Haiti - Second Rural Development Project in the North

Document of The World Bank FOR OFFICIAI. USE ONLY Report No. 9538 PROJECT COMPLETION REPORT HAITI SECOND RURAL DEVELOPMENT PROJECT IN THE NORTH (CREDIT 1410-HA) APRIL 29, 1991 Agriculture Operations Division Country Department III Latin America and the CaribDean Regional Office This document has a restricted distribution and may be used by recipients only in the performance of their ofricial duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENT Currency Unit - Gourdes (G) Appraisal (1983) - Gourde (G) 5.00 - US$1.00 PCR (1990) - Gourde (G) 5.00 = US$1.00 WEIGHTS AND MEASURES Metric System GLOSSARY OF ABBREVIATIONS BCA Agricultural Credit Bureau DCA Development Credit Agreement FAC Fund for Aid and Cooperation (France) GTZ German Agency for Technical Assistance IFAD International Fund for Agricultural Development MARNDR Ministry of Agriculture, Natural Resources and Rural Development ODN Organization for the Development of the North Development RDF Rural Development Fund SEPRRN National Roads Maintenance Service SDR Special Drawing Rights GOVERNMENT OF HAITI FISCAL YEAR October 1 to September 30  ORo OFFcIAL USE ONLY THE WORLD SANK Washington. D.C. 20433 U.S.A. Ok ni ofDucIteGnwal Ope,aimn Iv4uaSIn~ April 29, 1991 MmORANDUm THE EXECUTIVE DIRECTORS AND TIE PRESIDENT SUBJECTs Project Completion Report - Haiti: Second Rural Development Proiect in tbe North (Credit 1410-HA) Attached, for information, is a copy of a report entitled "Project Completion Report - Haiti: Second Rural Development Project in the North (Credit 1410-UH) prepared by the Latin America and the Caribboan Regional Office. No audit of this project has been made by the Operation. Evaluation Department at this time. Attachment Tsis document has a restricted distribution ant may be used by recipients only In the perfornce of their official dutioa Its contents may not otherwise be disclosed without World Dank authoriation.  FOR OFFICIL USE ONLY PROJECT COMPLETION REPORT HAITI SECOND RURAL DEVELOPMENT PROJECT IN THE NORTH (CREDIT 1410-EA) Page No. Preface . . . . . . . . . . . . . . . . .. . . . . . . . . i Evaluation Summary .. .... . . . . . . . . ....... Part I. PROJECT REVIEW FROM BANK'S PERSPECTIVE 1. Project Identity . . . .......... .. . . . . . 1 2. Project Background . . . . . . . . . . . . . . . . . . . . . 1 3. Project Objectives and Description . . . . . . . . 1 4. Project Design and Organization . . . . . . . . . . . . . . . 2 5. Project Implementation... . . . . . . 2 6. Project Results . . . . . . . ... . . . . . . . 3 7. Sustainability . . . . . . . . . . . . . . . . . . 8 8. Bank and Borrower Performance . . . . . . . . . . . . . . . . 9 9. Project Relationships ..... .. ... . . . . * 10 10. Consulting Services . .. . .... . . . . . . . . . . . 11 11. Project Documentation . . . . . . . . . . . . . . . . . . . . 11 Part II. PROJECT REVIEW FROM BORROWER'S PERSPECTIVE Borrower's Perspective of the Design and Implementation and its Development Impact on the Project . . . . . . . . . . . . . . . 13 Part III. STATISTICAL INFORMATION 1. Related IDA Credits .... . .... ........... . 33 2. Project Timetable . . . . . . . . . . . . . . . . . . . . . . 34 3. IDA Credit and IFAD Loan Disbursements . . . . . . . . . . 37 4. Project Costs and Financing . . . . . . . * ... . . .. .. 38-39 5. Project Results . . . . . . . . ..... . . . . . . . . . 40 6. Status of Covenants ..................... 44 7. Staff Inputs and Bank Missions ... . . . ... . . 45 MAP IBRD No. 16788 This document has a restricted distribution and may be used by recipients only in the performauce of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  PROJECT COMPLETION REPORT HAITI SECOND RURAL DEVELOPMENT PROJECT IN THE NORTH (CREDIT 1410-HA) PREFACE 1. This is tho Project Completion Report (PCR) for the Second Rural Development Project 'n the North, for which IDA Credit 1410-HA in the amount of SDR 17.7 million (US$19.1 million) and IFAD Loan 128-HA for SDR 4.65 million (USs5.0 million)V was approved on April 22, 1983. The credit was closed on December 31, 1989, one and a half years behind schedule and final disbursement from the credit account was on May 25, 1990. An amount in US$20.6 million under the IDA Credit has been disbursed and SDR 35,706 was cancelled effective May 25, 1990. An amount in US$5.2 million under the IFAD loan has been disbursed. The higher disbursed amount is due to the fact that the SDR appreciated vis-a-vis the dollar. 2. The PCR was jointly prepared by the Agriculture Sector Operations Division of the Latin America and the Caribbean Regional Office (Preface, Evaluation Summary, Parts I and III), and the Borrower (Part II). 3. Preparation of this PCR was started during the Bank's final supervision mission of the project in March 1989, and is based, inter alia, on the Staff Appraisal Report; the Development Credit Agreement (DCA); supervision reports; correspondence between IDA and the Borrower; interviews with relevant project staff; and internal IDA memoranda. i/ The IFAD Loan 128-HA was to finance agricultural development activities.  - iii - PROJECT COMPLETION REPORT HAITI SECOND RURAL DEVELOPMENT PROJECT IN THE NORTH (CREDIT 1410-HA) EVALUATION SUMHARY Obiectives 1. The project was IDA's second contribution to the rural development of the northern provinces, this time with three co-financiers, IFAD, France's FAC, and Germany's GTZ. Its objectives which were consistent with the goals and strategy of the 1982-86 plan (para. 2.02), were to increase smallholders dry-land and irrigated food production and to continue the improvement of institutions and infrastructure initiated under the first project (Credit 675-HA). It consisted of: (i) irriRatiOn rehabilitation, operation and maintenance, as well as on-farm development in two locations; (ii) extension, research and seed production for agricultural development in selected areas; (iii) agriculture credit; (iv) rural roads rehabilitation, construction and maintenance; (v) rehabilitation, construction and maintenance of rural water supply systems; (vi) institutional strenathenina through technical assistance, training, r- .,toring and evaluation, (vii) funding and operating a Rural Development Funi (RDF), and (viii) three studies, one of which was to be financed under GTZ Technical Assistance. The Organization for the Development of the North (ODN) was to continue planning and coordinating project activities (para. 3.01). Imnlementation Expterience 2. The DCA became effective on January 16, 1984, almost within original deadline and closed December 31, 1989 after two extensions (para. 5.01). Disbursements ran ahead of schedule until the political unrest of 1986-87--a key factor inhibiting good project execution--brought the project temporarily to a standstill (para. 6.17). Several project risks influenced project design (para. 5.02). Technical assistauce was adequately built into the project to meet the possibility of beneficiaries' lack of response to the discipline of irrigation. Only a relatively modest scale of infrastructure construction was included in the project, to mitigate the risk of insufficient maintenance. Although it is too early to say, signs of unsatisfactory maintenance are developing, in part due to the deteriorating macroeconomic situation of the country. Insufficient rainfall and/or farmers' indifference about improved practices did not turn out to be risks to rainfed agriculture. Rather, the main failing was due to overestimating the availability of technical innovations and the means to deliver them. The institutional risk was underestimated, although the contributing political risk was unpredictable.  -v - 3. Actual project coot was US$33.4 million, about 15% overrun. It was met by higher Borrower's contribution and by IDA and International Fund for Agricultural Development (IFAD) surplus funds resulting from an appreciated SDR vis-a-vis the dollar. Road building and project coordination incurred cost overruns while irrigation development, underruns. Procurement and reort.na were satisfactory. audit reports were issued with variable delayw. Except for defaults in training (covenant 4.08) and water charges (covenant 5.05(c)), covenants were met (para. 6.18 and Table 6). 4. irrigation rehabilitation was a qualified success. The quantitativs rehabilitation targets--260 ha at St. Raphael and 200 ha at Grison Garde--were met, as was that of land development (920 ha). Production, thanks to effective technical assistance, has increased substantially and so have farm incomes, albeit some 15% below expectation. It is uncertain whether maintenance will be sustained because farmers have not been organized for that purpose and only some 20% of water charges are collected (paras. 6.05-6.07) S. Rainfed acricultural development failed because extension was unsatisfactory due to poor training, lack of suitable technology to extend, and abrupt changes in orientation. Research trials were affected by changes in approach, indecisions about topics and lack of follow-up. Thus, except for land development trials and adaptation of certain varieties under irrigation, research results were meager. The production and supply of seeds was also unsatisfactory. These failures resulted principally from management discontinuities, overestimation of institutional capacity and lack of clearly drawn-up and agreed work plans. Positive achievements included ox-drawn cultivation and on-farm drying facilities introduced in modest scale following the recommendations of the FAC supported farm survey (paras. 6.08-6.09). 6. The construction of roads (para. 6.02) and water supply facilities (para. 6.04) exceed3d targets and reportedly the incremental traffic and number of beneficiaries, respectively, met expectation. Maintenance is already a problem in the case of water facilities and may develop in roads (para. 6.03) due to chronic shortage of funds. 7. The credit component did not perform well even though technical assistance was provided to the Agricultural Credit Bureau (BCA) in the hope of increasing its efficiency (para. 6.13). IDA suspended disbursements to BCA on May 19, 1987, because it defaulted on the audit covenant. Disbursements were not resumed for this component. 8. The RDF financed 150 projects of which some 40% were completed successfully. This mediocre performance resulted from insufficient staffing and management input. Nevertheless, the RDF concept has potential, provided it is well planned, managed and followed-up (para 6.14). 9. Of the three studies proposed under the project, one was financed by IDA and completed, i.e., a study on the strengthening of the accounting capabilities of the ODN (para. 6.17). The other two studies, namely feasibility of a dam for water storage and a study of irrigation water charges for the project area (Table 6, covenant 5.05(b)) were financed by GTZ. It was determined that no further study was required after completion of the first phase of this study (para. 6.15).  10. The institutional de"eloDment goals were generally not achieved. The most obvious cause was institutional instability exacerbated by political unrest. This undermined the work of technical assistance, which generally did well under the circumstances, particularly in training. Yet, overall, training was limited; the submlssion of a training plan was late and not followed up. The role of ODN vis-a-vis line agencies was changed several times and tensions with the Ministry psrsist. On the positive side, sound financial control as well as monitoring and evaluation have been established (parac. 6.16, 6.17). 11. The rate of return of the agriculture component is estimated close to zero, that of the roads component between 10 to 15%, provided maintenance is sustained, and that of the overall project between zero and 5% (paras. 6.19-6.25). 12. The sustAinability of the project's pop.tive achievements cannot be guaranteed unless infrastructure maintenance is improved. However, the Government has begun to initiate major policy actions which promise to improve the impact of future project interventions. In recognition of the deficiencies identified, and the lessons learned in this PCR, the follow-on project (forestry and environmental protection), now under preparation, would focus (in the context of raising agricultural productivity and the provision of agricultural support services) on the development of appropriate technology, greater participation of NGOs, and in general, keep the project small and manageable with use of pilot activities (para. 7.01). Lessons Learned 13. The following are the principal lessons from the project: (a) The importance of clearly specifying the non-physical components of the project, such as extension, research and technical assistance, and of assuring the understanding and agreement of all parties concerned should not be underestimated. Otherwise they are likely to be affected by ad-hoc decision making and policy reversals; (b) The capacity of executing agencies should be conservatively evaluated. In a weak institutional environment, maximum use of private agencies and NGOs (particularly to execute difficult grasoroot activities such as extension or organizing beneficiarios for a common purpose) should be made. In the context of those activities reserved for the public sector, institutional building should be pursued on the basis of well designed and followed-up technical assistance anchored by well thought out and enforced covenants; (c) The matters under (a) and (b) above require a positive but time consuming dialogue between the Borrower and financiers. Therefore, appraisal cannot be rushed. If external funds are required to maintain either the physical or institutional infrastructure built under an earlier project, interim financial arrangements should be preferred to advancing appraisal. Appraisal s. uld not precede the availability of identified key studies;  - vi - (d) The feasibillty of Borrower's obllgations under Intended covenants should be investigated thoroughly in advance before negotiations and if necessary should be adjusted to the circumstances. For inatance, the prevalence of tenant farmers in the irrigation perimeters makes the collection of water chargee unlikely; different arrangjements are needed; (e) The ability ot Government to provide fund. to sustain or maintain project achievements should be investigated at the macroeconomic level. Existing meager budgetary resources are subject to competing clalme and their expansion is a function of development itself which in turn requlres a minimum of well functioning infrastructure and institutions. Thus, until the fiscal base attains a certain critical mass the only practical arrangement to assuro. maintenance is to provide financing in follow-up projects; (f) The RDF is a flexible and effective rural development tool, particularly in difficult agricultural environments. It permite tailoring small-scale development activltiis to the perceived needs of the beneficiaries. However, it requires clear and sound eligibility criteria as well as sufficient competent staff to analyze and follow-up subprojects; and (g) When implementing a project through a unit that has a titular ministry, coordination issues, and delineation of responsibilities have to be carefully analyzed and addressed in advance. In this project there were latent tensions between ODN and MARNDR, resulting in frequent changes in policies and procedures.  