Document ofThe World Bank

FOR OFFICIAL USE ONLY

Report No. 20591

IMPLEMENTATION COMPLETION REPORT(CREDIT 2424-UG)

ON ACREDIT

IN THE AMOUNT OF US$15.79 MILLION

TO THE

REPUBLIC OF UGANDA

FOR AGRICULTURAL EXTENSION PROJECT

June 8,2000

Rural Development OperationsEastern and Southern AfricaAfrica Region

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

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CURRENCY EQUIVALENTS

Currency Unit = Ugandan Shilling (UShs.)At Appraisal: US$ = UShs. 1,000

At Completion: US$ = UShs. 1,356

FISCAL YEAR OF BORROWER

July 1 -June 30

ABBREVIATIONS AND ACRONYMS

AEP Agricultural Extension ProjectARTP Agricultural Research and Training ProjectASAC Agricultural Sector Adjustment CreditCAS Country Assistance StrategyCSDP Cotton Sub-Sector Development ProjectDFI District Farm InstituteEFMP Economic and Financial Management ProjectFAO/CP Food and Agriculture Organization Cooperative Program with the World BankFEW Field Extension WorkerGDP Gross Domestic ProductICR Implementation Completion ReportIRR Internal Rate of ReturnMAAIF Ministry of Agriculture, Animal Industry and FisheriesMTAC Management Training and Advisory CenterNAADS National Agricultural Advisory Services ProgramNARO National Agricultural Research OrganizationNGO Non-Governmental OrganizationNURP Northern Uganda Rehabilitation ProjectPPF Project Preparation FacilityQAG Quality Assurance GroupSAC Structural Adjustment CreditSAR Staff Appraisal ReportSCRP Smallholders Cotton Rehabilitation ProjectSMS Subject Matter SpecialistSWRAP South West Region Agricultural ProjectT&V Training and VisitUES Unified Extension Service

Vice President: Callisto MadavoCountry Manager/Director: James W. Adams

Sector Manager/Director: Sushma GangulyTask Team Leader/Task Manager: David Nielson

FOR OFFICIAL USE ONLY

CONTENTS

1. Project Data 1

2. Principal Performance Ratings 1

3. Assessment of Development Objective and of Quality at Entry 2

4. Achievement of Objective and Outputs 5

5. Major Factors Affecting Implementation and Outcome 11

6. Sustainability 12

7. Bank and Borrower's Performance 14

8. Lessons Learned 16

9. Partner Comments 17

ANNEXES

Annex 1. Key Performance Indicators 19

Annex 2. Project Costs and Financing 20

Annex 3. Cost Benefit Analysis 22

Annex 4. Bank Inputs 23

Annex 5. Ratings for Achievement of Objectives/Outputs byComponent 24

Annex 6. Ratings of Bank and Borrower Performance 25

Annex 7. List of Supporting Documents

Annex 7a Borrower's Contribution to the ICR 26

Annex 7b Economic Benefits 34

Annex 7c ICR Mission's Aide Memoire 45

This document has a restricted distribution and may be used by recipients only in theperformance of their official duties. Its contents may not be otherwise disclosed withoutWorld Bank authorization.

1. PROJECT DATA

Report Date: June 8, 2000Name: Agricultural Extension ProjectCountry/Department Uganda/AFTRI Credit 2424-UG

Number:Sector/Subsector: Agriculture Region: Africa

Key Dates Original Revised/ActualIdentification Not Available January 1990Preparation Mid-1991 April 1992Appraisal April 1992 May 1992Approval September 1992 September 29, 1992Effectiveness December 1992 June 18, 1993Mid-Term Review March 31, 1992 September/October 1995Closing June 30, 1998 December 31, 1998

Borrower Government of UgandaImplementing Agency Ministry of Agriculture, Animal Industry and FisheriesOther Partners None

Staff Current AtAppraisalVice President C.Madavo E.JaycoxCountry Director J.AdamsSector Manager S.Ganguly J.ShivakumarTeam Leader of ICR D.NielsonICR Primary Author FAO/CPTeam Leader of Appraisal - V.Mackrandilal

2. PRINCIPAL PERFORMANCE RATINGS

Outcome UnsatisfactorySustainability UnlikelyInstitutional Development ModestImpactBank Performance UnsatisfactoryBorrower Performance Unsatisfactory

QAG ICRQuality at entry Not available Marginally SatisfactoryProject at Risk at any time Not available Yes

3. ASSESSMENT OF DEVELOPMENT OBJECTIVE AND OFQUALITY AT ENTRY

3.1 Objective:The broad objectives of the project were to address urgent needs for disease control and

yield improvements in agricultural production and to build public sector capacity to deliverand support effective extension services. To this end the project aimed to improve: a)efficiency in the delivery of extension services in 16 out of 38 districts in the country; b)training capacity and skills of extension agents and farners; c) adoption of improvedtechniques by farmers; and d) efficiency in management services in the Ministry ofAgriculture, Animal Industry and Fisheries (MAIFF) in order to support the delivery ofextension and ensure its sustainability. In addition to the stated objectives, it was foreseen thatthe lessons and experiences gained through implementation of the project in the 16 originally-targeted Districts would provide the basis for the design of an extension service which wouldeventually achieve national coverage.

The original objectives were clear and continue to be important to the country. Projectpreparation began on the heals of years of civil strife and economic mismanagement whichhad devastated the economy. Agriculture was the most important sector in the economy. From1986, with the return of political stability, agriculture had begun to recover, mainly throughexpansion of the area under cultivation. By the early 1990s, however, agricultural productionwas still slightly below that of 1970, while the rural population had increased by two thirds,and rural incomes and productivity of land and labor had declined below levels achieved inthe late 1 960s. To address the deterioration and fragmentation of public agricultural researchand extension services, the two ministries responsible for crops, livestock, and fisheries wereamalgamated in 1991 to form MAAIF, and in 1992 the research programs were merged toform the National Agricultural Research Organization (NARO). The Agricultural ExtensionProject (AEP) and the Agricultural Research and Training Project (ARTP) were intended tosupport MAAIF and NARO respectively, and thereby disseminate and develop improvedtechnologies aimed at increasing productivity and returns to agriculture. In this respect, theAEP's focus on institution building was appropriate, and responded to government'sagricultural sector priorities and its overall objective of promoting broad-based economicgrowth. Similarly, the AEP's objective was consistent with the Bank's Country AssistanceStrategy (CAS) of supporting efforts to improve the climate for private investment andproduction.

3.2 Components:The project objective was to be achieved through four components:

(a) Strengthening the delivery of extension services (US$9.55 million) throughprovision of transport, equipment, rehabilitation of facilities, and incrementaloperating costs;

(b) Improvement in training capacity and skills (US$6. 10 million) through i)provision of equipment, supplies, facilities and transport for regular in-servicetraining of extension staff and periodic farmer training at the District FarmerInstitutes (DFIs), with the involvement of research staff, ii) rehabilitation,curriculum development and upgrading of staff capabilities at Bukalasa

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Agricultural College; and iii) demonstrations at the DFIs and fanner-managedtrials in their own fields;

(c) Strengthening of management systems (US$1.81 million) through i) training inmanagement and team building for MLAAIF staff at headquarters and in the projectdistricts; ii) staff training and consultancy services to improve financialmanagement, procurement, and budgetary procedures; iii) operational support formonitoring and evaluation; and iv) improved office equipment and facilities;

(d) Studies (US$0.28 million) on i) rationalization of the Training Institutes andColleges of MAAIF; ii) efficiency and impact of alternative technology transfermechanisms; iii) a Mid-Term Review and assessment; and iv) design of a follow-on project.

In September 1994, roughly two years after the start of the project, the DevelopmentCredit Agreement was amended to expand project coverage to 20 districts and to includeArapai Agricultural College under the training component. Taken together, the array ofcomponents formed a plan of investments and activities reasonably consistent with achievingthe project objective, including improving the management and implementation capacity ofMAAIF at its headquarters as well as at lower levels.

Operationally, the project supported a consolidation of several parallel programs ofpublicly provided extension. Prior to 1992, agricultural extension was being carried out byseveral ministries including the Ministry of Agriculture, the Ministry of Animal Industry, theMinistry of Fisheries, the Ministry of Energy, Minerals, Water, and Environmental Protection,and the Ministry of Commerce, Industry, Cooperatives, and Marketing. With the support ofthe Project, the Ministry of Agriculture was merged with the Ministry of Animal Industriesand Fisheries in 1992 to form the Ministry of Agriculture, Animal Industries, and Fisheries(MAAIF). With this merger, the overall responsibility for agricultural extension, like that foragricultural research, was consolidated into a single unified system within the new MAAIF.i

The consolidation of the parallel ministerial programs into a unified national systemwas motivated by the desire to increase the efficiency as well as the effectiveness of publicextension programs by eliminating duplication of effort between the parallel services whiletaking advantage of possible economies of scale by consolidation into one larger program. Afurther reason for the consolidation of the parallel programs was the recognition that fracturedprograms were not producing technologies and advice which were geared toward whole-farmmanagement. At times, the technical messages which were being broadcast by the parallelprograms were even contradictory in content.

Underneath the umbrella of the unified extension service, a Training and Visit (T&V)system of management was instituted. A few months before appraisal, pilots of the newextension program were launched in eight counties of four districts. Partly on the basis of theprogress observed under these (still, at the time, relatively short pilots), it was decided earlyon and reported in the SAR that over time the new system would be introduced and supportedin all project districts.

This merger of public sector extension services into a single institutional entity led to the use of the title"Unified Extension System" (UES).

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As outlined above, it could be argued that the design of the program addressed anumber of the central concerns which were held with regard to the public sector agriculturalextension program at the time. Even so, both the ideas of the Unified Extension Service(UES) and of the Training and Visit system of management were, from the beginning andthroughout the duration of the project, contentious design issues. This was particularly thecase outside the Bank, where skepticism with regard to the approach (based upon experienceselsewhere) was widespread from the outset. Critics from among the ranks of Government,development partners, and farmers themselves were increasing vocal in their concerns aboutthe approach as the program unfolded. Inside the Bank, the approaches chosen reflected themainstream thinking at the time and were being widely supported and applied across Africa.

The conclusion of this report is that sought after results on the ground were elusive. Theprogram never managed meaningfully to escape either the supply-driven top-down characterof the methodology nor the bureaucratic problems (such as ultimately unaccountable financialmanagement) which critics had feared. Over time, both critics and supporters of the originalprogram design began to converge in their thinking around ideas of how the extensionprogram could place more emphasis on empowering communities and farmers to analyze andfind their own solutions with assistance from outside facilitators. At the same time, there hasbeen a growing trend towards funding and delivery of extension (and research) in a mix ofpublic and private arrangements, decentralization of management, and ensuring that serviceproviders are more demand driven. The emerging consensus among stakeholders on theseissues has guided the design of the proposed follow-on program - the National AgriculturalAdvisory Services Program (NAADS).

In retrospect, it seems clear that the design of the AEP was optimistic in expecting thatconstraints to implementation of prior projects in Uganda such as inadequate and tardycounterpart funding, poor salaries, and weak management and financial systems would beaddressed by measures under other Bank supported projects (SAC, ASAC, and EFMP2). Still,to minimize institutional and financial risks, the AEP provided considerable support forhuman resource development and the strengthening of management capacity and processes,and for incremental recurrent costs. Nevertheless, the capacity of government to meet even asmall counterpart contribution proved to have been optimistic. To reduce complexity, thedesign focused on extension, and rightly planned phased implementation thus allowing foradjustments based on experience and resource availability. In practice, the project was scaled-up much more rapidly than had been planned originally. This stretched resources and limitedmanagement capacity - perhaps beyond what they could reasonably have been expected tosustain.

3.3 Quality at Entry:An assessment by the Bank's Quality Assurance Group is not available. The ICR rates

the quality at entry marginally satisfactory. The project objective was and remainscompatible with government priorities and the Bank's CAS. Preparation of the chosenprogram design was in many respects fully satisfactory. As indicated above, the chosenprogram design was in-line with the mainstream thinking of the Bank at the time. However,as was argued from the outset by many observers, project design reflected a degree of

2 Structural Adjustment Credit, Agricultural Sector Adjustment Credit, Economic and Financial ManagementProject

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centralization in its institutional structure which, in hindsight and with the benefit of widerexperience, proved to be overly bureaucratic and insufficiently responsive or accountable tothe needs of farmers. In addition, it can be argued that critical institutional and counterpartfunding constraints which had already plagued the performance of other Bank-supportedprojects were not sufficiently dealt with in the project design. As a result, these issues, too,haunted the project's performance throughout its period of implementation. Given the (eventhen) mounting criticism from outside observers and the (even then) accumulating evidence offrustrating results in the field, it remains unclear why, the program design chosen for thisprogram was and continued to be a mainstream approach to agricultural extension.

4. ACHIEVEMENT OF OBJECTIVE AND OUTPUTS

4.1 Outcome/Achievement of Objective:The outcome of the project is rated unsatisfactory. Neither the desired improvements in

the efficiency and effectiveness of the extension program, nor the desired impact of theextension program in terms of higher on-farm productivity and profitability were satisfactorilyachieved relative to what might have been hoped for. While some improvement in theefficiency of extension delivery was achieved in the project districts, the extent of this gainwas significantly constrained by concentration of vehicles at the central level, late payment ofoperating budgets and staff allowances, the non-linking of incentives to staff performance,inadequate supervision, and the impact of government's public sector reform anddecentralization initiatives. Those efficiency gains that were achieved have not been sustainedpost project. Further, despite significant investment in full time technical assistance at theHeadquarters level, very limited improvement in the efficiency of management services inMAA1F was achieved as indicated by the poor project management and financial controlsystems, tardy disbursement of project funds, late procurement of goods and services, delayedcivil works, establishment of inadequate monitoring and evaluation systems, and eventualabolition of the Directorate of Agriculture Extension and transfer of responsibility forcoordinating extension to NARO.

While targets for training of central and district level agricultural staff were exceededand resulted in improved technical capacity, a high proportion of the beneficiaries left publicservice, and achievements for training of FEWs and farmers fell well below target. Despite allthese shortcomings, training combined with the project provision of transport, operatingbudgets and travel allowances for extension staff did contribute to some increase in awarenessand adoption of technologies. However, farmer contact and adoption of improvedtechnologies was markedly lower than planned in the SAR. An analysis of available dataindicates that the AEP did not have a significant impact on productivity and that the aggregateincrease in production and returns was insufficient to justify the project investment.

