Tanzania - Second National Agricultural Extension Project

Document of The World Bank Report No: 29424 IMPLEMENTATION COMPLETION REPORT (IDA-28990) ON A CREDIT IN THE AMOUNT OF SDR 21.5 MILLION (US$31.1 MILLION EQUIVALENT) TO THE UNITED REPUBLIC OF TANZANIA FOR A NATIONAL AGRICULTURAL EXTENSION PROJECT II June 22, 2004  CURRENCY EQUIVALENTS (Exchange Rate Effective November 2003) Currency Unit = Tanzanian Shilling (Tsh.) 1 Tsh. = US$ .001 US$ 1 = 1,018 Tsh. FISCAL YEAR July 1 - June 30 ABBREVIATIONS AND ACRONYMS ASDP Agriculture Sector Development Program BEO Block Extension Officer (Zanzibar) BMW Bi-Monthly Workshop BTS Bi-Monthly Training Sessions CAS Country Assistance Strategy CBO Community-Based Organization DALDO District Agriculture & Livestock Development Officer DCA Development Credit Agreement DESC District Extension Steering Committee DMT District Management Team FAMO Farmer Motivator FEPU Farmers Education and Publicity Unit FFS Farmer Field School FRG Farmer Research Group GOT Government of the United Republic of Tanzania GOZ Revolutionary Government of Zanzibar ICB International Competitive Bidding ICR Implementation Completion Report IDA International Development Association IFAD International Fund for Agriculture Development IPPM Integrated Pest and Production Management IT Information Technology KATI Kizimbani Agriculture Training Institute (Zanzibar) LGA Local Government Authority LITI Livestock Training Institute M&E Monitoring and Evaluation MAC Ministry of Agriculture and Cooperatives MAFS Ministry of Agriculture and Food Security MANREC Ministry of Agriculture, Natural Resources, Environment and Cooperatives in Zanzibar MATI Ministry of Agriculture Training Institute MCM Ministry of Cooperatives and Marketing MOU Memorandum of Understanding MTS Monthly Training Sessions MTR Mid-Term Review MWLD Ministry of Water and Livestock Development NAEPII National Agriculture Extension Project Phase II NALERP National Agriculture and Livestock Extension Rehabilitation Project NCB National Competitive Bidding NGO Non-Government Organization PMU Project Management Unit  PORALG President's Office Regional Administration and Local Government PSC Project Steering Committee RALDO Regional Agriculture and Livestock Development Officer SAR Staff Appraisal Report SDR Special Drawing Right SHERFSP Southern Highlands Extension and Rural Financial Services Project SMS Subject Matter Specialist SUA Sokoine University of Agriculture T&V Training and Visit VEO Village Extension Officer WEO Ward Extension Officer WDC Ward Development Committee ZCC Zonal Communication Centre Vice President: Callisto Madavo Country Director Judy O'Connor Sector Manager Karen Mcconnell Brooks Task Team Leader/Task Manager: Mohammed Taqi Sharif  TANZANIA NATIONAL AGRICULTURAL EXTENSION PROJECT II CONTENTS Page No. 1. Project Data 1 2. Principal Performance Ratings 1 3. Assessment of Development Objective and Design, and of Quality at Entry 2 4. Achievement of Objective and Outputs 6 5. Major Factors Affecting Implementation and Outcome 11 6. Sustainability 13 7. Bank and Borrower Performance 14 8. Lessons Learned 16 9. Partner Comments 17 10. Additional Information 18 Annex 1. Key Performance Indicators/Log Frame Matrix 19 Annex 2. Project Costs and Financing 22 Annex 3. Economic Costs and Benefits 24 Annex 4. Bank Inputs 26 Annex 5. Ratings for Achievement of Objectives/Outputs of Components 27 Annex 6. Ratings of Bank and Borrower Performance 28 Annex 7. List of Supporting Documents 29 Annex 8. Institutional Framework and Operations of Extension Services 30 Annex 9. Experience of NAEP II Pilot Initiatives Component 36 Annex 10. Footnotes 40 Annex 11. 2003 Beneficiary Assessment - Summary of Results 41 Annex 12. Executive Summary of Government of Tanzania ICR 43 Annex 13. Summary of Revolutionary Government of Zanzibar ICR 54  Project ID: P002753 Project Name: NAT EXT PROJ PH.II Team Leader: Mohammed Taqi Sharif TL Unit: AFTS1 ICR Type: Core ICR Report Date: June 23, 2004 1. Project Data Name: NAT EXT PROJ PH.II L/C/TF Number: IDA-28990 Country/Department: TANZANIA Region: Africa Regional Office Sector/subsector: Sub-national government administration (82%); Agricultural extension and research (18%) Theme: Rural services and infrastructure (P); Decentralization (S); Participation and civic engagement (S); Other public sector governance (S) KEY DATES Original Revised/Actual PCD: 09/14/1995 Effective: 10/08/1996 10/08/1996 Appraisal: 02/09/1996 MTR: 12/21/1998 12/12/1999 Approval: 07/11/1996 Closing: 12/31/2001 12/31/2003 Borrower/Implementing Agency: GOVT/MIN OF FINANCE Other Partners: STAFF Current At Appraisal