Colombia - Integrated Nutrition Improvement Project

Report No. 1583-CO Colombia: Appraisal of an Integrated Nutrition Improvement Project August 29, 1977 Agritulture and Rural Development Department Nutriton Division FOR OFFICIAL USE ONLY Document of the World Bank This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS (at the time of appraisal and used in this report) Currency Unit = Colombian Peso (Col$) Col$ 1 = US$0.02777 Col$ 1,000 = US$27.77 Col$ 1,000,000 = US$27,770 4- WEIGHTS AND MEASURES Metric System GOVERNMENT OF COLOMBIA FISCAL YEAR January 1 to December 31 GLOSSARY OF PRINCIPAL ABBREVIATIONS (see next page)  FOR OFFICIAL USE ONLY COLOMBIA INTEGRATED NUTRITION IMPROVEMENT PROJECT Glossary of Principal Abbreviations ACPO - People's Cultural Action Program Caja Agraria - Agricultural, Industrial and Mining Credit Bank CDR - Ministry of Education Rural Development Center CIDA - Canadian International Development Agency CNAN - National Food and Nutrition Council CONPES - National Council for Economic and Social Policy DIGIDEC - National Community Developmentc Program DNP - Department of National Planning FAO - Food and Agriculture Organization, United Nations FEDECAFE - National Federation of Coffee Growers of Colombia FONADE - National Fund for Economic Delvelopment ICA - Colombian Agricultural Institute ICBF - Colombian Institute for Family Welfare ICFES - Colombian Institute for the Promotion of Higher Education IFI - Industrial Development Corporation IIT - Institute for Technological Research INAS - National Institute of Health INCORA - Colombian Institute for Agrarian Reform IRDP - Integrated Rural Development Program MOH - Ministry of Health PAHO - Pan American Health Organization PAN - National Food and Nutrition Plan PINA - Integrated Applied Nutrition Program PRONENCA - National Program of Applied Nutrition Education and Supplementary Feeding SENA - National Apprenticeship Service UNDP - United Nations Development Program UNICEF - United Nations Childrens' Funel USAID - United States of America Agency for International Development WHO - World Health Organization, United Nations This document has a ratricted distribution and may be used by recipients only in the performance of their omcial duties. It contents may not otherwise be disosed withou t World Bank authorization.   COLOMBIA INTEGRATED NUTRITTON IMPROVEMENT PROJECT TABLE OF CONITENTS Page No. SUMM,ARY AND CONCLUSIONS .................................... i - v I. INTRODUCTION .............................................. II. BACKGROUND ................................................ 2 A. The Nutrition Situation .... .............2 B. Earlier Actions to Counter Malnutritioni ......... 4 C. The National Food and Nutrition Plan ........... 6 D. Scope of the Proposed Project . . 8 E. Linkages with Donor Programs . . 8 III. TILE PROJECT .................,.e.............. 9 A. Goals and Strategy .............................. 9 B. Detailed Project Features .... ................... 11 - Health Services .............................. 11 - Water Supply and Sanitation .... .............. 11 - Nutrition Education .......................... 12 - Family Gardens ............................... 13 - Applied Food Technology and Quality Control .. 14 - Bolivar Test cf Nutrition System ............. 15 - Monitoring and Evaluation .................... 16 Program Coordination and Administration ...... 17 - Technical Assistance ......................... 18 IV. COSTS, FINANCING, PROCUREMLNT AND DISBURSEM4ENTS .......... . 19 A. Costs ...... 19 B. Financing .19 C. Fiscal Feasibilly.21 D. Procur*-ment ..................................... 22 E. Disbursement, Accounts and Auditing . . 23 F. Retroactive Financing ............ .. ....... 24 V. ORG&NIZATION AND MANAGEAENT ................... ............ 24 A. Administration and Coordination . . 24 B. Programming and Budgeting ....................... 24 C. Project Execution .................................. 26 VI. BENEFITS, JUSTIFICATION AND RISKS ............... ............ 27 VII. ASSURANCES . ................................................ 29  TABLE OF CONTENTS (Continued) ANNEXES 1. Nutritional Status in Colombia 2. Identification and Selection of Beneficiaries 3. Food Coupon Distribution System 4. Health Services 5. Water Supply and Sanitation 6. Nutrition Education 7. Family Gardens 8. Applied Food Technology and Quality Control 9. Monitoring and Evaluation 10. Project Organization 11. Calculations of Economic Benefits 12. Consultant Schedule 13. Project Cost Estimates 14. Estimated Schedule of Disbursements MAP - Areas for Proposed Nutrition Project  COLOMBIA INTEGRATED NUTRITION IMPROVEMEN' PROJECT Summary and Conclusions 1. The Government of Colombia regards widespread malnutrition among its poorest populations as a major obstacle to improving human productivity. It is one of the country's most acute development problems. Accordingly, the Government has incorporated a National Food and Nutrition Plan (PAN) into the general development strategy which has produced steady and notable economic growth over the last two decades, accompanied in recent years by steps to improve income distribution. PAN draws on previous Colombian nutrition experience to formulate a program which focuses clearly on the needs of target groups. It recognizes that income, production and emplcyment increases alone are not sufficient to assure adequate nutrition for the rural and urban poor. Therefore, it seeks to raise living standards, nutrient intakes and the productivity of the poorest groups through combined measures in the agricul- tural, industrial, health, education and social welfare sectors. 2. Malnutrition in Colombia is caused by a combination of factors. Despite steady increases over time, low incomes restrict effective food demand. Limited access to health services, poor environmental sanitation and unsafe water contribute to diseases which result in significant nutrient losses, particularly among pre-school children, compounded by inappropriate food habits such as premature weaning. 3. The most acute nutrition problem is protein-calorie malnutrition (PCM), which affects approximately four million or an estimated two-thirds of all children under seven years of age and at least an estimated 1.5 million women of child-bearing age. Although Colombia's aggregate availability of calories per capita appears to be adequate, almost 20% of the population consumes 60% or less of the recommended amount. Protein availability is 17% under per capita recommended intakes. Related nutritional problems include iron-deficiency anemia and other mineral and vitamin deficiencies. 4. Particularly vulnerable are the poorest, especially infants, pre- school children and pregnant and lactating women, although older children and adults also suffer from chronic calorie shortages. The adverse effects of malnutrition on the physical and mental development of the child, on the learning ability and school attendance of children and their subsequent productivity as adult workers have been documented by Colombian nutritionists. Malnutrition is also a prime cause of Colombia's relatively high rate of infant and child mortality (70 per 1,000 live births), both directly and as a contributing factor in disease-related deaths. Among lhe poorest half of the population, nutrition-related mortality of infants and children under five is estimated at double that of the general population and would appear to limit prospects for significantly reducing fertility rates further. 5. PAN deals with these problems through two major programs: nutrition and integrated rural development, the latter already supported by the Bank and  - ii - other donors. The nutrition program which will be fully implemented nation- wide by 1985 seeks to increase the productive capacity and well-being of the poorest 30% of the population through a combination of measures directed principally at low-income communities and groups within them at highest nutritional risk. It includes several innovative features. First, it is an integrated approach, seeking to combat malnutrition through multi-sectoral programs. Second, it involves a new food distribution system directed speci- fically at the needs of the nutritionally most vulnerable groups. Third, it uses the primary level of the new national health care system as a conduit for nutrition surveillance and delivery of integrated nutrition/health services including nutrition education, food supplements, environmental sanitation, promotion of family gardens and family planning services. The primary health measures rely principally on para-professionals recruited from within the communities they serve and emphasize preventive rather than curative care delivered through community health posts. 6. The Government requires Bank assistance to develop and carry out the nutrition program in its initial stages; to determine its nutritional and cost-effectiveness; to refine it through monitoring, evaluation and testing for expansion to national coverage, and to strengthen the managerial base to plan and execute it. The Government has requested Bank support to inaugurate the program in seven of Colombia's 22 departamentos and the Federal district of Bogota through a four-year project which would consist of a combination of action programs and supporting activities affecting food demand, supply and utilization. The action programs would be directed at populations in low- income target communities identified by economic and social criteria. Supporting activities would take place nationally. 7. At the community level, the project would assist the Government through financing to: (i) Incorporate delivery of nutrition interventions into the health system, using strengthened community health services as a conduit for: (a) nutrition education to improve food prepara- tion and consumption habits; (b) food supplements to reduce the gap between dietary needs and intake of the nutritionally most vulnerable groups, through a program of coupons (representing part of the value of the supplements) delivered by health personnel; and (c) improved environmental sanitation through latrines for waste disposal; (ii) Install potable water supplies to prevent diarrheal diseases, as well as water-borne parasitic and other infections, which cause high infant mortality rates and produce significant nutrient losses, and  - iil - (iii) Increase production and consumption of home-grown nutritious foods through financing of a family gar- dens program. 8. At the national level, the project would assist the Government through: (i) Applied Food Technology and Quality Control -- Improve the use of available food in low-income areas and stimulate production of new varieties of low-cost enriched foods while ensuring their conformity to prescribed quality standards, through financing of equipment, vehicles, materials, technical assis- tance and studies; (ii) Intensive Testing of the Regional Nutrition Delivery System and Monitoring and Evaluation -- Strengthen the Govern- ment's capacity to monitor, evaluate and improve the nutrition program and develop plans for its cost-effective expansion to full national coverage through financing of studies and surveys, data pro- cessing, and related technical assistance; and (iii) Program Coordination and Administration -- Strengthen and assure continuity of an effective managerial base for the national nutrition program through support for training and for the staff costs of the Government unit responsible for it during the first phase of the program. 9. The project would help the Government to inmprove the nutrition conditions, living standards and productive potential of around 1.8 million persons living below the poverty line. By the end of the project period, the Government anticipates around a 25% reduction in mortality rates for children under four and around a 50% reduction in the incidence of first, second, and third degree malnutrition in that age group among project beneficiary families. The project also would increase the effective availability and use of nutri- tious food by vulnerable groups and indirectly would redistribute income to the most disadvantaged. 10. On a national level at the end of four yea:rs, the nutrition program would have been carefully monitored and evaluated to determine administrative feasibility and nutritional and cost-effectiveness o.: program components to refine plans for its subsequent expansion in future years. Government's capacity to manage the program effectively also would be fully tested by that time. 11. Each of the components of the proposed project would be executed within existing Government organizational structures. The PAN Group in the Department of National Planning (DNP) would coordinate the project and would be responsible for project evalution. The Ministry of Health would  - iv - carry out the health services and latrines programs. The National Institute of Health (INAS), a semi-independent agency financed through the Ministry of Health, would execute the water supply program. The Colombian Institute of Family Welfare (ICBF) would be responsible for development and coordination of nutrition education and family food production activities. The Institute for Technological Research (IIT) would carry out food technology activities; INAS and the Ministry of Health would collaborate on food quality control. PAN committees representing all executing agencies would monitor and coordi- nate the project in each project region, assisted by a regional DNP director who would facilitate their work. 12. Total costs of the four-year project are estimated at US$68.9 million, including contingencies. The proposed Bank loan of US$25 million would finance about 36% of total project costs, consisting of the project's foreign exchange component of around US$13 million and an estimated US$12 million in local costs. Local cost financing is justified because the nutrition program involves multi-sectoral investments to which the Govern- ment has committed substantial resources over and above the project, includ- ing US$17 million for the food coupon system. Beneficiaries would finance around US$4.8 million of the costs of project health, water supply and latrine services. The Government would finance the remaining US$39.1 million. 13. Of the estimated US$55.1 million in project base costs, US$15.1 million would be for health services, US$18.4 million for water supply and sanitation, US$6.1 million for nutrition education, US$1.4 million for family gardens, US$3.8 million for applied food technology and quality control, and US$4.0 million for program coordination and administration. Intensive testing of the nutrition system in one region, and overall monitoring and evaluation would account for US$6.4 million. 14. Contracts for water pipes and pumping equipment (estimated costs, US$1.7 million) and orders estimated to cost more than US$100,000 for vehicles and other equipment would be awarded on the basis of international competitive bidding procedures in accordance with Bank guidelines. Domestic manufacturers would receive a a preferential margin in bid evaluation equal to the prevail- ing tariff or 15. of the c.i.f. cost of imports, whichever is lower. Orders costing less than US$100,000 for vehicles and equipment procured locally and for all latrine equipment and fixtures, would be made through local competi- tive bidding procedures which are acceptable to the Bank. Construction of health posts, latrines and potable water systems (estimated costs US$16.4 million) would be small subprojects widely dispersed geographically and, therefore, would be carried out by self-help and force account or local competitive bidding procedures which are acceptable to the Bank. Prudent local shopping in accordance with Bank procurement guidelines would be used for service contracts to produce and transmit mass media messages because of the specialized nature of the required procurement. This is normal practice in Colombia for similar communications campaigns. 15. Disbursement would be made on the basis of 100X of the costs of technical assistance, training and the foreign costs of directly imported  -v - vehicles, equipment, materials, supplies, water pipes and pumps; 75% of the ex-factory costs of locally manufactured water pipes and pumps; 55% of the costs of civil works, monitoring and evaluation costs of the PAi Group and mass media message production and dissemination, and 50% of the costs of imported and locally procured or of the ex-factory costs of locally manufac- tured vehicles, equipment, materials and supplies. Expenditures for baseline monitoring and evaluation surveys, for nutrition education message production and dissemination and for initial training programs under the nutrition education and family gardens components (after February 1, 1977) would be financed retroactively from the proposed loan up to US';300,000 equivalent. 16. The proposed project would mesh with PAN nutrition activities financed by other donors, including the U.S. Agency for International Develop- ment (USAID), three United Nations agencies and the Netherlands. Bank consul- tations with the leading donor agencies took place regularly in the field to assure appropriate linkages, to avoid duplication of effort and to use the early results of their experiences in project preparation. 17. The proposed project is suitable for Bank loan of US$25 million equivalent to the Government of Colombia for a term of 17 years, including a grace period of four years, at the standard Bank rate.   COLOMBIA INTEGRATED NUTRITION IMPROVEMENT PROJECT I. Introduction 1.01 Colombia's general development strategy has produced steady and notable economic growth over the last two decades. In recent years, that stategy has included actions to improve income distribution through pro- gressive tax reform, increased public expenditures on rural education and public health, and steps to reduce unemployment and enlarge credit facilities to small farmers. Despite these measures, widespread malnutrition persists among Colombia's poorest populations and is regarded by the Government as one of the country's most acute development problems. Consequently, Colombia has incorporated the first phase of a National Food and Nutrition Plan (PAN) specifically addressing nutrition problems into the 1975-78 national plan for social, economic and regional development. 1.02 PAN draws on the experience from previous, somewhat diffuse Colombia nutrition efforts to formulate a program which focuseEs clearly on the needs of target groups. It recognizes that income, food production and employment increases alone are not sufficient to assure an adequate diet for the rural and urban poor. Therefore, the Government's nutrition strategy aims at benefiting the poorest 30% of the population by a combination of action programs to improve their productive capacity and well-being. A central feature of the program is use of a strengthened community health system as a conduit for delivery of other nutrition-improving services which consist principally of nutrition education, including promotion of increased pro- duction and consumption of home grown nutritious foods; food supplements for particularly vulnerable groups (pregnant and nursing women and pre-school children); potable water supplies, and environmental sanitation. Applied food technology which will pave the way for better utilization of existing produc- tion in low-income areas has an important role in the program. Activities to evaluate and refine the program, test new approaches and strengthen its managerial base support the operational aspects of the national nutrition effort. 