4.2 Output by Components:a) Strengthening the Delivery of Extension Services (US$9.55 million, 54% of

costs)This component provided for establishment and implementation of the new extension

system for crops, livestock, and fisheries in 16 districts or 67 counties. Mass media was to beused to reinforce direct contacts between FEWs and farmers. Project coverage was to bephased in over three years. Pilot operations had been started in eight counties of four districtsin the first season of 1992 with funding from ongoing projects and were to be expanded with

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PPF funding in the second season. To implement this component, the project provided fortransport (vehicles for HQ and district officers, motorcycles for county officers, bicycles forFEWs), equipment, and incremental operating costs, and long-term international technicalassistance.

Implementation of the component was unsatisfactory. The project became effective inJune 1993. All 16 districts were phased in by January 1994, well ahead of schedule. The paceof the expansion of the program may have precluded the possibility of adequately adjustingprogram design in response to problems which developed and probably outpaced thedevelopment of experience and management capacity within the extension institution at everylevel. In mid-1994, AEP assumed responsibility for financing extension in three moredistricts formerly supported by the SWRAP, and in mid-1995 a further district was includedbringing the total to 20 districts with 87 counties, though one district was later absorbed bythe CSDP3. In effect the accelerated phasing and expansion of project coverage diluted theresources available for the districts and severely challenged the program's still weak financialand technical management capacity.

While FEWs who had been specialists in crops, livestock or fisheries now took on apolyvalent role, concerns were widely raised as to the effectiveness of technology transferwhen FEWs dealt with topics outside their original expertise. Training was employed to helpto deal with this problem. However, only two thirds of FEWs were sent on short courses toenable them to operate as generalists. Those who did get such training often received it wellafter the functional unification had been launched. Organizational unification of agriculturalextension and technical services under a single authority was never fully institutionalized.Initially, functional unification was achieved through designation of a district extensioncoordinator from among the department heads, but FEWs remained staff of the variousMAIFF directorates. Heads of district departments performed as SMSs, although theiradministrative functions and other duties assigned by their respective directorates in MAIFFlimited their availability to technically backstop the FEWs. Beginning in 1993, all districtstaff became employees of the district governments. Their salaries and operational costs werefinanced through unconditional block grants from central government. In each district aDistrict Production Department was established along commodity and disciplinary lines. Alarge number of FEWs, mainly certificate holders, were retrenched reducing the intensity ofextension in many areas to as low as one FEW to 3000 farmers. Some districts immediatelyabandoned functional integration and reverted to using specialized FEWs. By 1998 fewdistricts, if any, had institutionalized or were operating a UES effectively.

Procurement and distribution of transport to the 20 AEP districts was delayed andinadequate relative to the number of staff and the area to be covered: only 14 vehicles, 197motorcycles, and 536 bicycles for around 1100 field staff, SMSs and district managers. Ofthese, 820 of these were FEWs. This meant that the ratio of field extensionists to farmhouseholds was of the order of 1:2155.

During the period when functional integration of the program lasted and operatingbudgets and allowances were available, the FEWs did increase contact with farmers,undertaking on-farm demonstrations, field days and seed multiplication activities, including

3 The UES/T&V approach was also introduced in nine other districts, eight of which were financed by the Bankunder the CSDP/SCRP and NURP operations and the ninth by DANIDA.

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formation of mixed gender, women's and youth groups. A beneficiary assessment conductedin 1997 indicated that each FEW regularly met with only 4 to 8 groups averaging 10 to 15households. These figures were much lower than had been planned. Given these numbers, itis estimated that about 40,000 to 100,000 farmers had regular contact with FEWs, about 2 to5% of farmers in the project area. The project's coverage was further limited relative to plansin that it made less use of mass media than had been envisaged at appraisal. For those farmerswith whom they did have contact, FEWs conveyed a range of technologies andtechnical/management messages (improved seed, pest and disease control, simple croppractices, improved livestock husbandry, aquaculture) and at least some farmers adopted4.Collaboration with other projects and NGOs, particularly in supply and multiplication ofplanting material, contributed to adoption. Adopting farmers reported yield increases but overthe project life national production data did not indicate any aggregate increase inproductivity.

From 1995, the third year of operation, late provision of counterpart funds and late andnon-payment of staff allowances adversely affected project activities including levels ofsupervision, staff performance and morale. hnproved efficiency and cost effectiveness couldhave been achieved if payment of staff allowances and salary support had been linked toperformance indicators. In 1997/98, a Village Level Participation Approach (VLPA) waslaunched in eight districts aimed at increasing farmer participation and capacity in theidentification of priorities and the formulation of action plans. VLPA was widely appreciatedas a tool for encouraging and nurturing community level planning processes. However, formany it was a disappointing experience in that, on its own, it provided only passive guidanceas to how communities might access resources with which to carry out the plans generated bythe VLPA process. As a result, introduction of this broad based approach within the context ofan agricultural extension project, which had only one year of implementation remaining,resulted in unmet expectations. These observations emerged in a post-project beneficiaryassessment of the VLPA experience.

b) Improvement in Training Capacity and Skills (US$6.10 million, 34% of costs)In general, implementation of this component was marginally satisfactory. There was

over-achievement of targets in terms of postgraduate training, study tours, anddemonstrations, resulting in over-expenditure against the training category. On the other hand,much of the training was theoretical and there was under-achievement with FEW retraining,farmer training, in rehabilitation of the District Farm Institutes and Agricultural Colleges, andin improving the relevance of training provided. While a locally contracted TrainingSpecialist was employed throughout the project period, no counterpart was provided, atraining needs assessment was not carried out until mid-1997 (too late for project purposes),and no evaluation of training impact was carried out.

Rehabilitation of the Arapai and Bukalasa Agricultural Colleges was not done. This islargely due to the failure to employ a suitable civil engineer until near the end of the project

4 AEP contributed to adoption of a range of simple and more complex technologies. The 1997 beneficiaryassessment indicates that among the 2-5% of farmers who received regular contact from extensionists,adoption averaged 60% for simple practices (timely planting, weed control and harvesting) and from 2545%for improved seeds and planting material (in particular for maize and cassava), pest and disease control andproper storage. Other less widely adopted technologies included fishpond development, and improvedlivestock feeding and management.

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and inadequate availability of counterpart funds. The curriculum of Bukalasa AgriculturalCollege was revised with the assistance of Makerere University and also adopted by ArapaiAgriculture College. The Bank questioned the appropriateness of the new curriculum in that itoffered four diplomas in various disciplines instead of one diploma for polyvalent technicians.Notwithstanding these concerns, the colleges proceeded to implement the four options. Thetarget of upgrading 30 college staff was partially achieved: 18 lecturers were sponsored onmasters programs and on other training courses and study tours.

Rehabilitation of six District Farm Institutes (DFIs) was programmed includingprovision of equipment and operational costs for staff and farmer training and to provideaudio-visual support. However only two of the DFIs were rehabilitated and procurement andsupply of equipment was delayed, adversely affecting their capacity to provide adequate staffand farmer training. For example less than half of the courses targeted for farmers wasachieved. Despite these problems, the AEP reported implementation of over 800demonstrations, about three times the target, of proven techniques (including animal tractionand agricultural processing equipment) on the farms attached to the DFIs. The AEP alsoreported implementation of about 300,000 on-farm demonstrations over the life of the project.A breakdown by type of demonstration is not available. Effective supervision of FEWs wasimpeded by mobility constraints and late and non-payment of allowances, and independentmonitoring and evaluation of demonstrations was not undertaken. Therefore, the high numberof reported demonstrations and impact should be treated with caution.

About 60% of the planned orientation and reorientation courses on the extensionapproach were implemented. Pre-season planning workshops for relevant staff were heldmore or less as planned. Retraining of all FEWs in 5-week courses at the AgriculturalColleges, to better equip the FEWs with the knowledge and skills required to operate asgeneralists, was under-achieved, and the balance between theory and practice was consideredunsatisfactory by the Bank: 16 courses were implemented out of the 35 targeted.Implementation of the retraining courses began long after functional integration of extensionhad been established, and was suspended in 1997 due to inadequate funds. As a result only5 10 out of some 820 FEWs were retrained. The intention to sponsor 80 Field Assistants(certificate holders) through Agricultural Colleges for one year on specially designed diplomacourses was not implemented, reportedly because this category of staff was abolished.Monthly planning and review meetings for FEWs and monthly training days conducted bySMSs were reportedly held on a regular basis. FEWs considered this training inadequate, butno other evaluation of this training is available.

Only a third of the planned bi-monthly technical workshops for SMSs to interact withresearchers were held, mainly due to shortage of funds. It was planned to sponsor at least 15district level SMSs on masters programs at Makerere University, and six SMSs on overseasdegree training in specialized interdisciplinary areas for which there was no program atMakere. In practice, 47 SMSs (plus the 18 lecturers noted above) were sponsored on mastersdegrees, of which nine went abroad. In addition, 7 FEWs were sponsored on first-degreeprograms and another six FEWs were sponsored on six- to eight-month postgraduate diplomacourses abroad. Public sector restructuring resulted in retrenchment of over 50% of the staffwho undertook postgraduate training with project assistance.

Compared to the 30 targeted at appraisal, 49 internal and external study tours wereorganized involving staff, civic leaders, and farners. Towards the end of the project a number

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of training courses and workshops, for project staff, civic leaders and farmers, were organizedin order to implement the Village Level Participatory Approach in eight districts.

c) Strengthening of Management Systems (US$1.81 million, 10% of costs)Implementation of this component was unsatisfactory. Project management allocation

of resources was concentrated at the national rather than the district/local level, in terms of thenumber of vehicles (21 out of 36 vehicles procured were assigned to the headquarters level),over achievement of national level training targets and under achievement of district/farmertargets, and the four-fold increase in non-field recurrent expenditure. This imbalance inresource allocation reduced project effectiveness and impact. A locally contracted financeofficer was recruited from 1993 to 1996, but an effective counterpart was not assigned until1996. The number and capacity of support staff was inadequate and implementation oftraining for AEP and district accounts staff delayed5 As a result, for most of the project periodfinancial procedures, accounting systems, and controls were inadequate, and caused abottleneck. Besides poor budget monitoring and control, asset management was almost non-existent, and control of payments and advances was weak and serious cause for concern. Inparticular, lack of supporting documentation for expenditure was common, especially for fieldstaff allowances. A locally contracted procurement specialist was employed from 1993 to1998, without a counterpart. It took three years to complete most of the procurement.Provision for management training seminars for senior and district level management staffwas under-achieved: 24 seminars were organized by MTAC compared to the 33 targeted. Ashort-term international management-training specialist was not recruited as planned, to avoidduplication of similar assistance expected from, but never provided by, the AgriculturalSector Management Support. Planned construction of new offices and rehabilitation ofexisting ones was not undertaken due to the long delay in recruiting a civil engineer, changesin priorities and the higher levels of counterpart funding required.

Provision was made to support the design and implementation of an improvedmonitoring and evaluation (M&E) system. An M&E unit comprised of two senior officers andtwo support staff was established in MAIFF under the Commissioner for AgriculturalPlanning. A local consultant was employed for six months in 1993 to design the M&Esystem. The SAR provided a list of progress and impact indicators and these were more orless adhered to in AEP reporting. Rather general and vague definition of the impactindicators, however, led to difficulties in meaningfully quantifying and measuring projectimpact. Reporting by FEWs and consolidation by each level of management provided thebasis for developing the management information system. The number of studies to assesseffectiveness and impact was less than planned, especially in relation to quantitativeassessment. A baseline survey for 1992 was not undertaken until 1994, resulting in probablerecall bias. In 1995, district extension staff carried out a farmers follow up survey, and zonalofficers implemented an extension staff survey. Some questioned the credibility of thosereports which were generated systematically. For example, the high level of reported contactwith farmers, and of farmer awareness and adoption of recommendations was an issue.Sampling procedures and biased reporting by FEWs and of enumeration by district staff werecriticized. The beneficiary assessment conducted by a local consulting company in 1997 andother independent surveys indicated lower levels of farmer contact.

An international recruited financial management specialist was recruited for six months to streamline theaccounting system and train accounts staff.

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d) Studies (US$0.28 million, 1.6% of costs)Implementation of this component was unsatisfactory. Government's ICR for the AEP

reports that the required study on rationalization of the roles of the Training Institutes andMAAIF was partly covered by the Training Needs Assessment carried out by MTAC in 1997.While the MTAC assessment provided a basis, albeit rather late, for the preparation oftraining programs it fell far short of the required output. The study on efficiency and impact ofalternative technology transfer mechanisms was not carried out. As a result of the failure tocomplete both of these studies, opportunities were missed to ensure more cost-effective use ofpublic resources. The mid-term review (MTR) was completed in October 1995, six monthslater than scheduled. A proposal for design of a follow on project was completed in October1997, Both the MTR and the proposal for a second phase failed to anticipate the current visionfor support to extension which puts the sub-county level of government and farmers in thedriving seat and allows outsourcing and a plurality of service providers and methodologies.

4.3 Net Present Value/Economic and Financial Rates of Return:As was the case for many similar projects, the SAR did not provide a calculation of the

Net Present Value of the project. It provided an economic justification for the AEP bycomparing plausible outcomes to the minimum incremental agricultural GDP which wouldhave been required in order to have achieved an internal rate of return (IRR) of 15%. Thefigure 15% was, somewhat arbitrarily, treated as the break-even rate. The key assumptionswere that in the project area 55% of farmers would be contacted and 60% of these farmerswould adopt improved technologies, giving an adoption rate for all farmers of 33%. Based onthese parameters, as little as a 1.2% increase in project area productivity would be sufficientto generate an incremental return of US$8 per adopting household and an aggregate 15% IRRfor the project. This level of increase was judged feasible.

