivity and sustainable land management would also be supported. The SLEM partnership seeks to provide a framework to enable either individual or clusters o f Indian states to facilitate co-financing through a programmatic approach and reduce transaction costs where partners would use streamlined and harmonized project cycle procedures to develop and approve continuing interventions,

The purpose o f this annex i s to:

1. Identify complementarities and synergies between the activities proposed under the N A I P and GEF focal areas.

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2. Identify activities that are consistent with NAIP aims and activities that through SLEM funding will generate GEF Focal Area Benefits.

Propose ways in which the identified activities can be strengthened to enhance global and local environmental benefits defined in the global GEF focal areas.

3 .

GEF Focal Area Climate change/OP #6. Emerging priorities

Complementarities and synergies

Objective Adaptation; renewable energy; technology transfer;

Bo th NAP and SLEM recognize the development o f agriculture as important to the delivery o f livelihoods in India and further both explicitly recognize the importance o f achieving development without compromising the natural resource base. While the N A I P project seeks to exploit the natural resource base in a sustainable way and to ensure that agricultural development does not have negative impacts, SLEM’s focus on the enhancement o f environmental services strongly emphasizes the positive interaction between sustainable resource management and agricultural development. The projects have differences in emphasis but support the same principles o f sustainable development and are therefore highly compatible. This creates an important opportunity for synergy to be realized through investment by S L E M in NAP. N A I P will facilitate exploring, researching and mainstreaming new land and ecosystem management practices in consortia where public sector, private sector, c iv i l society and resource users work together. The proposed SLEM Partnership wi l l thus support the SLEM focus on sustainable land management (OP 15) and i s consistent with GEF Operational Program (OP) entry points OP3, OP6, OP9,OP12, and OP13 as summarized below (Table 1).

Land Management

Table 1. Potential GEF Operation Program (OP) entry points

o n people’s l ivelihood and ecosystem structure and functional integrity

IW/OP #9. Integrated Land and Water Multiple FA Program”

MFA/OP #12. Integrated Ecosystem

energy efficiency. Integration o f land and water management strategies as a result o f changes in sector policies and activities that promote sustainable development (watershed, upstream-downstream) and benefits in multiple GEF FA Catalyzing the adoption o f integrated ecosystem

Management” I management approach Biodiversity F A OP #13. SP 2 I Conservation and sustainable use o f biodiversity;

I 1 benefit sharing; conservation and sustainable use o f I I biodiversity important to agriculture. I Mit igation o f causes and effects o f land degradation Land Degradation FA/OP #15. Sustainable

Both NAIP and SLEM are underpinned by a complementary strategy for implementation. Both recognize the importance o f partnerships and new institutional arrangements as being important to accelerate the development and application o f agricultural innovations. Bo th are strongly country driven. Further, both N A I P and S L E M are at points in their development cycle that provide good scope for development o f partnership and productive linkages. Building upon the complementarities and synergies identified, and the potential for impact, activity areas for investment by SLEM are identified below where investment will enhance the delivery o f benefits by N A I P in GEF focal areas. For each o f the activities proposed anticipated benefits and indicators are outlined. This enables the additional benefit o f the S L E M investment to be clearly signaled and agreed between the N A I P and SLEM.

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Activities proposed

T o develop and test practical ways to establish environmentally friendly value chains. NAP proposes to focus o n marke t opportunit ies and as out l ined above sees agr icu l tura l d ivers i f icat ion and value add i t i on as presenting n e w opportunit ies t o increase incomes and reduce pover ty . T h i s ac t i v i t y wi l l explore ways to access p r e m i u m markets, both within India, a n d international ly, for products that are produced in envi ronmenta l ly and social ly responsible ways. T h i s act iv i ty addresses m a i n l y GEF OP15 and OP 9,0P12 as summarized b e l o w (Table 2).

Table 2. D e v e l o p i n g and test ing pract ica l ways t o establish env i ronmenta l ly f r i end ly va lue chains.

Possible Ent ry pointsz5 Biological and environmental resources important to rural livelihoods and productive- ecosystems are under threat.

Habitat loss threatens biodiversity o f global importance.

Opportunities exist to charge a premium for agricultural products that are produced in ways that reduce land degradation and deliver social and ecosystem benefits

Benefits

Informed consumers in national and international markets make decisions that lead to beneficial ecosystem and social impacts

Value added through delivery o f environmentally beneficial products*’ used to support sustainable production and deliver l ivelihood benefits

Emphasis on quality o f food product leads to nutrit ional benefits

Project Indicators1z6

Increased consumer awareness, in target markets, o f environmental and social consequences o f purchasing decisions.

Intermediary purchasers differentiate product selection and purchasing decisions on basis o f an awareness o f the environmental and social impacts o f Droduction.

Adoption, or development, o f standards that maintain access to export markets and enable premium prices in some cases.

Increase in agricultural production and financial return, that reflect access to new markets and higher prices.