PROJECT COMPLETION REPORT HAITI SECOND RURAL DEVELOPMENT PROJECT IN THE NORTH (CREDIT 1410-HA) PARTI I: PROJECT REVIEW FROM BANK'S PERSPECTIVE 1. Pro1ect Identity Project Name: Second Rural Development Project in the North Credit No.: 1410-HA RVP Unit: Latin America and the Caribbean Country: Haiti Sector: Agriculture Subsector: Rural Development 2. Prolect Background 2.01 Agriculture plays a major role in Haiti. It accounted for about 381 of GDP between 1976 and 1981 but it has stagnated since 1980. Cyclical shortfalls in coffee production resulted historically in erratic agricultural growth. Domestic food production is insufficient to meet demar.d and is complemented by sizeable imports (rice, maizo, beans and wheat) which are accelerating as X result of population growth and urbanization. Soil erosion is a basic, and, in the long run, perhaps the most serious constraint to agricultural growth in Haiti. Infrastructure, particularly the status of roads is a major agricultural constraint. Also, problems such as health, nutrition and environment remain to be tackled. 2.02 The project was executed in the context of the agricultural policies which are embodied in the 1982-86 five-year plan. Principally, they call for: (a) increasing the output of food and export crops; (b) improving infrastructure and support services; (c) expanding irrigated agriculture; (d) promoting farmer's associations; and (e) preserving natural resources. To implement these policies, one of the Government's strategies was to allocate to the agricultural sector concessional funds from the main external donor agencies. The project and the project components were consistent with Government agricultural policy and strategy. 3. Proiect Obiectives and Description 3.01 The pr *ct objectives were to increase small-scale crop production, bo. rrigated and dryland, and to continue the improvement of rural infrastructure and institutions initiated under the first project (Credit 675-HA). It consisted of: (a) rehabilitation as well as operation and maintenance of irrigation systems in St. Raphael (260 ha) and Grison Garde (200 ha) and on-farm development on 920 ha; (b) redeployment of extension  services, diversification of agricultural research and expansion of seed production for the purpose of agriculture development in selected areas; (c) provision of short- and medium-term credit; (d) rehabilitation and construction (116 km), as well as maintenance (200 km) of rural roadet (a) construction, rehabilitation and maintenance of rural water supplv systems; (f) institutional strengthening through technical assistance, training, monitoring and evaluation; (g) support to small-scale development activities by local communities through grants from a Rural Development Fund (RDF) from the project; and (h) three studies, one of which was to be financed under GTZ Technical Assistance. The Organization for the Development of the North (ODN) was to continue planning and coordinating project activities. 4. Project Design and Organization 4.01 The appraisal report defined with sufficient dstail and clarity this relatively complex project to be co-financed by IDA, IFAD, France's Fund for Aid and Cooperation (FAC) and the German Federal Republic's GTZ. Considerable effort on the part of the IBRD/FAO CP, the Bank and co-financiers was spent between 1979 and 1981 to complete preparation, based on the experience which was becoming available from the first project. In the abstract, the composition and organization of the project was sound. Success in the execution of some components such as irrigation, roads and water supply, was due to proper identification of issues arising during the first project. Yet, surprisingly, some problems experienced during the first project reoccurred during the project, chiefly in rainfed agriculture and, generally, in the respective roles of ODN and line agencies. In part this was due to faulty information in the case of rainfed agriculture, particularly to an overestimation of the potential of agriculture techniques tested during the first project. How.ver, exogenous factors also conspired against project execution. Thero were rumerous discontinuities in project management which were exacerbated in 1985 and 1986 during the removal of President Duvalier. An area of genuine misunderstanding between donors and Government, which incidentally is rather frequent, concerned the roles of consultants (para. 10.01). 5. Project Implementation 5.01 Effectiveness and Implementation Period. The DCA became effective January 16, 1984, less than a month from the original deadline. It was closed December 31, 1989 after two extensions to permit the completion of water supply and road infrastructure, and carry sut studies for a possible follow-up project. 5.02 Proiect Risks. Three risks are explicit in the appraisal report: (i) reluctance on the part of beneficiaries to abide by the discipline of irrigation development; (ii) failure of infrastructure maintenance; and (iii) insuff'cient rainfall for rainfed agriculture and/or farmer's indifference to innovations. The first two risks were correctly identified. The Technical Assistance built into the project was able to mitigate the risk to irrigation development. It is too early to say whether the risk to infrastructure has been avoided. It is likely that the third risk exists. However, the main factor behind the failure of the rainfed component was a technical misjudgment of the availability of technical innovations or of the effectiveness to convey them. In the end, the major omission was the institutional risk. The weakness and instability of the agencies involved was  - 3 - predictable from the first project; it was exacerbated by unpredictable political instability. 5.03 factors and Decisions that Affected Implementation. A key hindrance to the project was the political unrest. Other important factors were: (i) latent tensions between ODN and MARNDR which resulted in frequent changes in policies and procedures; (ii) starting-up the project before the FAC supported study was completed; (iii) delays in deploying cert' consultants, particularly in irrigation; (iv) lack of a clearly understood e..a agrced upon research and extension policy, illustrated by the repeated changes in emphasis of sugarcane vis-a-vis other crops; (v) unplanned staff inflation of ODN which increased cost without improving services, prompting IDA to decrease the appropriate disbursement percentage, and which was only reversed following a study requested by the donors; (vi) delays in arranging and submitting a project training plan and failure to follow it up; (vii) failure to recognize land tenure as a factor conditioning payment of water charges with implications for future maintenance; (viii) lack of proper emphasis on and follow-up of the soil conservation component; (ix) failure to provide for technical assistance in the RDF component; and (x) acceptance of BCA as the project credit agency. On the positive side, the donors and the Borrower were able to agree on carrying out and implementing certain key studies such as one on the financial procedures of ODii and another on its management. 6. Project Results 6.01 The objectives of the different project components were achieved to different degrees. Infrastructure components, such as, irrigation development, roads and water supply, were close to or exceedcd targets. Other components generally did not reach targets. 6.02 The road component, particularly construction, was satisfactorily achieved. Contractors, hired in accordance with ICB, built 117 km of roads (target: 116 km) in 13 sections compared with 16 planned. There were only small delays in spite of some early bureaucrstic snags in organizing ICB and later political unrest. Reportedly, in most sections built traffic has nearly trebled as forecasted. Actual unit costs (between US$43,000 and 47,000 per km) were double appraisal estimates. These cost overruns were caused principally by unexpected drainage problems and by the need to move more earth in the hills. In addition, the bids were relatively high because the job was small, resulting in relatively high unit mobilization costs. 6.03 The project provided for the maintenance of 200 km of roads, including those built during the first project. To that end ODN entered into a contract with the National Roads Maintenance Service (SEPRRN). Although at the beginning SEPRRN suffered from occasional lack of funds, which was somewhat resolved in mid-1986 by providing it with a revolving fund equivalent to US$60,000, roads maintenance has been acceptable. Yet, historically, Haiti has had difficulties funding road maintenance out of its own budget, particularly secondary roads. Thus, it is uncertain whether the maintenance of project roads can be sustained. 6.04 The targets of water supply construction were exceeded. At the closing of the credit, 28 village water supply systems had been completed and three others were under construction, compared with a target of 21. Over 200 wells had been built or rehabilitated compared with 195 planned. These  -4- facilities benefit at least the expected 128,000 people. However, repair and maintenance continues to be a problem. It was estimated that at the end of 1989 about 60% of the pumps installed tinder the project were inoperative. Clearly, not enough emphasis has been placed on motivation and training of the beneficiaries, since they have not yet assumed the responsibility for system maintenance, and have not been organized for that purpose. 6.05 Irrigation. The rehabilitation of the St. Raphael System 260 ha contemplated under the project was completed, with minor delays. This brought the total area rehabilitated and developed for irrigation under the First and this project to the planned 720 ha. Consequently, agriculture productivity and production have increased considerably. It is estimated that during the last five years in the rehabilitated area, the acreage under vegetables has increased by 93%, paddy yields have doubled reaching 2.6 m ton/ha, the average revenue per hectare has increased from US$400 to US$700 equivalent and the demand for remunerated farm labor has increased considerably. 6.06 The financing and execution of operation and maintenance (O&M) remains unresolved and irrigation maintenance is unsatisfactory. Users' labor contribution to system maintenance through u.'ers committees has so far failed, in part due to communities' lack of trust in external assistance efforts. The system of collecting water charges established in 1985 is generally ignored and yields only between 15 to 25% of the O&M cost. In fact, the recommended water charges, based on a study, were not implemented after 1986 (Table 6). Goverrment does not have the necessary funds and under these conditions the systems rehabilitated under the project are already falling into disrepair. The collection of water charges is a frequent problem in this type of project due to lack of political will, unsatisfactory servi'es, cultural values, etc. The problem in St. Raphael is exacerbated by the fact that about 40% of the beneficiaries are precarious tenants. 6.07 The system at Grison Garde involved 200 ha of dilapidated irrigation which the project intended to rehabilitate for intensive rice cultivation. The DCA provided that the completion of certain hydrological information was a condition of disbursement. This condition was not met and IDA did not release the funds. However, the Borrower proceeded with distributive urgent rehabilitation of some small structures such as a diversion weir and distribution structures from the Rural Development Fund (RDF) component, which allowed it to carry out eligible development activitieo without consulting IDA provided the cost was less than US$20,000 equivalent. At the completion of the project between 170 ha and 200 ha had been rehabilitated for irrigation; this is equivalent or close to targets. The total cost was well below original expectation because the quantity of works had been overestimated. The adoption of intensive double crop rice production on the part of beneficiaries is impressive. Reportedly in mid-1989, it involved 170 ha and 80% of perimeter farmers. Paddy yields average around 3.5 m ton/ha and gross farm incomes attained US$900 per ha and per crop. Demand for salaried work has also increased noticeably. Unfortunately, two problems threaten the future viability and sustainability of this subproject. As in St. Raphael, O&M remains an unresolved problem. In addition, successful land development has created conflicting claims on water availability and equitable distribution. Regrettably, IDA did not follow-up on the substance of this requirement.  6.08 Agrcultural DeveloDment. As designed, this project component involved activities which were key to stimulating agriculture production increases and thus to the generation of project benefits. This was particularly true in respect to rainfed agriculture which was expected to create over half of the benefits. These activities were: agriculture extension and soil conservation, research and development, and seed production. 