For the ICR, an expost analysis of the same sort has been carried out using data fromAEP surveys6, other related study findings, and secondary data sources. Allowing for amultiplier effect, it was assumed for the purposes of the economic analysis here that directly-contacted farmers (around 2-4% of all farmers) spread the information they received to theirneighbors so that an estimated total of 8% of all farmers gained awareness of the messagesbeing disseminated by the AEP extension staff (an assumption consistent with the beneficiaryassessments of the program. The 8% of farmers regularly becoming acquainted with FEWs'messages was much lower than planned, and the adoption of improved technologies at 40%was also lower. At these levels a productivity increase of 14.5%, equating to an incrementalreturn of US$97 per adopting farm household, would have been required to achieve an overallIRR of 15% for the project. The feasibility of achieving the incremental production andincreased farm household returns has been assessed using indicative enterprise budgets andfarn household returns based on regional farming system models incorporating the improvedtechnologies and practices extended by AEP. The models indicate that with farmers adoptingfour to six of the improved technologies for annual crops and bananas, the incremental returnper household for the different regions ranged from US$23 to US$4 1. These levels ofhousehold incremental return are inadequate for the project to generate an IRR of 15%. At 8%extension coverage and 40% adoption, farmers would have had to adopt a number of

6 AEP studies to assess project effectiveness and impact were much less comprehensive than had been planned,especially in relation to quantitative assessment. Consequently, data from these sources do not provide asufficient basis for the evaluation. For this reason, estimates of project benefits have been prepared hereusing secondary data sources.

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additional improved practices for perennial crops to generate the required incremental returnof US$97 for the project to break even7. The probability that this occurred is very low as theseimproved practices involve significantly higher input costs, and farmers' inability to accesscredit is a major constraint to adoption. On this basis, it can be judged with near certainty thatthe incremental farm household returns generated by the project were inadequate to result inan overall IRR of 15% for the project, and, further, it is clear that the AEP had a very limitedimpact on overall productivity. This conclusion is supported by national agriculturalproduction statistics, which do not indicate any improvement in productivity over the life ofthe project.

4.4 Institutional Development Impact:Institutional Development Impact was modest. Significant investment in training has

improved the capacity of a large number of professionals that will benefit government, otherprojects and the private sector. However, as noted earlier the UES was not institutionalizedand functional integration of extension is no longer practised. The modest efficiency gains inthe delivery and management of extension achieved by the project have not been sustainedpost project. Central government's transfer of responsibility for financing and implementingextension to the Local Government Councils in 1994, the retrenchment of a large number ofagricultural staff at both the central and district levels, the abolition of the Directorate ofAgricultural Extension in 1998 and the transfer of responsibility for coordinating.extension atthe national level to NARO are potentially positive institutional changes but were notinstigated by AEP.

5. MAJOR FACTORS AFFECTING IMPLEMENTATION AND OUTCOME

5.1 Factors outside control of government or implementing agency:Factors outside control of govemment or implementing agency which influencedimplementation of project activities included:

* limited private sector involvement in agricultural sector service delivery and marketing;* low commodity returns.

5.2 Factors subject to government control:Factors subject to government control which influenced implementation of project

activities included:* limited farmer access to input supplies (including improved seed, fertilizer, and credit)

and markets;* poor rural infrastructure;* insufficient sensitisation and awareness raising of district governments, prior to and

during project implementation resulted in limited project ownership and reducedcommitment;

* public sector restructuring and decentralization reduced the number of FEWs in projectareas and resulted in retrenchment of many staff who had benefited from postgraduatetraining under the project;

7 Sensitivity analysis indicates that if extension coverage is increased to 20%, which is optimistic, and adoptionreduced to 25%, incremental retums of US$65 per adopter are needed to reach the break-even point For thesame extension coverage and adoption at 40% an incremental return of US$38/adopter is required.

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* inadequate and delayed counterpart funding particularly affected civil works andincremental operating expenses, which in turn negatively affected performance and staffmorale;

* organizational restructuring at MAAIF and the transfer of extension responsibility toNARO in 1998 disrupted project implementation and financing.

5.3 Factors generally subject to implementing agency control:Factors generally subject to implementing agency control which influenced

implementation of project activities included:* staff salary supplements and allowances were not performance based;* deficient financial management;* weak project management;* centralised implementation and concentration of resources at the headquarters level,

reduced project impact at the district and field levels;* the positive bias in monitoring and evaluation reporting misled project management, the

government, and the Bank;* increased linkages with other extension service and technology providers (NGOs,

education institutions, research institutions, and local governments) contributed totechnology adoption.

5.4 Costs and Financing:The cost of the project at appraisal was estimated at US$17.75 million over 5 years. The

Bank's commitment amounted to US$15.79 million or 90% of overall costs, for civil works,vehicles and equipment, technical assistance, training, demonstrations and field trials, andincremental recurrent costs. Government's commitment amounted to US$1.96 million.During the project significant changes were made in expenditure ceilings and financingpercentages under particular categories, such that the Bank ended up financing 95% of totalproject costs. In part this reflected increases in the scale and scope of some activities, whichoccurred with the addition of the four extra districts, increases in levels of training andoperating expenses, and changes in priorities in terms of civil works and other activities thatrequired higher levels of counterpart funding. Significant transfers (over US$2.2 million)were made from civil works and consultant services (US$0.35 million), and used to fundincremental expenditure on training (additional US$1.5 million), field operations (additionalUS$1.3 million) and non-field operations (additional US$1.2 million, or 4 times the originalprovision). As a result, at project closure field and non-field operating costs accounted for48% of total Bank costs, and training 25%. Overall Bank disbursements amounted to US$15.7million (98.8% the original target), with only US$116,000 cancelled.

6. SUSTAINABILITY

6.1 Rationale for Sustainability Rating:Sustainability is rated unlikely. The project focused strongly on institutional capacity

building through human resource development and the strengthening of extension servicedelivery by providing financial support for operating expenses and staff allowances. Theimproved capacity in human resources is sustainable in the short term. However, theextension delivery system as supported by the project is not. The extension delivery systemadopted was relatively high cost, and required large recurrent expenditures to maintain it. Its

12

bureaucratic structure was heavily criticized and lost political and popular support. Theproject did not assess alternative more cost-effective approaches, or establish performance-based mechanisms that would have improved accountability, or introduce mechanisms thatwould increasingly leverage cost sharing by different levels of government, the private sectorand beneficiaries. Government and donors continue to place high priority on agriculturalextension and show a willingness to invest substantial amounts of money in an effectiveprogram - but not a program structured along the lines put in place under AEP. On thepositive side, farmers who adopted the technologies and improved their returns are likely tocontinue utilizing these techniques.

At design, it was estimated in project documents that a 10- to 15-year period would berequired before government itself would be able to absorb the recurrent costs of agriculturalextension. In the five years of AEP, public sector reform and decentralization resulted inreduced staffing levels and the transfer of extension staff to district government, restructuringand downsizing of MAAIF at the central level and transfer of responsibility for coordinatingextension to NARO. One outcome of the transfer of administrative and financialresponsibility to district government during and after the project has been a tendency in most,if not all, districts to change back from the UES to a technical line department FEW approach.In general, this has been accompanied by further reductions in recurrent budget allocation toextension. District governments are provided with unconditional block grants but they haveshown little commitment to meeting the costs of the agricultural extension system establishedby AEP. Since project completion, district agricultural offices have been given only verylimited funds and extension activities have been severely curtailed. Funds to maintain andupgrade the technical skill levels developed during the project are also likely to remain verylimited. At the national level the rationalization of MAAIF has resulted in a large number ofproject trained staff moving outside the ministry. The existing MAAIF budget is inadequate tosustain the level of technical support provided to district offices during the project. A newmore sustainable approach will be adopted under the follow-on project (National AgriculturalAdvisory Services program) under which funds will channeled directly to the Districts andSub-counties on a matching conditional grant basis.

6.2 Transition Arrangements to Regular Operation:In 1998, Government approved a presidential initiative to recruit, under permanent and

pensionable conditions of service, university graduates in agriculture, veterinary services andfisheries to serve at each sub-county in the country. As there are 888 sub-counties this impliesrecruitmnent of 2,664 graduates. The salary and operational costs associated with the graduatescheme are being met by conditional grants out of the Poverty Action Fund from the center tothe districts. By November 1999, 43 out of 45 districts had recruited a total of 444 graduatesand a tender had been launched to purchase motorcycles for the graduates.

The recently approved ARTP-II provides bridging finance for design of the Bank'sfollow-up support including pilot activities to test modalities to improve technical support forthe decentralized extension services. In August 1999, under the auspices of government'sModernization Plan for Agriculture, a Task Force on Agricultural Extension presented areport entitled "Strategic Framework for Agricultural Extension in Uganda". Subsequently agroup of donors have agreed to work with the Task Force in the design of a NationalAgricultural Advisory Services (NAADS) program. The program will be based on thefollowing principles: further decentralization of responsibilities for extension to the sub-county level and possibly beyond using conditional matching grants, separation of public

13

funding from public implementation of extension in the field to be accomplished throughcontracting out of extension services, cost-sharing between levels of government and clients,greater interface with the agricultural research community to be achieved by givingextensionsists and farners and local governments more control over research activitiesthrough giving them a budget to hire in research activities, and through giving them morevoice at research planning and priority setting meetings; strong emphasis from extension on(among other things) the management of the farm as a business enterprise and improvingfarner's capacity and skills at accessing and using input and output markets. Donors haveindicated that they are interested in joint financing the NAADS. Ajoint donor pre-appraisalmission to review progress is planned for May 2000.

7. BANK AND BORROWER'S PERFORMANCE

Bank

7.1 Lending:The Bank played a key role in the design of a program which, in retrospect, was overly

centralized and bureaucratic. It did not help to establish an incentive and institutionalframework that would motivate and support staff performance and enhance accountability totheir clients, or increase cost-sharing by public and private sector stakeholders. All of thesefactors hindered extension's effectiveness and its ultimate sustainability. Further, the designdid not adequately take into account or address other major constraints (access to credit, weakmarket systems, limited private sector provision of supporting services, poor infrastructure)that affect farmers' adoption of technologies. It also over-estimated governmentimplementation and financing capacity and did not give sufficient priority to establishment ofsound financial management and monitoring and evaluation systems.

7.2 Supervision:Twenty-three supervision missions were undertaken during project implementation over

the period, 1992 to 1999. The supervision reports seem on the whole unjustifiably positiveabout results being achieved on the ground. This led to often contradictory conclusions. Onthe one hand most reports noted serious project management and financial problems, poorauditing, delays in operating funding and allowances adversely impacting staff performance,the lack of an operational financial management system, weak mnonitoring and evaluationsystems, lack of proper management of the training program, lack of counterparts forcontracted technical assistance staff. On the other hand the reports consistently indicatedimportant training achievements, impressive progress with FEW-farmer contact, widespreadfarner adoption of improved technologies and practices, and steady improvement in thequality of M&E reporting. The unsatisfactory performance of three out of four projectcomponents, and the low level of FEW-farmer group contact and lower than targeted adoptionrates call into question the reliability of the assessments conveyed in the field reports whichwere prepared for supervision missions.

In general, where supervision missions left recommendations, there seemed to be littleeffective follow-up and most of the major issues were long-standing with key issues whichhad been discussed during numerous supervision missions remaining unresolved over the lifeof the project. While a number of assessments of the effectiveness of the program werecarried out, they were not put to use during the mid-term review in a manner which might

14

have effected a reform in the design of the program along the lines being pursued during thefollow-on project. Nor did they lead to effective solutions to the persistent problems with theprograms financial management. Nor did they lead to reforms which might have shifted thepattern of expenditures under the program so that a greater share of program funds might havebeen channeled away from headquarters and into the field where extension agents werefrequently left without funds with which to operate.

One area where Bank supervision was responsive to the issues emerging in projectimplementation was in the development of the VLPA initiative. This was clearly an attemptto instill more meaningful client participation into the direction of the program. While theultimate results of the VLPA experience were mixed, important lessons were learned (theseare now being articulated through the analysis of a beneficiary assessment undertakensubsequently to the close of the project).

7.3 OverallBankPerformance:Overall Bank Performance is rated unsatisfactory. In hindsight, it is clear that neither

the design nor the supervision of the project was fully satisfactory in leading to thedevelopment of an extension institution which could ultimately be either effective orsustainable. The failure to begin dealing with the problems in the program's design at themid-term review stage prolonged the emerging problems. However, lessons have beenlearned and are playing a central role in the articulation of the approach which will form thebasis of the follow on project.

Borrower

7.4 Preparation:The design of the extension institution was overly bureaucratic and centrally controlled.

7.5 Government Implementation Performance:The establishment of a substantial institutional structure with which to carry out

extension was an impressive achievement. However, it was far too inflexible in nature and itwas never satisfactorily operated or maintained. Lack of adequate counterpart staffing for thetechnical assistance, delayed counterpart funding, poor financial control, and the failure toformally institutionalize the UES system were major issues during implementation. The mid-project decentralization of the extension services to Districts was a good decision, but notenough was done to prepare and support this fundamental change in the structure of theextension services.

7.6 Implementing Agency:The decision to speed up the phasing in of districts and expand project area coverage

spread resources more thinly and stretched the limited management and technicalbackstopping capacity. Throughout the project period, administration was weak. Financialmanagement and disbursement systems were inefficient delaying fund allocation anddistribution to the districts. This impacted significantly on the level and effectiveness ofproject activities. Poor auditing practices delayed presentation of audited accounts. Whiletechnical assistance support in terms of long-term staff was provided with an extensionadviser, financial, procurement and training staff, the effectiveness of this support must bequestioned given the lack of operational systems and procurement delays. Inadequatemonitoring and evaluation systems were established, and a number of planned studies to

15

assess quantitative performance and impact, and the effectiveness of alternative extensionsystems were not undertaken, and were a major constraint in assessing the projectperformance and providing a basis for adjustments. This led to concerns as to the reliability ofsurvey data and findings.

7.7 Overall Borrower Performance:Taking into account the weaknesses in project preparation, delayed and inadequate

government funding, and poor implementation of the project, overall borrower performance israted unsatisfactory.

8. LESSONS LEARNED

Market Linkages

Liberalizing input and output markets, together with public sector financing oftechnology development and dissemination, are on their own insufficient conditions for rapidand widespread adoption of technologies. Other interventions in support of market linkagedevelopment are required: road network improvements; development of farmer organizationsto help increase farmers' bargaining power and reduce transaction costs for suppliers andbuyers; development of savings and credit associations and linkages with financinginstitutions; supporting rural stockists/buying agents by facilitating links to wholesalers andaccess to credit and by providing training in stock management and input use. Working withfarmers to help them to become more capable and effective in dealing with these issuesshould be a more central part of the job description for extensionists in their work withfarmers.

Project Management and Capacity Building

Priority should be given to the establishment of sound financial management, internalauditing and progress monitoring systems at all levels, and to closely monitor and backstopoperation of the systems throughout the project period.

Greater efforts are required to ensure reporting is more objective and that it providesmanagement with the information required to make adjustments necessary to improveperformance and cost-effectiveness. Potential conflict of interest in impact assessments couldbe reduced by outsourcing to local organizations but with supervision and critical reviewprovided by independent external consultants.