Producers report changes in their ag. management strategies and a reduction in land degradation as a consequence o f new market opportunities and premium prices for their agricultural products.

Improvements in nutrit ional quality and saftey o f food products in the local and regional market.

Improvements in health that can be l inked to improvements in food quality.

GEF Focal Area

Land Degradation FAiOP #15. Sustainable Land Management

IW/OP #9. Integrated Land and Water Multiple FA Program

M F N O P #12. Integrated Ecosystem Management

Biodiversity FA OP #13,

T h i s act iv i ty wi l l de l iver reduced env i ronmenta l degradation, i m p r o v e d hea l th and labor standards by developing marke t mechanisms that create incent ives to del iver social and env i ronmenta l benefi ts. A c h i e v i n g these will have a va lue for both consumers as w e l l as

25 Entry points will depend on strategies developed by project consortia in their proposals and wil l determine which GEF OPs are addressed. 26 Indicative indicators to be refined by consortia in proposals 27 May be both food or non-food products

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producers (as shown by the premium price paid for fair trade produce). Examples o f possible ways to add value include:

1) Introduction of pollution controls in aquaculture that allow entry in to new higher value European markets

2) Adding value to products through by branding and charging a premium for product produced under environmentally and socially responsible practices. Current examples o f branding used to differentiate products would include ‘Organic’ and ‘Fair Trade’.

3) Developing the bamboo market to reconcile the environmental impacts o f bamboo harvesting and i t s value as an agricultural product (eg. for construction material).

4) Monetization o f environmental benefits.

Proposals by consortia wi l l be required to provide a detailed analysis o f the potential scope and scale o f impact, based on preliminary market assessments. At this stage proposals wi l l also identify which GEF Operation Program(s) they address. Projects should demonstrate mechanisms that enable benefits to be delivered through the value chain, establishing the necessary mechanisms that enable certification under existing schemes and standards (or if appropriate develop new standards).

Development and adoption of integrated agricultural strategies that enhance watershed, biodiversity and climate change objectives. NAP recognizes the importance o f the sustained improvement in the incomes and well-being o f farm families in mainly rain-fed, hill and mountain, dryland and coastal areas which have been lef t behind in development. The critical importance o f agricultural development and environmental protection in rain-fed areas has been identified as an area o f priority by N A I P and GEF.

This activity will address OP 15, 13, and 9 as indicated below (Table 3), it will facilitate sustainable transitions from conventional to integrated land and ecosystem management that integrate ecological, economic and social goals to achieve multiple and cross-cutting local and global benefits whilst achieving the broader development goal o f raising productivity.

This activity wi l l use a non-deterministic development focused approach to test land degradation control measures. The measures may include enhancing water use efficiencies, improving soil fer t i l i ty and increasing production o f bio-fuels and fodder, sequestering carbon, conserve water for environment and human use, protection o f biodiversity.

Support wi l l be provided for the development and testing o f approaches for community development and empowerment o f local communities. This activity requires the use of innovative strategies used to promote adoption, adaptation and experimentation with technologies that deliver both livelihood outcomes and environmental benefits.

Approaches proposed should test or utilize a model for community development that i s sufficiently cost effective to operate in a private sector mode (not requiring funding at social cost). Strategies for promotion should be knowledge based and will capitalize on existing channels for service delivery and access to information rather than creation o f new project based infrastructure.

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This activity will operate, across rainfed regions at a sufficient scale to enable lessons learnt and comparisons to be drawn. Proposals should provide i) an assessment o f the impact that such approaches can achieve on agricultural production, livelihoods and environment ii) methods to identify factors that lead to success and failure, and iii) comparisons with other approaches.

Table 3: Development and adoption o f integrated agricultural strategies that enhance watershed, iodiversity and clii Entry Point

Poorly managed watersheds and kpletion o f forest and vegetative resources leads to loss o f biodiversity and degradation leads to erosion and associated loss o f soil quality

ate change objectives Benefits

Implementation o f strategies for watershed management lead to a reduction in soil erosion and degradation

Innovation learning approach enables examination of experiences and accelerates the adoption of alternative institutional approaches and arrangements

Project Indicators

Development o f a research consortia with a specific focus on developing more effective strategies for watershed conservation.

Increased agricultural production through more effective (more efficient) use o f water and reduction in negative impacts of erosion.

Improvement o f forest resources as a habitat.

New institutional arrangements emerge with strong emphasis on the mobilization of private resources and credit to achieve environmental benefits.

Increase in rate of implementation o f watershed programs with reduction in proportion o f costs met by Gov’t.

Government policy for watershed development and forest management reflects an analysis o f the prospects to deliver environmental benefits through appropriate knowledge based interventions and support for a non-deterministic and cost effective approach to community development.

Shift of focus from funding o f specific interventions to provision of support for processes that encourage private investment in appropriate interventions at the watershed level leads to more effective interventions.

Improvement in quality of both above and below ground water resources.