Vice President: Callisto E. Madavo V.E. Kimberley Jaycox Country Director: Judy M. O'Connor James W. Adams Sector Manager/Director: Karen Mcconnell Brooks Sushma Ganguly Team Leader at ICR: Mohammed Taqi Sharif Satish Kumar ICR Primary Author: David Ivory (FAO-CP) and Malathi Jayawickrama 2. Principal Performance Ratings (HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HL=Highly Likely, L=Likely, UN=Unlikely, HUN=Highly Unlikely, HU=Highly Unsatisfactory, H=High, SU=Substantial, M=Modest, N=Negligible) Outcome: S Sustainability: L Institutional Development Impact: SU Bank Performance: U Borrower Performance: U QAG (if available) ICR Quality at Entry: U Project at Risk at Any Time: Yes Bank Performance and Borrower Performance are considered 'marginally' unsatisfactory.  3. Assessment of Development Objective and Design, and of Quality at Entry 3.1 Original Objective: Context. Agriculture accounts for about half of Tanzania's GDP and exports, and hence its performance has a significant effect on output, income and poverty levels. Over the 1990s, agricultural trend growth was 3.6 percent, compared to average annual agricultural growth rates of 2.9 and 2.1 percent in the 1970s and 1980s (Tanzania, Accelerating Agricultural Growth and Poverty Reduction, Background CAS Note, February 2004). Agricultural exports grew at an annual rate of over 7 percent per year, although this rate has slowed in recent years due to declining world market prices. Food crop production has grown at about the rate of population growth (2 percent) and accounts for roughly 65 percent of agricultural GDP, with cash crops accounting for 10 percent. Tanzania has made significant progress towards the Government's target of sustained annual agricultural growth of 5 percent. The five-year moving average agricultural GDP growth rates were about 3.3 percent from 1991-2000, and 4.3 percent over 1999-2003. Five Year Average Agricultural GDP Growth Rates (%) 5.0 4.5 (%) Rate 4.0 Growth 3.5 GDP 3.0 Agricultural2.5 2.0 1991-5 1992-6 1993-7 1994-8 1995-9 1996-2000 1997-2001 1998-2002 1999-2003 Five Year Moving Average Recent improvements in food crops have been attributed to technological change. NAEPII supported advances in several of these crops--maize, the most important (accounting for over 20 percent of total agricultural GDP) followed by rice/paddy, beans, cassava, sorghum, and wheat. Adoption of improved varieties, especially in maize, and better land management practices have increased overall yields substantially in recent years, to record annual average growth rates of around 4 percent for food crops. Yet, Tanzania's productivity levels for a variety of agricultural crops are much lower than those observed in other countries (Concept Note for the Tanzania Country Economic Memorandum, draft, June 10, 2004). An International Food Policy Research Institute review in 2000 showed that Tanzania has a strong comparative advantage in maize and rice/paddy, and all the traditional export crops (cashew, coffee, cotton, tea, and tobacco). Improved productivity, through both technical efficiency and technological change, will play a major role in increasing Tanzania's future agricultural output and income, and reducing poverty. NAEPII was prepared and implemented in order to contribute to the ongoing process of agricultural growth. - 2 -  Objectives. The project's objective was to "continue to improve the delivery of extension services to smallholder farmers for increasing their incomes and productivity, while improving its relevance, sustainability and cost effectiveness" (SAR, June 5, 1996). NAEPII sought to achieve this by continuing the essential elements of the training and visit system (T&V) of agricultural extension introduced in earlier projects, but with emphasis on a participatory farmer group approach, supported by more knowledgeable extension staff and farmers, improved systems of information transfer to farmers, and pilot initiatives to enhance technology transfer, extension management, input supplies and farmer empowerment.1/ NAEPII's design aimed to: (i) support efforts to reshape the role of the Ministry of Agriculture and Cooperatives (MAC), limiting its core functions at central level to policy formulation, regulation, extension and research, and to strengthen its extension service at the field level; (ii) increase participation and enhance farmers' role in the generation and dissemination of technology; (iii) develop the human resource base through the training of farmers and extension staff; and (iv) increase agricultural growth and smallholder income. These objectives reflected the Government's priorities, articulated in the National Agriculture and Livestock Policy, and the World Bank's Country Assistance Strategy (CAS). Accelerating agricultural growth, with emphasis on agricultural research and extension, livestock health and natural resources management, is at the core of the Bank's strategy to support growth through poverty reduction. 