Provision for training should ensure a proper balance between theory and practical skillsand should be more demand-driven. Systematic assessment of training needs, effectivenessand impact is required. A strong training emphasis should be given to enabling extensioniststo become more effective at participatory techniques of problem identification and actionplanning.

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Approach to Extension

Effectiveness and sustainability of any publicly financed extension service, regardlessof the methodologies used, will be difficult to achieve if mechanisms are not put in place toensure that extensionists (and researchers) are more accountable to their clients and financiers.

Given the range and diversity of client needs and requirements, and the variety ofextension approaches available, the institutional structure of the program should supportpluralism in approach depending upon the need. Different extension approaches and deliverysystems (public, private, NGO) which respond to these pluralistic requirements should beconsidered including empowerment of farmer organizations and lower levels of governmentto pull in specialists in accordance with their priorities. Evaluations and comparisons ofapproaches should be one of the important roles of the central level extension office.

The various extension providers - government, farmer organizations, and NGOs -tended to focus independently on the same farmers. However, where it took place,collaboration and cost sharing between these various programs contributed to technologyadoption. A great deal of attention should be devoted to establishing ways to encourage jointworking and financing.

Supervision and assessment of impact of a large number of FEWs delivering a widevariety of simple messages and supporting a large number of small on-farm demonstrations iscostly and difficult. Maintaining farmer group cohesion is difficult unless the FEW isperceived as having something to offer either in knowledge or material terms. The quality ofdialogue and the multiplier effect may be higher with fewer, better-trained and well-supportedextensionists. Similarly, focusing on a smaller number of high impact, strategically located,and verifiable demonstrations of technology options may be more cost effective. Incentivesfor extensionists should be linked to verifiable performance.

9. PARTNER COMMENTS(a) Borrower/Implementing Agency:

In November 1999, the Permanent Secretary to MAIFF presented a policy paper onagricultural extension to a National Forum on Decentralization. In the assessment ofexperience with extension to date the paper states "Efforts to revive the AgriculturalExtension Services since 1986 have made very little impact particularly in respect to foodproduction. These efforts have been criticized for lack of ownership by the majorbeneficiaries, the farmers, thus making the interventions non-responsive to farmers' needs andconcerns but rather supply driven by the center, largely offering unviable and unsustainablepackages. The research-extension-market linkages and the delivery systems have also beeninadequate. Extension agents reach less than 10% of the farmers, technology adoption ratesare estimated at less than 35% while on-farm technology production levels are below onethird of the research station performance levels. The agricultural sector remains a low-input,low-output activity with high levels of transaction costs, post harvest losses and therefore, lowlevels of agricultural enterprise profitability." In contrast the contribution to the ICR preparedin December 1998 by the out-going management of the AEP claims that "The project hassuccessfully contributed toward institution building, capacity building, capacity utilizationand above all in improving production and the socio-economic status of the farmers. The

17

project facilitated the development and organization of an integrated system, which is beingimplemented in 33 districts of Uganda. This has resulted in improved extension servicedelivery as 75% of the farmers reported contacts with extension staff, ...the diffusion ofimproved technologies under the project generated substantial increases in agriculturalproduction, awareness of recommended crop practices increased for 60% of farmers and ofthese 75% adopted the recommendations". The findings of this ICR strongly support thestatement made by the Permanent Secretary to MAIFF and seriously question the reporting bythe AEP.

(b) Other partners (donors/NG(Os/private sector):In June 1998, a memorandum from the Bank's Country Director for Uganda to the Task

Manager for AEP stated "For all of its achievements in establishing a national service, thecurrent project has received a great deal of criticism within Uganda". The ICR mission'smeetings with numerous major donors and NGOs confirmed that other partners consideredthe AEP unsatisfactory and that it had had little development impact.

18

Annex 1

Key Performance IndicatorsOutcome/Impact Indicators:

Adopting farm families 392,000 80,000No. of adopting women and young farmers 60,000 NA% of readopting families 90% NA% of adopting families practicing agro-forestry 15% NA% of families practicing agro-pastoral systems 25% NAAverage % increase in yields from baselinecrops 50% NAlivestock 35% NAno. of fishponds established 2,000 3683 (2860 stocked)Average increase in family income (current US$) 10 30* Latest estimates provided by the project were considered inflated and therefore have not been listed. The only estimates given arebased on comparison and assessment of various AEP surveys and other related studies. NA indicates that reliable data were availableneither from the implementing agency.

Output Indicators:

Vehicles procured __________ 100%Counties covered 6787Fanning families contacted 710____ 000_ 200,000Improvement in Skills of Extensionists and FarmersRehabilitation of Bukalasa College % completed 0%Lecturers trained 18Retraining of FEWs _ 510No. of SMSs trained 15 55Person days spent on training by researchers 256 1,380Demonstrations of Improved Techniques l_100%_____No. of demos at DFIs 290 862No. of demos on farmers' plots 1850 305,127Strengthening of Management SystemsPerson days of training 685 720Person days of training for district staff 533 480StudiesRationalization of Ag. Training not doneInstitutes/Colleges atDFIs29Efficiency of various extension methods not done,Preparation of follow-on project sta0completed

1 9

Annex 2a

Project Costs and Financing

Project Costs by Component (in US$ million equivalent)

Delivery of Extension |8.09 NAExtension Training 5.14 NAManagement Systems 1.54 NAStudies 0.24 |NA||Total Base Costs 15.01 NAPhysical Contingencies 1.63 NAPrice Contingencies 1.11 NATOTAL Project Costs 17.75 NA

NA=Not Available.

IDA Disbursements by Expenditure Category (in US$ million equivalent)

lCivil Works 2.38 0.12 5.1%{Vehicles and Equipment |1.86 |1.90 102.1%Technical Assac .011 54Training 2.48 3.96 159.8%Demonstrations and Field Trials 00.64 101.8%Incremental Recurrent Costs: Field Operations 4.58 5.88 128.3%Incremental Recurrent Costs: Non-Field 0.36 1.56 432.9%Operations __|_ __I

Refund of PPF Advance 0.5 0.41 82.0%Sub-total 14.29 0.0%Unallocated 1.50 0.0%

TOTAL 15.79 15.60 98.8%

20

Annex 2bProject Costs and Financing

Project Costs by Procurement Arrangements (in US$ million equivalent) 11

E E | l | l g g g .901 0.251 3.151 1E || | I || I | .881 0.21 2.181

| | | | || | | | 1|1 1 1 5.531 15531

| | 0 | 1|1 lg | 1~6.89 i6.89 i

I | |1E g| g 1! 4.781 0.351 12.621 17.751

Note: NBF= Not Bank Financed (includes elements provided under parallel cofinancing procedures, consultantsimder trust funds, any reserved procurement and any other miscellaneous items).The procurement arrangements for items listed under "Other" and details of the items listed as NBFneed to be explained in footnotes to the table.

1/ Actual disbursement data by procurement method not available.

21

Annex 2c

Project Financing by Component (in US$ million equivalent) 1/

Management Systems 1.63 0.18

Studies ~0.28 0.01

Total Project Costs 15.79 1 96

1/ Note: Actual disbursement by component not available.

Annex 3Cost Benefit Analysis

15%. Less than l15%1 __ _ _ _ _ _ _ _ _ _ _

Note The SAR did not include a traditional cost benefit analysis. The methodology used wasbased on a sector program approach, and involved estimating the incremental GDP requiredfrom adopting farmers in the project for it to generate an IRR of 15%, which was used as thebreak-even rate. As no baseline without project or with project economic data was collectedduring AEP, the ICR has used a similar methodology, and in addition has assessed whether theincremental retums were feasible at the household level using regional fami models thatincorporate improved technologies. The results indicate that AEP was not viable as the IRR isless than 15%.See main text and the Annex 7b on Economic Benefits for additional information.

22

Annex 4aBank Inputs: Site Visits

. l | i _ J a~~~Jn 90 - Apr 92 | n.a. |n.a. l | | N May-S~ay-ep, 92 |Ag.Ec.Ex.FA.ln.Pr

. ' | _Noov 13-25, 92 AS.EX __1_ _ _

| l | M ar2;~~ar 11,93 EC rT

1/Key to typesJul of23,expert2xise:

| l | S e~~~Sp 4-8, 93 TEX.I_ Ag Agriculturalist Ja n 19-Feb 4, 94 nEC FAn ge.men

AS = griclturl Sevice MEg Moniorin and9 Evaluatio

i Diursemen OctGOspecia24-27,94 TEX.. l l | _ J a~~~Jn 12-20, 95 |EX. _ s

Ec EconomistNRMp 16 Natur, Anes c.2Ex.Tr.20p Mana

i | i F e~~~Fb 1-14, 96 6 Ag.Di.Ex ME O sI

Ex Extension Opr 2 O peratin,6 OgMEr

FAv-22 Fiania |An.AlS. i 2xTPr S Prcuemn

FM=FinancialManagement Tr 19Educat,i97 |Ag.FMnTr aU iSH Hgluaiaty ui 12 U7 S TSa .Eti XFA-OPaNGOtU oS

23.EX.OP.NGO

_ J a n~~~~~~~a 21-29, 97 |AS I

0 _ J u n~~~~~~u 30-Jul 17, 98 Ec_+8 others s _>n~~~~~~~~a 23-Feb 5, 99 12EC.EX.OP ¢ S

I/Key to types of expertise:Ag = Agricufturalist In = Institutions and ManagementAS = Agricultural Services ME = Monitoring and EvaluationDi = Dibursement NGO = NGO specialistEG = Economist NRM = Natural Resource ManagementEx =Extension Op =Operations OfficerFA =Financial Analyst Pr =ProcurementFM =Financial Management Tr = Education and Training

2/ Performance Ratings recorded in Form 590slPSRs and in the ICR:HS = Highly unsatisfactory; U = Unsatisfactory; S = Satisfactory

23

Annex 4b

Bank Inputs: Staff *

| | | 11 | ~14.6 25.4

2 | | | 10 lX 26.6 78.3| | l | | | E 173.3 539.7_

| 0 | 11 11[~~ 71.9

| | | S 01 g 214.5 715.3

Annex 5

Ratings for Achievement of Objectives ** / Outputs by Components

_~~~~~~~~~~~~~~Notes: Also ildes Bank-fi e a

I s to t o 24 I x

11_ I I x - I I I~~~~~~

1 _ 1 1 1_ 1 1 X I~~~~I I I I I~~~~~~~

Notes: *Also includes Bank-financed and trust fund consultants**Relates to the objectives specified in the SAR

24

Annex 6

Ratings of Bank and Borrower Performance

25

Annex 7a

REPUBLIC OF UGANDA

MINISTRY OF AGRICULTURE, ANIMAL INDUSTRY AND FISHERIES

AGRICULTURAL EXTENSION PROJECT(CR 2424-UG)

DRAFT IMPLEMENTATION COMPLETION REPORT

PREPARED BY

DIRECTORATE OF AGRICULTURAL EXTENSION, DECEMBER 1998

EXECUTIVE SUMMARY

INTRODUCTION

Agricultural Extension in Uganda has undergone numerous changes sinceindependence. In the colonial and immediate post-colonial era, it was mainly regulatory andcarried out by chiefs, who enforced the production of certain crops (e.g. coffee, cotton), whichwere for foreign exchange earnings. In the 50's, the Government recruited extension workersin different sub-sectors of agriculture. Until mid-1991, four ministries were principallyinvolved in agriculture.

Each of these ministries had extension workers, distributed on the basis ofadministrative levels (district, county and sub-county). These were responsible for advisingfarmers in the disciplines of the agricultural sub-sectors of each Ministry. In addition, variousdonor funded projects adopted the commodity approach and had parallel extension workersemployed specifically for a commodity. The resultant fragmentation of extension services intovarious ministries and departments had adverse effects on extension services delivery. Thiscoupled with poor facilitation resulted into low extension contact with farmers andconsequently low production and productivity.

To address the above shortcomings, the government undertook the restructuring of theagricultural sector to strengthen agricultural support services.

SECTOR DEVELOPMENT

In 1987, an action plan for the Agricultural Policy Agenda was developed as part of theeconomic recovery programme. The Government of Uganda (GOU) and the InternationalDevelopment Association (IDA) agreed to set up two technical working groups - 9a forresearch and 9b for extension where strategies were developed for effective sustainableresearch and extension services. The recommendations of the two working groups led to thepreparation of investment programmes for research and extension by the Task Forceestablished by the Agricultural Policy Committee (APC). This resulted in the creation of the

26

National Agricultural Research Organization (NARO) and the Unified Agricultural ExtensionService (UAES).

The Agricultural Extension Project (AEP) was conceived to support, strengthen andexpand the implementation of the Unified Extension Service started under the HeadstartProgramme of Agricultural Research and Extension (HARE). The project which becameeffective on 18t June 1993 was scheduled to end by June 36*, 1998 was extended to 31 "December 1998. This extension was to allow continuation of support for on-going operationsand to prepare the follow-on project.

OBJECTIVES

The broad objectives of the project were to address the urgent needs of disease control;improvements in yield and build capacity to deliver extension services as well as tospecifically support an effective extension service.

Specifically, AEP aimed at improving:(a) Efficiency in the delivery of extension services in 16 districts;

(b) Training capacity and skills of extension agents and farmers;

(c) Adoption of improved techniques by farmers; and

(d) Efficiency in management services of MAAIF in order to support thedelivery of extension and ensure its sustainability.

COMPONENTS

AEP had four components, namely:- Strengthening of the delivery of extension services* Improvements in training capacity and skills- Strengthening of Management Systems in MAAIF* Studies

DESIGN, ORGANIZATION AND MANAGEMENT

National Level

At national level, the project was fully integrated into the regular organizationalframework of MAAIF. The Permanent Secretary assisted by Director of AgriculturalExtension (DAE), Director Crop Resources and Director of Animal Resources wereresponsible for the overall management of the project. However, the Director of AgriculturalExtension was responsible for the day today management of the project assisted by theCommissioners, Zonal Extension Officers and Subject Matter Specialists (Headquarters) fromdifferent sub-sectors.

27

District Level: The post of the District Extension Coordinator (DEC) was introducedby MAAIF to coordinate extension activities at district level. He/she was assisted by a team ofSMSs.

County Level: Similarly, the County Extension Coordinator was made responsible forcoordination at county level.