GEF Focal 4rea

Land Degradation FA/OP # 15. Sustainable Land Management

Biodiversity F A OP #13

IWIOP #9. Integrated Land and Water Multiple FA Program”

Land Degradation F N O P #15. Sustainable Land Management

Using modeling and simulation tools to enable the development of national agricultural production strategies that minimize environmental impacts. This activity focuses on OP15, but also considers OP 13, 19 and 6 as outlined below (Table 4). I t wi l l address the asymmetric nature o f agriculture in large parts o f India. For example, intensive production o f rice and wheat in the Punjab and Haryana, particularly involves, extensive use o f inputs (including fertilizers, herbicides, pesticides and extensive groundwater irrigation). Significant environmental impacts have been observed and there are concerns that total factor productivity i s declining. Further to the east, the environmental and biophysical conditions appear to favor the production o f rice and wheat, however agricultural production i s lower and adoption o f technologies to increase rice production has been much slower.

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Table 4: The development o f agricultural production strategies that minimize environmental and ecosvstem imDacts Entry Point

Land degradation affects people’s l ivelihood and ecosystems through salinization and degradation o f soil quality.

Sharedltransboundary water resources are damaged by depletion o f groundwater resources and inefficient use o f surface water resources.

Current land management strategies do not take account o f environmental externalities.

Benefits

Agricultural diversification leads to a reduction in avoidable environmental and ecosystem impacts while maximizing l ivelihood benefits

Rice and wheat productivity increased whilst environmental and ecosystem impacts are reduced through appropriate adoption of new technologies and improved access to existing technologies, knowledge and inputs

Project Indicators

Research publications demonstrate new capability in the assessment o f the trade offs between agricultural production, environmental, ecosystem and livelihood objectives in irrigated rice and wheat systems.

Evidence that Gov’t policies and strategies take explicit account o f quantitative assessments of the trade offs between agricultural production, environmental, ecosystem and livelihood impacts o f diversification from irrigated r ice and wheat to less water consuming crops in Western Punjab.

Adoption o f strategies for use of groundwater and rainwater to augment canal irrigation in Eastern and maximize water productivity.

Adoption o f strategies for diversification from irrigated r ice and wheat to less water consuming crops in Western Punjab.

Introduction o f breeding and land management strategies that seek to maintain diversity of land-races and exploit traits that wi l l lead to resilience.

Evidence o f the use o f project tools and communication products by Gov’t, NGO and private sector in planning investments infrastructure and support for development of new technologies, improved access to existing technologies, knowledge and inputs draw.

Research investments provide data to improve understanding tradeoffs inherent in a change in agricultural management, including GHG emissions that can be used to validate decision support models.

Improved management o f soil quality through appropriate tillage and management o f organic resources leads to an improvement in soil quality and sequestration o f C in soil.

GEF Focal 4rea Zlimate :hange/OP #6. Land Degradation

F N O P #15. Sustainable Land Management

[WIOP #9 ‘Integrated Land and Water Multiple F A Program”

Biodiversity FA OP #13, SP 2

Climate changeiOP #6. Land Degradation

F N O P #15 Sustainable Land Management

IW iOP #9. Integrated Land and Water Mult iple FA Program

The purpose o f this activity i s to develop tools which will enable users (including, policymakers, development organizations, private sector investors and senior research managers) to explore the potential implications in production, socio-economic and environmental terms o f new agricultural and resource management strategies. Research approaches are l ike ly to be underpinned by both biophysical and socio-economic models implemented in a spatial context. The tools developed will be used to examine potential strategies to reduce the environmental impact o f agncultural production whilst maintaining profitability o f agri-based activities o n the Indo-Gangetic Plains

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and maintaining commodity crop production. Consortia proposals should provide a strategy for promoting the uptake and application o f the products envisaged.

Strengthening the identified activities in NAIP

N A I P i s to be implemented in a decentralized manner through competitively selected consortia of service providers f rom both the public and private sector. NAP requires systems for accountability to be established by consortia and once the implementation agreement (contract) i s in place these systems become the key mechanism for management. I t i s proposed that the S L E M investment in N A I P should be directed by N A I P to support consortia in the activity areas identified above. Given the anticipated scope o f investment by SLEM it i s proposed that S L E M funds ($15 M) be’used to support 3 or 4 consortia. The investment by S L E M in NAIP should utilize NAP operational, management and reporting structures presented in Annexes 4 and 6. To ensure that SLEM interests are represented during project selection and management i t i s recommended that NAP considers involving a S L E M nominated representative in the Technical Advisory Groups (TAG) that supports the component in which the S L E M funded activities take place.

In addition to leveraging the investment in management and reporting structures the GEF investment will directly leverage $46 M investment by NAP in capacity building through component 1 of NAP “ICAR as the catalyzing agent for management of change in the Indian NARS’. Further, in each activity the investment will leverage investment by consortia partners who wil l contribute both facilities and staff time at n o charge to SLEM.

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MAP SECTIOK