6.09 It was expected that under the project, the extension services would be redeployed in the subareas of better agricultural potential and that in close coord-tation with research, it would disseminate known and simple improved production techniques. Except in the irrigated areas which were relatively small and compact and which benefitted from close foreign technical assistance, extension did not perform as hoped. An important cause was severe discontinuities and abrupt changes in direction following the frequent changes in project management. It is difficult to confirm that the number and potential of extension services available, as well as their acceptability on the part of rainfed farmers, was less than believed because the conveying mechanism broke down. It is also difficult to assess the effect of the limited training of the extension staff. At any rate, the effect on output fell short of expectation (para 6.20). The soil conservation measures which were supposed to be concurrently executed were minimal. They were confined to the protection of 340 ha of hillside lands and the distribution of a limited number of tree seedlings without any follow up; after 1986 this subcomponent was virtually discontinued. 6.10 Agriculture research, for which continuity is critical, also suffered from the frequent changes in management, which resulted in changes in approach, indecision concerning the relative emphasis of on-farm field trials, and impeded sufficient follow-up of the trials. The selection of research themes was also inadequate (too numerous at the beginning), and subject to changes in emphasis such as the sudden concentration and then abaaidonment of sugarcane research between 1985 and 1987. Consequently, except for the selection, adaptation and introduction of a few rice and vegetable varieties the results were minimal. On-farm development trials under irrigation were successfully carried out and disseminated in the irrigation perimeters. 6.11 ODN continued to produce basic seeds of selected varieties of maize, beans, groundnuts, sweet potatoes, etc., initiated under the first project. Finally, as envisaged, it contracted field multiplication with farmers in 1985 but, for lack of support and control, the output was deficient and the effort was terminated shortly thereafter. As a result the supply of good seed, for which farm demand is strong, was unsatisfactory. 6.12 Pursuant to the findings of a FAC supported farm survey which was not completed until atter appraisal, the project carried out some activities not included in the DCA. These were ox-drawn cultivation, on-farm crop drying facilities and input retail stores, all also supported by FAC. Although these activities were in small scale and not fully evaluated, they show promise, particularly the first two, judging by their acceptability on the part of farmers. Ox-drawn cultivation was initiated in 1985 and by the end of the project 76 units were in operation. Between 1984 and 1989 some 850 drying facilities were built on project farms with resources from the RDF (para. 6.14) after tests of the specifications, carried out in 1984. Reportedly, these facilities were very beneficial to paddy growers. ODN  -6- built, initially stocked and ran, input retailing facilities in three location to serve as example to potential local entrepreneurs. The stores were not able to procure the inputs either in the nature, quantity, and timing required and therefore the experiment was not satisfactory. 6.13 A&ricultural Credit. The expectation that with external assistance BCA would prove an acceptable lending institution proved unfounded; it remained inefficient and bureaucratic. ODN, which had handled credit inefflciently during the first project, had been given the role of assisting farmers to prepare credit applications and to organize mutually responsible groups of borrowers. It did not perform this function satisfactorily either. The relative success of some components, such as irrigation and ox-drawn cultivation was in spite of, rather than because of, the credit arrangements of the project. Farm credit was provided through 1987 when IDA suspended disbursements because of a breaching in the audit covenant. In total BCA extended 472 project loans compared with 1,700 planned for a total of about US$400,00n as planned. Credit recovery 's poor at about 52x. Reportedly, the appraisal mission recommended to channel credit through a private Bank but the Government did not accept this. Clearly, in the future, credit arrangements ir. the project area should be different and at any tate involve considerable technical assistance and training. 6.14 Rural DeveloRment Fund. The project provided grants worth US$1.5 million for RDF to finance small community projects which would be technically and economically viable and which would involve beneficiaries' labor in construction. At the closing of the project, virtually all the funds had been committed to finance some 150 projects. About 401 of these are estimated to have been completed successfully and to be in operation. ODN assigned only one professional to this component who could not cope with the workload. As a result, the capacity to analyze project proposals suffered as did the subsequent supervision of their implementation. Overall, bowever, this flexible mechanism of financing rural development has potential in an environment like the project area. Demand for support of small viable community projects is strong. However, successful implementation requires--in addition to clear and sound eligibility criteria--an institution with appropriate staff to analyze and follow-up projects and disburse the funds. 6.15 Studies. Of the three studies proposed under the project, one was financed by IDA and completed, i.e., a study on the strengthening of the accounting capabilities of the ODN. The other two studies, namely feasibility of a dam for water storage and a study of irrigation water charges for the project area (Table 6, covenant 5.05(b)) were financed by GTZ. It was determined that no further study was required after completion of the first phase of this study. 6.16 Coordination and Institutional Development. Pursuant to the experience with the first project, the project was expected to be executed by line agencies under the coordination of ODN, except in the case where line agencies had serious limitations, such as, in research and development, seed production, training, irrigation development, water supply, and monitoring and evaluation. It also provided for institutional strengthening in the form of technical assistance and training. 6.17 In general, the objectives of institutional development were not met. The most obvious cause was the general instability in the country during  the project life. ODN had 6 Directors in 7 years and considerable staff turnover. These changes neceessarily blurred the understanding of project management in respect to the principles and agreements to govern the project. Thus, shortly after project start-up, ODN took on progressively mote execution functions and only in 1987, following the result of the accounting capabilities study required by the donors, agreements were signed between ODN and the MARNDR for the devolution of executing functions to line agencies. The impact of the TA was also affected as consultants' duties and responsibilities were often modified and this also undermined their ability to train changing counterparts. On the positive side, a sound accounting system designed by an international accounting firm was installed with the help of a newly appointed expatriate financial controller; so far, however, it has been utilized mostly to satisfy donors disbursement requirements rather than for internal financial management. The project has established a sound M&E system, based on a FAC financed base survey, which, unfortunately, the frequent changes in management did not permit to fully exploit. The Borrower issued the required training plan late and it was not followed. However, the project provided training to project technicians in the form of short courses and seminars under contract with the Middle Agricultural School at Dondon. On-the-job training and field training to farmers was informally supplied by consultants. 6.18 Credit Administration. The final Rroject cost was, in dollars, about 33.4 million some 15Z above original estimates. The costs of road building and project coordination were about double and plus 302, respectively, of appraisal estimates. Irrigation costs were less than budgeted because less investment was required, particularly at Grison Garde, and the fact that these costs were paid out of the RDF category. Disbursements were ahead of schedule during the first two years but came to a standstill during 1986-88 due to political unrest. They were completed in April 30, 1990. Because the SDR appreciated vis-a-vis the dollar, IDA and IAD disbursed in dollars 1.5 and 0.2 million, respectively, above original estimates; they also cancelled about US$0.04 and US$0.( million, respectively. Procurement proceeded satisfactorily. Project reporting . generally punctuals good in infrastructure, poor on agriculture, and moot on prices and economics. Some special reports commissioned from the M&E unit were very good indeed. IDA received the audit reports required but with variable delays. In 1987 IDA suspended disbursements to BCA because it was in default of the audit covenant. The status of covenants as of the credit closing date is in Part III, Table 6. The defaults concerned training (covenant 4.08) and water charges (covenant 5.05(c)). 6.19 Project Impact. The physical and institutional objectives of the project were expected to make a positive developmental impact by increasing agricultural output and beneficiaries' farm incomes and by strengthening local institutions to provide continuity, diversification and expansion of project activities in the future. The quantifiable part of these benefits gave a rate of return of 23% at appraisal. This rate embodied all projected costs and benefits except water supply, which was justified by unquantifiable benefits. The rate of return was subjected to a variety of sensitivity tests; this section examines the changes of the key variables utilized in the original tests and attempts to draw conclusions in respect of the likely ultimate project rate of return.  - 8 - 6.20 Although the irrigation land development targets were met (paras. 6.05 and 6.07), the impressive gains in output were not sufficient to meet the ambitious targets. It is estimated that at completion, they were lagging between 40 and 45x. Since maintenance is not satisfactory, barring any drastic change, it would not be reasonable to assume that they will catch up. Since the activities designed to increase output of rainfed agriculture were generally not successful, the project-induced output from these lands was minimal. The monitoring and evaluation services of the project estimated a shortfall from appraisal targets of the order of about 911; virtually no effect. 6.21 The project incremental output was expected to come to roughly 58X and 421 from irrigation and rainfed cropping respectively. The sensitivity analysis indicated a switching value of -202 of output in respect to the opportunity cost of capital (OCC). Thus, the actual shortfalls in output would make the ROR inferior to OCC and, if positive at all, small. This is consistent with the barely positive (less than 11) re-estimated ROR at completion calculated by the M&E services for the agriculture components. Farm income, in irrigated areas, increased to 80% of target. The individual shortfall in farm income is less than proportional to that of output because beneficiaries' farms were larger than planned; 1/3 less farms benefitted from irrigation development. No increase in rainfed farm income can be reported. 6.22 At appraisal, a separate ROR of 311 was estimated for the roads component. The roads were constructed substantially as planned and with little delays. Reportedly the traffic has increased in line with the original expectation. Unit cost, however, was double that estimated. The sensitivity analysis indicated that a doubling of costs would reduce the ROR of this component to the level of the OCC. This is what seems to have occurred but could be reduced if maintenance is not continued (para. 6.03). 6.23 The impact of the water supply component is likely to have reached its expected impact as of the time of completion. Over the longer run, it will depend on the level of maintenance (para. 6.04). 6.24 The impact of the RDF component was not estimated either at appraisal or at completion. It is, however, reasonable to assume that the impact of the RDF component would be about proportional to the number of eubprojects successfully completed. Thus, it would be about 40% of the original expectation (para. 6.14). Nevertheless, this component proved that RDF can be an effective and flexible rural development tool, provided it is properly planned and managed. 6.25 The institutional impact of the project was minimal. 6.26 The overall rate of return of the project is unlikely to be better than zero to 5%. 7. Sustainabilitv 7.01 Considering that the maintenance of those project components satisfactorily completed, such as irrigation infrastructure, roads, and water supply, is not adequate, and that the institutional component has fallen short of expectation, it is difficult to be optimistic about the sustainability of project achievements. It seems clear, however, that activities exist which  - 9 - can be carried out effectively to benefit the target population. This would require further external support including considerable technical assistance and anchored by well thought out and followed-up conditions. The Government has begun to initiate major policy actions which promise to improve the impact of future project interventions. In recognition of the deficiencies identified, and the lessons learned in this PCR, the follow-on project (forestry and environmental protection), now under preparation, would focus (in the context of raising agricultural productivity and the provision of agricultural support services) on the development of appropriate technology, greater participation of NGOs, and in general, keep the project small and manag.-able with use of pilot activities. 8. Bank and Borrower Performance 8.01 Between 1979 and 1982, the Bank together with the IBRD-PAO/CP and donors, diligently carried out project identification and preparation in the course of three CP missions and 19 first project supervision missions. In general, identification work and preparation focussed on the right issues: weak institutions, lack of qualified local staff, land tenure, unsatisfactory availability of improved rainfed agriculture techniques, infrastructure maintenance and cost recovery, water availability for irrigation at Grison Garde, etc. Bank appraisal was competently carried out, generally following up on the issues raised previously. The assurances recommended were appropriate. On the downside, it could be argued that appraisal should have awaited the completion of the FAC-financed survey (para. 6.12) and that the potential of the rainfed "technical packages" wae overestimated. While the tenurial problems on irrigable lands were fully appreciated, the effect on cost recovery and on maintenance were not. Activities, such as extension and research, were either poorly specified or else the agreements reached in their regard with Government were not clearly understood by the parties concerned. Supervision was frequent and generally focused on the right issues. The Bank chould perhaps have pursued more vigorously the compliance with the spirit of certain covenants, particularly those concerning the relative roles of ODN, line agencies and consultants, infrastructure maintenance and cost recovery, and submi.sion and execution of training plan. Of course the Bank could not predict the political and institutional problems that prevailed during the project life. 8.02 The performance of the Borrower was commendable in achieving many of the physical objectives of the project under a most unstable environment. Unfortunately, in spite of the efforts and motivation of project staff and management, the developmental impact (paras. 6.18-6.25) and sustainability (para. 7.01) of the project are in doubt. Experience shows that projects such as this one, which are carried out in a challenging natural and human environment are difficult to execute under the best of circumstances; frequent changes in management and directions make it almost impossible. 8.03 Le"sons of the Proiect. The following lessons from the project apply, mutatis mutandis, to both the Bank and the Borrower: (a) The importance of clearly specifying the non-physical components of the project, such as extension, research and technical assistance, and of assuring the understanding and agreement of all parties concerned should not be underestimated. Otherwise they are likely to be affected by ad-hoc decision making and policy reversals;  - 10 - (b) The capacity of executing agencies should be conservatively evaluated. In a weak institutional environment, maximum uoe of private agencies and NGOs (particularly to execute difficult grassroot activities such as extension or organizing beneficiaries for common purposes) should be made. In the context of those activities reserved for the public sector, institutional building should be pursued based on well designed and followed-up technical assistance anchored by well thought out and enforced covenants; (c) The matters under (a) and (b) above, require a positive but time consuming dialogue between the Borrower and financiers. Therefore, appraisal cannot be rushed. If external funds are required to maintain either the physical or institutional infrastructure built under an earlier project, interim financial arrangements should be preferred to advancing appraisal. Appraisal should not precede the availability of identified key studies; (d) The feasibility of Borrower's obligations under intended covenants should be investigated thoroughly in advance before negotiations and, if necessary, should be adjusted to the circumstances. For instance, the prevalence of tenant farmers in the irrigation perimeters makes the collection of water charges unlikely: different arrangements are needed; (e) The ability of Government to provide funds to sustain or maintain project achievements should be investigated at the macroeconomic level. Existing meager budgetary resources are subject to competing claims and their expansion is a function of development which in turn requires a minimum of well functioning infrastructure and institutions. Thus. until the fiscal base attains a certain critical mass the only practical arrangement to assure maintenance is to provide financing in follow-up projects; (f) The RDF is a flexible and effective rural development tool, particularly in a difficult agricultural environment. It permits tailoring small-scale development activities to the perceived needs of the beneficiaries. However, it requires clear and sound eligibility criteria ae well as sufficient competent staff to analyze and follow-up subprojects; and (g) When implementing a project through a unit that has a titular ministry, coordination issues, and delineation of responsibilities have to be carefully analyzed and addressed in advance. In this project there were latent tensions between ODN and MARNDR, resulting in frequent changes in policies and procedures. 9. Proiect Relationshios 9.01 In epite of the many issues that arose during the execution of the project, the relationship between the Bank, the cofinanciers and the Borrower were cordial and constructive. Project supervision was frequent and in the course of the dialogue, the cofinanciers were able to persuade the Borrower to focus on unexpected difficulties and to take corrective actions (para. 6.17).  - 11 - 10. Consulting Services 10.01 The project cost provided for the hiring of 10 long-term consultants. At the closing of the project, 85% of the monies provided for these services had been spent. As mentioned before (para. 6.17), there were some misunderstandings with the Borrower concerning the role of certain consultants in spite of the clear definition of functions laid down in the project documentation. The changes in management and directions also affected the effectiveness of consultant services. For instance, between 1984 and 1986 the training specialist was actually assigned to do agricultural research in the field. Nevertheless, by and large, consultants' services were effective; part of the success in completing the project infrastructure as expected was due to the interaction between consultants and local staff. The Borrower and donors executed flexibly the consultant part of the project; certain studies were commissioned (para. 6.17) and new specialists (ox-drawn cultivation) were brought into the project as the need arose. 11. Project Documentation 11.01 The appraisal report and the credit documents were clear and comprehensive. Supervision reports generally addressed the key issues. As a result of studies and surveys carried out by consultants and local agencies, particularly the project's M&E services, abundant project literature was produced which should provide a better informed basis for the future development of the project area.  - 13 - PR.OJECT COMPLETION REPORT HAITI SECOND RURAL DEVELOPMENT PPOJECT IN THE NORTH (CREDIT 1410-HA) PARTI II: PROJECT REVIEW FROM BORROWER'S PERSPECTIVE The Borrower has completed a Full Project Completion Report (PCR). Attached io the unedited text of Borrower's PCR from which we have deleted the descriptive portions of the report. The Full PCR is available in LAC Files.  - 15 - I. INTRODUCTION 1.01 The North Plain, one of the regions in Haiti with most agricultural potential, is an ideal place to attempt relatively high gaine in both output and productivity. It is easily reached from the capital, Port-au- Prince, by a paved highway. However, unlike numeroua other parts of the country, it does not consist solely of small commercially oriented family farmst there are also various large estates or plantations that use employed manpower and comparatively nonintensive production methods (.9ugarcane, livestock farming on the extensive system, etc.). 1.02 The project suffered greatly from the lack of any master plan for rural development in the Departments of the North and Northeast. Numerous uncertainties still affect everything to do with the future of sugarcane in the region, plans for government-owned land, and the types of farmer on whom efforts to promote agricultural development will be focused. 1.03 The project also suffered greatly as a result of the political and social unrest that preceded and followed the fall of the Jean-Claude Duvalier regime in February 1986, and was manifested principally in takeovers of land by poor rural groups, numerous staffing changes in the Civil Service, considerable smuggling, and a very significant drop in the price of food products. 1.04 The Organization for the Development of the North (ODN), the agency responsible for the project, bore the full brunt of the ensuing political and social repercussions, the results of which included no fewer than six changes of director in six years, partial temporary suspension of activities between December 1986 and April 1987, several administrative reorganizations, continual changes of focus and major time overruns in the conduct of the agricultural segment of the project. 1.05 The lack of continuity in agricultural development activities was also partly the result of IDA staff turnover: no fewer than three individuals were responsible at different times for monitoring this component, the main reference document available to them being an appraisal report that was unrealistic as far as project goals were concerned and vague as to the resources that were to be brought into play. II. PROJECT IDENTIFICATION, PREPARATION AND APPRAISAL (B) Preparation and Appraisal 2.01 An initial preparation mission (FAO/CP) in May 1981 examined the possibility of a rural development project without a sugarcane component. In addition to its proposals on rural infrastructure, the mission concluded that foodcrop development could best be promoted by using the traditional crop association practices followed in the North but employing the improved varieties selected during the First Rural Development Project in the North (RDN I). Comparatively limited goals were set for extending irrigated areas, given the difficulties encountered in this sphere during execution of RDN I.  - 16 - It wa understood also that a second mission was to identify and describe the series of problems associated with sugar production and sugarcane growing in the North. 2.02 A second preparation mission undertaken a year later, in May 1982, spelled out the objectives for the various components of the project: infrastructure (roads and water supply), irrigation, water management, applied research and seed production, extension, farm credit, institutional strengthening, training for farmers and other personnel, etc. This mission, too, concluded that a fuller range of information on sugar production in the North was needed before a recommenlation could be made regarding a sugarcane component. 2.03 A foreign consulting firm then commissioned to study the problem of sugar production advised that the chief obstacle was the way the privately- owned processing plant (the Citadelle mill) and cane collection were managed; in addition, the ecological conditions under which sugarcane was grown were not always the most appropriate (faulty drainage). The consequences of the structural decline in world sugar prices (except for the quotas sold at preferential prices to the US), and of the fact that the largest landowners were absentees, appear to have been largely underestimated, however. 2.04 At the time of the IDA appraisal mission in September-October 1982, the sugar mill had just been bought up by Banque Natlonale de Cridir d'HaXei, with assurances that everything would be done to rehabilitate the plant, under a management contract, as soon as possible. As a result, a sugarcane component -- designed to concentrate sugar plantations within a relatively limited area and to rehabilitate them gradually with improved varieties -- was added to the project late. 2.05 Generally speaking, the benefits of RDN I were largely overestimated at the time of preparation and appraisal of the agricultural component of RDN II. The chief misconception was the belief that it was possible to increase tae production of rainfed crops rapidly merely through extension work to disseminate simple technical messages (use of improved seed, introduction of varieties selected during RDN I, etc.). The assumption that the yield potential of the varieties traditionally cultivated would be the chief limiting factor was at least arguable, given the very nature of rainfe farming in a highly unpredictable climate. Furthermore, the studies and research conducted as part of RDN I did not make it possible to predict the impact of new grain and tuber varieties on smallholder crop-association patterns. 2.06 The difficulties with irrigation and water management encountered during the first project were assessed realistically, although the evaluators nevertheless slightly overestimated potential increments in yield and output from the rehabilitation of small irrigation networks during the second project. 2.07 In the absence of any real classification of farms according to type, it was impossible to predict how different groups if farmere would behave or react to the technical practices advocated. The k'ey error was to  - 17 - assume that all farmers would be interested in intensifying crop production and possessed the means of increasing yields. 2.08 The reasons why ODN went considerably beyond its initial coordinating/financing/planning function, becoming the executing agency at the time of the first project, have been insufficiently analyzed, while the beneficial influence such an entity was capable of exercising on the development of national institutions was seriously overestimated. ODN's assigned role as regards the agricultural component of the second project was consequently formulated in ambiguous terms, in the sense that A real distinction was not always drawn between actions where ODN shouid limit itself strictly to a coordination function and those where it should attend to all or part of the execution process. III. EXECUTION (A) Intervening Period 3.01 Between the end of RDN I (December 1982) and actual start-up of RDN II (October 1983), FAC -- Fund for Aid and Cooperation (France) -- continued to provide ODN with support by making two (and then three) experts available to its Monitoring and Evaluation Division and R & D Division, so that they could join forces on a study of the realities of the farm world in the Departments of the North and Northeast. Such a study was warranted in view of plans to extend ODN's jurisdiction to new districts, since collection of detailed data on zones identified for future intensive development was regarded as indispensable. Conducted between April 1983 and January 1984, it covered 11 zones considered to be representative as far as farming practices and agro-ecological conditions were concerned, revealing the diversity of conditions under which smallholders farmed in the horth and drawing the attention of agricultural specialists to the need to always take full account of the interests and know-how that farmers brought to the exercise of their occupation. When published in January 1984, it confirmed the generally (correct] or mistaken nature of some of the recommendations made in the Appreisal Report, enabling ODN to reformulate its technical messages and redraw the boundaries of the districts that were to be priority targets. Several of the messages selected at this time were thus implemented, with varying degrees of continuity and perseverance, throughout the project period (varietal improvement, small-scale irrigation, use of animal traction, input supply systems, drying floors, etc.), while others were unfortunately given only very sporadic attention (anti-erosion measures incorporated as part of smallholder production systems, restocking of pig herds with hardy breeds, etc.). (B) Proiect Start-up 3.02 The Credit Agreement was signed on September 9, 1983, although the results of the study conducted during the intervening period were still not available in fuil. However, since all the conditions for project effectiveness incorporated in the Agreement had not been met at the time,  - 18 - financial difficulties arose during the initial months and the project did not really get under way until February 1984. 3.03 The late arrival of the civil engineering and irrigation consultants led to some delays in start-up of work on rural infrastructure and irrigation-system administration. 3.04 Activities in the agricultural arena (extension, R & D, seed multiplication, farm credit, etc.) were begun despite the lack of any basic strategy decisions or real coordination among the different entities responsible. For a lengthy period, there were uncertainties about the importance that should be accorded to training and about the content of training curricula; the consultant who was to have been responsible for these tasks was transferred at an early date to the R & D arena. The arrival in 1984 of the consulting expert on sugarcane enabled ON to revive its activity in this arena, although, given the contents of the study made during the intervening period, caution should have been a primary concern. 3.05 The massive employment of unskilled/underqualified personnel (field agents, messengers, guards, typists, etc.), the difficulties encountered in project administration, and the disorganization affecting most service entities rapidly led the donors to suggest a study that would promote the adoption of new management practices and procedures by ODN. Carried out in December 1984 by an expatriate consulting firm, it did not lead to any reorganization of the agency's management structure until August 1985. (O) Project Operations 3.06 The first change in the directorship of ODN was made in October 1984, following the appointment of a new Minister of Agriculture. It was this new director who was to implement part of the administrative reform program advocated by the consulting firm. The principal element in the program was the creation of five new Divisions, for which highly qualified and highly paid professionals were to be recruited. The Agriculture Division decided to concentrate most of its activities in five operating zones, each of them the responsibility of a qualified agronomist: Zone I: Grison Garde, Plaine du Nord Zone II: Quartier Morin-Bord de Mer-Limonade Zone III: St. Raphael Zone IV: Grande Rivi6re du Nord Zone V: Grand Bassin-Terrier Rouge-Quanaminthe 3.07 Expenses rose significantly because of increased salary costs, coming on line of rural infrastructure, construction of new buildings (offices, garage, sugarcane analysis laboratory, computing activities center), purchases of equipment (tractors, drain cleaners, hothouses, etc.), and execution of subprojects financed by the Rural Development Fund. 3.08 In 1985, the Ministry of Agriculture decided that the entire responsibility for extension programs in the North was to be transferred to ODN. Taken uni'Aterally, this decision was absolutely contradictory to the  - 19 - Agreements signed in 1983 by the Ministry and ODN, which had stipulated that the Ministry was to serve as executing agency. 3.09 The focus of farming development programs was changed sharply, as a result of: almost complete suspension of agricultural research, coming into operation of irrigation infrastructure at St. Raphael, slowing down of farmer-support operations (animal traction, input supply outlets, drying facilities, etc.), and the priority given to sugarcane. An especially equipped area of the government-owned Madras Plantation was set aside for production of cuttings of potentially high-yield and smut-resistant varieties. A 177-m2 laboratory for analytical work was built on the grounds of the sugar- processing mill. This degree of emphasis on sugarcane growing was largely a result of the conclusions reached in a May-June 1984 study of the farming sector sponsored by the World Bank. Mainly concerned with identifying comparative advantages, it demonstrated that sugarcane production costs in Haiti were low and that problems occurred mainly at the processing stage. However, the error committed by its designers was to forget that smallholders in the North Plain region who rely on the labor of their own families are often more concerned to grow plantains or other fooderops. Large-scale planters, even if they generally have capital to invest, are not necessarily prepared to put a lot of it into agriculture when other activities (commerce, real estate, etc.) can give better rates of return. Generally speaking, they content themselves with production systems of the extensive type, which require relatively low per-hectare levels of investment -- and sugarcane, for instance, fits the bill, since plantations are still only infrequently renewed. It was thus mistaken to believe that sugar planters would be prepared to restock their land entirely in five years, so that their annual harvests would eventually consist entirely of high-yield varieties -- a mistake pointed up by the subsequent history of the project. 3.10 After the fall of the Jean-Claude Duvalier regime and inauguration of a National Council of Government, an individual prominent in Cap Haitien was appointed director of ODN in March 1986, in the hope this would lead to achievement of some degree of consensus in the region. Despite certain innovative ideas (specifically, on extension services and rehabilitation of irrigation networks), the new director did not really succeed in imposing his authority. Delays in budget preparation soon resulted in failure on the part of the Government to transfer counterpar: funds to the agency. The drastic shrinking of cash flows, ODN's excessive administration costs and a fuel shortage throughout the country were all factors that contributed to the slowing down of ODN activities which began in May-June 1986. The hiring of an internal auditor in September 1986 did not result in a return to orderly financial management, and the director himself was dismissed on December 15 following a demonstration by agency employees. 3.11 After a brief period of management by three of the agronomists representing the Ministry of Agriculture in the North, ODN was temporarily shut down between December 31, 1986 and February 4, 1987, the date ahen a new director was designated. The agricultural development and clean water supply components of the project were the most seriously affected by this situation to a particular degree, although it proved possible nevertheless to continue  - 20 - with some activities, thanks to FAC financial support and ongoing German and French technical assistance. 3.12 When ODN resumed its operations, the fourth director, acting on repeated recommendations by the World Bank, began a reorganization of ODN, whose functions were henceforward limited to general responsibility for the project and coordinating action programs. Particular components were entrusted on a contractual basis to different executing agencies: to the Ministry ,f Agriculture, activities in the farming arena; to the TPTCs, road building; to SEPRRN, road maintenance; to SNEP, water supply works; to a foreign contracting firm, the construction of main roads; etc. As of April 1987, project activities began to gather speed again. In the farming arena, priority was assigned to rehabilitating irrigation networks and developing farm plots at St. Raphael and Grison Garde. The programs associated with sugarcane production were gradually abandoned. A study commissioned by the Ministry of the Economy and Finance, (funded by the World Bank and published in May 1988) was to conclude that sugarcane was an underlying cause of the very low creation of value added in the agro-ecological and socioeconomic conditions existing in the North Plain region. The sugarcane plantations set up to provide planters with shoots of high-yielding varieties disappeared completely in February 1989, following the occupation of Madras Plantation by poor smallholders. 3.13 Cooperation arrangements with the French authorities came to an end in December 1987, the date initially scheduled for completion of the project; the cost of th-i technical assistance made available under them was taken over partly by ODI0, with funding from the World Bank. The closing date of the IDA Credit war fA.rst extended to June 30, 1988, and subsequently to June 30, 1989 (with disbursement possibilities available until December 1989). 3.14 New appoiriLnments to the ODN directorship were made in July and November 1988, but caused little interruption ir the continuity of agency operations. The clean X -ier program was virtually completed in the second quarter of FY88/89. The ontractors responsible for building 116 km of rural roads completed their contractual obligations in November 1988; the maintenance program for rc ds built during RDN I was certified as completed in September of the same yea-; and the rehabilitation of irrigation systems at St. Raphael and Grison Gat:Ve was virtuelly completed by July 1989. 3.15 As far as the agricultural development component of the project is concerned, however, we are forced to note that the objectives in view were a long way from being achieved. While remarkable progress was made by a small number of farmers in the irrigated sectors of St. Raphael and Grison Garde, the same was not true of rainfed crop districts, where the project never really came up with any appropriate technical recommendations. Rapid productivity grins would have been possible in the districts devoted to sugarcane and to livestock farming on the extensive system, except that land redistribution became a factor in the picture.  - 21 - IV. RQJECT CMOMPOENTS (A) Irriaation 4.01 Rehabilitation of the St. Raphael irrigation area continued as planned, and the area now irrigable in the dry season totals 725 ha. Thanks to better water management and to the plot development techniques advocated through the project, the total irrigated surface area under vegetables increased very considerably (by 93% over 5 years), paddy yields more than doubled, and farmer incomes increased on average by $400-700/ha/year. Advances with such labor-intensive crops as rice, vegetables, and tobacco increased the demand for hired labor significantly, which was met from the large reserves of manpower available in rainfed and hilly farming areas. 4.02 For lack of any prior arrangement with IDA, rehabilitation of the Grison Garde irrigation area was undertaken in conjunction with the Rural Development Fund in a succession of small tranches of less than US$20,000 e%ch. Accompanied by an intensive plot development and R & D/training effort, i'rrigation has allowed an area of approximately 170-200 ha to be devoted to intensive ricegrowing (two crops a year). 4.03 Water management, payment of water charges by irrigators, and organization of users for system maintenance have continued to pose problems at both St. Raphagl and Grison Garde. Although ODN has proposed new mechanisms for solving them, there is no real indication that this will be enough to keep irrigation at an optimum level in the future. (B) Agricultural Development 4.04 The agricultural component of RDN II was designed initially to facilitate general dissemination of the technical messages which were believed to have been finalized during the course of RDN I. On the subject of extension services, preparatory project documentation indicated that messages to smallholders would be simple, and that progress in cropgrowing achieved through the project would mostly be a matter of using good seed of varieties selected for yield and hardiness. According to the Appraisal Report, extension services were to cover 8,000 ha of rainfed cropland and 920 ha of irrigated cropland; one third of the 20,000 full-time farmers in the region were to be targeted, on a basis of one extension agent per 260 farms. Very significant increases in yield were anticipated for food crops (grains, tubers, food legumes, plantains, etc.), vegetables, tobacco, sugarcane, cocoa, and fruits. 