Circle Level: A new operational area called circle was put in place. It is a geographicaloperational area of the FEW covering between 1000 to 3000 farm families. This correspondsto two to several parishes depending on population density, availability of staff andgeographical spread. Several modifications were made in the original design of the project,which are printed in the text.

STRENGTHENING THE DELIVERY OF EXTENSION SERVICESMETHODOLOGY

The Unified Extension Approach is characterized by programme planning based onfarming systems involving farmers, extension workers and researchers. A front-line extensionworker is responsible for transfer of technology to groups of fanners in a manner thatencompasses a farming systems approach. The methodology focuses on a group approach totransfer technology to farmers through demonstrations, group meetings, and on-farm trials. Inaddition, field days are held to show the achievements of farmers to the community. Inter- andintra-district study tours also formed an important educational means. Mass media are used todisseminate educational messages as well as creating awareness of new developments to thefarming community and the general public. Bottom-up planning is emphasized throughsystematic client consultation by the FEW and other extension staff at all levels.

EXTENSION ACTIVITIES

The extension methods used for transfer of technology and motivating farmers foradoption include: visits, group identification/formation, training, result demonstration, methoddemonstrations, group meetings, field days/study tours, radio and TV, and literature.

INTERVENTIONS TO STRENGTHEN EXTENSION DELIVERY

In order to strengthen the delivery of extension services, the following interventionswere introduced:

(i) Farmer-to-Farmer Seed and Stocking Material Multiplication;

(ii) The Village Level Participatory Approach (VLPA);

(iii) Information Dissemination Strategy;

(iv) Pilot Demonstrations; and

(v) Cost-Benefit Analysis of Enterprises.

28

PARTNERSHIP WITH OTHER INSTITUTIONS AND SERVICES

The MAAIF collaborated with various institutions and NGOs. The institutions includedMakerere University, NARO, Management Training and Advisory Centre (MTAC), NationalInstitute of Extension Management (MANAGE, India) and Agricultural and RuralDevelopment Foundation (ARDF, Philippines). The extension programme also collaboratedwith NGOs such as CARE, World Vision, Uganda National Farmers Association (UNFA) andSG 2000.

TRAINING COMPONENT

The training component was incorporated to build capacity among extension workersand farmers. The following types of training were provided:

(a) Orientation Courses,

(b) Pre-seasonal Planning Workshops,

(c) Monthly Training Programmes (MT),

(d) Technical Workshops (TWs),

(e) Inservice Training Courses,

(f) Re-training of FEWS,

(g) Management Training Programmes,

(h) Farmers Training,

(i) Long Term Training, and

(j) Study Tours, Visits, Workshops and Courses.

STRENGTHENING MANAGEMENT SYSTEMS

Under the management component six committees were established to strengthen themanagement systems. They included the Policy Committee, Technical Committee, TechnicalAdvisory Committee, Procurement Committee, Finance Committee, and Fanner-Research-Extension-Linkage Committee.

In order to strengthen the above committees, a Desk Officer was appointed to closelywork with the Director of Agricultural Extension. In addition, six zonal teams, eleven leadpersons as well as eight Subject Matter Specialists were put in place.

To build the local capacity, the following consultants were hired on long-term namely:Extension Advisor, Extension Training Specialist, Procurement Specialist, Finance Officerand Civil Works Engineer.

Besides the above Consultants a number of short-term consultants were recruited by theproject.

29

STUDIES

The Studies conducted to improve the implementation and management of AEPincluded the following:

* Baseline Survey* Farmers Follow-up Survey* Extension Staff Survey* Monitoring and Evaluation Surveys* Mid-term Review* Beneficiary Assessment of the Agricultural Extension Project* Manpower Status, Training Needs, Training Plan and Personnel Specifications;* Rationalising the Roles and Responsibilities of the Various Training Institutes,

Colleges and Centre under MAAIF and Development of their Curricula;* Evaluation of monthly Training Programmes, and* Design of a Follow-on Project.

PROCUREMENT

Procurement activities fell under three categories namely: Procurement of services,Procurement of works, Procurement of goods.

The project met constraints in civil works and consequently it carried out somerehabilitation of only Ikulwe DFI. Work at Kyembogo DFI did not commence.

With regards to goods: vehicles, motorcycles, bicycles, office and field equipment wereprocured.

ESTIMATED PROJECT COSTS

The appraised project costs were estimated at US$ 17.75 million. The InternationalDevelopment Association (IDA) and Government of Uganda (GOU) were to contribute US$15.79 million and US$ 1.96 million respectively.

ACTUAL FINANCING

Out of the US$ 17.7 million by 30Q October 1998, AEP had spent US$ 16.87 million.This gives an overall positive variance of US$ 0.83 million. Out of the total expenditure pfUS$ 16.87 million, GOU contributed US$ 1.83 million, which is approximately 93% of thecontribution stipulated in the DCA. The IDA contributed US$ 11.5 millions, which isapproximately 92% of what was stipulated. Besides, the project has streamlined the FinancialManagement System by introducing Imprest System for the district financing, comparison ofaccounts and training of financial staff.

30

DONOR AND GOU SUPPORT

Donor and government performance was cordial and effective throughout the period ofimplementation of the project. There were frequent and regular visits by the IDA teams tobackstop the project operations. The Government of Uganda also provided promptly therequired counterpart funds; although there was a short fall in the counterpart funding during1995 which to some extent affected the field activities.

Several suggestions are given in this document to improve further the donor andgovernment performance. In addition, the project also established good working relationshipswith public agencies and NGOs especially, NARO, UNFA, SG 2000, MANAGE, CARE,MTAC and Makerere University. This helped to promote AEP activities.

BENEFITS AND RESULTS

The benefits and results of the project revealed by the studies conducted by the MidlandConsulting Group, Management Training and Advisory Centre, Monitoring and EvaluationUnit of MAAIF and reports are summarised below:

(a) The project facilitated the development and organisation of an integratedextension system, which is being implemented in 33 districts of Uganda.This has resulted in improved extension service delivery as 75 per cent ofthe farmers reported contacts with the extension staff.

(b) The project significantly contributed to capacity building through humanresource development by enhancing skills and capabilities of 1000 staff and500,000 farm families. Besides, 71 SMSs and lecturers were trained at post-graduate level, 7 undergraduates and 510 FEWs were retrained. In addition,58 inservice training programmes together with 49 study tours wereundertaken.

(c) The diffusion of improved technologies in the districts under the projecthelped to generate substantial increases in agricultural production, whichimproved the nutrition and standard of living of number of rural families.The extension services reached both directly and indirectly over 900,000farm families.

(d) Women farmers benefited from improved production and processingtechnologies in addition to labour and energy saving devices. Thus, genderconcerns received special focus in the project.

(e) The awareness of the recommended practices by 60 percent of crop farmers,40 percent of livestock farmners and 100 percent of fish farmers wasattributed to AEP. Among the farmers who were aware, 75 percent of cropfarmers have adopted the recommendations.

(f) The crop yields were reported to have increased by 20 to 50 percent andmilk yield rose from 1 to 2 litres per day in local cattle and 5 to 10 litres inexotics.

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RECOMMENDATIONS

v Unified Agricultural Extension Programme should be extended throughout the country byintroducing interventions like VLPA.

/ The various training programmes, demonstrations, field days, study tours and visits thatcontributed a great deal to increased farmers awareness adoption of the recommendedtechnologies and increased production should continue in the follow-on project.

/ The World Bank Resident Office should be given adequate capacity and authority tohandle some financial and procurement matters as well as supervision problems.

/ Whenever a programme approach is adopted and the projects are integrated into theorganisational framework of the ministry, without having a coordination/implementationunit, a proper appraisal should be made of the local management capacity. Besides, it isnecessary to clearly spell out the roles and responsibilities of each actor involved in itsmanagement. This should also take care of delegation of authority commensurate with theresponsibilities to all concerned.

v For continuity, capacity building and sustainability, a team of counterpart staff rather thanone individual should be assigned to each TA as conditionality.

v It is recommended that the monitoring and evaluation be strengthened by establishingmanagement information systems.

The GOU should release adequate counterpart funds on time to ensure timely, sustainedand effective implementation of project activities.

v The project had Memoranda of Understanding with some stakeholders. It is recommendedthat similar arrangements should be formalised with all other stakeholders, includingdistricts.

/ As a result of the collaboration with MTAC in providing management trainingprogrammes, there were improvements in management. Further training programmes ofthis nature should be organised.

V It is recommended that the current rigid procurement procedures, which are slow andrather cumbersome resulting in failure to complete the civil works, be reviewed.

The imprest system of releasing funds to the districts on quarterly basis should continue, toensure a steady flow of funds, and enable the districts to implement planned programmeson time.

Districts should make deliberate efforts to harmonise, rationalise and integrate NGOactivities and resources into the district extension plans and programmes.

The positions of ZEC and DEC need to be established and institutionalised at the Ministryheadquarters and in all districts, respectively.

32

/ The computerised accounting system, which was developed by AEP, should be used in thefollow-on project as well as the entire MAAIF.

CONCLUSION

The Agricultural Extension Project has successfully contributed toward institutionalbuilding, capacity building, capacity utilization and above all in improving production andthe socio-economic status of the farmers. In order to maintain this gain and to expand theactivities, it is necessary to put in place a follow-on extension project immediately.

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Annex 7b

IMPLEMENTATION COMPLETION REPORT

UGANDA

AGRICULTURAL EXTENSION PROJECT(CR. No. 2424-UG)

Economic Benefits

1. Background

Key assumptions underlying AEP were that improvements in the delivery of extensionservices, in the skills of extension workers and farmers, combined with strengthening ofmanagement systems in MAAIF would result in an improvement in extension service efficiencyand increased farmer contact, increased adoption of improved technologies and practices byfarmers and improvements in productivity of crop, livestock and fish enterprises.

1.1 SAR Methodology

The AEP Staff Appraisal Report (SAR) 1992, attempted to quantify the benefits that wouldbe attributable to the AEP using a sector program approach. This involved estimating theminimum impact from planned project activities on GDP to achieve an internal rate of return(IRR) of 15 per cent. While noting that there are a range of other factors besides extensioninfluencing the adoption of new technologies and innovations, the SAR outlined a number of keyassumptions underlying the analysis. Among the underlying assumptions were the following:

I) That project coverage of farm families would increase from approximately 30 per cent inyear 1 to 60 per cent by year 4, and that adoption rates would increase from approximately40 to 55 per cent in the last year of the project. This would result in 33 per cent of farmersin the project area, approximately 390,000 farmers adopting some improved practices byyear 4 of the project.

2) Agricultural GDP was conservatively estimated at US$800 million for the 1.2 millionfamnilies in the project area. This estimate was based on a project area of sixteen districtswith estimated share of 1991 agricultural GDP (monetary and non-monetary) at 60 per cent.This would mean adopting farmers would account for approximately US$260 million of theGDP.

3) The analysis based on these assumptions (SAR Annexl0) is reproduced in Appendix 1,Table 1. The analysis was based on adopting farmers only requiring a I per cent increase innet output, approximately US$8 per family, to generate an IRR of 15 per cent on projectexpenditure, including recurrent expenditure in the post implementation period. Theestimate is based on a twenty-year period.

1.2 Project Quantitative Studies

The SAR outlined a number of process and impact indicators to be monitored duringimplementation. Monitoring actually carried out during implementation fell short of that whichwas originally planned. Several studies of the project's performance and impact were carried out

34

during the course of implementation. Taken together, project monitoring and the performancestudies fell short of providing the information which would have been required to undertake thequantitative assessments of the project's performance which were foreseen in the SAR.

The AEP studies which were undertaken did not use a standard methodology and this haslimited their applicability as bases for definitive assessment of project effectiveness or impact.The key studies completed during the course of the project were the following: the BaselineSurvey; the Farmer Follow-up Surveys; the Extension Staff Survey; and the BeneficiaryAssessment. VVhile in some of the studies the survey data collection method employed resulted inpotential bias, the studies do make it possible to do some qualitative assessment. A systematiccomparison of the surveys and the beneficiary assessment findings on adoption rates was notpossible due to the use of different numbers of project impact points in the earlier survey studiesand aggregation of the findings.

1.3 Related studies

The limited reliability of statistical data collected and reported by the project has made itimportant to supplement this data with that collected and reported in a number of other relatedprojects and studies. These are:

* South West Region Agricultural Rehabilitation Project (SWRARP) ImplementationCompletion Report (ICR), 1997. The agricultural extension activities under this projectwere taken over by AEP;

* Agricultural Research and Training Project (ARTP) II Project Appraisal Document,Economic Assessment of Agricultural Research in Uganda, 1999;

* World Bank Uganda Agricultural Sector Memorandum, 1998;* Ministry of Planning and Economic Development, Agricultural Policy Secretariat,

Report on Economics of Crops and Livestock Production 1997;* Uganda Bureau of Statistics.

2. Assessment Methodology

2.1 Methodology

The analysis reported here is based on a two part approach:

1) Sector Program Approach. The AEP SAR used a sector program approach to assess theminimum required incremental output in terms of growth in agricultural GDP for the proj ect togenerate an IRR of 15 per cent. This rate of return is treated as the break-even rate.

Based on the AEP survey findings and those in related studies on the level of farmer contactand farmer adoption of technologies, the GDP productivity increase and the increased returnsrequired per farm household is estimated to achieve an IRR of 15 per cent.

Sensitivity analysis is used to assess the impact of changes in the key variables (extent offarmer contact and level of farmer adoption) on the required productivity increase and resultingincremental farm household return to maintain the IRR at this level.

2) Farm Household and Enterprise Level Productivity. The feasibility of achieving theincremental production and increased farm household returns is assessed using indicative

35

enterprise budgets and farm household returns based on regional farming system models, whichincorporate the improved technologies and practices extended by AEP. These estimates areindicative, as in the absence of quantitative data from the project, secondary data sources havebeen used.

3. Project Impact and Effectiveness

3.1 Extension System Delivery

The Government of Uganda AEP ICR (1998) indicated that farmer group meetings,technical workshops and farmer retraining were less frequent than planned in the AEP design, andthat management and supervision of project field extension worker (FEW) activities occurred at alower level than planned.

The project surveys indicated that over the period of the project there was an increase in theFEW/farmer group contact (refer Table 1), though the level of contact was less than planned. Thesurveys did differ in their findings on the level of systematic contact, with sampling procedures insome of the surveys resulting in the risk of an over-estimation bias. Factors which reduced theFEW contact levels were: the reduction in FEW numbers; the lack of operating budgets; travellingdistance; late payments of allowances and a lower level of supervision than planned.