1.03 The Government has requested the Bank to assist in carrying out the first phase of the national nutrition program by support to a project in seven regions and the Federal district of Bogota for: (i) strengthening of the primary health care system as the base for delivery of integrated nutrit:ion and health services, to include Bank-assisted nutrition educa- tion and food supplementation; (ii) expansion of potable water supplies and environmental sanita- tion in project areas; (iii) promotion of family gardens; (iv) improvement of food technology and quality control; and  - 2 - (v) strengthening nutrition program infrastructure through training, program coordination and monitoring and evaluation. 1.04 This report is based on the findings of an appraisal Mission which vis:ited Colombia January 23-February 11, 1977. The Mission consisted of: Mr. S. Venkitaramanan (Chief of Mission); Messrs. S. Basta, D. Dapice, S. Futagami, J. Greene and N. Wilkie of the Bank staff, and Messrs. G. Herrera and C. Schlesinger, consultants. The Mission's work was facilitated by representatives of the Bank Resident Mission. The project results from a continuous dialogue between the Bank, the Department of National Planning (DNP) and associated ministries and institutions in Colombia dating from January, 1975. It derives from comprehensive multisectoral plans and sectoral studies prepared by these Government bodies, coordinated by DNP and reflects sustained effort by the Government and Bank staff. Government and Bank consultation with external aid agencies in Colombia ensured that the proposed project would complement investment commitments and assistance to the nutrition program already made or scheduled by the U.S. Agency for International Develop- ment (USAID), the United Nations Development Program (UNDP); the United Nations Children's Fund (UNICEF), the Pan American Health Organization (PAHO), the Netherlands and other donors. Project appraisal was initiated by a mission in March, 1976, and was completed in February, 1977, after additional preparation and adjustment of GoVernment programs. II. BACKGROUND A. The Nutrition Situation 2.01 Daily availability of calories in Colombia is estimated to be 2,251 per capita, marginally (4%) above the recommended average allowances. Per capita protein availability at 47 grams per capita is 17% below the recom- mended daily allowance. These overall averages mask profound variations in food intake between different age and socio-economic groups, between regions, and within each of these substrata. Recent surveys show that almost 20% of the total population consumes 60% or less of its recommended calorie intake. The deficits in protein, vitamins and minerals at the lowest income levels are higher still. Both calorie and protein availabilities and consumption are estimated to be somewhat lower in rural than urban areas. Nutrition Problems 2.02 Major nutritional problems identified by the Government, based on the findings of Colombian experts, are:  - 3 - (i) protein-calorie malnutrition (PCM), afiecting mainly infants and pre-school children, but also affecting older children, pregnant women and nursing mothers; (ii) iron-deficiency anemia in women, small children and a significant proportion of adult male laborers in coastal areas; and (iii) other mineral and vitamin deficiencies, particularly of vitamin A and calcium, affecting both children and adults, especially those in low-income rural areas. 2.03 Of these problems, PCM is the most acute and persistent, affecting approximately four million or an estimated two-thirds of all children under seven years of age and an estimated 1.5 million women. of child-bearing age. About 22% of all children under four years of age suffer moderate or severe malnutrition. A recent study in low-income areas of Bogota showed that PCM affected 86% of the children surveyed. Statistics on infant and child mortality also reflect the magnitude of PCM in Colombia: 40% of all deaths each year are among children under the age of five, and even with significant under-reporting, one-third are attributable directly or indirectly to PCM and its effects. The mortality rate among inl-ants, although declining, remains substantial (70 per 1,000 live births,) and in some poor urban and rural areas is reported to reach rates of 150-200 per 1,000. Among the poorest half of the population, nutrition-related mortality of infants and children under five years of age is estimated at double the rates for the general population, although reliable data are not available. Chronic calorie and protein shortages affect older children, adult workers and are especially critical among pregnant women and nursing mothers, who require an extra 300-600 calories and 20-30 grams of protein per day compared to other women of similar age to facilitate normal physical and mental development of their infants. Causes of Malnutrition 2.04 As in other developing countries, malnutrition in Colombia is caused by a combination of factors. Despite steady increases over time, low incomes continue to limit effective food demand among the poorest. Insufficient education on nutritional needs and sound feeding practices severely limit a poor family's opportunities to help itself. Diseases from lack of safe water supplies and poor sanitation facilities cause nutrient losses. Insufficient facilities for safe and hygienic storage of food crops, poor roads, and a domestic food distribution system which tends to favor urban consumers exacerbate the problem in rural areas. Consequences of Malnutrition 2.05 The effects of malnutrition on the physical and mental develop- ment of the child, on the mother's ability to nurse her infant adequately, on the learning ability and school attendance rate of children, (54% drop  - 4 - out before the third grade) and on the productive capacity of adult workers, have all been documented by Colombian nutritionists. Inadequacies in the diet furthermore expose the individual more readily to infectious diseases, in the gravest cases increasing the risk of premature mortality, and in others inducing the familiar cycle of morbidity, loss of energy and apathy. In economic terms, the effects of malnutrition and associated infections are equally serious, both for the individual Colombian's work and income- earning capacity and for national economic development. A recent study among cane-cutters in the Valle region showed a significant positive cor- relation between nutritional status and labor productivity. Another study, undertaken by the Association of Medical Faculties and Ministry of Health, estimated that the 96 million work days lost each year through illness, to which malnourishment contributes, have an economic value cf at least US$55 million per annum. B. Earlier Actions to Counter Malnutrition 2.06 The Government has sought with mixed results to improve nutritional standards through both general economic and specific nutritional measures. Rapid Colombian economic development has resulted in increased employment and improved living standards for many persons. Nevertheless, problems on both the demand and supply side have left substantial portions of the popula- tion with a nutritionally deficient diet. Colombia's agriculture strategy resulting in a 4.6% average annual growth of output between 1971 and 1975, concentrated on production of commercial crops to improve the balance of payments position and reduce foreign exchange constraints. Output of domestic food crops grew less rapidly than population, restricting supplies. However, even significant food production increases could not be expected by themselves to improve conditions among the nutritionally deprived in the face of persis- tent income distribution and land-ownership inequalities and continuing high levels of unemployment and underemployment which limit demand. 2.07 Specific programs to improve nutritional levels, some dating back 20 years, have accompanied national development efforts. These have included an early program to fortify salt with iodine which resulted in the virtual eradication of goiter as a public health problem. Others involving nutrition education, supplementary feeding and household food production generally have had more limited impact. 2.08 The three main nutrition programs carried out in recent years are: (i) the integrated program of applied nutrition (PINA); (ii) the national program of applied nutrition education and supplementary feeding (PRONENCA), and (iii) the production of Bienestarina, a vegetable-protein mixture for use in institutional feeding programs. All three are implemented by the Colombian Institute for Family Welfare (ICBF), an autonomous agency under the Ministry of Health. PINA carries out regional programs of varied scope and size. These include in-service nutrition training for ICBF staff and personnel of  other agencies; the operation of nutrition rehabilitation centers, and rural food production programs which frequently have tended to emphasize cash crops and poultry and livestock production. Although PINA has not been evaluated fully, its overall nutrition impact appears to have beer. relatively modest. 2.09 Since 1968, PRONENCA has distributed food supplements from external donors to infants, pre-school and primary school children, pregnant women and nursing mothers through health and welfare facilities and primary schools. The food aid is used to attract mothers to ICBF nutrition education classes and demonstrations at 140 community health centers. PRONENGA in 1976 supplied about 39,000 metric tons of food to about a million beneficiaries throughout Colombia. While the program has been administered fairLy efficiently, it has tended to reach middle-class families as well as the poor. These factors, along with the expected phasing out of donated foods by the end of 1978, contributed to the Government decision to develop a food coupon system as an alternative to PRONENCA. 2.10 Other Government agencies have contributed specialized services to Colombia's nutrition programs. The Institute for Technological Research (IIT) has carried out effective work since the late 1960's to develop and introduce nutritious processed foods, including pilot programs incorporating indigenous raw materials in locally processed foods to improve their nutritive value. The Institute of Public Health (INAS) of the Ministry of Health has undertaken modest nutrition-related activities in food quality analysis. The Colombian Agricultural Institute (ICA) has been associated with PINA schemes for pig and poultry-raising, smallholder cultivation of fruits and vegetables and other food production projects. 2.11 International and bilateral donor agencies also have been associated with Colombian nutrition programs for some years. PAiHO/WHO, FAX and UNICEF provided joint assistance to PINA from its inception in 1961, and contributed to national nutrition planning efforts in the early 1910's. Supplementary feeding programs have been heavily dependent on external assistance. United States voluntary agencies alone contributed nearly US$147 million over the years 1954-76, while World Food Program assistance in this sector has amounted to US$42 million since 1964. UNDP has given periodic support through small-scale projects to finance technical assistance. Bilateral support has included Netherlands Government contributions of funds and technical assistance to develop composite flour products through IIT. 2.12 The overall nutrition impact of these diverse programs has been limited by several major factors including: (i) lack of a clear and sustained focus on nutritionally deprived groups; (ii) emphasis on short-term, remedial rather than preventive measures; (iii) inadequate levels of budgetary support, (iv) absence of meaningful evaluation of the nutrition, impact of the programs previously undertaken, and (v) absence until recently of a cohesive Government strategy to deal with the nutrition problem, to mobilize resources and insti- tutions outside the health sector and to coordinate their activities.  -6- C. The National Food and Nutrition Plan 2.13 While the country's overall development strategy gradually would reduce poverty and malnourishment, by the early 1970's the Government recognized that special measures were required to deal with these problems and speed the integration of Colombia's lowest-income populations into the mainstream of national development. Consequently, the Government developed a long-term National Food and Nutrition Plan (PAN), and incorporated its first phase into the 1975-78 National Plan for Social and Economic Development. PAN seeks explicitly to raise incomes, productivity and nutritional levels among the poorest half of Colombia's population during the current national development plan period and thereafter. Drawn up by DNP with support from what is now the interministerial National Food and Nutrition Council (CNAN), PAN was approved on March 5, 1975, by the National Economic and Social Policy Council (CONPES), a cabinet-level body chaired by the President of Colombia. 2.14 PAN's main priorities are to raise productivity and incomes of the poorest 50% of Colombia's population. This is to be accomplished through increased food production, improved marketing and processing and improved nutrition and health conditions through strengthened health services, water supply systems and environmental sanitation, an expanded program of nutrition education, and the provision of subsidized processed food supplements to vulnerable groups among the poorest through a newly developed food coupon system. The measures which make up PAN would optimize food consumption by malnourished target groups and other low-income persons within existing income constraints, increase food supplies and incomes of small farmers in low-income groups, and would increase food demand among the poorest. 2.15 The two principal components of PAN are the Integrated Rural Develop- ment Program (IRDP) already assisted by the Bank and the national nutrition program, which the proposed project would support. Complementing these two components is a Bank-aided project to increase production of commercial crops for export and for the domestic processing sector, while encouraging the expansion of agro-industry. The food coupon program, while representing only a modest increase in total demand for domestic food crops, would provide an assured and growing market for output from the IRDP and agricultural credit projects. 2.16 The first five-year phase of IRDP covers selected groups of farmers in eight of Colombia's 22 regions and also is supported by the Canadian International Development Agency and the Inter-American Development Bank. It seeks to raise smallholder production and incomes by promoting farm investment through supervised credit, roads and related measures among the poorest 50% who have suitable agricultural potential.  2.17 The nutrition program is directed at even more disadvantaged rural and urban populations in the poorest 30%, who live in absolute poverty. These beneficiaries include landless laborers as well as others whose cir- cumstances would not qualify them as immediate targets for IRDP credit and related investments. They were selected for inclusion in the nutrition program by a process (see Annex 2) which ranks all Colombian communities by levels of income and access to public services. 2.18 The nutrition program draws on the lessons oi- previous, less concentrated Colombian efforts to focus attention on and direct resources to the specific needs of the nutritionally most deprived. Its combined measures are intended to interrupt the recurrent cycle of low productivity, malnutri- tion and poverty through actions to reduce malnourishment in the short run while providing the potential for increased human productivity as further economic development takes place. The nutrition program provides a way to bridge the current nutrition gap among the poorest 30% while increasing their capacity to utilize economic opportunities. 2.19 The nutrition program would improve the well-being of beneficiary families by integrating into a single package, where feasible, community health services, provision of potable water and latrines, nutrition educa- tion, promotion of family gardens and supply of subsidized processed foods to the nutritionally most vulnerable. Two special features of the nutrition program are the use of the community health post as a delivery mechanism for nutrition services and the use of coupons to provide subsidized food supplements to pregnant and nursing women, infants, and malnourished pre- school children through commercial channels. 2.20 As part of PAN, the Government began in 1976 to install a regional- ized national system of primary health services. Designed to ensure accessi- bility, the system places high priority on preventive care; mother-and-child health services, including family planning; and environmental sanitation. The reformed health system would delegate more functions to para-professional personnel and would promote active community involvement in program develop- ment and control. The system would operate at three levels. At the community level, a health worker (promotora), selected locally by her community, would serve about 180 families. The second level would consist of a community health post staffed by two auxiliary nurses (auxiliares) who would supervise about six health workers under the direction of a part:-time physician. Urban community health posts would be staffed by a half-time physician and a half- time dentist. The local hospital would form the thirdl tier of the system and would receive patients from the health posts, in addit:ion to servicing residents of its immediate, usually urban neighborhood. It wou:Ld link to the regional hospital which in turn would refer patients to the university hospitals. Under the new health system, a considerable reduction of earlier costs per health case is anticipated, since an estimated 85% of health problems will be handled at the local level by paraprofessional personnel rather than by physicians.  - 8 - 2.21 The food coupon system would represent an innovative approach to supplementing the diets of Colombia's poorest pregnant and nursing women, infants and malnourished pre-school children. It derives from a growing body of opinion that carefully-targeted food subsidies represent a potentially effective measure to meet the immediate food needs of groups who cannot afford adequate diets. The coupons entitle nutritionally most vulnerable groups to buy fixed quantities of certain types of nutritious processed foods at subsidized prices through the market place. Subsidy levels (averaging 60X of the retail costs of the foods) and food types and quantities were determined by complex calculations of average calorie and protein shortfalls for each kind of beneficiary, taking into account current family income and food availability (see Annex 3). The entitlement and coupon distribution process operates through health posts in low-income communities identified for inclusion in the nutriltion program (see Annex 2). Community health workers certify women and children for coupons to be issued by auxiliary nurses at the health post where weight-height measurements are taken regularly for all infants and malnourished pre-school children. D. Scope of the Proposed Project 2.22 The Government has requested Bank assistance for the first phase of the nutrition program specifically: (i) to strengthen Colombia's operational capacity to carry out the program in seven regions and the Federal district of Bogota; (ii) to monitor and evaluate it effectively, and (iii) to identify and test out appropriate variations and additional measures to increase its impact as the program expands to national coverage. Initially the Government intended for the nutrition program to achieve full national coverage by 1978. In consultation with the Bank, the Government decided on a less ambitious imple- mentation pace, with national coverage to be reached in three stages ending in 1985. The first phase began with a three-year USAID loan signed in September, 1976, providing US$6 million to support selected aspects of the program including its operation in the three regions of Cauca, Huila and Norte de Santander. The four-year program of proposed Bank assistance is also part of the first phase. Bank support would encompass low-income communities in two different geographic areas besides the Federal District of Bogota. Four are contiguous regions in the west-central mountain and valley area (Caldas, Risaralda, Tolima and Valle) and three are contiguous regions in the northern coastal plains area (Atlantico, Bolivar and Magdalena.) In accordance with a Government decision to spread development benefits as equitably as possible, the eight IRDP project zones and regions with their own special development plans were excluded from the first phase of the nutrition program. However, by 1985, PAN would cover the whole country. E. Linkages with Donor Programs 2.23 Several current or planned donor-assisted programs under PAN would complement the proposed Bank project. PAHO expects to continue advisory  - 9 - services to help Colombia develop the new community health system and plan more effective use of health resources. 2.24 The USAID nutrition loan signed last year finances health services, water supply, environmental sanitation and costs of food coupon administration in the three regions mentioned above, as well as equipment for a processed food plant to produce 10,000 tons annually of Bienestarina (a nutritious processed vegetable-protein mix) for Government programs. About 14% of the loan is for training, technical assistance, pilot studies and evaluation. Early experience gained through that project, particularly its pilot studies on the integrated delivery of nutrition services, the Lood coupon system and development of an evaluation methodology, paved the way for and influenced the design of the project proposed for Bank support. 2.25 Two other donor-assisted projects also relatie to the proposed Bank- supported nutrition effort. The Netherlands government is providing approxi- mately US$740,000 to finance equipment, materials, technical assistance and fellowships for research and development of various soy-based products, in- cluding composite flours, bread, soy milk and cheese. UNICEF is providing consultant services and training support to the national nutrition education campaign and to the Ministry of Health for monitoring and evaluation of health system implementation. It plans limited additional assistance in technical aspects of nutrition education and further support for health studies and related consultant services. 2.26 While PAN in general, and the multisectoral nutrition program in particular, are both ambitious and complex, government agencies concerned have the capacity to carry them out through existing arrangements. 2.27 The Government also would manage the other donor projects under PAN through existing arrangements. These appear satisfact:ory and would not interfere with or duplicate the proposed Bank project, which would include assistance specifically for management, coordination and evaluation. III. THE PROJECT A. Goals and Strategy 3.01 The proposed nutrition project has three basic goals: (a) to improve nutrition, living standards and the productive capacity of 1.8 million Colombians now living in absolute poverty in seven selected regions and the Federal district of Bogota; (b) through systematic monitoring and evaluation, to enable the Government to refine PAN and ensure its sustained effectiveness and financial feasibility as coverage expands during the project and thereafter, and (c) to strengthen the managerial base for planning and executing the nutrition program.  - 10 - 3.02 To achieve these objectives, financing would be provided to a combination of action programs and supporting activities affecting food de- mand, supply and utilization. The action programs would be directed pri- marily at populations in the target communities while supporting acti- vities would take place nationally. The programs would include: (i) Incorporating delivery of nutrition interventions into the health system, using strengthened community health ser- vices as a conduit for: (a) nutrition education to improve food preparation and consumption habits; (b) food supplements to reduce the gap between needs and intake of the nutritionally most vulnerable groups, through a program of coupons (represent- ing part of the value of the supplements) de- livered by health personnel; and (c) improved environmental sanitation; (ii) Installation of potable water supplies to prevent diarrheal diseases, as well as water-borne parasitic and other infections which cause high infant mortality rates and produce significant nutrient losses, and (iii) Increased production and consumption of home-grown nutri- tious foods. 3.03 The above programs would be complemented by selective assistance for national activities, including: (i) Applied Food Technology and Quality Control -- Improve the use of available food in low-income areas and stimu- late production of new varieties of low-cost enriched processed foods while ensuring their conformity to prescribed quality standards, through financing of equipment, vehicles, materials, technical assistance, and studies; (ii) Monitoring and Evaluation -- Strengthen the Government s capacity to monitor, evaluate and refine the national nutrition program through financing of studies and surveys, data processing, intensive testing and moni- toring of the food supplement system in one region and technical assistance; and (iii) Program Coordination and Administration -- Strengthen the managerial base for the national nutrition program through funding for the staff costs of the PAN Group in DNP, which coordinates it.  - 11 - B. Detailed Project Features Health Services 3.04 The project would finance the strengthening of the primary health care system as a mechanism for integrated delivery of nutrition/health ser- vices including nutrition education, family planning services, coupons for subsidized food supplements, potable water supplies and latrines. The 1.8 million health service beneficiaries (at 90% coverage) would include around 573,000 pregnant and nursing women and pre-school children at particularly high nutritional risk. 3.05 Project funds would be provided to construct: 56 and renovate 225 community health posts in rural and urban areas. Each of the 213 rural posts would be staffed by a full-time team of about 6 community health workers, and 2 auxiliary nurses, a part-time physician and a part-time dentist, serving an average of 6,000 persons. Each of the 68 urban posts would serve around 8,000 persons through a full-time staff averaging 6 health workers, 2 auxil- iary nurses, a half-time physician and a half-time dentist. An average of one ambulance would be available to every four health posts. 3.06 The project would finance training for around 2,028 health workers and 677 auxiliary nurses to staff project health posts (allowing for 25% attrition over four years), and 2,400 medical kits for health workers. It would provide medical supplies, vaccines, mules and bicycles for health workers and communications equipment for rural health posts. To strengthen the Ministry of Health's capacity to plan and implement the primary health care system, the project would finance four person-years of consultants to the programming office in the Ministry's planning wing. It would also fi- nance four person-years of consultant services to the Ministry's Division of Community Participation, and four person-years of Colombian supporting staff services to each of the seven regional chiefs of medical services responsible for health system programming in project regions. Draft terms of reference for these consultants are in Annex 4, Appendix 4. 3.07 The new health system represents a major departure from previous Government health programs which bypassed most of the rural poor and empha- sized expensive curative services provided by physicians rather than preven- tive care by paramedical personnel. Training enabling health workers, auxil- iary nurses and physicians to function effectively as members of community health teams is essential for its success. While suitable training curricula have been adopted for paramedical personnel and are beginning to be used, the Ministry of Health still is revising its program for training rural physicians. Assurances were received that the Government would implement specialized health care training, satisfactory to the! Bank, for all staff working at the primary care level of the health system. Water Supply and Environmental Sanitation 3.08 Assistance would be provided so that the project area population with access to potable water would be doubled through around 360 rural water  - 12 - supply systems serving 231,000 persons in 372 small communities (populations under 2,500) also served by health posts. It would finance construction and equipment costs to expand or install 215 gravity systems, including a chlori- nation plant for the one project community which requires it, as well as for 134 pumping systems, generally from deep wells. Each system would serve an average of about 100 households through individual connections. Purchase of vehicles as well as equipment needed to help communities maintain the systems also is included. 3.09 Installation of the rural water supply systems would be carried out by the National Institute of Health (INAS). INAS is a decentralized, semi-autonomous agency funded through the MOH. It has an impressive per- formance record in rural water supply, partly because INAS requires bene- fitting communities to contribute at least 10% of the initial investment cost of rural water supply systems (estimated total investment cost US$65 per capita) and subsequently to operate, manage and maintain them principally with local resources. (See Annex 5.) INAS also has the technical and manager- ial capacity to execute the project-assisted water supply program. 3.10 The component also would provide fixtures, building materials and vehicles for the Ministry of Health to install 112,000 household latrines serving 627,000 persons, doubling the number of latrines available in project areas over the four-year project period. Benefitting families would provide at least half the estimated US$33 total cost of each installed latrine in labor, cash or materials. An MOH sanitary promoter attached to each project health post would be responsible for encouraging beneficiary families to install latrines, for arranging delivery of the fixtures and related materials to families from regional MOH storage facilities and for ensuring that the latrines are installed properly and maintained thereafter. 3.11 Provision of water supply systems and latrines would be synchronized, where possible, with installation of health posts through coordination mechanisms described in para. 5.02. Nutrition Education 3.12 The component would finance a combination of mass media programs and individual and group discussions to improve nutritional habits of project area populations. It also would provide similar coverage after 1977 in the three regions where USAID nutrition education assistance under the 1976 loan was confined to initial design and introductory activities. The campaigns would promote better weaning habits and improved preparaton and increased consumption of foods already available to low-income beneficiaries. 3.13 Mass media financing would support the development, production, pre-testing and dissemination of radio messages by 127 stations reaching an estimated 80% of the families who own or have regular access to radios in project areas. About 250 spot announcements would be financed, each to be broadcast an average of 10 times daily over a three-month period, and about 20  - 13 - radio serials to be broadcast daily in five-minute episodes. Themes, content and timing of these messages would be coordinated with individual and group nutrition education activities in project areas. Playback equipment for DNP to monitor and review the broadcasts would be included. Financing also would be provided to produce six 10-minute nutrition films to be shown in 240 theatres nationwide and in rural project areas by three mobile units which the project also would finance. Additionally, the component would finance produc- tion of a 15-minute T.V. program on nutrition, principally for urban viewers. 3.14 Training for health personnel in techniques of conducting individual and group discussions would also be financed. It would include training programs of between one day and two weeks for around 2.,028 health workers as part of their health training, as well as for about 2,400 community leaders, 3,000 shopkeepers who sell coupon-subsidized foods and around 600 personnel from other agencies involved in the nutrition education campaign. Assurances were received that such training programs would be sat:isfactory to the Bank. Around five person-years of local consultant services wqould be provided for development of rural nutrition education materials and for improvement of production techniques. Five person-years of fellowships would be provided in communications techniques, production of nutrition education materials and training of nutrition education trainers. The project also would finance educational materials, equipment, monitoring and administrative costs. 3.15 In accordance with national policy, DNP would execute mass media activities. Overall coordination of mass media with other kinds of nutrition education under the project, as well as the development and management of the individual and small group programs, would be done by ICBF. (See Annex 6.) Family Gardens 3.16 This component would support a pilot effort to increase home produc- tion and consumption of nutritious vegetables and legumes by 20,000 families in project areas. Gardens organized through an existing Ministry of Education program at 100 rural schools would serve as demonstration centers for the program. The component would finance the costs of developing suitable tech- nical packages of inputs and practices for the 12x6 meter home garden plot which each farm family would tend. It also would cover training and training materials for 100 full-time extension agents and 100 school teachers; seeds, fertilizer and pesticides for home and school gardens; and salaries of the extension agents. Assurances were received that such training programs would be satisfactory to the Bank. Farmers would receive inputs on a grant basis for demonstration purposes during the first two years of their participation. They would pay at least 50% of the input costs in the third year and the full cost of inputs in the fourth year and thereafter. Each plot would be expected to produce an estimated minimum 100 kilos of vegetables per year based on current average yields. (The expected annual return rLet of purchased inputs as a result of the program would be US$26.50 per family at July, 1977 wholesale prices against a per family annual average program cost of US$17.10.) Based on the experience gained during the project period, the program would be expanded during the next phase of PAN.  - 14 - Applied Food Technology and Quality Control 3.17 This component would pave the way for better utilization of avail- able food in low-income areas. It also would stimulate production of new var- ieties of low-cost enriched foods, while providing an efficient mechanism for ensuring their conformity to prescribed quality standards. 3.18 The Applied Food Technology sub-component would finance equipment, materials, personnel and foreign and local technical assistance for 26 sub- projects which would lead to widespread adoption or extension of useful techniques and products. (See Annex 8.) These activities, which would be carried out principally by the Institute of Technological Research (IIT), would concentrate on: (i) technologies for safe storage of local farm produce and village-level processing, and (ii) accelerated diversification of raw materials and processes for commercial food use. 3.19 IIT would develop a number of practical measures to improve family food consumption and to raise the productivity of rural agriculture through reduction of post-harvest food losses of cereal grains, fruit, cassava, plantains and potatoes. The project also would finance development of portable processing units for small-scale production of pre-cooked doughs, enriched cornbread, soybean flour and pre-cooked soy-based products and prototype units to produce pre-cooked enriched cereal flour in rural areas based on existing industrial-scale technology. An extension program to replicate successful prototype installations in selected nutrition project communities also would receive project support. 3.20 Fourteen sub-projects would seek to stimulate further investments in commercial food processing. Of these, five would involve development, testing, demonstration and utilization of new formulas and processes for vegetable protein mixes, flour and for enriched pastas, using precooked rice, sorghum and cassava. Five sub-projects would deal with applied research, development and industrial trials of enriched food formulas using cottonseed flour, wheat concentrates, sesame, broad beans, cow peas and other legumes as alternative protein sources to soybeans in low-cost nutritious foods. Two pilot plant trials of processed textured vegetable protein foods would be financed, one adding by-products of fish and meat and the other a simplified technology for texturization. One technical trial would take place to extend the storage and shelf life of cereal-based processed foods. A pilot project would also be undertaken to fortify staple foods like sugar, rice and pasta with micro- nutrients (e.g. iron, vitamin A), including evaluation of the economic and technical feasibility of fortification at various levels and trial and demons- tration of appropriate processes. During the last year of the project, IIT in consultation with these agencies and the PAN Group would develop a plan of operations to introduce successful techniques on an operational scale during the next phase of PAN. 3.21 The Food Quality Control sub-component would finance Government in- stallation and operation of an effective system to ensure that enriched foods  - 15 - produced by commercial manufacturers are safe, wholesome and conform to re- quirements already established by the Ministry of Health through resolutions and decrees. The project would finance basic laboratory equipment, spare parts, vehicles, salaries for personnel, packaging and delivery expendi- tures to collect and analyze processed foods under the Ministry inspection and control system. INAS would analyze the chemical and physical composition and micro-biological quality of processed foods while the Ministry's Division of Environmental Sanitation would carry out the surveillance, collection and consignment of samples to INAS through regional health service units. 