3.2 Revised Objective: The Regional Administration and Local Government Act of July 1997 was enacted a year after project approval. Implementation responsibility for extension service delivery was transferred from MAC to the Local Authorities (LAs) covering regional administrations, district, municipal and urban councils. This resulted in the establishment of 119 autonomous district extension services and a reduced role for MAC. Following the Mid-Term Review (MTR) in December 1999, the Bank and the Government reached agreement on the need to amend the project's objectives in line with the Government's decentralization strategy. The development objective was revised to "continue to improve the delivery of extension services to smallholder farmers in the Borrowers territories by focusing on the enhancement of the technical and administrative capacity of the LGAs to provide such extension services". This significantly changed the emphasis of the original objective, from developing an extension system that would directly result in increasing agricultural output and incomes of smallholders, to creating an institutional arrangement that would better facilitate extension services. MAC was subsequently restructured (in 2000) to form three separate ministries--Ministry of Agriculture and Food Security (MAFS), Ministry of Water and Livestock Development (MWLD), and the Ministry of Cooperatives and Marketing (MCM). In general, decentralization was viewed by the Bank as a positive move. The restructuring of MAC, however, was unhelpful to support the decentralization process, as central responsibility for, and contribution to, agriculture and livestock extension services was further split. The Development Credit Agreement (DCA) was amended on several occassions.2/ The project sought to achieve the revised objective through: (i) developing a Vision/Strategic Framework for Extension for the next decade, consistent with the changed institutional landscape; (ii) identifying the needs of selected LGAs (limited in geographic coverage) and building their administrative and technical capacity to effectively deliver extension services; (iii) enhancing training for staff of these LGAs, and farmers, on their roles in a participatory, demand-driven and decentralized extension delivery system; (iv) developing a participatory, demand-driven extension system that would particularly respond to smallholder needs through a variety of pilot initiatives; (v) ensuring the development of extension and technological packages appropriate to poor farmers and women; and (vi) strengthening and enhancing extension support for input supply and marketing, and organizing farmers to address these issues. - 3 -  Original and Revised Project Scope. The original project focused on strengthening extension services of MAC in the 16 regions supported under the National Agriculture and Livestock Extension Rehabilitation Project (NALERP). The four remaining regions in mainland Tanzania were covered by the IFAD-supported Southern Highlands Extension and Rural Financial Services Project (SHERFSP). Following completion of SHERFSP in August 1999, NAEPII's geographic scope was expanded to cover all 20 regions of mainland Tanzania. At restructuring in early 2000, the proposed focus of NAEPII was only on 56 districts (out of 119 districts in the 20 regions of mainland Tanzania) identified for Agriculture Extension Reform in the remaining time to project completion. In May 2000, the geographic scope was further expanded to include the islands of Zanzibar, to enable the Revolutionary Government of Zanzibar (GOZ) to complete critical activities left unfinished by the phased-out IFAD-funded Smallholder Support Project (1991-1997). 