An independent survey undertaken for the govemment by the World Bank EconomicDevelopment Institute and CIET International (A Report Based on the Findings of the BaselineService Delivery Survey,1 995) indicated lower levels of FEW contact with farm households, with11 per cent of households having contact with FEWs. This ranged from 15 to 21 per cent in threedistricts and was less than lO per cent in the other six surveyed districts. A number of the districtswere AEP districts and in these districts group visits were less likely 53 per cent versus 70 percent in non AEP districts, and households in AEP districts were less likely to be visited. The meanfor FEW farmer visits in districts with AEP was 10 per cent, and for those districts without AEP14 per cent.

The Beneficiary Assessment Report (1997) indicated that FEWs met with farmer contactgroups on a less regular basis than planned. The Beneficiary Assessment results indicated thatwhile FEWs were expected to meet regularly with 16 farmer groups, on average they actuallyonly met with five of the 16 groups as regularly as had been planned. On average, they met withanother third of their assigned groups on only an occasional basis, and with the final third of theirassigned groups they scarcely if ever met during the period examined. Based on these reportfindings and the project area having approximately 820 FEWs (MAAIF AEP District Profiles,April 1998), it meant that if groups averaged 12 persons each, approximately 50,000 farmhouseholds were in regular direct contact with the FEWs. This is approximately 3 percent of the1.8 million farm households in the project area.

Estimates from a sample of District Extension Coordinators (outlined in the World Bank,Agricultural Memorandum, 1998) indicated that each FEW met with 4 to 8 farmer groups(averaging 10 - 15 households) on a regular basis. When this estimate is applied over the proj ectarea it meant that if all groups consisted of twelve farmers, on average around 40,000 to 80,000households were in regular contact with FEWs. That is 2 to 4 percent of farm households in theproject area. This estimate is of a similar order of magnitude to that reported in the BeneficiaryAssessment.

36

Table 1: Level of Farmer Involvement in FEW-Farmer Contact Groups

Project Studies No. of Households(HH) No. of Districts Level of farmerSurveyed involvement in contact

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ ___ ___ ____ ___ _ _ ___ ___ ___ ___ __ g rou pBaseline Survey (based 767 16 verage II%on 1992 year), (1994) (range 2-31%)

Farmer Follow-up 205 7 Approxiiately 43% of HHSurvey (1995) in contact group, (range

3-50%/o), only 33% ofgroups met regularly.

Extension Staff Survey Extension staff: FEWs, 8 FEWs contact about 33%(1995) county & district extension f farmers in their target

coordinators, subject area (circle).matter specialists,headquarter staff

Beneficiary Assessment 507 8 6%(1997) (range 30-55%)

3.2 Farmer Contact Group

While the FEW were an important factor in farmer group formation, a number of otherfactors influenced this process including access to other resources, existing group based culturalpractices and operating in districts where other development players had established farmer andcommunity groups. The surveys indicated that lateral transfer of extension information did occurfrom contact farmer group members to non-contact farm members, with farmers being animportant source of information particularly for the simpler technologies. While the focus wastechnical messages to transfer to farmers, part of this contact group linkage involveddemonstrations, trials and field days.

3.3 Technologies

Under AEP a range of simple and complex crop, livestock and aquaculture technologies andimproved practices were extended. These technologies and practices were referred to as impactpoints, and the main ones extended under the project are outlined in Table 2.

37

Table 2: AEP Impact Points

Sub-Sector Enterprise Production PracticeCrop Improved plant materials

Timely plantingOptimum plant populationSoil & water conservationWeed controlPruningPest/ disease controlTimely harvestStorage

Livestock mproved breedsHousingPasturageZero GrazingWaterngSupplementary feedingPest/ disease control

Aquaculture Pond sitingPond constructionPond fertilizationPond stockingSupplementary feedingHarvest croppingSampling

3.4 Farmer Awareness

The project surveys (baseline, farmer follow-up, beneficiary assessment) differed in thenumber of impact points surveyed, and concems have been raised as to the reliability andaccuracy of some data. While noting these constraints the beneficiary assessment report indicatessome interesting trends in the three sub-sectors.

Crops. The beneficiary assessment report indicated that AEP did not significantly affect the levelsof awareness compared to previous extension practices for the simple technology messages:timely planting; pruning of bananas and coffee; timely harvest and storage impact points;optimum planting populations; and soil and water conservation.

AEP did significantly influence the level of farmer awareness for improved plant materialand for pest and disease control. With crops the main source of information was farmers andFEWs.

Livestock The beneficiary assessment report indicated that while AEP had a significant impacton farmer awareness of livestock housing, watering and zero grazing, for the other livestockimpact points the level of awareness was not significantly different from previous extensionservices. With livestock impact points the main sources of information being FEWs and farmers.

38

Aquaculture. The beneficiary assessment report indicated that AEP increased farmer awarenessin promoting this activity with farmers, indicating that FEWs were the main source ofinformation.

Based on the survey findings, the overall trend across all impact points is that AEP had an impacton the levels of farmer awareness for more complex recommended crop and livestock productionpractices, while for the more basic and low cost production recommendations it did notsignificantly differ from that of previous extension services. Farmer to farmer dissemination wasindicated as an important method of extension information transfer.

3.5 Farmer Adoption

Overall adoption rates were higher for the simpler technologies than for the more complextechnologies. A statistical analysis based on a comparison between the different project surveyswas extremely constrained as the earlier studies included fewer impact points and the surveyfindings were aggregated for annual crops.

Crops. Moderate levels of adoption (40 to 60 per cent) were undertaken for most productionpractices, with the simple and common production practices (timely planting, weed control andharvesting) averaging around 60 per cent (Beneficiary Assessment, 1997). The least adoptedproduction technologies (improved cultivars and seeds, pest and disease control and properstorage) with adoption rates ranging from 23 to 45 per cent, were those involving use ofpurchased inputs, seeds, chemicals and herbicides. Generally there were only small differencesbetween contract group and non-contract group farmers in terms of awareness and adoption ofcrop recommendations with the exception of improved planting material and optimum plantpopulation.

Livestock. Generally greater than 50 per cent of farmers who were aware of recommendedproduction practices had adopted them. The exceptions were for improved animal breeds, zerograzing, improved pasture for sheep, improved housing (pigs) and pest and disease control (pigsand sheep). Generally there was no significant difference between contact and non-contact farmeradoption except for improved breed production practices.

Aquaculture. Contact group farmers had higher levels of adoption of recommended practices.

Overall, AEP increased the level of adoption of more complex impact points (improvedplanting material, animal breeds, pest and disease management in livestock and crops, andaquaculture) though it didn't cause a significantly different level of adoption from that of previousextension services. Constraints to livestock adoption included the non- availability of breedingstock, lack of capital and inputs, access to markets and poor rural infrastructure.

Sources of Information. The survey indicates that for crops, farmers and FEWs are the primarysource of information, while for livestock it is FEWs and farmers. FEWs were more important forthe more complex technologies.

4. Agriculture Sector Institutional Expenditure and Project Financial Cost

4.1 Agriculture Sector Funding

Institutional expenditure in the agriculture sector is funded from a range of sources: the coregovernment budget that is for recurrent cost expenditure, and from the capital budget; and from a

39

range of development partners undertaking specific projects, that are often implemented indefined geographic areas. This range of funding sources makes accurate estimation of totalexpenditure difficult. The govemment estimate outlined in the Republic of Uganda, Statement tothe Consultative Group Meeting (December 1998), indicated that for 1998/99 total govemmentand donor funded expenditure in the agriculture sector was estimated at 57 billion shillings, withdonors accounting for two thirds of the total. In the budget, extension accounted for 17.5 billion(US$ 13.6 million) with donors funding 8.7 billion shillings of this amount, research 12.5 billionshillings and production and marketing 4.1 billion shillings.

4.2 AEP Project Expenditure

AEP project expenditure by component differed markedly from that planned in the SAR, inthat the capital investment program was drastically reduced and there was a large transfer ofproject funds to meet recurrent operating costs and allowances. The planned transfer of recurrentcost to the govemment over the period of the project did not occur. Actual project capital andrecurrent costs are adjusted to constant 1991 prices, and it is these expenditures that are includedwhen estimating actual project retums (refer Appendix 1, Table 2). Recurrent costs post projectare maintained at 75 per cent of the average recurrent expenditure over the last three years(1 995/96 to 1997/98) of the project.

4.3 Project Cost Effectiveness

No studies were undertaken to assess the cost effectiveness of extension delivery systemsused under the project. It is likely that altemative low cost delivery systems may have been morecost effective for the delivery of simple low cost technologies, while the higher cost direct FEWfarmer group contact is more appropriate for more complex technologies. The issue is raised inthe Govemment Statement to the Consultative Group Meeting (December 1998), where estimatesare provided of the cost of government extension services in terms of contact farmers of US$60per farmer, compared with other delivery systems used in the IDEA project of US$2 per farmerper demonstration, and for the Sasakawa-Global 2000 program of US$15 per farmer perdemonstration site. While such comparisons are only indicative, they demonstrate that dependingon the crop and technology alternate dissemination systems are available and may be more costeffective.

5. Agricultural Production

5.1 National Agricultural Production

The agricultural GDPhas increased over the period of the project (1992-1998). Theagricultural sector GDP has increased in real terms by 26 per cent, with an average annual realincrease of 4 per cent over this period. The agricultural sector GDP figures are detailed inAppendix 1, Table 3. At an aggregate level in 1998 crop enterprises accounted for approximately74 per cent of agricultural GDP and livestock enterprises 17 per cent. Based on the agriculturalproduction data (refer Appendix 1, Tables 4 to 6) yields have remained relatively constant overthe project period with the production increases being from increases in the crop area.Productivity has not increased, being affected by: lack of modern technology inputs; availabilityand access to improved varieties; low fertilizer use and the increase in land use intensity resultingin reductions in soil fertility.

The national agricultural statistical data is generally of poor quality, as the data collectionsystems used are non uniform and often fragmentary, and based on estimates and outdated survey

40

ratios which use 1989 as the base. As greater than 50 per cent of the food sub-sector output isconsumed on-farm, estimating this output is difficult.

The agricultural production data is collected by the MAAIF, and the Department ofStatistics collects the price and market data. While shortfalls exist in the data, key agencies suchas the World Bank consider that the general trends in the GDP (outlined in Appendix 1, Table 3)are reliable and consistent with what is occurring. The data shortfalls limit the value of dis-aggregation of data to district and regional level, and limit the confidence placed on inter-yearvariation.

6. Project Impact on Agricultural Production

In assessing impact it is difficult to isolate AEP activities and impact from other factorswhich influenced production and from complementary activities on other related projects. Theabsence of planned AEP studies is a further constraint.

While the Beneficiary Assessment Report indicated that for farmers adopting the improvedpractices there was a large increase in yield and productivity, no studies were undertaken duringAEP that would enable any definitive assessment of project economic benefits. The surveyfindings indicated that while AEP increased awareness and adoption of more complextechnologies and practices (i.e. improved cultivars and seeds, optimum plant population,improved breeds and aquaculture) that these higher levels of adoption were not significantlydifferent from previous practices. These outcomes are indicative as there are concerns regardingthe statistical rigor of the surveys.

Based on the project and other survey results the estimates on farm contact and adoption ofimproved technologies and practices was markedly lower than planned in the SAR. As outlined insection 3 farmer group contact was estimated at 2 to 4 per cent. However, allowing for amultiplier effect it is assumed that 8% of farmers gained awareness of the messages disseminatedby the AEP extension staff. Adoption of technologies ranging from 25 to 45 per cent for the morecomplex technologies requiring cash inputs. These levels of adoption are comparable with someothe.r related projects, the SWRARP ICR (1998) used an adoption rate for improved technologiesof 20 per cent after eight years, while the ARTP II PAD (1999) indicated adoption rates forimproved technologies with a number of crops: bananas (25 per cent over 20 years); maize andbeans (33 per cent over 10 years); cassava (50 per cent over 10 years). These estimated level offarmer group contact and rates of adoption are comparable with those used in other related studiesand summarized in Appendix 1, Table 7.

The analysis (detailed in Appendix 1, Table 2) indicates that for the AEP level of farmerextension contact of 8 per cent and technology adoption rates of 40 per cent that a productivityincrease of 14.5 per cent is required to achieve an IRR of 15 per cent (refer Table 3). Theproductivity increase equates to an increase of $US 96.76 per adopting farm household. Thefeasibility of farm households achieving this level of increase was assessed using enterprisebudgets.

Sensitivity analysis undertaken to assess the impact of changes in the key parameters (extensioncoverage ranging from 8 to 60 per cent, and for farmers adoption rates ranging from 25 to 55 percent) is outlined in Table 3, and indicates that for:

41

* Extension coverage of 8 per cent, and with adoption rates of 25 to 40 per cent the perfarm household incremental return required for an IRR of 15 per cent ranges fromapproximately US$167 to US$97;

* Extension coverage at 20 per cent which would be considered optimistic based on thesurvey findings, and with adoption rates of 25 to 40 per cent the per farm householdincremental return required for an IRR of 15 per cent ranges from approximately US$65to US$38;

* Extension coverage at 40 and 60 per cent is unlikely, and with the adoption rate of 25 to40 per cent would require a considerably lower incremental return ranging fromapproximately US$33 to US$14 per farm household;

* Adoption rates of 55 per cent while included in the analysis are generally unlikely andwould be limited to very simple technologies.

Table 3: Productivity Improvement and Incremental GDP Required to Achievean IRR of 15 % (per adopting farm household in constant 1991 US$)

Adoption Rates (%)Project Surveys

SARExtension Cover

! __ ___ ___ _ _ (55) 40 25

SAR (60) 1.450/ 2.05°/ 3.400/(US$9.68 (US$13.68, (US$22.69

40 2.10N 30/ 5°/(US$14.01 (US$20.20) (US$33.37

20 4.000/c 5.700/ 9.700/(US$26.69 (US$38.04, (US$64.73

8 10.500/c 14.500/ 25%(US$70.07 (US$96.76' (US$166.84

In the absence of any project enterprise budgets the detailed cost of production budgetspresented in the Report on Economics of Crops and Livestock Production 1997 (Ministry ofPlanning and Economic Development, Agricultural Policy Secretariat) were used. Models of thefarming systems at regional level are used to indicate the impact of adoption of improvedtechnologies at the household level. These regional farm models and the summarized enterprisebudgets are outlined in Appendix 1, Tables 8 to 13. The 1998 Report on Economics of Crops andLivestock Production was not available, though it is planned for publication in 2000. Whileaccepting the constraints of using 1997 data, in that the input and output price relativtes may havechanged since 1997, the budgets provide an effective benchmark for feasibility assessment. Theincremental retums are also presented in 1991 constant prices in these Tables (refer Appendix 1,Tables I 0to 13).