4.05 It quickly became apparent at the outset of RDN II that the legacy of technical messages from RDN I was very small. The most available at that time were some results from work on varieties: irrigated rice CICA 7 and CICA 8, cassava CMC 40, smut-resistant sugarcane, etc. Diagnostic work done in the interval between the two projects had produced a number of suggestions for new extension messages (animal traction, drying floors, input supply outlets, restocking of pig herds, etc.); however, since local data on these areas of interest left much to be desired, it was considered advisable to conduct trials with local farmers first. While ODN's R & D Division was  - 22 - intent initially on working up the kinds of material suggested by the diagnostic study, its Extension Division recruited numerous field agents to promote not always appropriate techniqu,e (composting). 4.06 As a result of the general reorganization of ODN in 1985, its extension services and R & D efforts as such were swallowed up in a huge "agricultural component" that was supposed to include varietal selection, seed multiplication, beekeeping, cultivation of fruit trees, irrigation, plot development, etc. The priority action zones were reduced in number to five, and emphasis was put on extension at the expense of R & D. A beginning was made with disseminating a number of new messages (animal traction, drying floors, etc.). Others, however, required fine-tuning, which meant organizing numerous on-farm demonstration trials -- each with a threefold purpose: experiment with a new technique, introduce it to farmers, and provide the necessery training in it. Demonstration trials thus became the vehicles for gradually refining techniques and disseminating them rapidly among farmers -- techniques of plot development, for instance, and the technical "packages" now successfully used to provide instruction in growing rice and market-garden crops on irrigated plots developed for the purpose (St. Raphael and Grison Garde). These are complex technical "packages," use of which tends to spread spontaneously, through imitation, to interested farmers, and not the simple, standard messages that had been envisaged initially. 4.07 It must be recognized, however, that the progressive approach (i.e., associating R & D closely with training and farmer participation) did not always prevail in the various project zones. Cut off from the processes of research and on-the-job training, extension was often irresolute and not as determined and persevering as necessary. This was the case, for instance, with beekeeping (where regular follow-up was neglected), or tree crops (where little importance was given to working with smaliholders), or sugarcane (a crop, however, in which few farmers were actually interested). Agricultural development was also very adversely affected by the rigidities in the Agricultural Credit Bureau's procedures and practices for granting loans, by the frequent. disruptions in the supply and availability of inputs, and by the lack of coordination between field agents and the service units located on Grand Pr6 Plantation (nursery, seed multiplication, varietal research, etc.). The agronomists responsible for managing the project zones never had the financial autonomy (i.e., the necessary working capital) to manage day-to-day operations, while any measures they took were undermined by bureaucratic complications (problems with fuel, repairs, overtime payments, etc.). The over-centralized decision process and the lack of any real delegation of responsibility down to the project-zone level deprived both zone managers and field agents of the necessary flexibility in doing their job&. 4.08 The number of farmers who benefited in 1989 from the various facets of the agricultural component definitely did not exceed 5,000, or 80% of the number initially foreseen, once the project had settled into its normal operating pattern. Various crops for which a full-scale extension effort was planned finally received only scant attention: tobacco (probably as a result of the withdrawal of the Comme I1 Faur company from the North Plain), plantains (despite their importance on the humid plains), cocoa trees (except for distribution of young plants), and certain food legumes. The most  - 23 - neglectrid zones appear to have been Quartier Morin, Grand Rivibre du Nord and Camp Louise (abandoned in 1985). (C) Pam Credi 4.09 The farm credit program was also seriously affected by the rigidity and slow pace of Agricultural Credit Bureau procedures. Only 472 loans were made to 285 applicants, for a total of US$620,260. Of this amount, 861 was approved for short-term loans and 141 for medium-term financing. Most loans were made for agricultural purposes (food-crops, livestock, animal traction) and the beneficiaries were small and medium farming enterprises. The rate of recovery has never been any more than poor (52S). (D) Rural Roads 4.10 The goal to build or rehabilitate 116 km of roads was achieved, with the 13 sections in which work was completed actually totaling 117 km. The roads appear to have helped significantly in opening up the zones where they are located. One 25-km section, leading to Vallieres, which was not provided for in the initial project designs, was built over a less than ideal route and therefore still carries a very low volume of traffic. 4.11 Road building costs proved considerably higher than the figures anticipated at the time of project appraisal: US$43,400/km instead of US$21,760 for roads crossing plains and US$46,700/km instead of US$25,680 for mountain roads. Road maintenance is an ever-present problem and is not always adequately monitored. (E) Water SUD21V 4.12 Numerical goals for the project's water supply component were accomplished, despite some delays: 22 village water-supply systems were completed and three others were under construction by July 1989; 91 new wells, 62 of them deep, were sunk and 116 old ones rehabilitated. However, a major problem has proven to be the types of well and equipment (hand- or motor- pumps) chosen, exacerbated by shortcomings in maintenance and repairs; as a result, numerous users are without running or drinkable water. (F) Rural Development Fund (FDR) 4.13 A wide range of subprojects was carried out with FDR resources, although most involved the creation of community-based infrastructure: markets, schools, social centers, bridges, public squares, solar power systems, etc. However, directly productive investments were rare, and many of the subprojects, of little interest from the development standpoint, were undertaken for reasons of prestige. In the agricultural sphere, too little advantage was taken of FDR potential: some fishery units and livestock facilities were certainly set up, but they were few and far between; little importance was given to restocking farms with hardy aative breeds of pig; soil conservation operations went ahead in a haphazard fashion, and some were no more than pretexts for local people to earn wages. In all, over a six-year period, FDR disbursed US$474,000, but the resulting impact on the economic  - 24 - development and welfare of beneficiary groups was not on the same scale. The responsibilities of the principal (ODN) should doubtless have been more clearly separated from those of its various agents, while stricter procedures for monitoring and taking eventual delivery of subprojects should have gone hand in hand with the use of very precise statements of contractual conditions and specifications. V. ]gQLE AND EVOLVEMENT OF INSTITUTIONS (A) Institutional DeveloDment 5.01 One of the effects of the project not measurable in terms of figures was to be the positive influence it would have on the development of the country's institutions, at both the regional and national levels. Sound performance by ODN would serve as a model for other development programs, whether on the North Plain or in other regions: for instance, one of the project goals was to strengthen the management and maintenance capabilities of entities responsible for irrigation. 5.02 As a result of the difficulties encountered in the course of RDN I, it vas agreed that ODN's major function during RDN II would be to finance and coordinate the various executing agencies (Ministry of Agriculture, SEPRRN, SNEP, the TPTCs, etc.), with which subcontracting agreements were to be signed. However, this principle was not adhered to from the outset in the agriculture sector, and ODN soon formed its own research and extension teams, thus showing up this type of arrangement as a fine example of how not to run a rural development venture. Cumbersome to manage and expected to disburse considerable sums in a very short time, ODN proved incapable of steering either efforts or investments toward the kinds of activity likely to be most productive and most useful to the community. Its chief shortcoming was that it was never able to limit its role to that of a mere financing and coordinating agency in the agricultural arena. The situation improved somewhat after a subcontracting agreement was signed with the Ministry of Agriculture in 1987, although ODN never disbanded its own group of development agents, whose functions remained ill-defined in many instances. 5.03 RDN II suffered the ill-effects of real laxity in the conduct of agricultural operations, and also in the allocation of human and financial resources, which did not always coincide with the requirements of production and profitability. The hiring of a very large number of poorly qualified employees was more indicative of a concern to create wage-earning opportunities immediately than to achieve effectiveness and prompt program execution, but ODN became the foremost employer in the North. Significant sums were also swallowed up in building programs (offices, garages, laboratories, hot houses, computing activity center, erc.) or purchases of equipment (automobiles, tractors, office equipment, etc.), the economic and social utility of which was a long way from being satisfactorily demonstrated. The management structure proposed in 1985 by a foreign consulting firm did not put an end to red tape. The creation of new upper-level management positions and the recruitment of highly-paid personnel led more to an increase in expenditure than to anything else, while ODN's excessively high administration  - 25 - costs quickly absorbed the meager counterpart funds available. Hiring of an internal auditor, reorganization of ODN in 1987, and the emergence of the Ministry of Agriculture as executing agency helped improve the situation somewhat, although not all problems were eliminated. Under very considerable pressure to spend the sums allocated to the project budget, ODN did not always choose the most productive investments, particularly with FDR. What is apparent here is a defect inherent in almost all projects where major sums are to be spent within a short time period: it is quicker and easier to have buildings constructed, buy heavy equipment and recruit an over-large staff than to draw technicians and farmers gradually into a research/development approach. However, the experience gained from this very project demonstrates that it is this second option which is the most fruitful as far as agricultural development is concerned. With hindsight, there is no escaping the fact that the few operations that produced results during RDN II (intensive irrigated ricegrowing on smallholder plots specifically developed for the purpose, input supply outlets, use of animal traction, etc.) were precisely those where efforts and expenditure were kept to a steady pace -- without overstaffing or overambitious building. 5.04 RDN II was put at a great disadvantage by the numerous changes of director and the juggling of staff they almost inevitably involved. The very size of the project budget could not fail to attract the attention of politicians in the situation of general instability that prevailed between 1984 and 1989, so that the various ministerial reshufflings were almost all accompanied by changes in the orientation of the project. Changes in appointments affected not only Haitian civil servants and staff members but also expatriate staff, whe were not always able to play the part initially assigned to them in training local cour.terpart personnel and strengthening the country's institutions. This largely explains the withdrawal of FAC in 1987, and the wish on the part of GTZ to see the St. Raphael operations managed as an increasingly independent subproject. Similarly, short-term missions did not always have the anticipated impact, since their conclusions were not necessarily passed on to, or shared by, the different senior management teams that succeeded one another. 5.05 Except for the steps taken to improve management and mainten&ace of the St. Raphael irrigation area, RDN II did very little to foster the emergence of smallholder organizations capable of taking their own affairs in hand and themselves managing development programs. Instead, the fact that employment opportunities were created for the rural population in such an ill- considered manner made smallholders less accountable in numerous spheres and reinforced their dependence on the public coffers. At the same time, the instability prevailing in government circles pointed up the urgent need to entrust most development programs to local authorities, NGOs, producer associations and user committees. 5.06 Project accounts were always maintained correctly. However, the accounting system was useless for project management purposes. Organized to fit in with the presentation to donors of monthly applications for payment of cumulative expenses (technical assistance) and reimbursement of expenditures incurred, the classification of expenses had no connection with the activity categories used in operating plans and periodic progress reports. Accounting  - 26 - terminology covering allocation of budget funds by activity was settled once and for all in 1985, but the operations engaged in subsequently did not always correspond with those envisaged iritially; this meant that they had to be designated by terms that had little connection with the facts, simply so that they would fit in with accounting conventions. For instance, expenses associated with the development and dissemination of techniques of intensive irrigated ricegrowing were posted at St. Raphael to the category "Plot Development," while at Grison Garde the same types of expense were posted to "Varietal Improvement." This type of muddle, needless to say, did absolutely nothing to facilitate management and guidance of the project. 