3.3 Original Components: The original project had four components. (a) Institutional Strengthening (US$15.7 million). This component sought to continue reorganizing and strengthening the extension services of MAC headquarters and field services to strengthen districts' roles and improve farmer linkages through: (i) increasing the number of full-time Subject Matter Specialists (SMSs) and deploying them to district and lower levels; (ii) establishing a Project Steering Committee (PSC) and District Extension Steering Committees (DESCs); (iii) retrenching unsuitable Village Extension Officers (VEOs); (iv) establishing an M&E system; and (v) training M&E staff. The Project also planned to provide vehicles, equipment and furniture, rehabilitation of some field offices, construction of a limited number of residential houses, and cover operating costs of vehicles, field supervision and maintenance. (b) Extension Education and Training (US$12.6 million). This component aimed to enhance the effectiveness of technology transfer, create more effective farmer-extension-research linkages, develop appropriate support to farming, and address gender issues in agriculture. NAEPII aimed to achieve this through: (i) Staff Training, including formal education at degree and diploma level, short courses, refresher courses, Bi-monthly Workshops (BMW) and Monthly Training Sessions (MTS) for field extension staff, and local and overseas study tours and training; (ii) Farmer Training, including residential courses, on-site training, farmer study tours, demonstrations and provision of extension materials for farmers; and (iii) Training Support, including establishing a Training Coordination Committee (TCC) to finalize annual training plans, review training curricula and progress, facilitate networking between training institutes, and give directions for overall management of training support. The Project planned to finance training costs, a needs assessment study, M&E operations, and training institutes, covering teaching aids, farm and office equipment, audio-visual aids, and civil works for rehabilitating selected facilities. (c) Communications Support (US$2.9 million). This component supported the government's strategy to decentralize information management to the zonal level, to enable an effective response to area-specific information needs of local farming communities, through: (i) establishing six Zonal Communication Centers (ZCCs); (ii) reorganizing the MAC Field Extension and Publicity Unit (FEPU) in Dar es Salaam; (iii) a needs assessment study for communications development; (iv) overseas and local training for selected staff; and (v) technical assistance to train core ZCC staff. NAEPII planned to finance civil works, communication support equipment, vehicles, materials production, and field visits. (d) Pilot Initiatives (US$1.7 million). The Pilots attempted to improve extension management, technology transfer, farmers-extension-research linkages, participation of other providers in extension delivery, seeds - 4 -  production and input supply, farmer empowerment and gender impact. A Government task force identified nine pilot initiatives at project appraisal, with additional initiatives to be identified during implementation. 3.4 Revised Components: The restructured project retained the four original components. However, it reoriented activities and reallocated budgets between components, to emphasize capacity building of extension services in the LGAs under the first component (additional US$6.5 million allocated), and reduce support to extension education and training, and communications, under the second and third components, respectively. Pilot initiatives were expanded (an additional US$5.0 million). These changes applied to the 20 regions in mainland Tanzania. In Zanzibar, the change in project scope to include strengthening GOZ institutions required the allocation of a separate budget (US$2.5 million) from the 'unallocated' category of NAEPII. GOZ's counterpart fund contribution was US$100,000. While Zanzibar was not considered an additional component in the project DCA, it was considered separately, for both convenience and political reasons, as it is in this ICR. This component supported adaptive research on selected crops, improving human resource capacity of extension staff and farmers, developing a more participatory extension system and improving institutional facilities. 3.5 Quality at Entry: The project was rightly predicated on the need to continue support for agricultural extension services initiated under NALERP, but it did not internalize major policy and strategy changes regarding decentralization. Although the SAR mentions that "Government initiatives under the civil service reform program are aimed at decentralizing responsibilities and functions to the districts" (SAR, page 8), the project was designed on the assumption that MAC would continue to control extension services from the center. Given what was known at the time, the project design should have: (i) embraced decentralization from the outset and been more proactive in the dialogue on decentralization; and (ii) incorporated some flexibility in terms of institutional arrangements and the flow of funds. Consequently, the