In the analysis undertaken the focus is on cropping enterprises as it accounts forapproximately three-quarters of the agricultural GDP. AEP did not concentrate on all crops. Four

42

key crops on which technologies and improved practices were extended are used in thisassessment: matoke; maize; cassava and beans are assessed to determine the financial impact atthe household level. With three of these crops improved varieties were released prior to andduring the project period: maize (Longe 1 released in 1991); cassava (mosaic resistant varietiesreleased 1992/93) and beans (K13 1 and K132 in 1994). The yield improvements used are thosedetailed in the Report on Economics of Crops and Livestock Production, and are in line with otherrelated studies (refer Appendix 1, Table 7) though lower than the general 3 5 per cent estimateused in the beneficiary assessment report.

Regional Farm Models. The regional farm models detailed in Appendix 1, Tables 10 to 13indicate the incremental crop enterprise returns from adopting improved technologies andmanagement practices.

Eastern Region. With the eastern region farm model (Appendix 1, Table 10) the incrementalretums (based on the average area of each crop grown) range from less than US$1 for a number ofcrops, to US$46 for a single stand coffee crop and to US$49 for a mixed stand of coffee/ matoke.For the core food crops the incremental returns were approximately wheat $US 10, maize US$16,rice US$8.60, beans US$3 and for cassava US$3. If a farmer undertook all four improvedtechnologies they would increase returns by approximately US$40.

Central Region. With the central region farm model (Appendix 1, Table 11) the incrementalreturns (based on the average area of each crop grown) range from US$87 for coffee, matokeUS$6, and for mixed stand crops (coffee/matoke, vanillalcoffee) of US$72 and US$22respectively, to the annual crop returns of maize US$24, cassava US$8 and beans US$3. If afarmer undertook all these three annual crop and matoke improved technologies they wouldincrease returns by approximately US$41.

Northern Region. With the northern region farm model (Appendix 1, Table 12) the incrementalreturns (based on the average area of each crop grown) were significantly lower compared withthe other regions. Returns ranging from approximately US$27 for coffee, and for mixed standcrops (maize/beans, maize/groundnuts) of US$5 and US$4 respectively, to the annual crop retumsof maize US$11, sorghum and groundnut of US$4 each, cassava US$2, and finger millet of US$2.If a farmer undertook all these five annual crop improved technologies they would increasereturns by approximately US$23.

Western Region. With the western region farm model (Appendix 1, Table 13) the incrementalretums (based on the average area of each crop grown) range from US$47 to US$55 for Arabicand robust coffee, matoke US$3, and for mixed stand crops (coffee/matoke) of US$24, to theannual crop returns of maize US$14, sorghum, wheat and cotton each of US$4, cassava US$3 andbeans US$8. If a farmer undertook all these six annual crop improved technologies they wouldincrease returns by approximately US$39.

The farm models indicate that with farm households adopting four to six of the annual cropimproved technologies and improved technologies for matoke, the incremental return perhousehold for the different regions ranged from US$23 to US$41. With these levels ofincremental returns a farmer would need to adopt a number of improved practices for perennialcrops as well to generate the required incremental return of US$167-US$97 for extensioncoverage of 8 per cent and adoption rates of 25 and 40 per cent), or US$65 for extension coverageof 20 per cent and an adoption rate of 25 per cent to result in the proj ect having an IRR of 15 percent.

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It is highly unlikely that farn households would be able to undertake this number ofimproved practices at one time, as adoption of these practices involves significantly higherincremental input costs, and farnmers assess to credit is a major constraint to adoption. This isindicated by the very low percentage of farmers using purchased inputs. On this basis theexpected incremental farm household retums would be inadequate to generate an IRR for the AEPto break even.

7. Other Benefits

The benefits from the improved human resource skills developed with the project trainingand the strengthening of the local institutional capacity have not been assessed quantitatively. Theproject training to FEWs, extension staff, subject matter specialists and headquarter MAAIF staffin technical and management areas will have improved skills and potential productivity. Thetraining of FEWs, village groups and farmer contact groups at the local level has strengthenedlocal institutional capacities. Both the human resource skills and institutional capacity willgenerate benefits when used in other economic and non-economic activities.

8. Conclusion

Both the project statistical analysis on project impact points, and the sector programanalysis and assessment at the farm household level indicate that AEP did not have a significantimpact on improving productivity. While at the farm household level awareness and adoption ofimproved technologies and practices did improve returns the incremental increase was inadequatefor the project to generate an IRR of 15 per cent which would result in the project breaking even.

Further, the national agricultural production statistics do not indicate any improvement inproductivity. While a number of other factors influence productivity and yield (i.e. climatic,retums) and the aggregate totals may mask some intra-regional or project and non-project effects,very limited if any quantitative evidence is available to indicate improved yields.

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Annex 7c

UGANDA: Agricultural Extension Project - Intensive Learning ICR Mission -Back-to-Office Report

A. Introduction

Following terms of reference dated 21 October 1999, I visited Washington from 1-4 November 1999 tocollect documentation relevant to preparation of the Intensive Learning Implementation Completion Report (ILI)for the World Bank fnanced Agricultural Extension Project (AEP) in Uganda. From 6-14 November, Ijoined a different FAO/CP mission in Mozambique charged with initiating discussions onpreparation of a rural development strategy (see separate BTO by M. Wales, TCIR). From 16-26November, I visited Uganda with Allan Kelly (economist, consultant) to gather more informationon the AEP and to meet representative stakeholders. The ELI is expected to focus especially onlessons leamed with a view to informing the stakeholders involved in the formulation of futuregovemment and donor support for agricultural extension in Uganda.

Preparation of the ILI will follow a five-stage process. Firstly, this mission presented togovemment in an Aide Memoire its preliminary impressions based on material gathered andinterviews with key informants. In Entebbe and Kampala the mission met relevant staff from theWorld Bank, the Ministry of Agriculture, Animal Industry and Fisheries (MAAIF), and theNational Agricultural Research Organization (NARO), and representatives from donors andNGOs active in the agricultural sector. A field trip included meetings with district levelagricultural staff, field extension workers (FEWs) and farmers. Following further analysis of theinformation obtained a draft ILI will be prepared. Secondly, a systematic consultation withfarmers, community leaders, extension workers, NGOs, and district officers in three districtsrepresentative of the major agro-ecological zones is planned for January 2000. Local consultantswill be contracted to carry out the systematic consultation. Thirdly, a stakeholder workshop isplanned for February/March 2000 to discuss the findings of the consultation exercise and the draftILI. Fourthly, the ILI will be revised taking into account the stakeholder consultation. Fifthly theILI will be reviewed by Bank staff from the relevant sector/thematic group in another region andby OED, and then finalized.

Preparation of the AEP started in 1990. The Bank appraised the project in May 1992. An advance facility(PPF) of US$ 500,000 was provided in July 1992 to expedite project start-up. The US$15.79million credit was approved in September 1992 and became effective on June 18, 1993. MAAIFwas the implementing agency. The Mid-Term Review took place in October 1995. The credit wasclosed on December 31, 1998 compared to the original closing date of June 30, 1998.

. Salmen (World Bank) arrives Kampala 13 December to start up the systematic consultation exercise. The localteam will be contracted through FAO/CP. At the same time, M. Muchena (FAO/IC) is initiating a similar processas in input into the ICR for the first Agricultural Research and Training Project. As far as is advantageous thetwo consultation exercises will be harmonized. Consideration will be given to holding the stakeholder workshopfor AEP during the joint donor pre-appraisal of the National Agricultural Advisory Services Program.

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B. Assessment of Development Objective and Design

Objective. The broad objective of the project was to address the urgent needs for diseasecontrol and yield improvements and to build capacity to deliver and support effective extensionservices. To this end the project aimed to improve: a) efficiency in the delivery of extensionservices in 16 districts; b) training capacity and skills of extension agents and farmers; c) adoptionof improved techniques by farmers; and d) efficiency in management services in MAAIF in orderto support the delivery of extension and ensure its sustainability.

The objective was clear and continues to be important to the country. Years of civil strife and economicmismanagement had devastated the economy. Agriculture was the most important sector in terms of GDP,employment, and export earnigs. From 1986, with the return of political stability, agriculture had begunto recover, mainly through expansion of the area under cultivation. By the early 1 990s, however,aggregate agricultural production was still slightly below that of 1970, while the rural populationhad increased by two thirds; and rural incomes and productivity of land and labor had declinedbelow levels achieved in the late 1960s. To address the deterioration and fragmentation of publicagricultural research and extension services, the two ministries responsible for crops, livestock,and fisheries were amalgamated in 1991 to form MAAIIF, and in 1992 the research programs weremerged to form NARO. The AEP and the Agricultural Research and Training Project (ARTP)were intended to support MAAIF and NARO respectively, in the dissemination and developmentof improved technologies aimed at increasing productivity and returns to agriculture. In thisrespect, AEP and ARTP responded to government's agricultural sector priorities and its overallobjective of promoting broad-based economic growth. Similarly, both projects were consistentwith the Bank's Country Assistance Strategy of supporting efforts to improve the climate forprivate investment and production.

At the time the project was prepared, the Bank was strongly advocating in Uganda and elsewhere aUnified Extension Service (UES) and the Training and Visit (T&V) system; that is a singleservice and line of command to polyvalent FEWs provided with regular training and expected tocarry out programmed visits to groups of farmers in order to provide advice and demonstrationson a wide range of crop, livestock and fisheries topics. In early 1992, MAAJF issued a directiveestablishing a structure for the UES/T&V approach. With funding from the Bank financedAgricultural Sector Adjustment Credit (ASAC), the UES/T&V approach was piloted in 4 districts.According to the AEP's appraisal report progress with the pilot was satisfactory and provided thebasis for supporting phased expansion of the UES/T&V approach to cover 16 out of the 38districts in the country. However, the time between start up of the pilot and appraisal of the AEPwas insufficient for an objective assessment of the pilot.

Adoption of the UES and T&V was and continued to be a major design issue within the Bank, amonggovernment technicians, and with other development partners. Those in favor of the UES arguedthat it would operationalize a whole farmn approach and expand coverage of extension particularlyto poorer farmers. Critics argued that tuming specialists into generalists required more than a fewweeks of training, that the quality of the service would be reduced to the lowest commondenominator, that farmers wanted access to more not less specialist expertise. The advantages ofT&V were seen to be simplified management, training, supervision and monitoring. Critics ofT&V argued that the system was top-down, hierarchical, prescriptive, inflexible and unresponsiveto farmers' priorities, that the investment and recurrent costs was high and unsustainable, and thatthe return on investment would be marginal at best. Most altematives to UES/T&V, though notnecessarily proven, put more emphasis on empowering communities and farmers to analyze andfind their own solutions with assistance from outside facilitators, and on exposing farmers to arange of innovations. At the same time, there has been a growing trend towards funding and

46

delivering extension in a mix of public and private arrangements. These alternatives provide thebasis for the emerging consensus between govemments and their development partners, includingthe Bank, on the way forward for extension. In this light, the fact that the design of the AEPignored criticisms of the UES/T&V approach and did not provide an adequate assessment of thepilot or altematives can be seen as a major deficiency.

Components. The project objective was to be achieved through four broad components:Strengthening the delivery of extension services (US$9.55 million) through provision oftransport, equipment, rehabilitation of facilities, and incremental operating costs;

Improvement in training capacity and skills (US$6. 10 million) through i) provision forequipment, supplies, facilities and transport for regular in-service training of extension staff andperiodic farmer training at the District Farmer Institutes (DFIs), with the involvement of researchstaff, ii) rehabilitation, curriculum development and upgrading of staff capabilities at BukalsaAgricultural College; and iii) demonstrations at the DFIs and farmer-managed trials in their ownfields;

Strengthening of management systems (US$1.81 million) through i) training in managementand team building for MAAIF staff at headquarters and in the project districts; ii) staff trainingand consultancy services to improve financial management, procurement, and budgetaryprocedures; iii) operational support for monitoring and evaluation; and iv) improved officeequipment and facilities; and

Studies (US$0.28 million) on i) the rationalization of the Training Institutes and Colleges ofMIAAIF; efficiency and impact of alternative technology transfer mechanisms; iii) a Mid-TermReview and assessment; and iv) the design of a follow-on project.

In October 1994, the Credit Agreement was amended to expand project coverage to 20districts and to include Arapai Agricultural College under the training component. In 1995,responsibility for one of the districts was transferred to the Cotton Sub-Sector DevelopmentProject.

The components were reasonably related to achieving the project objective and to improving themanagement and implementation capacity of MAAIF at the central and lower levels. However, thedesign was over-optimistic in expecting that constraints to implementation of prior projects inUganda such as inadequate and tardy counterpart funding, poor salaries, and weak managementand financial systems would be addressed by measures under other Bank projects (SAC, ASAC,and EFMP). To minimize institutional and financial risks the project provided considerablesupport for human resource development and the strengthening of management capacity andprocesses, and for incremental recurrent costs. Nevertheless, the capacity of government to meeteven a relatively small counterpart contribution was over-estimated. To reduce complexity thedesign focused on extension only, and rightly phased implementation thus allowing foradjustments based on experience and resource availability. On the other hand, it could be arguedthat the decision to finance research and extension through separate projects made development ofeffective research-extension-farmer linkages more difficult. It was naively assumed in theappraisal report that the adjustment operations (SAC and ASAC) would ensure that market prices,lack of inputs and other factors would not constrain farmers' incentives to apply new technology.

Structural Adjustment Credit, Agricultural Sector Adjustment Credit, Economic and Financial ManagementProject

47

High transaction costs, in large part due to the poor condition of the road network, continue toimpede market linkages resulting in low prices for food crops and high cost of inputs at the farmgate. Concurrently, lack of access to credit means that most farmers have been unable to financeimprovements dependent on purchasing seasonal inputs, veterinary supplies, or improved breedsetc..

C. Achievement of Objective and Outputs

Outcome/Achievement of Objective

Overall project objectives were partially achieved. The extensive trining activities improved thetechnical capacity and skills of MAAIF and district level agricultural extension staff, and of the farmers whoundertook training. This training combined with the proj ect provision of transport, operating budgetsand travel allowances for extension staff resulted in some strengthening of extension deliveryservices and, with the collaboration of other projects and NGOs, may have contributed to someadoption of technologies leading to improved disease control and yield improvements. Given thepreliminary stage of analysis and that a more systematic consultation exercise is planned, themission reserves judgement on the overall rating for the project outcome. However, the missionconsiders that the proj ect will probably be rated either marginally satisfactory or unsatisfactory.

Achievement of Outputs

Strengthening the delivery of extension services. Implementation of this component wasmarginally satisfactory. A unified extension service (UIES) was established in the project districts,and FEWs were provided with some training to enable them to operate as generalists. However,concerns were widely raised as to the effectiveness of the technology transfer when FEWs dealtwith topics outside their original expertise. As districts became responsible administratively andfinancially for extension some districts reverted back to agricultural services based on technicalline departments and FEWs (crops, livestock, fisheries) rather than using a generalist FEW. Whileoperating budgets and allowances were available the FEWs did increase contact with farmers,undertaking on-farm demonstrations, field days and seed multiplication activities, though numbersof groups per FEW and the level of contact per group were significandy lower than planned. Theproject made some use of mass media, but could have done much more especially for simplemessages. Available information indicates that 100,000 to 200,000 farmers had regular contactwith FEWs, about 8 to 16% of farmers in the project area. FEWs conveyed a range oftechnologies and technical/management messages (improved crop management, improved seed,pest and disease control, improved livestock husbandry and aquaculture) which a number of

Note the new Bank guidelines for ICRs define project outcome as the degree to which the project achieved itsrelevant objective. Relevance refers to the extent to which the project's objectives are consistent with currentcountry and sectoral strategies. Achievement of the objective is judged by the standards prevailing at the time ofthe ICR, not those at the time of the loan approval. The ICR assesses the project's outcome as one of thefollowing: a) Highly satisfactory - project achieved most of its objectives and has achieved or is likely toachieve substantial development results, without major shortcomings; b) Satisfactory - project achieved most ofits objectives and has achieved or is expected to achieve satisfactory development results with only a fewshortcomings; c) Unsatisfactory - project failed to achieve its major relevant objectives, has not yielded and isnot expected to yield substantial development results, and has significant shortcomings; d) Highly unsatisfactory- project failed to achieve any of its major relevant objectives and has not expected to yield worthwhiledevelopment results.

48

farmers adopted. Collaboration with other projects and NGOs, particularly in the supply andmultiplication of planting material, contributed to adoption. Adopting farmers reported yieldincreases, but over the period of the project national production data do not indicate any increasein productivity. From 1995 the late provision of counterpart funds adversely impacted on projectactivities, and the late and non-payment of staff allowances affected staff performance and levelsof activity. Improved efficiency and cost effectiveness could have been achieved if payment of thestaff allowances and salary support had been linked to performance indicators. In 1997/98, avillage level planning approach was piloted in 8 districts aimed at identifying priorities and actionplans. Reportedly, 1007 villages were covered. Introduction of this broad based approach withinthe context of an agricultural extension project, which had only one year of implementationremaining, resulted in unmet expectations.

Improvement in training capacity and skills. In general, implementation of this componentwas marginally satisfactory. There was over-achievement of targets in terms of postgraduatetraining, study tours and short term training, resulting in over-expenditure against the trainingcategory. On the other hand, much of the training was theoretical and there was under-achievement with FEW retraining and farmer training. No evaluation of training impact wascarried out. Public sector restructuring resulted in retrenchment of over 50% of the staff whoundertook postgraduate training under the project. Only two out of the six targeted District FarmInstitutes were rehabilitated, and rehabilitation of the Arapai and Bukalsa Agricultural Collegeswas not done: reasons include the higher counterpart contribution required for civil works anddelayed recruitment of a competent civil engineer to oversee the works. The curriculum of thecolleges was revised and adopted. The Bank questioned the appropriateness of the new curriculumin that it offers four diplomas in various disciplines instead of one diploma for polyvalenttechnicians.

Strengthening of management systems. Project management was less than satisfactory. Inproject implementation allocation of resources was concentrated at the national rather than thedistrict/local level (in terms of the number of vehicles, over achievement of national level trainingtargets and under achievement of district/farmer targets, and significant increases in recurrentexpenditure), and this reduced project effectiveness and potential impact. While the projectprovided for local recruitment of a financial officer and staff training, for most of the projectperiod financial procedures, accounting systems, and controls were inadequate. Besides poorbudget monitoring and control, asset management was almost non-existent, and control ofpayments and advances was weak. Monitoring and evaluation systems were established at thenational and district level, though the high level of reported achievement and impact is an issue:the Bank's supervision missions reported impressive levels of field activity, adoption and impact,whereas other data sources and anecdotal evidence suggest the opposite. Planned construction ofsome new offices and rehabilitation of some existing ones was not undertaken due to changes inpriorities and the higher levels of counterpart funding required.

Studies. Implementation of this component was unsatisfactory. The studies on therationalization of the training institutes and colleges of MAAIF, and on the efficiency and impact

The AEP appears to have contributed to the adoption of a range of technologies: perhaps the most widelyadopted would be cassava mosaic virus resistant planting material, and a higher yielding maize variety. Otherless widely adopted technologies would include fishpond development, improved beehives, zero grazing andimproved management of livestock. However, in most if not all cases otherprojects and NGOs either supportedthe provision of the inputs and/or supported the FEWs with training and allowances. Therefore, it is impossibleto determine the extent to which adoption and benefits were attributable to the AEP. It could be argued thatadoption of these technologies could have been achieved without the AEP.

49

of alternative extension methodologies were not undertaken. As a result, opportunities weremissed to ensure more cost-effective use of public resources. While the Mid-Term Review anddesign of a follow-on project were carried out, both exercises failed to anticipate the currentvision for support to extension which puts the sub-county level of government and farmers in thedriving seat and allows outsourcing and a plurality of service providers and methodologies.

Economic and Financial Analysis

The appraisal report undertook an economic analysis based on the incremental agricultural GDPrequired for the economic internal rate of return (EIRR) to be 15%. Based on this incrementalGDP the incremental per household return was estimated using a farmer technology adoption ratein project districts of 30%. In this ILI a similar methodology will be utilized to assess whetherproject appraisal estimates were achieved. Further, it is planned to link the GDP changes over theproject period, to the household level, and assess whether the incremental returns required at thehousehold level would have been achieved with adoption of the project technologies. Thisanalysis will be dependent on the incremental return and rates of adoption of the technologies, andsensitivity analysis will be undertaken. The planned systematic consultation will provide someindicative verification of FEW contact and the adoption of technologies, and on improvement inlivelihoods.

D. Major Factors Affecting Impact and Outcome

Factors outside control of government which influenced implementation of project activitiesincluded:* declining prices for food crops;* inadequate provision of input and output marketing services in rural areas by the private

sector;* little or no credit available for small farmers.

On the other hand, government and its development partners could have donemore to facilitate private sector provision of agriculture services and credit (see para.23).

Factors subject to government control which influenced implementation of projectactivities included:* poor rural infrastructure which limited farmer access to input supplies and markets;* inadequate and delayed counterpart funding particularly affected civil works and

incremental operating expenses, which negatively affected performance and staffmorale;

* staff salary supplements and allowances were not performance based;* deficient financial management;* weak project management;* centralized implementation and concentration of resources at the headquarters level

reduced project impact at the district and field levels;* insufficient involvement of district governments in project preparation and during

implementation resulted in limited project ownership and low level of commitment toextension;

50

* public sector restructuring and decentralization reduced the number of FEWs in projectareas and resulted in retrenchment of many staff who had benefited from training underthe project;

* the positive bias in monitoring and evaluation reporting misled project management,government, and the Bank; organizational restructuring at MAAIF, the abolition of theDirectorate of Agriculture Extension and the transfer of extension responsibility toNARO in 1998 disrupted project implementation and financing; and

* increased linkages with other extension service and technology providers (NGOs,education institutions, research institutions, and local governments) contributed totechnology adoption.

Costs and financing. The cost of the project at appraisal was estimated at US$17.75million over 5 years. The Bank's commitment amounted to US$15.79 million for civil works,vehicles and equipment, technical assistance, training, demonstrations and field trials, andincremental recurrent costs. Government's commitment amounted to US$1.96 million.During the project significant changes were made in expenditure under particular categories,in part reflecting increases in the scale and scope of some activities, which occurred with theaddition of the four extra districts, increases in levels of training and operating expenses, andchanges in priorities in terms of civil works and other activities that required higher levels ofcounterpart funding. The project credit agreement was modified to meet increased levels ofoverall project financing, such that the Bank financed 95% overall. Significant transfers (overUS$2.2 million) were made from civil works and consultant services (US$0.35 million), andused to fund incremental expenditure on training (additional US$1.5 million), field operations(additional US$1.3 million) and non-field operations (additional US$1.2 million). As a result,at project closure field and non-field operating costs accounted for 48% of total Bank costs,and training 25%. Overall Bank disbursements amounted to 99.2% of target, with onlyUS$116,000 cancelled.

E. Sustainability

The project focused strongly on institutional capacity building through human resourcedevelopment and the strengthening of extension service delivery by providing financialsupport for operating expenses and staff allowances. While the improved institutionalcapacity in human resources is sustainable in the short term, the extension delivery system assupported by the project is not, given the institutional reforms that have occurred, the natureof the proposals for extension in the future (see para. 22) and existing and likely future levelsof local and national government support. The project supported extension delivery system isrelatively high cost, and requires large recurrent expenditures to maintain it. The project didnot assess alternative more cost-effective approaches, or establish performance-based systemsfor payment of staff allowances that would have improved accountability. For the farmerswho adopted the technologies and improved their returns, they are likely to continue utilizingthese techniques.

When designed the project indicated that a ten to fifteen year period would be requiredbefore the government would have the revenue base to absorb the recurrent costs ofagricultural extension. In the intervening period public sector reform and decentralization hasresulted in reduced staffing levels and the transfer of responsibility for extension to thedistricts. One outcome of this transfer of administrative and financial responsibility to district

51

government during and after the project has been a change back from the UES to a technicalline department FEW approach, and generally further reductions in recurrent budgetallocation to extension. The district government providing support from the block grants withadditional support being provided through conditional grants from the national level for therecruitment and operational costs of graduate specialists at the sub-county level. Whileagriculture is a district priority there appears to be a lack of local government support to meetthe financial costs of the existing agricultural services.

During the project the budget shortfalls were covered through an increase in the level ofBank support to operating expenses and allowances (about 90% of total). Since projectcompletion the extent of the financial constraint is very visible with district offices onlyhaving very limited funds with extension activities severely curtailed. Funds to maintain andupgrade the technical skill levels developed during the project are also likely to remain verylimited. At the national level the restructuring of the MAAIF and abolition of the Directorateof Agricultural Extension has resulted in a large number of project trained staff movingoutside the ministry. The existing MAAIF budget is inadequate to sustain the level oftechnical support provided to district offices during the project.

As no follow on credit for agricultural extension has yet been processed by the Bank,the recently approved ARTP-II provides bridging finance for design of the Bank's follow-upsupport including pilot activities to test modalities to improve technical support for thedecentralized extension services. Under the government's Modemization Plan for Agriculture,a consensus is gradually emerging at the central level of government and among itsdevelopment partners on a vision for the future of the public sector's support to agriculturalextension. The basic principles underpinning this vision include, inter alia, furtherdecentralization of responsibilities for extension to the sub-county level using conditionalmatching grants, outsourcing, cost-sharing between levels of government and clients, andallowing for a plurality of service providers and methodologies. In line with these principles,a Task Force has completed preparation of a strategy framework for extension and is busyformulating proposals for a National Agricultural Advisory Services program for possiblejoint financing by all donors interested in the sub-sector. Ajoint donor pre-appraisal isplanned for February 2000.

F. Lessons Learned

Market Linkages

Liberalizing input and output markets and public sector financing of technologydevelopment and dissemination are insufficient conditions for rapid and widespread adoptionof technologies. Other interventions in support of market linkage development are required:road network improvements; development of farmer organizations to help increase farmers'bargaining power and reduce transaction costs for suppliers and buyers; development ofsavings and credit associations and linkages with financing institutions; supporting ruralstockists/buying agents by facilitating links to wholesalers and access to credit and byproviding training in stock management and input use.

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Project Management, Capacity Building and Supervision

Priority should be given to establishment of sound financial management, internalauditing and progress monitoring systems at all levels, and to closely monitor and backstopoperation of the systems throughout the project period. This will be even more critical withdecentralized management systems.

Greater efforts are required to ensure that government and Bank reporting is moreobjective and that it provides the informnation required to make adjustments necessary toimprove design, performance and cost-effectiveness. Potential conflict of interest in impactassessments could be reduced by outsourcing to local organizations but with supervision andcritical review provided by independent external consultants. Similarly, consideration shouldbe given to involving OED or the QAG or other independent reviewers in the Bank'ssupervision missions and reporting.Provision for training should ensure a proper balance between theory and practical skills.Systematic assessment of training needs, cost-effectiveness and impact is required.

Travel and overnight allowances should be paid in advance. Continued payment ofallowances and other staff incentives should be linked to verifiable performance.

Approach to Extension

Before expanding application of an extension methodology an assessment of cost-effectiveness compared to other approaches should be carried out. Given the range anddiversity of client needs and requirements, different extension approaches and deliverysystems (public, private, NGO) which respond to these pluralistic requirements should beconsidered including empowerment of farmer organizations and lower levels of governmentto pull in specialists in accordance with their priorities. While the new vision for extensionallows for outsourcing and a plurality of service providers and methodologies someframework will still be required to guide who and what is being contracted.

Providing specialized FEWs and higher level SMSs with an understanding of availabletechnologies beyond their core expertise helped reinforce team working and a whole farmapproach to problem resolution.

The various extension providers - government, farmer organizations, and NGOs -tended to focus on the same farmers. However, collaboration and cost sharing contributed totechnology adoption. More could be done to encourage joint working and financing.

Supervision and assessment of impact of a large number of FEWs delivering a widevariety of messages and supporting a large number of small on-farm demonstrations is costlyand difficult. Moreover, maintaining farmer group cohesion is difficult unless the FEW isperceived as having something to offer either in knowledge or material terms. The quality ofdialogue and the multiplier effect may be higher with fewer, better-trained and well-supportedextensionists. Similarly, focusing on a smaller number of high impact, strategically located,and verifiable demonstrations may be more cost effective.

53

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