5.07 The input and processing of accounting data previously verified by the Internal Audit Division presented no great problem, although numerous instances of having to carry forward from one document to another made the whole process quite cumbersome. It would doubtless be wise to develop a computerized system for processing accounting data which is founded on data bases that allow primary information to be classified by various methods for a wide range of users: - classification by categories of expenditure and posting, for the general balance; - classification by categories of administrative and activities expenditure, for cost accounting purposes; - classification by categories of donor expenditure; - etc. Such a system should help ODN to carry out its coordinating and control functions better, provided careful thought is given beforehand to definition of tasks and delegation of responsibilities. (B) Personnel Training 5.08 Beginning in 1987, considerable emphasis was placed on continuing practical training for project staff working in ODN's areas of action, and particularly on how to program and evaluate their own work. A large proportion of their more formal training was subcontracted out, beginning in July 1987, to the Ecole Moyenne d'Agrlculture at Dondon (EMAD). Following a survey among agents who received this type of training, it was decided to institute a monthly three-day seminar there, which became a fairly regular feature. The chief subjects dealt with were seed multiplication, fertilization of irrigated rice, conduct of demonstration trials, calculation as applied to agriculture, etc., the idea being to associate training in technical matters with training in the general discipline of thinking. Staff working in input supply outlets also received training -- in how to advise farmers on methods of employing the products sold (fertilizers, plant health products, etc.). It is regrettable that the project agronomists did not take a more active interest in training their own agents for the extension goals they themselves set, instead of leaving it to the Training Division for the  - 27 - most part. The agents often regarded these training seminars as welcome intervals in their working life. 5.09 Retraining sessions were also organized for the group of agronomists, often taking the form of organized "chats" on subjects of general or special interest. Great emphasis was placed on filling in and relying on the monitoring protocols developed for the interpretation of demonstration trials. It became clear th4ii this activity, since it takes place at the point where research and developmen- meet, can contribute greatly to the self- training of supervisory staff, provided the processes of observation and interpretation are conducted with strict scientific rigor. 5.10 Considerable effort was put into drawing up and publishing documents likely to contribute to the ongoing training of both agronomists and extension agents, although still wider use could be made of them. Many of the results of RDN II have also been incorporated into a textbook intended for use in the Faculty of Agricultural Science and Veterinary Medicine at Damien. (C) Monitoring and Evaluation 5.11 ODN's Monitoring and Evaluation Division experienced a greater degree of continuity throughout the project than any of its other organizational units. Division responsibilities remained the same at all times: to keep project managers and donors advised of progress with project operations and of problems encountered during implementation; and to evaluate the real impact of the project on rural development in the region and on the welfare of its population. Although the purpose of monitorlng and evaluation was to facilitate "steering" of the project through the execution process, the numerous changes that occurred at different levels (Government, donors, directorship and divisional management of ODN, etc.) frequently meant that full use was not made of the findings generated. 5.12 Monitoring consisted mainly in issuing regular progress reports on the full range of project components, for the benefit of project management staff (internal distribution) and ministries and donors concerned (external distribution). Description of key achievements, and comparisons against quarterly and annual planning schedules, provided the basis for assessing progress with both physical and financial execution. One difficulty Wvs that staff members directly responsible for project operations were frequently late in filing their reports. They appear to have been reluctant to respond to the concerns of the Monitoring and Evaluation Division, believing its chief function to be the tracking of staff performance, although many of them also wondered how accurately the operating data they provided would be interpreted. This type of resistance was particularly strong among the group of university- trained agronomists, who had never previously been required by their supervisory ministry (Agriculture) to engage in this type of exercise. Ultimately, of course, the quality of monitoring/evaluation work done depended on the quality of project staff members and their commitment to the soundness of the project. 5.13 Not enough attention was paid to the kind of data that might have indicated benchmark points in the ongoing analysis of change in the rural  - 28 - environment. Some indicators gave a picture of technical, economic and social changes that were direct consequences of project operations, but these were only rare observations and measurements providing any regular intelligence on changes related indirectly or quite unrelated to the project (prices, wages, employment, marketing, etc.). Market prices for agricultural products have been monitored regularly since RDN I, but the data compiled has not been processed so far. It is thanks entirely to the many evaluations of specific subject areas made at project start-up and throughout the execution process that any analysis of change in the rural world has been possible at all. 5.14 Numerous studies and surveys were undertaken, mainly at the request of the Finance Division, to asses the real impact of particular project operations on rural development. Numerous short, good-quality memoranda on the more elaborate materials of this kind were produced, and frequently based on careful examination of the Appraisal Report dating from the inter-project period. Evaluation of agricultural development operations appears to have been the chief concern, although there is an almost complete absence of studies on the programs that were seriously interrupted: sugarcane, fruit trees, soil conservation, beekeeping, etc. Assessment of the impact of access roads on agricultural development, although planned, did not eventuate; today, the resulting gap seriously limits the possibility of evaluating the overall impact of the project with all its components. 5.15 The Monitoring and Evaluation Division gradually assembled a collection of project or project-related documents. In time, this became the "imemory" and library of the project, very quickly proving to be a vital resource in view of project staff turnover and organizational changes, especially after it was reorganized to improve user access to its contents. Although it may not yet be everyone's first impulse to consult the many project documents available, it is nevertheless clear today that much remains to be done to classify the scientific and technical gains achieved through the project and to make information on them accessible to the greatest possible number of interested individuals. 5.16 The computerization process (equipment and training) was fully successful. The system is used mainly in processing survey data and setting up programming schedules. Various data bases were put together from the records of the Monitoring and Evaluation Division (e.g., irrigation-system water users, borrowers of ODN funds through the Agricultural Credit Bureau, etc.), most of which were made available to the service entities concerned. 5.17 Although the Monitoring and Evaluation Division itself was consulted as such on only very few occasions by the directors of ODN and their advisors regarding questions of general project focus, they had the benefit of numerous informal consultations. For lack of any real determination to define explicit objectives and delegate responsibilities accordingly, the planning function within ODN was never really put on any formal basis; each director simply followed his own policy, as circumstances dictated. In the end, this meant that the results of quantity surveys and other measurements of project impact could not be judged against any standard other then the general project objectives as set out in the Appraisal Report.  - 29 - 5.18 IDA supervision missions were very regular and helped to limit -- to some degree -- the effects of the changes of direction and other upheavals that affected the project, even though the political environment during the implementation period was very unsettled. IFAD kept a very low profile during RDN II, leavir3 the task of supervision to IDA. VI. FINANCIAL RESULTS 6.01 In order to facilitate payment procedures and rapidly give ODN adequate working capital, IDA and IFAD advanced sums to it in the form of deposits with the Bank of the Republic of Haiti. In 1984, they made an initial deposit of US$478,143, replenishing it on three occasions in 1985 and 1986, to the point where it totaled US$940,628. Drawings against these deposits were matched by applications for reimbursement addressed to IDA and IFAD. 6.02 The contribution from the Government of Haiti, estimated initially at US$1.6 million, had risen to approximately US$2.523 million by March 1989, or 582 more than had been anticipated. This contribution was made chiefly in the form of salaries paid directly by the Treasury to civil service staff assigned to the project; from 1987 onwards, it was increased by the basic salaries of the employees of ODN's Coordination Bureau. The Government was also responsible for the counterpart contribution to such expenditure categories as its share of the maintenance of water supply systems and its 22S of the SEPRRN invoice for road system maintenance. The pattern of government spending on the project was quite irregular, with a very marked peak in 1984/85, a period of very heavy recruitment, and a very significant trough in 1985/86, during the events which preceded and followed the fall of Jean-Claude Duvalier. The overrun in the Government's contribution was mainly the result of its meeting salary costs during the two years by which the project execution period was extended. 6.03 Cooperation arrangements with Germany and France (through GTZ and FAC, respectively) involved grants which financed a major proportion of technical assistance costs. Although estimated initially at US$2.238 million, the GTZ contribution rose to approximately US$3.1 million between October 1983 arid March 1989, an overrun very largely due to the fact that technical assistance from this quarter had to be continued beyond the originally scheduled project completion date. FAC's contribution was limited to the US$1.5 million initially estimated, its place being taken by IDA/IFAD from January 1988 onwards. 6.04 The Appraisal Report estimated total project cost at US$29,152,000. As of March 31, 1989, actual project expenditure totaled US$31,934,000, a very slight overrun (9.5Z) due mainly to payment of salaries and technical assistance costs during the period by which the project was extended. 6.05 Expenditure on ODN coordination, personnel training, and monitoring and evaluation exceeded the original estimate by US$4.2 million, an overrun of 103Z, and represented over 25% of all expenditure incurred. Two thirds of  - 30 - this sum was absorbed by payroll and technical assistance costs. Consultants alone accounted for approximately 302 of the "Coordination" category, only half of which was financed from grante. 6.06 Activities associated with agricultural development (extension, R & D, plot development, etc.) accounted for 23% of total project expenditure, with an overrun of 502 above initial estimates; over half was absorbed in payroll costs, to which was added technical assistance financed entirely from grants. Roughly half of all the Ministry of Agriculture expenditure on the agricultural development component was spent on seed multiplication and tree- crop promotion, although with little impa t at field level. More than anything else, this reflects the propensity of the project to commit to expenditure on government-owned plantations (Grand Prd, Chabert, Madras, etc.) without too much thought for the question of subsequent benefit to smallholders. Activity to promote sugarcane as a crop (limited to distribution of some 400 metric tons of young plants) alone cost US$669,000, or 9.12 of all expenditure on agricultural activities (although it is true that technical assistance, financed under a grant, accounted for 432 of this figure). In contrast, activities associated with the sale of inputs from tbe outlets set up by ODN accounted for only 6% of all expenditure on agricultural development, despite the importance of the outlets in enhancing the value of irrigated areas and the expectations among smallholders that outlets would be expanded and improved. 6.07 The irrigation and water supply budget was executed almost in its entirety for the original estimate, without any cost overruns. On the other hand, final expenditure on rural road construction and maintenance exceeded Appraisal Report estimates by a very wide margin of 65.72. 6.08 The Rural Development Fund, endowed with US$1.5 million, was utilized entirely, despite the slow pace at which loans were granted early in the project period. Nearly half of RDF resources (48%) were disbursed in just 15 months, between January 1988 and March 1989. 6.09 Expenditure on farm credit did not reach 55% of the sum initially estimated. More than anything else, this attests to the cumbersome nature of Agricultural Credit Bureau procedures, since demand for loans is invariably very heavy during crop seasons in the North and Northeast. 6.10 Beginning on April 15, 1988, the donors started gradually taking reimbursement for the deposits that had provided working capital. Since the project had committed to some expenditures that were not eligible for reimbursement from the donors (especially prior to FY87), this move caused cash-flow difficulties in the stages. Payroll costs were met as best they could be, but agricultural activities could not be carried on normally during the last months of the implementation period. VII. ECONOMIC EVALUATION 7.01 Since it was not possible during the actual course of the project to arrive at a precise assessment of the impact of all its components on  - 31 - agricultural output and economic development in the region targeted, there is also difficulty today in evaluating its overall effect, although this may correctly be regarded as clearly falling short of initial expectations (see Annex 8). 7.02 Projections of increased output from rainfed crops were notably unrealistic, since the only increments in this output traceable to the project came mainly from distribution of certain types of healthy seed (Jacmel haricot beans, cassava, CMC 40, etc.), and they remain limited all the same. The impact of the project on irrigated agriculture is much more significant, given the very appreciable increases in market-garden produce and rice output at St. Raphabl and Grison Garde. For lack of any regular follow-up data on the fate of young plants distributed to farmers, it is difficult to say whether tree-crop output (fruits, cocoa) is significantly higher than would have been the case without the project. 7.03 Farm incomes, predicted to triple in the project area, failed to do so. On a per-farm basis, incremental income is 562 less than the projected figure. The gap is much greater in rainfed cropping areas (-91Z) than in irrigated areas (-18Z). 7.04 The fact that the internal rate of return on the agricultural component was not much above zero (0.65Z) demonstrates that, taken as a whole, it was not cost-effective. Calculation of this figure was based on domestic market prices for products not suitable for interuational trade (fresh vegetables, cassava) and on border prices for all other products. Hired labor was assumed to have an opportunity cost of nil, since the largely under- employed rural labor force resorts to the labor market only after completing necessary work in its own gardens. Skilled laborers and administrative personnel were estimated at their market cost. Technical assistance financed with grant funds was excluded. Only the direct effects of the project were taken into account, all possible indirect or induced effects being excluded. 7.05 Calculated by the same method, internal rates of return for irrigated areas are much higher: 22.5% at St. Raphael and 252 at Grison Garde -- better than the opportunity cost of capital. Net discounted benefits amount to US$1.98 million and US$0.42 million for St. Raphael and Grison Garde respectively, using an interest rate of 10%, and to US$0.8 million and US$0.2 million respectively, using an interest rate of 15%. 7.06 Since rural road construction costs were higher than projected and traffic loads significantly lighter on some stretches, the internal rate of return of the road component is likely to be lower than anticipated initially (322). 7.07 The water supply component of the project was not subjected to economic evaluation since it was regarded as a source of social benefits. These are very obviously inferior to what was expected, however, since many of the facilities created are now in poor condition for lack of maintenance and spare parts.  - 32 - VIII. CONCLUSIONS 8.01 The Second Rural Development Project in the North has not had the expected effects in the economic and social arenas. There are four main reasons for this: a flawed initial assessment of the then prevailing situation (particularly ae far as rainfed farming was concerned), the lack of any master plan for development of the North and Northeast, abrupt changes in project focus as a direct result of the political upheavals of the period, and a style of project activities management that was much too bureaucratic in nature. 8.02 RDN II has nevertheless created a number of valuable assets in the form of rural roads and irrigation systems (intensive ricegrowing, market- garden crops). It has also led to better knowledge of the specific realities of the region and of its problems, besides resulting in the working up of new methods of assistance for the rural world that involve a combination of research, training and development. 8.03 It would be advisable to enhance the value of these assets still further through a possible third project focused on intensive cropgrowing in small irrigated areas and on a close linkage of research, training and development measures in parts of the country where productivity gains can reasonably be envisaged (government-owned land, certain hilly zones, etc.). However, experience gained through RDN II demonstrates that it is absolutely necessary to make the management of project activities more flexible by drawing a very clear distinction between the responsibilities of the principal (0DN) and those of its agents (government departments, local authorities, private enterprises, NGOs, etc.), and by providing the latter with substantial cash advances or working capital funds on condition that they undertake to abide by very precise contractual conditions and specifications subject to coordination, monitoring and evaluation by ODN itself.  HAITI SECOND RURAL DEVELOPMENT PROJECT IN THE NORTH (Credit 1410-HA) PROJECT COMPLETION REPORT Related IDA Credits 1/ Year of I Projects Purpose Approval status Comments First Rural Development Rural 1977 Closed The project faced implementation problems from the outset Project in the North Development and vas classified as a problem project nearly half of the (Credit 675-,9A) implementation period. The project encountered serious problems of social, agricultural, and technical nature by the weaknesses of the regional services. Agricultural targets were not met, irrigation underwent substantial reformulation during implementation, however, infrastructure components were carricd out as targeted. ODN failed to provide an analysis and a management overviev of implementation and issues. Excess tur.over of directors and technical staff. Post-Hurricane Agricultural Agriculture 1981 Closed Project appraised under abbreviated procedures, experienced Rehabilitation Project major delays during the various implementatiou stages. (Credit 1106-ha) Limited capacity of the implementation agency DARNDR to absorb financial assistance, but no reasonable alterLatives available to the urgent need to rehabilitate agriculture in the eff4cted areas. The operation was not succesful and confronted with -Imitation of counterpart funds, serious institutional constraints of DARNDR to manage the project, and BCA for delivering and control credlt operations. The project was simple and well defined in scope, however, Pilot Forestry Project Forestry 1982 Closed expectations for the "Foret des Pins* management plan were (Credit 1257-9A) too optimistic due the population pressure on the land and the difficulties in controlling illegal logging. The project succeeded in setting-up a Forestry Bureau. The project has had no inpact on the overall wood and forestry situation in Haiti, since it vas basically a pilot operation. Has had a reasonable impact on the development of human resources, has made limited contribution to improve physical environment, erosion control, and slowing down the destruction of the natural pine forests. KARNDR's performance was not satisfactory due to its weak managerial capacity, lack of timely counterpart funds, and excessive turnover in management and staff. 11 Approved before the Second Rural Development Project. nb -'.4  - 34 - Part III Tablo 2 Page I of 3 HAITI SECOND RUA.AL DEVELOPMENT PROJECT IN THE NORTH (Credit 1410-HA) PROJECT COMPLETION REPORT Prolect Timetable Item Date Date Date Planned Revised Actua&, Identification FAO/CP 03/79 Identification FAO/CP 08/80 Preparation FAO/CP 08/81 IDA Appraisal 09/82 Credit Negotiations 05/83 Board Approval 1' 08/23/83 Credit Signature 09/20/83 Credit Effective 01/19/84 01/16/84 Credit Closing 06/30/88 06/30/89 12/31/89 Project Completion 12/31/88 06/30/90 IFAD Appraisal 09/82 Board Approval ' 04/22/83 Loan Signature 09/09/83 Loan Effective 01/06/84 Loan Closing 06/30/88 06/30/89 12/31/89 Project Completion 12/31/88 06/30/90 Identification - financing of studies for project preparation; - slower project implementation of the first phase project that prevented verification of some assumptions made in the first phase; - availability of national quality staff; I/The Executive Project Summary was issued on June 17, 1983. 2/ The Executive Project Summary was issued on March 23, 1983.  - 35 - Part III Table 2 Page 2 of 3 land tenure (lack of clear ownership titles and excessive fragmentation of plots); credit disbursements to farmers estimated to be slow and based on their voluntary participation to group themselves in to SAC's (Societe Agricole de Credit); and marketing and price policies (the small producers count on local traders, agents and exporters). Preparation - weak performance of the first project prevents the financing of the second phase; - limited availability of technical agricultural packages; - land tenure; - financing of project total costs; - project very sensitive to economic rentability; - extended sugarcane cultivation in the project area; - the project rural roads will be faced with construction problems (technical studies not available); - irrigation water charges not yet envisaged; and - limited availability of agricultural credit to farmers. ADpraisal - agricultural credit (BCA may not be expected to become financially viable during project implementation); - retroactive financing (a number of small technical studies should be completed before the start of the second project); - cost recovery in irrigation (it is unlikely that investment costs can be fully recovered due to the conflicting water legislation and the unwillingness of farmers to pay); and - lack of agricultural packages, agricultural actions would focus only in seven zones, farms in the outside zones would be included if they show adequate potential; and  - 36 - Part III Table 2 Page 3 of 3 institutional weaknesses and adequacy of ODN's staff and accounting system. Negotiations counterpart funds for O&M of roads, and water supply and irrigation systems; and water charges in project irrigation systems (a provisional irrigation water charge will be introduced until a new system is in place). Cost Effectiveness - transfer cf ODN's first project credit portfolio to BCA; - execution of working agreements between the agencies participating in the project; - employment of a financial adviser for ODN; and - establishment of a Special Account. Credit Closina - collection of maintenance costs in the St. Raphael irrigation system has improved, but the overall percentage is still a mere 151; - some agricultural activities in the St. Raphael irrigation scheme such as seed multiplication, fruittforestry trees propagation, soil conservation, animal traction and apiculture have been hindered by lack of resources and support of DARNDR and ODN management; only 401 of accepted subprojects to be financed with the Rural Development Fund had been achieved, by deficiencies on execution and investments and the lack of an adequate monitoring system; project credit funds were used by farmers through BCA, but the lack of control and low recovery from the farmers, resulted in the loss of capital; agricultural production in zones not assisted by foreign specialists had not improved, because of the deficiency of DARNDR's organization, low quality and experience of local extensionists, and the limited comprehension of illiterate farmers.  - 37 - Part III Table 3 HAITI SECOND RURAL DEVELOPMENT PROJECT IN THE NORTH (Credit 16410-RA) PROJECT COMPLETION REPORT Credit and Loan Disbursements .. . . .. . . ... I..... ... (US$ million) _____._ _____.__............. 0........................._.___.___.___................_. .............___._. __............ Fiscal Year (FY) 1/ Items 1984 1 1985 1986 1 1987 1 1988 1 1989 j 1990 Total Appraisal Estiate I I IDA 0.7 j 2.3 4.6 5.0 6.5 0.0 0.0 19.1 IFAD 0.6 | 1.0 1.1 1.1 1.2 0.0 0.0 5.0 Actual IDA 0.7 2.6 4.7 5.1 3.8 2.3 1.4 20.6 IPAD 0.0 0.7 1.2 0.6 0.9 1.3 0.6 5.2 Actual as X of Appraisal Estimate IDA 100 113 102 102 58 - 108 i FAD 0 67 109 50 75 _ _ 104 Date of Final Diabursements May 25, 1990 Cancelled at closing IDA US$39,000 IFAD US$364,820 1/ Dank FY (July let to June 30)  - 38 - Part III Table 4. Page 1 of 2 HAITI SECOND RURAL DEVELOPMENT PROJECT IN THE NORTH (Credit 1410-HA) PROJECT COMPLETION REPORT A. Project Costs 11 @.._..._........... (US $'000) _._...._.____....................._ _ ...............__..._.,_,.....................___.._.._____.. Appraisal Actual Actual as I Category Estimates | as lof Appraisal USS 2/ | 05/31/90 | Estimate. 1. Civil Works (a) Part A, D and E 7,526 10,683 142 (b) Part B, C and C 161 233 145 2. Vehicles and Equipment (a) Parts A, D and E 1,803 1,488 83 (b) Part. B, C, G and I 635 780 123 3. Consultant Services (a) Parts A, D and E 4,038 2,515 62 (b) Parts B.2, C and H 2,637 2,331 88 (e) Part J (iii) and (iv) 162 1,024 632 4. Local Salaries Parts B, C, G, and H 2,046 3,689 180 5. Adn4nistration and Vehicle Operation (a) Parts A, E, and F 1,145 3,305 289 (b) Parts B, C, G, and H 2,482 2,923 118 6. Agricultural Credit Part C 344 341 99 7. Maintenance of roads Part D 1,580 1,723 109 8. Maintenance of Water Works Part E.3 397 393 99 9. Rural Development Fund 1,303 1,634 125 10. Project Preparation vorks 302 299 99 11. Special Account 497 _ 0 12. Unallocated 2,093 . 0 Subtotal 29,151 33,361 114 1/ Exchange rate 1US$ a SCrds for local currency 2/ Exchange rate at the time of Appraissal I SDR n 1.0798 US$ Exchange rate at the time of IFAD Loan approval ISDR - 1.0753 USS  HAITI SECOInD RURAL DYEIV.OIEUT PROJECT. IN S8Z WORT (Credit 1410-H) PROECT COnPLMC" REPRET S. Project Fina0ct8a Appraisal Estimates Actual tul f Category Il I 1J RFA | FAC WV Total IDA IFAD RIVA | WV Tota l tffatl 6 P narts an 1f4i 1,?0 11,49 log 6699 14i812 2. Vehicles and Vehicle ,M rato