project design became rapidly obsolete and required major restructuring after one year of implementation. The project design exhibits an element of internal contradiction, retaining overall commitment to the T&V system, but including features of participation and demand responsiveness suggesting doubts as to the soundness of the T&V approach. During the period of project preparation, considerable debate was occurring throughout the Bank and the developing world on the merits of T&V, in terms of impact, cost effectiveness and sustainability.3/ During the early period of implementation of the project, the debate was largely resolved through the completion of evaluative work by OED, documenting high cost and low sustainability of the T&V system.4/ At the time of project design, however, senior and highly-placed advocates of the T&V system discouraged project teams from rejecting T&V in favor of less centralized and more demand-responsive approaches. Although the project files do not contain documentary evidence of the debate with regard to this particular project, it is likely that the overall intellectual climate within the Africa Region with regard to agricultural extension influenced project design, and led to retention of design elements that were subsequently dropped during implementation. The SAR does not include Key Performance Indicators (KPIs). The Memorandum of the President (MOP) has an abbreviated and incomplete set of KPIs. A well-defined set of KPIs should have been set out at preparation in order to guide the surveys conducted under NAEPII, especially the baseline and final assessments, in gathering information needed to monitor project outcomes. At the time NAEPII was approved, NALERP had been under implementation for eight years (although the ICR for NALERP was completed only in May 26, 1998). The Bank had ample opportunity to incorporate the lessons emerging - 5 -  under the previous project. These lessons included: the costly aspects of the T&V system; and the importance of clearly identifying meaningful performance indicators. These lessons were not reflected in the design of NAEPII. Thus, overall quality at entry is considered unsatisfactory. 4. Achievement of Objective and Outputs 4.1 Outcome/achievement of objective: Did NAEPII satisfactorily achieve its original objective of improving extension delivery to smallholder farmers for increasing their productivity and incomes? A comprehensive assessment of project outcome is difficult for several reasons including: (i) the weakness in KPIs noted above; (ii) the complexity in separating the effects of NAEPII and other variables on farmer productivity and incomes; and (iii) the lack of comparable information on the farmers' situation before and after the project in the four assessment surveys conducted under NAEPII -- Baseline survey (1996), Beneficiary survey (1999), Household asset surveys (2001) and the Final Beneficiary Assessment study (2003). These surveys evaluate different populations of farmers, districts and villages in successive rounds, and lack the information needed to evaluate outcomes in relation to objectives. Also, 2002-03 was a drought period, affecting overall national yields and the Final Beneficiary Assessment data. Another factor was the change in project objectives upon restructuring, which shifted emphasis to monitoring institutional capacity development rather than changes in agricultural production in the latter years. Given these limitations, a table of the main output and outcome indicators has been constructed in Annex 1, and gives an indication of project achievements. Almost without exception, the adopted technological packages as piloted by the micro projects led to more than doubling farm crop and livestock yields. The ultimate impact on incomes, however, depended on the market situations. In most cases, notably for seasonal and perishable goods (e.g. milk, vegetables and fruits), increased production resulted in lower producer prices. Nevertheless, the reduced prices were more than compensated by the increased volume, therefore leading to improved incomes. This emphasizes the need for extension agents to be able to advise on marketing as well as on production. The quality of inputs also affected farmer incomes (see Lessons from Experiences of NAEPII Micro Projects, and Beneficiary Assessment--Annexes 9 and 11 for details). What is not in dispute is the fact that where farmers opted to use improved technological packages, they experienced higher yields and better incomes, despite the setbacks mentioned above. Farmers gave evidence of how the increased disposable income had helped them to: