Argentina - Agricultural Services and Institutional Development Project

 ICRR 10372 Report Number : ICRR10372 ICR Review Operations Evaluation Department 1. Project Data : OEDID: OEDID : L3297 Project ID : P006009 Project Name : Agricultural Services and Institutional Development Project Country : Argentina Sector : Agro-industry & Marketing L/C Number : Ln. 3297-AR Partners involved : IDB, Japanese PHRD Grant Prepared by : Ridley Nelson, OEDST Reviewed by : John Heath Group Manager : Gregory Ingram Date Posted : 06/30/1999 2. Project Objectives, Financing, Costs and Components : Total Project Cost at Appraisal: US$83.2m; Total Project Cost at completion: US$121.3m; IBRD Financed at Appraisal: US$33.5m; IBRD Financed at Completion: US$32.9m. Main objective was to improve Argentina's ability to compete in export markets for basic and high value added agricultural, horticultural, livestock, forestry, and fisheries products . The aim was to: (a) establish mechanisms to improve the efficiency, productivity, impact, and accountability of technical services while achieving savings in operation; and, (b) diversify the agricultural export mix by strengthening marketing, export promotion, technical and research services for a variety of agricultural products through joint public and private -sector interventions. Main components were: strengthening animal disease control, especially foot and mouth disease, through vaccination programs; strengthened phyto -sanitary programs to maintain disease -free and insect pest-free zones, and certify levels of chemical residues; improve wool classification; strengthen monitoring of sustainable fish catches; promote high value -added meat exports with the private sector; improve research, including biotechnology; provide training to strengthen technical and marketing skills; and, assist the private sector to venture into new export markets. 3. Achievement of Relevant Objectives : The project achieved most of the main objective to improve Argentina's ability to compete in export markets . However, notwithstanding a detailed institutional capacity gaps analysis during preparation, institutional strengthening interventions had limited impact and were poorly monitored . 4. Significant Achievements : There were a number of significant achievements . In particular, the number of foot and mouth disease outbreaks fell from above 1000 to 0, the percent of beef exported with a quality stamp rose from below 25 percent to 100 percent, 4 new citrus markets were entered, the percentage of self financing for operating costs for services reached between 70 percent and 90 percent, participation in trade fairs rose substantially, and, fruit fly was eradicated in Patagonia . 5. Significant Shortcomings : The main shortcoming was in the area of institutional strengthening . Project Implementation Units were setup within a number of parent agencies. In most cases, these were viewed as isolated groups of well -paid consultants and improved management skills were not transferred . Project co-ordination and institutional strengthening costs rose from six percent of total project costs at appraisal to 20 percent at completion, with limited longer -term payoff. Only in cases where the unit was embedded in a new agency, and where therefore the unit and the agency grew together, was there more success in this area . Performance indicators in the SAR related largely to project output rather than the impact on the institutions and the quality of the services they provided . While generally Bank performance was good, there was weakness in the supervision of this important institutional area . While the extent of cost recovery and producer involvement, on balance, gives reason for rating sustainability likely, the efficiency of public services will remain an unfinished agenda. 6. Ratings : ICR OED Review Reason for Disagreement /Comments Outcome : Satisfactory Satisfactory Institutional Dev .: Partial Modest Sustainability : Likely Likely Bank Performance : Satisfactory Satisfactory Borrower Perf .: Satisfactory Satisfactory Quality of ICR : Satisfactory 7. Lessons of Broad Applicability : 1. Thorough analysis of key constraints to improved agricultural export performance can have high payoffs . 2. Critical technical issues such as animal and plant disease may be at least as important as economic policy reform during liberalization. 3. Marrying legislation, budgetary support, and technical skills is needed to enforce restrictions in such areas as fisheries . 4. Institutional strengthening needs to give priority to leaving behind an improved institutional structure and improved skills and processes rather than simply to the immediate expediency of getting a project implemented. 5. Temporary enclaved project implementation units in agencies do not contribute to sustainable institutional reform and may even delay it . 8. Audit Recommended? Yes No Why? A number of potentially useful lessons related to export expansion, privatization, institutional reform, and increasing producer involvement . Possibly some lessons for CDF. 9. Comments on Quality of ICR : A very thorough and balanced assessment covering the key issues . Ideally, an economic analysis would have been helpful in assessing performance but we accept that causality would have been very difficult to establish . The high levels of cost recovery offer some evidence of a strong benefit steam .