3.22 Included in this component would be six studies dealing with food quality analysis and improvement, the development of minimum-cost diets using processed foods in different regions, and the economic effects on producers and consumers of food standards legislation. Equipment, materials, personnel costs, local and foreign fellowships (about 4.5 person-years) and 16 person- months of advisors to carry out these special studies would be provided under this component. The National Fund for Economic Development (FONADE) of DNP would contract with appropriate agencies for these studies. The Pan Group, in consultation with appropriate agencies, including IIT, would utilise these studies in refining the national nutrition plan. Bolivar Test of Nutrition Delivery System 3.23 The component would finance the costs of evaluating the effective- ness of the nutrition delivery system in the region of Bolivar for groups at highest nutritional risk. Bolivar is representative of poorer parts of Colombia and thus has been chosen in consultation with the Bank for intensive monitoring and evaluation with particular emphasis of the food coupon program. All elements of the nutrition program will operate in Bolivar. Variations will be introduced in ration amounts and the composition of recipient groups to determine the most effective use of resources. Variations in the intensity of nutrition education also would be tested. Financing would be provided for producing, distribution and accounting for coupons distributed to health posts. The coupons would account for an average of around 60% cf retail costs of food supplements reaching around 30,000 pregnant and nursing women and pre-school children in Bolivar by 1980. The beneficiaries would pay the remaining food costs at participating retail stores. The Bank would nct disburse against the subsidy element (see para. 4.09). The Government would meet all food subsidy and administration costs for the coupon program, estimated at US$17 million over and above project costs over the four-year period during the initial phase of PAN. The evaluation (costs of which are includled under the monitoring and evaluation component) would be designed to determine: (a) the nutritional impact of the system; (b) the operational problems in the identification and follow-up of the beneficiaries of the system, the extent of supervision needed and provided, the food leakage at different points in the delivery mecha- nism; and  - 16 - (c) the relative cost effectiveness of the different variants of the coupon system and direct distribution of food through PRONENCA community centers or schools. Assurances were received that the special Bolivar evaluation would be initia- ted not later than January 1, 1978 on the basis of terms of reference accep- table to the Bank, with the results utilized to modify the national nutrition program, such modifications being carried out in consultation with the Bank. Monitoring and Evaluation Progress of Project - Monitoring 3.24 The different components of the project would be monitored to determine their progress toward goals and implementation schedules. This would be done at local, regional and national levels. PAN Group personnel at DNP headquarters and in project regions would review the progress reports for each locality monthly, with reference to installation of the health posts; percentage of beneficiaries reached and kinds of service provided; delivery of coupons to potential beneficiaries; implementation of water supply, sani- tation and home gardens; training, and procurement of necessary equipment and vehicles. The regional heads of executing agencies also would review these reports individually and jointly, analyze the progress and problems of the project in the region and take appropriate action. They also would submit a quarterly review to the national PAN director as well as to the concerned ministries. These reports would be examined at the national level by the Monitoring and Evaluation Unit at DNP and form the basis of a quarterly report to CNAN and CONPES. Semi-annual monitoring reports would be furnished to the Bank and the concerned ministries by DNP. 3.25 Monitoring reports would be designed to highlight the actual and likely slippages and deviations if any, in respect of each component, and act as early warning signals to avert further problems. Evaluation 3.26 Baseline surveys of the nutritional status of target groups would be carried out by ICBF teams on behalf of DNP and would be repeated semi-annually in project areas to supplement the simple anthropometric measurements taken by community health workers and auxiliary nurses. Other information requirements of on-going project evaluation would be built into the design of the monitoring system so that separate data gathering (for purposes of evaluation) would be reduced to a minimum. Evaluation would be continuous and would produce quarterly reports to project management at different levels so that there could be early correction, where necessary. In view of the relative newness of the community health system, two special evaluations of it would take place in its initial implementation phase. First, the Government would complete its current intensive evaluation of around 50 health posts selected on a represen- tative basis from among those initially established in nutrition program  - 17 - areas. This evaluation deals primarily with the foLlowing elements: preventive care; the training, coverage and workload of health workers, with special reference to distribution of food coupons; the extent to which the nutrition services are integrated with the health care system; and the ade- quacy of financial and material provisions. Second, assurances were received that an interim evaluation of the system would be carried out by the Govern- ment not later than September, 1978, under terms of reference acceptable to the Bank. Based on the results of that evaluation, the pace and manner of implementation of health posts for the remaining project period would be revised on a basis acceptable to the Bank. The Monitoring and Evaluation Unit also would carry out the intensive four-year evaluation of the effectiveness of the nutrition system and its relationship to project effectiveness in Bolivar. 3.27 The project also would finance, as part of evaluation, studies of: (a) management effectiveness of the nutrition delivery system, comparing coupon distribution through health posts with direct distribution of foodstuffs through PRONENCA; (b) intra-family distribution of foods in families as- sisted by the food distribution program, the ex- tent of diversion to non-target groups; and the im- pact on nutritional status; and (c) effect of the nutrition project on productivity, employment and income levels of adult workers in the project areas. 3.28 The component would finance around three person-years of short-term foreign consultants to help refine and improve the monitoring and evaluation data system and assist with the design, execution and analysis of project- financed evaluation studies. Program Coordination and Administration 3.29 This component would finance the salary and operating costs of the PAN Group in DNP, which was set up in 1976 to coordinate, evaluate and refine the national nutrition program and prepare plans for its further implementation. Financing would be provided throughout the project for the salaries of 28 professional staff, including the director of the PAN Group; the heads of its programming, finance, evaluation and food coupon units; seven regional PAN directors and seven statistical assistants stationed in the seven project regions; and six specialists in the evaluation unit. Operational costs for the PAN Group also would be included along with a project management fund of $300,000 to support innovative activities consistent with the purpose of the project. This includes possible development of programs to identify the nutritional consequences of Government agricultural policy measures and propose options to them and funds to test special ways of reaching indigenous  - 18 - population groups. Assurances were received that the list and scope of all activities proposed for financing by the Fund would be agreed on with the Bank before their implementation. 3.30 The PAN Group is a strengthened outgrowth of the DNP unit responsible since 1974 for development, coordination, monitoring and evaluation of the national nutrition program. Financing for the PAN Group is justified to ensure its efficient functioning, which is critical both to project implementation-- requiring a good deal of interagency collaboration, particularly at the regional level--and to refinement of the nutrition program in ways assuring continued effectiveness during its expansion to national coverage. The quality of PAN Group staff, and the continuation of the important functions they now perform, are central to achievement of project objectives. Assurances were received that: (a) the director of the PAN Group and the directors of its programming and evaluation units would have appropriate qualifications and job descriptions; (b) DNP would continue to employ a suitably qualified core staff in the PAN Group, whose job descriptions would be furnished to the Bank, to carry out its nutrition program and project responsibilities, and (c) DNP would continue to staff the PAN Group ade- quately through 1985. Technical Assistance 3.31 The project would finance a total of about 45 person-years of consultant services and about 10 person-years of fellowships as follows: (i) Consultants -- A total of 4 years of foreign (average cost, U.S.$54,000 per person-year) and 41 years of local consultants would be provided, principally to the Ministry of Health, which would receive 36 person-years of local consultant assistance '(para. 3.06). Around five years of short-term local consultants would be provided under nutrition education (para. 3.14). About three years of foreign consultants for time periods of up to 6 months would be financed under monitoring and evaluation (para. 3.28). About one year of foreign short-term technical assistance would be provided in applied food technology (para. 3.22). Terms of reference for all consultants of three months or longer are attached to the annexes for individual components. (See Annex 12 for consultant schedules.) Assurances were received  - 19 - that the qualifications, experience and terms and condi- tions of employment of project-financed consultants would be satisfactory to the Bank. (ii) Fellowships -- The project would finance about six person- years of foreign long and short-term fellowships and about 4 person-years of local fellowships. Nutrition education would account for about 5 person-years of foreign fellowships and applied food technology would account for the rest. IV. COSTS, FINANCING, PROCUREMENT AND DISBURSEMENTS A. Costs 4.01 Total project costs are estimated at US$68.9 million over four years. The foreign exchange component is US$12.9 million, or about 19% of total project costs. Cost estimates by component are cetailed in Annex 13 and are summarized in Table I (see page 20). Base costs were calculated as of July, 1977. All operating costs are incremental. Physical contingencies have been applied at a uniform rate of 10%. Price contingencies are 15.1% of baseline costs or 13.7% of combined baseline costs and physical contingencies. They have been computed separately for local and foreign costs and have been adjusted for the effects of expected currency changes during the project period. Local price contingencies have been computed based on the projec- tion of annual inflation rates of 26% in 1978, 18% in 1979 and 15% in 1980 and 1981 adjusted to reflect exchange rate changes expected during the period. The provision for foreign exchange price contingencies assumes inflation of 7.5% annually in 1978 and 1979 and 7% annually in 1980 and 1981. B. Financing 4.02 Project costs would be financed by a Bank loan of US$25 million covering foreign exchange costs and US$12.1 million in local costs. Project beneficiaries would provide direct financing totalling around US$4.8 million including contingencies in health post, water system and latrine installation and water supply maintenance costs. The Government of Colombia would finance the remaining US$39.1 million. Local cost financing is justified because the nutrition program involves multisectoral measures to which the Government has committed substantial resources outside the project, including an estimated US$17 million for the food coupon system. The project will be implemented over a four-year period. The closing date is June 30, 1982. Annex 14 contains a schedule of estimated disbursements.  - 20 - TABLE 1 COLOMBIA INTEGRATED NUTRITION IMPROVEMENT PROJECT Project Cost Estimates by Component (in '000) Col$ US$ % Foreign % Base Local Foreign Total Local Foreign Total Exchange Cost Hlealth Services 467,478 74,827 542,305 12,986 2,079 15,065 13.8 27.3 Water Supply and Sanitation 530,667 131,448 662,115 14,741 3,651 18,392 19.9 33.3 Nutrition Education 193,641 25,971 219,612 5,379 721 6,100 11.8 11.1 Family Gardens 49,108 129 49,237 1,364 4 1,368 0.3 2.5 Applied Food Technology and Quality Control 106,461 29,670 136,131 2,957 824 3,781 21,8 6.9 Monitoring and Evaluation 105,864 4,832 110,696 2,941 134 3,075 4.4 5.6 Test of Nutrition Delivery System in Bolivar 75,597 45,577 121,174 2,100 1,266 3,366 37.6 6.1 Program Coordination and Administration 109,305 33,092 142,397 3,036 919 3,955 23.2 7.2 Base Costs 1,638,121 345,546 1,983,667 45,504 9,598 55,102 17.4 100.0 Physical Contingencies 163,812 34,555 198,367 4,550 960 5.510 10.0 SUB-TOTAL 1,801,933 380,101 2,182,034 50,054 10,558 60,612 Price Contingencies 215,872 83,926 299,798 5,996 2,331 8,327 15.1 TOTAL PROJECT COSTS 2,017,805 464,027 2,481,832 56,05n 12,889 68,939 18.7  - 21 - C. Fiscal Feasibility 4.03 Projected costs of the nutrition program are financially feasible. They would rise from somewhat less than 1.4% of current. Government expendi- tures in 1977 to a little less than 3.3% in 1985, when the program would reach full national coverage. (The per capita cost of the nutrition program in 1985 is projected at around US$2.25 against an expected GDP per capita of around US$1,000.) In terms of total national Government: expenditures, the increase is from about 0.75% in 1977 to 2% in 1985. The table below relates nutrition program expenditures by component to current and total national Government expenditure in 1977 and as tentatively projected for 1985. 1977 ------ 1985 -------- % of % of % of % of Current Total Current Total Spending Spending Spending Spending Health posts .29 .16 1.50 0.90 Food Coupons .18 .10 1.20 0.70 Direct Distribution of food .23 .13 0.40 0.30 Water/Sewerage .27 .15 0.10 0.10 Other .42 .23 0.10 Total 1.39 .77 3.30 2.00 4.04 Health post costs as a percentage of total Ministry of Health spending would rise from 2% in 1977 to 11% in 1985, at full national coverage for the estimated 40% of the population now virtually excluded from access to public health care. At full national coverage, the primary health system would absorb around 22% of the expected MOH budget growth 1977-85. This is an affordable level. Project emphasis on preventive rather than curative care, and the continued use of paraprofessionals rather than physicians, would keep the primary health care system simple and relatively inexpensive. 4.05 Beneficiary Contributions and Cost Recovery - Under the project the Government would continue existing arrangements in force for health services and water supplies. Beneficiary communities would be required to provide at least 10% of health post investment costs or a total of around US$0.5 million in labor, materials and cash. Communities would contribute an initial average of 10% (estimated total, US$1.4 million) of the investment  - 22 - costs of each water supply sub-project, followed by a further 10-40% of these costs over time, depending on the community's ability to pay. These recoveries would amount to US$0.7 million over the project period in accor- dance with INAS's existing procedures (see Annex 5). Communities themselves would pay the cost of operating and routinely maintaining the systems, esti- mated at US$1.0 million during the project period, through uniform monthly water tariffs at INAS-established rates which averaged US$1 per household (somewhat less than a minimum daily wage) at the time of appraisal. INAS would use investment cost recoveries to finance major maintenance of indivi- dual sub-projects and their possible further expansion. 4.06 The Government would add additional beneficiary contribution ele- ments under the project to keep down outlays on latrines and primary health services. Each benefitting family would provide the labor and some of the basic materials needed to excavate and install each latrine and to construct its shelter. Estimated at US$17 per latrine, or a total beneficiary contri- bution of around US$1.9 million, these costs are considered feasible in terms of beneficiary ability and willingness to pay. Beneficiaries also would pay the actual costs of drugs and medicines provided at health posts. These recoveries would average an estimated US$0.58 per capita yearly, or an esti- mated 15% of yearly primary health care operating costs. 4.07 Assurances were received that the beneficiary contribution and cost recovery arrangements described in paras 4.05 and 4.06 above for the health system, potable water supplies and latrines would be maintained and enforced under the project. D. Procurement 4.08 Contracts for water pipes and pumping equipment, estimated costs around US$1.7 million, and orders for vehicles and other equipment costing more than US$100,000 would be awarded on the basis of international com- petitive bidding procedures in accordance with Bank guidelines. Domestic manufacturers would receive a preferential margin in bid evaluation equal to the prevailing tariff or 15% of the c.i.f. cost of imports, whichever is lower. Orders costing less than US$100,000 for vehicles and equipment procured locally and for all latrine equipment and fixtures would be made through local competitive bidding procedures which are acceptable to the Bank. Construction of health posts, latrines and potable water systems (estimated costs US$16.4 million) would be small sub-projects widely dispersed geographically and, therefore, would be carried out by self-help and force account or local competitive bidding procedures which are acceptable to the Bank. Prudent local shopping in accordance with Bank procurement guidelines would be used for service contracts to produce and transmit mass media mes- sages because of the specialized nature of the required procurement, as is normal practice in Colombia for such communications campaigns.  - 23 - E. Disbursement, Accounts and Auditing 4.09 The US$25 million loan would meet 36% of project costs. Disburse- ment would be made on the following basis: (a) 100% of the costs of technical assistance, training and the foreign costs of directly imported vehicles, equip- ment, materials, supplies, water pipes and pumps; (b) 75% of the ex-factory costs of locally manufactured water pipes and pumps; (c) 55% of the costs of civil works, monitoring and evalua- tion costs of the PAN Group (including thes project manage- ment fund) and mass media message production and dissemi- nation, and (d) 50% of the costs of imported and locally procured or of the ex-factory costs of locally manufactured vehicles, equipment, materials and supplies. 4.10 Disbursement for all project expenditures would be in accordance with normal Bank procedures and would be supported by full documentation, except for expenditures under force account procedures for construction of health posts and potable water systems. The disbursements against force account activities would be made against certified statements of expenditure, the documentation for which would be retained by the executing agencies and made available for inspection by the Bank during project supervision missions. 4.11 Each ministry and executing agency would keep separate accounts at the regional and national level for PAN and Bank-financed activities, which would be available for DNP review. Supplementing existing Government auditing arrangements, which the Bank considers satisfactory, CNAN can require the Ministry of Finance to carry out special audits for PAN funds. F. Retroactive Financing 4.12 Retroactive financing not exceeding $300,000 is proposed for pay- ments made after February 1, 1977, for baseline monitoring and evaluation surveys, for nutrition education message production and dissemination, and for initial training programs for the nutrition education and family gardens programs. Such financing is justified both by the long period of project preparation and the need for these initial activities to proceed if the project is to move ahead rapidly after the loan becomes effective.  - 24 - V. ORGANIZATION AND MANAGEMENT A. Administration and Coordination 5.01 The National Council For Economic and Social Policy (CONPES) would determine overall PAN policy. Oversight of the national nutrition program, which would include the Bank-assisted project, is the responsibility of the National Food and Nutrition Council (CNAN), a CONPES subcommittee. CNAN is chaired by the head of DNP; its members are ministers and national directors, or their representatives, of ministries and agencies involved in the national nutrition program. CNAN monitors and reviews development and execution of the program and advises CONPES on its implementation progress. 5.02 Last year the Government set up a special DNP division--the PAN Group--to deal exclusively with the national nutrition program. The director of the PAN Group (the national PAN director) reports directly to the head of DNP. Members of the PAN Group serve as the executive secretariat for CNAN. The director of the PAN Group would have overall responsibility for coordination of the proposed nutrition project. Under his direction, the PAN Group would carry out all budgeting, programming, coordinating and evaluating activities required for the nutrition project. It also would have principal responsibility for project monitoring in collaboration with executing agen- cies. At the regional level, a PAN committee, chaired by the Governor, would coordinate and monitor nutrition program activities in each project region. Because of the importance of effective integration of regional nutrition activities, the PAN Group would have a permanent representative stationed in each project region as executive secretary of the regional PAN committee. The regional PAN director would assist in expediting and coordinating project activities. Each of the regional directors of health, The Colombian Institute for Family Welfare (ICBF), the National Institute of Health (INAS), Accion Cultural Popular (a national voluntary agency specializing in basic educa- tion), appropriate agricultural entities and the head of the regional planning office would be members of the regional PAN committee. An organizational chart of the national nutrition program structure appears on page 25. B. Programming and Budgeting 5.03 The PAN Group would review annual project budgets and work pro- grams prepared by regional PAN committees and national ministries. Follow- ing CNAN approval, the PAN budget would be transmitted to the Ministry of Finance for incorporation into the national budget. After approval of the national budget, the PAN Group would advise ministries and regional PAN committees of the detailed programs of operation for the following fiscal year. 5.04 Regional PAN committees also would submit quarterly project invest- ment budgets and work programs to the PAN Group for review and approval. Disaggregated by monthly expenditures and targets, these submissions would be reconciled and refined by the executive secretariat in consultation with  COLOMBIA INTEGRATED NUTRITION IMPROVEMENT PROJECT ORGANIZATION CHART DNP - Organization at National and Regional Levels for Project Coordination and Evaluation National Social and Economic Planning Council (CONPES) President of Colombia, Chairman Chief, DNP Ministers Agriculture Chief, Department of I~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ HeEalutio Prtonralm Panng andFodCopo Directors /~~~~~~~~~~~~~Dieco / ~~~~~~~~PAN Group National Food & Nutrition_. Counicil (CNAN) | Evaluation l|Programmning and |C|Fod Coupon| Unit Budgeting Unit System Regional PAN Committee Governor as Chairman | | Regional ICBF I Regional Health | Head j Regional Regional INAS Head Secretary r - - - -- Agriculture PAN I Reginnal ACPO Hd. | Heads Director Nutrition Health, Water Supply, Education Sanitation World Bank - 17824  - 26 - programming and budgeting offices of executing agencies at the national level. CNAN and Ministry of Finance approval would be received 60 days before the start of the following quarter. 5.05 The flow of funds would follow established Government procedures. The PAN Group would send monthly payment orders to the Ministry of Finance by region, agency and component, notifying national ministries and executing agencies and regional PAN committees accordingly. Each ministry then would request Finance to authorize Treasury release of appropriated project funds, which ministries would transfer to their regional offices. Any delay in transmittal of funds to regional offices would be noted by the regional PAN committee and reported to the PAN Group for investigation. C. Project Execution 5.06 Existing ministries and agencies would carry out the project as shown in the table below: Responsible Agency Project Activity Ministry of Health (MOH) - Health services, latrines, food cou- pon distribution to beneficiaries. National Institute of Health (INAS) - Water supply, food quality control. Colombian Institute of Family - Nutrition education, family gardens. Welfare (ICBF) Institute for Technological - Applied food technology. Research (IIT) National Planning Department (DNP) - Project coordination, monitoring and evaluation; mass communica- cations nutrition education. 5.07 Programming, budgeting, accounting, auditing, procurement and procedural responsibilities of each executing agency and ministry would be covered by a four-year agreement with DNP. Basic project work plans subject to annual revision for each participating entity would be a part of its agreement with DNP. Assurances were received that agreements acceptable to the Bank would be signed with each project entity as a condition of dis- bursement for project activities covered by that agreement and that signed agreements between DNP and MOH, between the Government and INAS, and between the Government and ICBF would be a condition of effectiveness.  - 27 - 5.08 The Programming Office of the MOH's Planning D)ivision would be responsible for programming, coordinating and supervising the development of the health care delivery system. The head of the regional health admin- istration (the Seccional de Salud) would execute and be responsible for implementation and operation of primary health care in the region. The Planning Division of the MOH would be responsible for monitoring and eval- uating health system implementation, developing methods to ensure community participation in the organization of basic health services, and communicating the information and experience acquired to other units in the MOH as well as the regional health administrations. 5.09 To strengthen the organization and management of the MOH and the regional health administration during the initial phase of the national nutri- tion program, the project over four years would provide for (i) a health sys- tems management consultant to the Programming Office of the MOH, (ii) a con- sultant with experience in community organization to the Division of Community Participation of the 140H, and (iii) a health systems management consultant to each regional health administration involved in the project. Assurances were received that the Government would fill the regional positions by January 1, 1978, with persons whose qualifications and terms and conditions of employment are acceptable to the Bank. VI. BENEFITS, JUSTIFICATION AND RISKS 6.01 The project would assist the Government in achieving its major nutrition objectives by improving the nutrition conditions and living standards of 1.8 million persons living below the poverty line in seven regions and the Federal district of Bogota. The Government poverty threshold is defined as a monthly family income of Col. $1150 per month in 1974 prices or about US$113 per person per year at the time of appraisal. By the end of the project period, the Government seeks around a 25% reduction in mortality rates for children under 4 and expects to reduce by half the incidence of first, second and third degree malnutrition among that age group in project areas. These goals are ambitious but probably could be met substantially where the proposed project operates as scheduled. 6.02 An immediate return from the project would be the increased produc- tivity of economically active persons through reduced numbers of sick days. Illustrative calculations at the time of appraisal showv that a 20% reduction in sick days for the average rural family labor force of 2.67 adult workers (based on Colombian estimates that the poorest workers probably are sick an average of 36 days per year) would produce an annual family income gain of US$8.00, even when assuming that only one-fourth of the days saved result in employment which did not substitute for the work of others. If half the days saved were worked, the family income gain would be US$16.00. (See Annex 11 for details.) This translates to a total annual increase of US$2.4-$4.8 million in family incomes for project beneficiaries, depending on the assump- tions used. The higher figure would amount to about two-thirds of the annual per capita operating costs of health posts in project areas.  - 28 - 6.03 Another short-term benefit should be the increased efficiency of health spending and reduced beneficiary expenses for curative drugs and health care due to better preventive medicine. A 1970 Colombia study showed that a poor rural household spent about US$24 a year on private health care, a figure which would have risen to over US$33 in January, 1977 if health costs rose as much as the consumer price index. On that basis, a 5-10% reduction in family health care expenses would save an additional US$0.5-$1.O million for those covered by primary health care services. 6.04 An important intermediate term benefit of the nutrition program would be its contribution to improved utilization of existing food through better processing, storage and transport. Since present losses amount to over US$20 million a year in the few crops studied, a potential for substantial savings each year exists. In addition, switching food demand to more readily available locally produced foods creates a potential for greater self-suffi- ciency, with associated employment gains and foreign exchange savings. 6.05 A second intermediate-term benefit is the likelihood that improve- ments in infant and child mortality will lead to greater acceptance of family planning efforts. The relationships between assured children's survival and increased family planning have been demonstrated in a number of studies and are now well accepted. 6.06 A further intermediate-term benefit is the reduction in the unit costs of schooling per capita due to fewer dropouts, less grade repetition, and the more efficient use of existing facilities by a more alert, more responsive, and attentive student population. 6.07 The major long-term benefit of the project should be found in the improved quality, vigor, and productivity of the future work force. Reduction in the rate of malnutrition and serious disease should result in better mental and physical growth, and consequently a better educated and more able adult population. 6.08 Although measurement of the above gains, plus those associated with lower mortality, are difficult, a minimum annual return of US$10-13 million exclusive of lower mortality benefits is indicated in the provisional calculations in Annex 11 at about 20% of project base costs including physical contingencies. 6.09 Corollary benefits also would result from the project. Pilot programs would increase home production and consumption of nutritious foods for around 100,000 persons in target areas. The rate of return on these activities considering all costs and benefits during the project period would be more than 20%, if 80% of the farmers participate. Some 550,000 project beneficiary families would receive nutrition education designed to improve their food behavior and related sanitary and health practices. Operational techniques developed, applied, evaluated and refined under the project would permit increased effectiveness of nutrition education as PAN expands to national coverage. Some 231,000 project beneficiaries would obtain potable  - 29 - water; around 627,000 would use new latrines for waste disposal. Through nationally replicable activities, approximately 2,600 health workers and supervisors would be trained to carry out community programs and 600 community workers from other agencies would be trained to conduct interpersonal education activities. 6.10 The project also reflects the importance of women in development, both as project beneficiaries and as most of the health workers and nutrition education personnel who will carry out PAN activities. 6.11 Finally, the development of an effective project monitoring and evaluation system would permit the Government to calibrate its national food and nutrition program for increased cost-effectiveness during expansion to nationwide coverage in succeeding years. Risks 6.12 This project carries the risks inherent in any national program involving a number of executing agencies. Two other risk elements also are present. First is the uniquely comprehensive and innovative nature of PAN. Second, no standard formulae yet exist for easy identification of cost- effective intervention mixes. Consequently, nutrition benefits in later phases of the project, after its early lessons have been learned and applied, may be more significant than initial results. Positive factors making these risks acceptable are the care and thoroughness of the project design, parti- cularly its monitoring and evaluation system; that the managerial system and executing agencies are in place and functioning; the flexibility of the program in terms of its capacity for adjustment and provision for consultation with the Bank in key areas of critical project concern, as well as the sub- stantial development benefits associated with the project. VII. ASSURANCES 7.01 During negotiations, assurances were received on the following principal points: (a) that with respect to health services, (i) the Government would carry out an evaluation of the primary health care level of the national health system by September, 1978, under terms of reference acceptable to the Bank, and would use the results to revise the pace and manner of community health post imple- mentation for the remaining project period on a basis accept- able to the Bank (para. 3.26), (ii) the government would implement specialized health care training satisfactory to the Bank for primary health care system staff (para. 3.07) and, (iii) the Government would fill the project-funded con- sultant positions in the regional health administrations by  - 30 - January 1, 1978, with persons whose qualifications and terms and conditions of employment are acceptable to the Bank (para. 5.09); (b) with respect to the nutrition delivery system, (i) the special evaluation in Bolivar would be initiated not later than January 1, 1978, on the basis of terms of reference acceptable to the Bank, and (ii) the results of evaluation would be utilized to modify the national nutrition program, such modi- fications being carried out in consultation with the Bank (para. 3.23). (c) with respect to program coordination and administration that (i) the Director of the PAD; Group in DNP and the heads of its programming and evaluation units would have appropriate qualifications and job descriptions; (ii) DNP would continue to employ a suitably qualified core staff in the PAN Group, whose job descriptions would be furnished to the Bank, to carry out its nutrition program and project responsibilities, (iii) DNP would continue to staff its PAN Group adequately through 1985, (all para. 3.30) and (iv) that the list and scope of all activities proposed for financing by the project management fund would be agreed on with the Bank before their implementation (para. 3.29); (d) that the qualifications, experience and terms and conditions of employment of project-financed consultants would be satisfactory to the Bank (para. 3.31); (e) with respect to cost recovery, the Government would (i) require communities to provide an average of 10% of the health post investment costs in labor, cash or materials (ii) recover the cost of drugs and medicines provided at health posts, esti- mated at 15% of health care operating costs; (iii) would require recipient families to provide at least 50% of latrine installation costs through a combination of cash, labor and materials; and (iv) INAS would recover all water system operating costs including maintenance and depreciation, and a portioni of installation costs, from users as determined by its present statutes (paras 4.05-4.07); (f) that DNP would provide signed copies of agreements with each executing agency, which would include a basic work plan subject to annual revision for the project period, as a condition of disbursement for project activities covered by that agreement and that the Government and DNP would sign agreements, satisfactory to the Bank, with the main project entities as a condition of effectiveness (para. 5.07).  ANNEX 1 COLOMBIA INTEGRATED NUTRITION IMPROVEMENT PROJECT Nutritional Status in Colombia Nature, Causes and Consequences of Malnutrition Introduction 1. Recent Colombian food balance sheets 1/ show tnat while overall average caloric requirements are available, significant and continuing deficits remain in proteins, calcium, iron and other micro-nutrients (Tables 1 and 2). In addition, food consumption and health surveys of various population groups show that the aggregate figures for food availability mask profound distortions in food intake between different socio-economic segments, between urban and rural communities and between regions (Tables 3 and 4). Analysis of the nutritional and health status of the deficit groups has revealed the existence of a complex of nutritional disorders at the individual level and a national food distribution problem of considerable magnitude. Thus, it is estimated (Table 5) that about 20% of the population consumes 60% or less of its recom- mended caloric intakes while the deficit in proteins, vitamins and minerals is higher still (Table 5). For instance, nearly 25% of the population is thought to have close to a 50% deficit in protein intake. Although it is felt by many that the recommended allowances for Colombia are overestimated by some 10-15%, the figures still leave a significant number of people well below recommended or even "required" intakes. 2. The major nutrition problems are: (i) proteir,-calorie malnutri- tion (PCM), affecting mainly infants and young children; (ii) chronic calorie deficits among older children and adults; (iii) vitamin and mineral deficien- cies, particularly of vitamin A and calcium, affecting both children and adults and especially those in low-income and rural areas; and (iv) iron deficiency anemia in women, small children and a significant proportion of the adult male working population in coastal areas. Of these disorders, PCM in children poses the most acute and persistent problem. Nationwide studies undertaken between 1963 and 1968 showed that 66.6% of surveyed children under five years of age suffered from PCM, of which approximal:ely 20% was moderate malnutrition and 2% was very severe third degree malnutrition. In this period, PCM accounted for between 40% and 70% of hospitalization cases among children under five. 3. Evidence of undernutrition, signifying a continuous deficiency of overall food intake compared with requirements, has been recorded among older children and adult workers in rural areas, and among urban families. It is particularly serious among pregnant women and lactating mothers in Colombia, I/ Hoja de Balance de Alimentos, Colombia, 1972-73-74, ICBF, Bogota 1975.  ANNEX 1 Page 2 who require an extra 300 to 600 calories per day, and from 20 to 30 extra grams of protein to protect the nutritional status of their infants and facilitate normal physical development. 4. Vitamin and mineral deficiencies are widespread, exacerbating the problem of PCM among infants and young children and the nutritional status of other vulnerable groups. Deficiencies of vitamin A, which can cause xerophthalmia and lead to blindness, and of calcium, which is essential for physical growth and development, vary markedly between urban and rural populations and between socio-economic classes in Colombia. Among low-in- come groups in urban areas, average intakes of vitamin A meet only 56% of requirements and of calcium only 30%. In rural areas, average intakes of vitamin A and calcium respectively meet only 50% and 40% of requirements. There is also an overall deficit of nearly 40% of certain B vitamins, most notably of riboflavin. The problem of iron-deficiency anemia affects between 25% and 40% of the population, particularly rural communities.l/ Causes of Malnutrition 5. In Colombia, as elsewhere in the developing world, malnutrition is caused by a number of factors. Income levels are a key constraint. A family food consumption survey completed in 1972 2/ showed significant variations in diets between surveyed populations with incomes of more than Col $2,000 per month and those receiving under Col$1,000 per month (Tables 6 and 7). In the latter group, for example, over half (53.6%) had an average protein deficit of 30% and 44% had a similar calorie deficit. An earlier survey of the weight and height of children aged 0-15 in Bogota 3/ reveals persistently lower averages for children in the lowest socio-economic stratum, while an- other study of low income areas in Bogota showed that 86% of children surveyed were malnourished. 4/ 6,. Poverty affects the family's capacity either to produce or to purchase the foods required for an adequate diet. The poorest segment of the population also lacks safe water supplies and proper sanitation facil- ities and is ignorant of nutritional needs and food habits, especially with regard to the feeding of infants and other vulnerable members of the 1/ The iron availability figures are misleading. Only 10-15% of the iron in a typical Colombian diet is absorbed. As a result, ICBF estimates that about 40% of the population suffers from anemia, since about 20 mg. of iron per day per capita should be available to ensure an absorption of around 2 mg. iron per day. 2/ Habitos de Consumo de Alimentos en el Pais. Survey undertaken by the Instituto Colombiano de Bienestar Familiar (ICBF), 1972. (Report not published,) 3/ Cited in El Problema Nutricional y Alimentario de Colombia. ICBF, 1974. 4/ ICBF and Harvard/Giessen University Study, 1976. (Report not published.)  ANNEX 1 Page 3 family. A nationwide survey 1/, undertaken in 1972 of the child-feeding habits in 1,400 low-income families showed, for example, that when infants develop diarrhea or other intestinal infections, mothers stop feeding them such nutritional foods as milk, soups, eggs and meat, although these are best suited to stave off malnutrition. Food also is often prepared in such a way that most of its value is lost in the cooking. 7. Particularly in the rural sector, the food distribution system 2/ is structurally weak. Insufficient facilities for safe and hygienic storage of staple food crops result in excessive food losses. High transportation costs and poor roads through Colombia's mountainous areas impede the flow of food supplies between rural and urban sectors. The cost of transportation of some staples and processed foods from urban depots to isolated communities is normally borne by the rural trader and consumer and hinders the growth of demand for nutritionally beneficial foods. Thus, although a plentiful and diverse supply of staple food crops exists in Colombia, in rural areas items are either so expensive or sometimes so scarce that large numbers of the rural population cannot benefit from them. Consequences of Malnutrition 8. Extensive research undertaken by national nut:rition authorities since 1963 has developed a comprehensive picture of the nutritional situation in Colombia. They show that deficiencies in dietary intake directly affect the weight and height of infants and young children and can retard formation of tissues, cause loss of appetite, fatigue, irritabil:Lty and apathy, and impair brain development, perhaps irreversibly. In 1971, the infant mortality rate was 70 per 1,000 live births and the mortality rate for children aged 1-4 was 9.2 per 1,000, compared with rates of 22.4 and 0.8 per 1,000 respectively in the USA. In some poor urban and rural areas of Colombia, the infant mortality rates reach 150 to 200 deaths per 1,000 live births. 9. The nutritional status of the mother during pregnancy affects infant birth weight, mortality, and morbidity. Among the poorest half of the population, nutrition-related mortality of those under five years of age is estimated at double the rate for the general population, although specific data are not readily available. Maternal malnutrition affects these rates. During lactation, her capacity to breast-feed her infant adequately may be affected. In addition, her own health, resistance to infections and stamina will suffer. Nutrient deficiencies affect also the learning capacity and school attendance rates of older children and the productive capacity of adult workers. Inadequacies I/ Habitos Alimentarios de la Poblacion Colombiana en Relacion con la Alimentacion del Lactante y del Preescolar. ICBF. August, 1975. 2/ See especially 'La Produccion Alimentaria y el proceso de Comercili- zacion en Colombia', Vol. III. DNP-UDS-DPN-10. National Planning Department, 1974.  ANNEX I Page 4 in the diet furthermore expose the individual more readily to infectious diseases, in the gravest cases increasing the risk of premature mortality and in others inducing the familiar cycle of morbidity, loss of energy and apathy. Of the 80,000 deaths (from all causes, including communicable diseases) of children under the age of five occurring each year in Colombia, one-third are attributable directly or indirectly to protein-calorie malnutrition and its effects, and malnutrition is estimated to be a causative factor in about 80% of the mortality figures in childhood communicable diseases. 10. In economic terms, malnutrition and associated infections may restrict the individual's eventual work and income-earning capacity and on a broader scale may seriously hamper national economic development. Anemia has been shown in one study in Indonesia to lower the productivity of male laborers by some 25%. 1/ Another study in Colombia 2/ has estimated the economic value of 96 million work days lost each year through illness at US$55 million per annum, excluding the financial costs of medical attention and economic costs of reduced efficiency of the worker and permanent disability or premature death. It is highly probable that most physical laborers, who tend to be from the lower income brackets, cannot afford to buy the nutritive foods they need to undertake heavy work, with the result that their productivity is low. A recent pilot productivity study in Kenya, 3/ as well as the above mentioned study in Indonesia, indicates that the adverse affect of malnutrition on labor productivity may be as high as 20-25%. 1/ "Iron Deficiency Anemia and the Productivity of Adult Males in Indonesia," S.S. Basta and A. Churchill, IBRD Working Paper No. 175. 2/ El Problema Nutricional y Alimentario de Colombia. Instituto Colombiano de Bienestar Familiar, (ICFB) Bogota, D.E. 1974. 3/ IBRD-financed nutrition/productivity study. Report pending.  ANNEX 1 Table 1 COLOMBIA INTEGRATED NUTRITION IMPROVEMENT PROJECT Recommendations and availability of calories and nutrients for the Col- ombian population and percentage adequacy of availability, 1972 (1,2) Percentage Calories and Nutrients Recommendations Availability Adequacy Calories 2,150 2,251 10 Proteins 56.3 g. 47.0 g. 83 Calcium 670 mg. 611 lag. 91 iron 13.0 mg. 13.1 mng. 100 Vitamin A 14,150 I.U, 3,0146 I.u. 73 Thiamine 0.8 mg. 0.8 mg. 100 Riboflavin 1.3 mg. 1.0 mg. 77 Niacin 14.3 mg. 11.1 mg. 78 Vitamin C 145 mg. 96 mg. 213 (1) Average recommendation per capita per day for the population. (2) Source: ICBF: Colombian Food Balance sheet.  ANNEX A Table 2 COLOMBIA INTEGRATED NUTRITION IMPROVEMENT PROJECT Annual total and per capita requirements of unprocessed foods for human consumption. Balance with availabilities. Colombia 1972 (1, 2) Food Gsroups Rbequirements Availability Balance with Availability Per capita Total Thousand Tons Needed Excess Kgs./Year ('000) per Year Total ('000) Total ('000) Tons Ton/Year Ton/Year Meat and Eggs 40 900 684 216 Milk and milk products 131 2,946 2,,641 305 Legumes 11 247 101 146 Cereals 84 1,889 1,977 88 Tubers 86 1,934 2,072 138 Vegetables 28 630 393 237 Fruits 115 2,586 2,152 434 Fats 9 202 128 74 Sugar 34 765 1,471 706 (1) Based on a population of 22.490.500 (2) Source: ICBF Colombian Food Balance Sheet  COLOMBIA INTEGRATED NUTRITION IMPROVEMENT PROJECT Percentage adequacy of calorie and nutrient consumption in the diet of 1400 families in different regions of the country studied by ICBF in 1972 Region Calories Proteins Iron Vitamin A Calcium Thiamine Riboflavin Niacin Vitamin C Region 1 (Atlantico, Cordoba, Cuajira, Bolivar) 97 87 72 49 48 70 54 58 132 Region 2 (Antioquia, Caldas, Quindio y Ri- saralda) 89 76 103 45 57 32 71 68 449 Region 3 (Choco, Valle del Cauca y Cauca) 106 96 82 104 87 86 87 54 166 Region 4 (Bogota, Boyaca y Cundina- marca) 99 98 127 59 69 15 93 84 255 Region 5 (Meta) 106 111 154 87 72 13 98 80 223 Region 6 (Narino) 92 93 102 76 44 96 63 75 219 Region 7 (Norte de Santander y Santander) 96 914 110 68 70 l 81 7h 223 Region 8 (Huila, Tolima) 77 75 88 59 45 72 56 63 181 Region 9 (Territorios Nacionales) 97 96 185 67 83 76 92 68 198 TOTAL 94 88 102 64 63 100 75 75 256 g11  COLOMBIA INTEGRATED NUTRITION IMPROVEMENT PROJECT Percentage of required calories and nutrients available, daily per capita, by zones (urban md rural) in ten of eleven localities surveyed in Colombia by the National Nutrition Institute, 1963-65 Zone and Socio- 1/ Economic Class Calories Proteins Calcium Iron7 Vitamin A Thiamine Riboflavin Niacin Vitamin C Urban Very low 76 67 39 109 56 82 47 77 91 Low 80 80 43 108 54 67 55 87 101 Middle 93 106 69 112 107 77 92 102 148 Upper 114 126 87 165 135 110 110 124 200 All classes 88 87 50 126 86 85 71 93 127 Rural Very Low 77 64 40 108 50 81 54 89 174 Low 90 82 54 125 68 77 68 94 192 Middle 87 82 49 140 56 88 60 93 161 Upper 98 97 66 124 84 98 74 95 216 All classes 83 72 46 115 56 83 61 90 178 1/ Figures do not represent absorbable iron. See footnote Annex 1, page 2.  ANNEX 1 Table 5 COLOMBIA INTEGRATED NUTRITION IMPROVEMENT PROJECT Percentage of Surveyed Population with Deficits Greater than the Indicated Amount Greater than Greater than Greater thian Greater than NIJTRIENT 0% 20% 40% 60% Calories 62.4 41.4 18.5 4.6 Proteins 61.6 45.6 27.0 11.2 Calcium 86.5 79.0 67.3 42.5 Iron 61.6 41.9 20.9 6.5 Vitamin A 87.0 80.8 69.2 51,4 Thiamine 63.7 148.2 30.4 10.6 Riboflavin 78.6 68.7 49.5 2h.9 Niacin 83.2 67.0 46.1 20.4 Vitamin C 14.8 10.1 6.3 3.4 Source: ICBF - 1972  ANNEX 1 Table 6 COLOMBIA INTEGRATED NUTRITION IMPROVEMENT PROJECT Deficits of Calories for Levels of Family Income: Percentage of Surveyed Population with Deficits Greater than the Indicated Amount DEFICIT OF Less than From $ 1,001 From $ 1 501 More than CALORIES $ 1,000 To $ 1,500 To $ 2,000 $ 2,000 TOTAL .0 79.3 67.9 57.0 48.o 67.4 10 66.9 53.9 43.2 36.7 54.6 20 54.0 41.0 29.4 22.7 41.4 30 43.8 28.7 18.1 14.2 30.9 40 29.4 15.2 9.6 4.4 18.5 60 7.2 3.7 3.5 0.2 4.6 80 0.4 .0.0 0.0 0.0 0.2 Source: ICBF - 1972 Note: Incomes in Colombian pesos, 1972  ANNEX 1 Table 7 COLOM1BA INTEGRATED NUTRITION IMPROVEMENT PROJECT Deficits of Proteins for Levels of Family Income: Percentage of Surveyed Population with Deficits Greater than the Indicated Amount DEFICIT OF Less than From $ 1,001 From $ 1,501 More than PROTEINS $1,000 To $ 1,500 To $ 2,000 $ 2,000 TOTAL 0 74.1 62.1 48.6 43.7 61.6 10% 67.6 52.5 40.2 36.6 54.0 20% 60.9 41.6 31.8 27.4 45.6 30% 53.6 31.8 19.2 16.5 36.2 40% 42.8 23.1 13.5 7.4 27.0 60% 19.7 8.5 5.3 0.5 11.2 80% 3.5 1.3 0.0 0.0 1.7 Source: ICBF - 1972 Note: Incomes in Colombian pesos, 1972  ANNEX 2 COLOMBIA INTEGRATED NUTRITION IMPROVEMENT PROJECT Identification and Selection of Beneficiaries Introduction 1. The National Food and Nutrition Plan (PAN) grew out of an intensive analysis of the nutritional status of Colombia's population which concluded that a direct correlation exists between malnutrition and poverty. Programs implemented under PAN would, therefore, assign priority to the poorest 50% of the population. Two categories of programs are planned: Integrated Rural Development (IRDP) and the national nutrition program. IRDP is to be directed at those among the poorest half of the nation who are considered to have sufficient agricultural potential to justify such inputs as credit, roads and related measures. The national nutrition program is to be directed specifi- cally to the poorest 30% of the nation which includes such impoverished groups as landless laborers, tenant farmers and sharecroppers. Beneficiaries of the food coupon aspect of the national nutrition program would constitute even more limited populations -- the most nutritionally vulnerable groups including nursing mothers and pregnant women, infants and malnourished pre- school children. The rural poor are to receive special emphasis under the 1975-78 Plan for Social, Economic and Regional Development, of which PAN is a part. 2. Regionalization - The methodology used to identify the poorest 30% of the population has been developed by the Department of National Planning (DNP) and is referred to as "regionalization". 1/ It is designed to select specific localities in which nutrition activities should be concentrated. The analysis was applied at the municipio level 2/ and Colombia's 930 municipios were ranked according to three primary indicators of living standards: average family income, educational status, and access to public service utilities 3/. The poorest 30% of Colombia's municipios were thus identified. Two further steps were required to target beneficiary areas. A complicated formula was applied to indicate the appropriate range of the population within I/ Described in detail in (i) Working Paper B 'Regionalization'. March- April, 1976 Appraisal Mission Report and (ii) Plan Nacional de Alimen- tacion y Nutricion. Regionalizacion del Pais para su Aplicacion. Unidad de Desarrollo Social, Division Poblacion y Nutricion, DNP, May, 1976. 2/ Colombia is divided politically into 22 regions or departamentos, the Federal District of Bogota, and national territories, Each region is divided into municipios, each of which has an urban or semi-urban center (cabecera) and surrounding rural areas. Each urban municipio comprises a number of neighborhoods (barrios). 3/ The Government decided against identifying those most in need on an individual or family basis since (i) income and related tests could not be administered economically on a national basis, and (2) many of the Plan's major investments must be implemented on a regional basis.  ANNEX 2 Page 2 a municipio which should be included in the nutrition program, varying from 18% of the urban population of the 4 largest cities to 100% of the populations of rural municipios. 1/ A further analysis was required to identify which areas or barrios in non-rural municipios would benefit firom the nutrition program. Selection was based on locally secured data on income, health status, etc., taken in conjunction with maximum coverage allowed under the formula mentioned above. 3. A major problem arose as a result of using the size of the major town or cabecera as a key variable in the initial pre-selection process. Although the larger major towns tend to have wealthier populations than the smaller, there may be pockets of poverty in the former while the latter may include some relatively wealthy families. It could be possible on the one hand that some needy groups would be omitted from the program while other well-off groups would be included. To reduce such anomalies to a minimum, during 1976 DNP substantially revised its methDdology for the selec- tion of food coupon beneficiaries within urban areas, 2/ and initiated a series of tests in four urban municipios to establish thie relative effec- tiveness of alternative approaches to beneficiary identification in areas of high social mobility and greater income dispersion (see Appendix I for details). While it is necessary to continue to correct any basic inequities in the community selection procedure deriving from the regionalization exer- cise, the present selection process offers an acceptable framework for ensur- ing that communities and beneficiaries reached through the nutrition program are among those which constitute the poorest 30%. 4. Regionalization is being applied on a nationwide basis. In consulta- tion with the pre-appraisal mission, however, DNP decided it would be wise administratively to extend the national nutrition program in phases rather than to implement it nationally all at one time. The first phase would include 10 regions and would be implemented over a four year period. In the first phase, three regions (Cauca, Huila and Norte de SantancLer) were included in the USAID nutrition loan while seven others (Atlantico, Bolivar, Caldas, Magdalena, Risaralda, Tolima and Valle), plus the Federal district of Bogota would be included in the Bank project. 5. Identification and Selection of Food Coupon Beneficiaries - The regionalization process provides information as to the expected population 1/ Municipios are ranked according to the size of their major city or town (cabecera) in 4 categories: (1) the four major cities with populations over 100,000; (2) intermediate cities (pop. over 30,000); (3) small cities (pop. 1,500-30,000); and (4) rural areas, including towns of less than 1,500. 2/ 'Aspectos Productivos y Eficiencia Social del Plan de Alimentacion y Nutricion, UPG-PAN. DNP, December, 1976.  ANNEX 2 Page 3 coverage within municipios 1/ for delivery of the food coupon segment of the program. They will include: (a) infants aged 3-24 months; (b) pre-school children aged 25-48 months identified as either suffering from malnutrition or at particularly high nutritional risk; (c) pregnant women, for the last six months of pregnancy; 2/ and (d) lactating mothers, for the first 12 months postpartum. 2/ The selection and enrollment of these individual beneficiaries in the coupon scheme will be based both on economic and on nutritional criteria and will be made at the community health post in two stages: first, a census will be made of each community on the basis of which the health worker will identify qualifying families; and second, the auxiliary nurse will measure child weight-and-height-for-age and check family health status with the mother. It is expected that, in line with the progressive introduction of health posts, the total number of coupon beneficiaries will grow from 40,000 in 1977 to 183,000 by 1980. (See Annex 3 for details.) 1/ Whereas in rural municipios all individuals in groups (a)-(d) will qualify for coupon benefits, in urban areas a limit would be placed on the numbers of beneficiaries in each group in accordance with the maximum allocation for populations within specific urban municipios. 2/ These reflect the conclusions of Colombian nutritionists that fulfill- ment of the mother's nutritional requirements during pregnancy and lactation is critical to normal physical and mental development of the child through infancy and the entire pre-school period.  ANNEX 2 Appendix 1 COLOMBIA PROPOSED NUTRITION IMPROVEMENT PROJECT Pilot Tests of Urban and Rural Food Coupon Beneficiary Selection I. Methodogy of Beneficiary Selection in Rural Areas: Pilot Project Tests in Cauca 1. The methodology for selecting food coupon beneficiaries in rural communities was tested through a pilot project in Cauca begun in July 1976. Initial population censuses undertaken by health workers in each of four community health post areas selected revealed smaller total populations than those estimated from the regionalization data at regional and municipio level. Preliminary results also suggested that there were in eEfect no family bene- ficiaries having incomes above the theoretical poverty ceiling of Col$1,150 per month. (In January, 1977 prices this amount to an annual per capita income of US$113.) They also revealed a need for attempts to make supplementary feeding programs more acceptable to indigenous Indian population groups. DNP will study this problem further. The Government proposes to continue to make minor local adjustments to the beneficiary selection process where necessary. II. Methodologies of Beneficiary Selection in Urban Areas: Pilot Project Tests in Bogota and Other Urban Municipios 2. DNP initiated in November, 1976 a series of pilot project tests among poor urban populations in municipios of different size to test whether it would be more effective to identify potential food coupon beneficiaries through home visits or through encouraging applications at local health posts. The tests began in Bogota, to be followed before mid-1977 by similar tests in Cartagena, in one intermediate-sized city, and in one small town. The two methods will be tested in separate, but comparably poor zones in each of the selected pilot project cities. (In Bogota these are: S. Cristobal Nc,rte comprising 14 barrios; and Los Laches, comprising 5 barrios). Cost-effectiveness will be compared between (i) having urban health workers identify the neediest families through home visits and assess their eligibility (to be validated by the auxiliary nurse) according to a set of family poverty indices, and (ii) encouraging needy families to apply to the nearest health post for enrollment in the coupon scheme. Both methods will then be compared with the methodology applied in rural areas. When a decision is reached on the most efficient method, the coupon programs will then be progressively introduced into other urban municipios.  ANNEX 3 COLOMBIA INTEGRATED NUTRITION IMPROVEMENT PROJECT Food Coupon Distribution System I_ntroduction ]. The Government's nutrition strategy is directed at families living below the poverty threshold. 1/ Nutritional deficiencies are especially marked among pregnant women, nursing mothers, infants and pre-school children. The Government recognizes the need for special programs to provide food supplements to those vulnerable groups in the poorest 30% of Colombia's population. 2. Through the National Food and Nutrition Plan (PAN), the Government proposes to administer this food assistance by introducing a unique system of coupons for individuals in the highest priority groups to use as part-payment f'or purchases of specific nutritionally-enriched products at commercial stores. An existing, limited program of direct food distribution to selected beneficiaries through existing institutional channels, principally schools and day-care centers, would be phased down as the coupon system progressively expands during the first phase of PAN (1977-1980). The food coupon program is expected to be nutritionally more cost- effective than direct distribution, which requires an extensive supporting bureaucracy and facilities to buy, deliver, store, distribute and account for food. Processed foods under the coupon program would be nutritionally balanced, providing calories, as well as more usable protein and micro- nutrients per unit cost than other foods which beneficiaries, particularly infants, would be likely to consume (see Appendix 1). Additionally, leakages to other family members are expected to be less with processed weaning and infant foods than with staples or other traditional varietjies. Concept 4. The coupon system represents an imaginative effort, with a combina- tion of features unique among developing countries, both to attack the special problem of poverty-related malnutrition among vulnerable groups through a selective consumer subsidy and to generate agricultural production and proces- sing. The system is flexible and already has been substantially modified and simplified as a result of pilot projects undertaken in 1976 to improve cost- effectiveness and minimize risks (see Annex 2, Appendix 1). Additional variations would be tested under the proposed project (see para. 3.16). T'arget Groups 5. The procedures for selecting target communities and food coupon beneficiaries in PAN nutrition program regions are described in Annex 2. In 1/ Calculated by DNP as equivalent to Col$1,150 per month in 1974.  ANNEX 3 Page 2 the selected communities, coupon beneficiaries will comprise infants aged 3-24 months, malnourished or nutritionally high-risk pre-school children aged 2-4 years, pregnant women (for the last six months of pregnancy) and lactating mothers (for the first twelve months postpartum). Enrollment of individual beneficiaries will be made at community health posts in two stages: first, through identification of qualifying individuals by the local health worker, and second, through checking of their health and nutrition status by the auxiliary nurse. Coupon Value 6. All coupons have a fixed value, which has been set for 1976-77 at Col$3.50 but which may be adjusted in succeeding years to compensate for price increases. Each coupon is valid for exchange against a 250- gram unit package of one of the enriched foods available through the pro- gram. At current value this coupon represents for beneficiaries an average 60% subsidy of the retail price of coupon food items. Beneficiaries pay in cash the difference between the coupon value and the retail price. Coupon Types 7. All coupons are clearly identified as being valid only for purchase of PAN-approved foods. Each coupon carries a serial number, and is valid for one purchase only. Two types of coupons are being issued, differentiated by color. Green coupons are issued for infants aged under two years. Pink coupons are issued for beneficiaries aged 2-4, and for pregnant and nursing women. Producers of foods included in the coupon system will display a PAN symbol on their product packages, thus visually linking the coupons and foods in the program. Coupon Foods 8. Green coupons may be exchanged only for approved infant food mix- tures, which initially include Duryea 1/ and Colombiharina 2/ brands, already sold through commercial food stores, and Bienestarina. Production of 1/ Duryea is a dry mixture containing maize and soya flours, and dried skim milk powder fortified with vitamin-mineral additives. It provides 345 calories and 28 grams of protein per 100 grams. 2/ Colombiharina is a dry mixture of broken rice and. soya flours with vitamin and mineral additives. It provides 331 calories and 19 grams of protein per 100 grams.  ANNEX 3 Page 3 Bienestarina, 1/ presently confined to ICBF-operated institutional feeding programs, is being expanded so that its introduction into commercial outlets and inclusion in the coupon program can be accelerated. Pink coupons cur- rently may be exchanged only for enriched pastas and Colombiharina. Other approved foods for older children and adults, including Carve texturized vegetable protein, Provesol soy-milk and Bienestarina, will be included for distribution through coupons during the first phase of PAN as soon as produc- tion and marketing arrangements can be made final. The government is accele- rating its program for diversification of the coupon foods through applied food technology. (Details are given in Annex 8.) Food Values 9. All processed products accepted for inclusion as coupon foods in the program are obliged to meet the standards of nutritive value prescribed by the Ministry of Health, and the additional criteria (primarily nutrient/ cost ratio) exercised by the government to determine whether they merit subsidy support. Appendix 1 tabulates the composition of coupon foods and illustrates the comparative nutritive value of these foods against traditional Colombian food items and commodities donated under food aid programs. Coupon Quantities 10. Government estimates of the quantities of coupons required by each beneficiary derive from sequential calculation of (i) the average daily deficit in proteins and calories occurring in each target group, respectively in urban and rural situations, (ii) the required daily/monthly intake of the selected foods to bridge this gap, and (iii) the monthly quantities which this represents (expressed in 250-gram units equivalent to the number of coupons required). By extrapolation of data at municipio and regional level on the numbers of qualifying beneficiaries, quarterly estimates have been made of the quantities of coupons required for issue each year up to 1980 according to the above criteria. On an average, adult beneficiaries would receive 28 coupons per month, infants up to two years would receive 12, and older pre- school children 14 per month. These quantities would not necessarily meet the nutritional needs of each individual beneficiary. However, as community census data reveal the extent of nutrient gaps at the local level, adjustments could be made to coupon allocations for each community within the ceilings set for each region. It is estimated that within nutrition program regions covered by the Bank project approximately 40,000 beneficiaries would share a total of 6.4 million coupons in the first year and that by 1980 coupon ben- eficiaries would number 183,000 and receive a total of 34.6 million coupons. 1/ Bienestarina is the generic name for several product formulae developed by ICBF. Formula 1124 B, the most widely used, is an admixture of wheat, maize and soy flour with dry skim milk powder, vitamin-mineral additives and D.L. Methionine. 100 grams of product provides 340 calories and 25 grams of protein.  ANNEX 3 Page 4 Food Volume 11. The projected quantities of coupons to be distributed in Bank proj- ect regions would represent 1,600 metric tons of processed foods in 1977, rising to an annual volume of 8,650 metric tons by 1980. Additional internal demand for these foods would arise from coupon distribution in the three USAID nutrition project areas, from direct distribution programs, 1/ and from free market demand, contributing to a total projected demand for approxi- mately 37,000 tons of these foods annually by 1980. The Government has cal- culated 2/ that raw material supplies and installed and planned processing capacities for foods included in the system will be adequate to meet projected annual levels of demand up to and beyond 1980, and therefore to meet the specific food needs of the coupon system. Coupon Programming and Printing 12. The flow system for coupon distribution, delivery and redemption is shown in Appendix 2. Coupon programming is carried out at the national level by the PAN Group and is based on community and regional data prepared by Ministry of Health personnel in conjunction with the regional DNP director. The Industrial Development Corporation (IFI) is the central authority for disbursement of funds and printing and delivery of coupons. DNP submits its annual estimate and quarterly program to IFI, specifying quantities and types of coupons required for distribution in each community for each quarter. Coupon printing is carried out for IFI under quarterly' contract with printers selected by IFI after open bidding. Coupon and Food Delivery Systems 13. Under arrangements commencing in 1977 the printed coupons would be transmitted by IFI to the Agricultural, Industrial and Mining Credit Bank (Caja Agraria), and through Caja Agraria's internal system to its regional and community branches. The coupons would be held in trust by Caja Agraria on behalf of the regional authorities of the Ministry of Health (Seccionales de Salud). The auditor of each Seccional de Salud would authorize withdrawals from Caja Agraria community branches and deliveries to the auxiliary nurse of each health post as required by the monthly distribution schedule. Distribu- tion of coupons to beneficiaries would take place on fiixed days each month at the health post. The auxiliary nurse would deliver to each registered mother those coupons to which she and her family are entitled. Family beneficiaries would exchange the coupons at retail food stores, paying the additional cash supplement appropriate for the foods selected. Retailers would transmit the coupons to their food suppliers, either through wholesalers or directly to 1/ Only Bienestarina would be included in direct distribution. 2/ Aspectos Productivos y Eficiencia Social del Plan de Alimentacion y Nutricion. UPG-PAN. National Planning Department, Bogota. December 1976.  ANNEX 3 Page 5 manufacturers' representatives, and would receive their standard trading margin on the combined value of the coupons plus cash paid to their suppliers. Manufacturers would transmit the quantity of coupons received to the regional branch of Caja Agraria at which they have established a separate coupon ac- count. As the coupons initially deposited by IFI are treated by Caja Agraria as currency of equivalent value, coupons returned by manufacturers would be redeemed by effecting a credit transfer to the manufacturer's account. Once certification of transfer has been confirmed to IFI the coupons would be removed from circulation and destroyed. 14. Extensive ground work takes place before the program is undertaken in a given community. Manufacturers are obliged to see that merchants stock adequate supplies in scheduled coupon-recipient communities. Distribution channels and coverage, scheduled coupon allocations and projected food demand are reviewed by the regional PAN director with participating manufacturers before introduction of the coupon system in each community. Retailers are invited to participate in training sessions where prescribed conditions for coupon handling and exchange are described. Initial stocks of coupon foods are supplied by the manufacturer to wholesalers and retailers on credit. Normal price structures and trading margins for distributors are applied, coupons being accepted at face value by all parties for purposes of invoice settlement and replenishment of stocks. Product delivery, either through intermediaries or directly to retailers, is effected according to the usual practice of each manufacturer. Maintenance of adequate coupon food stocks at each distribution point is the responsibility of manufacturers and merchants but will be monitored by DNP through personnel involved in PAN at local levels. Lists of local participating retailers are displayed in each health post, and auxiliary nurses notify coupon beneficiaries of local coupon food retailers who register in the program. Coupon Control and Accounting 15. The quantities of coupons printed each quarter for IFI are trans- ferred in audited batches by IFI to Caja Agraria for onward transmission to community branches in accordance with programmed allocations. Caja Agraria audits deliveries made monthly at community level to the health post auxiliary nurse. The auxiliary nurse is responsible for the security and delivery of coupons to beneficiaries at the health post. Three forms are completed by the auxiliary nurse: (i) the registration ticket, which the beneficiary keeps as the ration card, (ii) a registration card for each beneficiary, retained by the auxiliary nurse, which beneficiaries sign each month for the quantity of coupons of each color received, and (iii) a monthly inventory sheet, on which all daily movements of coupons through the health post are recorded (quantities received, transferred, held in stock, delivered to beneficiaries) against monthly allocations. The inventory sheets are checked by regional auditing staff of the Ministry of Health and reported to the regional PAN director. Once coupons are exchanged for foods at retail stores by the beneficiaries, accounting and security procedures adopted by traders and manufacturers in handling the coupons would be those normally applied in handling money.  ANNEX 3 Page 6 Coupon System Administration 16. Overall responsibility for administration and coordination of the coupon system rests with the PAN Group in DNP, which includes a coupon program unit. Administrative arrangements at national level with manufacturers, IFI, Caja Agraria and the Ministry of Health are handled by this Group. Program- ming and administration of the system at regional level are handled by the regional PAN director. Coupon administration and resolution of operational problems of the coupon system at community level rest with local Ministry of Health personnel in consultation with the regional PAN director. Coupon System Trials 17. The design of the coupon system is the result of continuous revi- sion and refinement of administrative procedures during 1976, including approximately 6 months of field trials in 4 rural commrunities of the Cauca region and 2 months of urban beneficiary selection tests in selected poor communities of Bogota. The latter test will be extended to three other cities of varying size during the first half of 1977. The government plans for trial and modification to continue until a fully satisfactory system is established (see Annex 2). 18. During the first six months of field trials, various practical difficulties 1/ were encountered in coordinating the inputs of financial and technical agencies, food manufacturers, and the administrative staff and traders associated respectively with coupon and food delivery. By early 1977, most of these procedural and scheduling problems had been resolved, and the feasibility of operating the system on a broader geographical basis in Colombia had been adequately established. The Cauca trials were not accompanied by other aspects of the nutrition program, however, such as provision of safe rural water supplies, expansion of the community healt:h infrastructure, and nutrition education. As a result, there were no f-indings regarding the combined benefits of all these elements. The Government, therefore, proposes to carry out special programming, monitoring and evaluation of the coupon system in Bolivar region as part of an intensive moniitoring, evaluation and testing of the earlier nutrition delivery system under the proposed project. Within that region the Government would not only synchronize the coupon program with other activities but also would test its possible variations. These could include changes in the quantities and value of coupons to be distributed, alternative levels of subsidy, and the effects on demand for coupon foods when a broader range of products is included. (See para. 3.23.) Costs and Financing 19. The costs of the food coupon distribution system include food subsidies, coupon procurement, coupon distribution, administration and moni- toring. Total program costs for operating the system in the seven regions and the Federal district of Bogota included under the Bank project were estimated at the time of appraisal at Col$336 million (at 1977 prices) over four years, of which Col$273 million is direct food subsidy. The cost estimates to 1/ Evaluation Report, July-December 1976.' DNP-PAN February, 1977.  ANNEX 3 Page 7 Col$273 million is direct food subsidy. The cost estimates to Govern- ment are shown for each region in Appendix 3, based on the following assump- tions: (a) Coupon beneficiaries include pregnant women, nursing mothers and infants aged 3-24 months each year through the health posts in Bank project regions, and a percentage of children aged 2-4 years affected by malnutrition or at particularly high nutri- tional risk. (b) Women receive an average of 28 coupons per month beginning after the third month of pregnancy and extending up to twelve months post-partum; infants aged 3-24 months receive 12 coupons per month; beneficiaries aged 2-4 years receive 14 coupons monthly. (c) The food subsidy is Col$3.50 per coupon at 1977 prices. (d) The combined cost of coupon procurement and distribution is Col$0.80 per coupon. The food subsidy cost would be financed by the Government from its own budget. Under the proposed Bank project, operating costs of coupon procure- ment, distribution, administration and monitoring would be financed by the Bank in one region (Bolivar) selected for intensive monitoring and evaluation of the system. The cost of the coupon food subsidy in this region would be included in total project costs. The costs of the food coupon system would rise to Col$797 million in 1985, when full national coverage is reached for an estimated 868,000 beneficiaries. This would represent less than 10% of the Government's proposed commitments under PAN at that time. 20. Summary - The food coupon system is designed to be a multi-purpose, catalytic instrument for achieving nutrition goals. It will: (i) enable beneficiaries in poor families to obtain the types and quantity of food needed to meet their nutritional requirements; (ii) stimulate industrial food processors to invest in appropriate products and facilities to meet this increased consumer demand; (iii) provide an indirect income transfer to the selected beneficiaries; (iv) expand the industrial market for rural farm output of raw materials, and thereby help raise producer incomes, especially in areas identified for the Integrated Rural Development Program (IRDP); (v) continue to promote progressive substitution of imported raw materials with local products of equal or superior nutritive value, thereby simultaneously contributing to nutritional improvement, agriculture and savings of foreign exchange; (vi) forge a link between project families and the community health post, promoting better utilization of health services and nutrition education.  COLOMBOIA LSTEGOATED NUTREITION IMFROVEMEN PROJECT Food Coupon Distribution Systen Conp.rison f the Nuiritioo,al Content Per lEE goo of Traditlonsi Foods, Sub.idised Foods (Proided by Internotilo..l Agencies and the CoIonbi.n Gove,,nent) and ProceSed Food. Feed in Colooba.. Processed Foods For- Proce...ed Fooda Troditio...l Foods CARE, OFP & CARITAS F..odo erly u..d ir Colonbi. Scheduled for S.bsidi.ation under PAN Whea Bienes Bfenee- Ofcs. oln Wheot Yellow Fortified SoY- . teino iorino torin En- Ibe-r-a Lea Whole Flout Mstee B`lg'r With Sya Fortified rc"pariso Fo-hito- Fornle F.r-le Foreo1o Ciohed ria- TO'S'.r 061R7L0000S Pleat Egg. Mlilk Flou P-nel Pctei C..a.. VIRice Beoc. Fosits Oats CSM WOE Wheat ot 127. Bo1gor 0i1 F.-nui 15A Minture 3 1124A 1124B 1107A Foote tore 5 Doya(goys) Pronaso Calories (Y.) 150 Sf3 60 356 322 312 359 046 359 302 350 348 373 360 354 357 350 EE4 338 335 344 342 346 338 330 345 324 522 Proteins g,sa 21.5 02.8 3.4 10.4 9.1 0.0 9.0 i.E 7.2 20.4 10.7 10 20 20 11.2 lb 11.3 0 27 20.4 27.6 25.3 21.5 18.5 19.2 28.28 311 44 PIXt~ Efficiency 3.2 3.8 3.2 E.g 0.5 - 0.9 - 210 - - 2.2 2.4 2.4 1 1.95 2.3 E 2,2 - 2.39 2.18 2.5 2.66 2.01 1.8 2.02 2.26 Tot.1 Cechohydrate. - 0.7 4.6 75.1 70.9 86.0 76.6 35.5 28.8 54.6 73.6 68.3 62 ES 75.7 70.7 70 E 07 - 565 58 64.1 64.3 64.7 57.15 32 19 Pat gee 6.5 11.5 3.3 0.5 3.7 0.10E.7 0.1 o.4 1.2 0.4 .6 6 6 1.5 1.25 2 1EE 6.2 - E.g 0 0.4 0.83 0.8 0.61 1 30 Fibre gee - E 2 - 0.0 0.9 0.3 3.0 0.3 0.7 1.4 - - - - 0 - - 0.2 1.2 0 1.48 0.4 2.17 3.4 0,7 Ash gsa 0.0 1 0.7 0.7 1.3 0.0 1.1 E.g 0.5 b.0 0.5 0.5 2 - - - 0 - - 5.4 4.7 4.4 2.23 2.6 4.45 3.6 6.0 Moi.t.re gee 70.0 74.0 88.0 12.8 12.0 12.3 11.4 61.8 12.2 14.8 14.5 00.5 00.0 - - - - 8.0 9.8 8.6 12.7 11.4 4.9 5.1 3.4 Vitaefo A IU. - 0,000 105 - 5EE - - 00 - - - - 1.940 0,658 - 882 - 5 4,790 1.650 3,'52 3,198 3,004 2.9- 4.2 - 2,700 - 33 Tbis,i eg 40 0.10 0.04 0.17 0.30 0.02 8.27 0,04 0.07 0.43 0.13 0.46 0.05 1.49 0.20 0.64 0.25 0 0.32 0.17 1.3 1.2 1.3 0.12.0.10 1.65 0.5 - 0.91 Riboflavin eg. 0.25 0.29 E.18 8.05 0.13 0,07 0,06 0.03 0.03 0.12 0.04 0.00 0.9 0.59 0.14 0.36 0.03 0 0.43 0.66 0.76 0.75 0.7 - 0.53 0.6 - 0.26 VEise.inC ge - - 2 - - 3 0 3E - 3 - 40 40 - - - 0 - - 30 30 38 L.2-E.4: - 58.3 - PtcoEgs 2.8 8.0 0.1 0.8 2.1 0,3 4.8 0.0 1.3 1.9 0.7 0.2 6.3 9.1 5.5 4.63 4.19 0 15.3 - 7.4 7.1 8.5 312 -161 4.06 6.786 - 1.5 n6 5 1. 20 30 08 80 36 27 9 000 25 55 513 685 22.6 211.2 54.3 0 5.5 236 827 81.0 788 3 122 505.3 640 239 iron 060 2.7 2.7 0.2 2.7 2.7 2.4 1.7 0.6 0.8 7.1 3.7 E.S 18.3 20.8 7.3 4.9 4.7 0 1,085 - 15.7 14.8 05.0 206 08.6 7.0 10.1.6 6 PFh.ph.r.s ego 215 210 95 1.40 276 60 480 35 1040 430 120 320 3128 562 430 062.29 3E5 5 509 - 82 849 788 - 1253 389.4 600 67 [ot ...ioapg 335 1129 140 9j-3044 j - - 192 - - 604b 624 229 374.0 424 ij - 1- - - .. 996.4 - - SOURCE, 'S.bprsgrarea de Di.tribuci.. Sireota de Alinentos' DNP, pMay, 1976. Table 6.  ANNEX 3 Appendix 2 COLOMBIA INTEGRATED NUTRITION IMPROVEMENT PROJECT Food Coupon System Flow Chart I F I W--s"- - ........ " -- . 4 PAN Director l Regional Health Regional PAN l Administration Director Producer_ Caja Agraria Regional Producer b ~~~~~Office Health Post Wholesaler Auxiliary Nurse * . Flows of: ._________I__ . b1. Coupons Health *-.---* 2. Information HealIth Distributor Worker * 3. Products i i .' ~ _4. Cash Beneficiary { Shopkceeper . Population * Acts as a "depository" for the coupons on behalf of the regional health administration. Health officials withdraw coupons from the regional Caja Agraria office to meet health post needs. World Bank - 17825  ANNEX 3 Appendix 3 COLOMBIA INTEGRATED NUTRITION INPROVEMENT PROJECT Coupon Beneficiaries and Costs 1/ Full National Project Only Coverage 1977 1980 1985 Health Post 2/ Population (000) 445 1,995 7,750 Coupon Beneficiaries by Province j Atlantico H 1,92 3,670 3-24 1,29 '09 2-4 12397 Bogota M 2,280 8,977 3-24 3,180 12,988 2-4 2,075 6,546 Bolivar M 1,383 9,340 3-24 2,027 13,514 2-4 1,317 6,811 Caldas M 476 2,958 3-24 689 4,279 2-4 448 2,157 Not Magdalena M 852 7,212 Applicable 3-24 1,352 10,436 2-4 887 5,260 Risaralda M 531 2,335 3-24 729 3,379 2-4 474 1,703 Tolima M 815 7,420 3-24 1,113 10,736 2-4 715 5,411 Valle M 1,575 8,614 3-24 2,173 12,463 2-4 1,421 6,281 Total M 9,148 51,889 296,856 3-24 13,237 75,078 429,660 2-4 8,603 37,839 1h1,484 *000 Coupons M 3,073 17,435 99,744 3-24 1,906 10,811 61,871 2-4 1.4X5 6,357 23,769 Total 6,424 34,603 185,384 Costs-million pesos 27.6 148.8 797.2 Number of persons reached 40,332 182,866 868,000 1/ M - pregnant women and nursing mothers 3-24 - infants aged 3-24 months 2-4 - children aged 2-4 years Based an annual rates and quarterly phase in of health post implementation / End of year population served during year; assumes 1985' coverage is 25% of total population. / In person-year equivalents, not equal to total persons reached.  ANNEX 4 COLOMBIANi INTEGRATED NUTRITION IMPROVEMENT PROJECT Health Services Health Sector Resources 1. It has been estimated that in 1970 Colombia spent 4.8% of its GDP on health care, 1/ a percentage which is probably still current. In 1973 this amounted to Col$11.6 billion divided as follows: national government, 26%; social security system, 20%; local government, 8%, and private and other, 46%. Most of these funds were spent on the operation and upkeep of costly inpatient facilities. In 1976, investment and recurrent expenditures of the Ministry of Health (MOH) and its decentralized agencies were projected to amount to 12% of the investment budget and 7.4% of the operating budget of the central government. 2. Colombia has 12,000 physicians, a ratio of 1/2,000 population. 2/ There is an average of one trained nurse/10,000 population, one auxiliary nurse/1,000 population, and one community health worker/6,000 population. 2/ These figures, however, do not accurately relect the availability of health personnel in most of the country. It is estimated by the Government that 40% of the population or most of the rural and urban poor have practically no access to health care. 3. Seventy-five percent of Colombian physicians practice in Bogota or departmental capitals where the physician to population ratio is 1/800 or less. In rural areas the ratio is 1/8,000. A similarly unequal distribution holds for nurses and auxiliary nurses, personnel largely employed in hospital facilities. However, even in the cities the poor are underserved because cultural and economic barriers impede access to the health care system. 4. In 1974 there were about 44,000 hospital beds (2/1,000 population) with 73% in government hospitals, 13% in hospital/clinics operating under the social security system, and 14% in the private hospitals and clinics. The average occupancy rate of hospital beds was 60%, a low figure. Outpatient facilities included about 2,000 health posts and centers, i.e., about 1/11,000 population. Most lower level facilities are poorly staffed, poorly equipped, and poorly maintained. Government Review of National Health Policy 5. A critical review of the health sector in 1972 by the Colombian government led to the development of a new health policy which calls for: (a) coordinating health sector policy with policy in other sectors; 1/ Colombia Health Sector Analysis, USAID, Bogota 1974. 2/ Ministry of Health Figures reviewed by Appraisal Mission.  ANNEX 4 Page 2 (b) developing a regionalized integrated health system giving priority to increasing coverage; (c) ensuring equitable access to health services for all, by extending coverage to the 40% of the population heretofore unprotected, mainly the rural and urban poor; (d) according high priority to preventive care, MCH services, and environmental sanitation; (e) introducing the medical team approach with delegation of functions to paraprofessional personnel; and (f) promoting active community involvement in program development and control. The National Health Plan 6. To implement the new national health policy, a national health plan was initiated in 1976. A regionalized health care system was designed which would operate at three levels. Within the commLunity, the key person is the health worker (promotora), selected locally by her community. The second level consists of community health posts staffed by 2 auxiliary nurses (auxiliares) who supervise a team of 4 to 6 he!alth workers. In urban areas these posts will be based at existing health centers, some already staffed by one physician and one dentist. 7. At the third level are the hospitals. The local hospital, an in- stitution where internal medicine, surgery, obstetrics and pediatrics are practiced by general physicians, receives patients from the health posts and health centers, in addition to servicing residents of its immediate (usually urban) area. The local hospital is linked administratively and functionally to the regional hospital, usually located in a large town or city where more specialized medical resources in surgery, pediatrics, obstetrics, gynecology, orthopedics, and pathology are available. The regional hospital, in turn, refers patients to the university hospital located in the capital of the region, where all medical specialities are practiced. 8. Reduction of per capita health costs currently estimated at around US$17.50 per person served 1/ is anticipated under the new system. An expected 95% of health problems will be handled at the local level by health workers and auxiliary nurses at the health posts or at the local hospital. It is expected that 4.5% of patients will require attention at regional hospitals and 0.5% at university hospitals. 1/ Mission calculation, January 1977  ANNEX 4 Page 3 Staffing for the Rural Health Post 9. The rural health post is intended to serve 6,000 people and is staffed by a team of six community health workers trained for up to 10 weeks by the regional health service, two auxiliary nurses who are graduates of an 18-month training program, and one sanitation worker. Each health worker covers approx- imately 180 households or 1,000 persons and performs the following tasks: (a) Maternal and Child Health (MCH): Identifying and screening preg- nant women for abnormalities and high risk factors; attending normal deliveries and paying post-natal health education visits to families; informing couples about family planning and referring them to the health post for such services. (b) Nutrition: Identifying and enrolling eligible children under four and pregnant or lactating mothers for the food coupon program in target communities; making home visits to supervise food utiliza- tion and promoting establishment of vegetable gardens and the maintenance of domestic animals; carrying out nutrition and health education with groups of mothers and individual families. (c) Medical Care: Providing curative treatment for children and adults with the following problems: vomiting, diarrhea, respiratory infections, cough and fever, dehydration, intestinal parasitism, malnutrition, skin rashes, fever, malaria, anemia, and accidents requiring first aid; obtaining blood samples to detect malaria and sputum samples to detect tuberculosis, and supervising the treatment of these disorders. (d) Environmental Sanitation: In coordination with the sanitation worker, promoting installation and use of latrines; promoting use of potable water, appropriate waste disposal and improvement of housing standards. (e) Reporting: Preparing map of area of work and a census of the target population; completing necessary data forms and statistical reports. 10. The auxiliary nurses are based at the health post, and are expected to carry out the following tasks: (a) Supervision: Visiting and supervising health workers 2-3 times per month. (b) MCH: Identifying and screening pregnant women in immediate areas of influence of the health post; referring high risk cases to the physician; attending deliveries, including those referred by the physician; educating in MCH care and providing family planning services.  ANNEX 4 Page 4 (c) Nutrition: Monitoring growth and development of children under five; enrolling those with moderate or severe malnutrition in a rehabilitation program; distributing coupons to beneficiaries identified and enrolled by the health worker; keeping coupon delivery records; carrying out nutrition education of mothers receiving coupons. (d) Primary Care: Providing simple care to children and adults and referring serious cases to the physician; carrying out epidemiolo- gical surveillance; administering smallpox, diptheria paratyphoid typhoid (DPT), tuberculosis (BCG), polio, measles, yellow fever, and rabies vaccines as indicated. (e) Information Management: Preparing a map of the health post area, by compiling program areas of the health worker and a census of the population by age group; consolidating all information provided by health workers and reporting on immunizations and diseases that need to be reported, cases attended, and nutrition activities. 11. Physicians based at the local hospital and equipped with four-wheel drive ambulances will supervise up to five health posts. A dentist equipped with a portable dental unit will service six health posts. Staffing for the Urban Health Center and the Health MAC Posi: 12. The urban health post covers 8,000-10,000 people and is staffed by a team averaging four health workers, two auxiliary nurses, one sanitation worker, a half-time physician, a half-time dentist, an administrative assistant and a security guard. The cost of half-time physician and a half-time dentist at each urban post are justified as long as the posts do not duplicate services already provided at local and university hospitals. Progress in Implementing the Plan 13. The Colombian government had planned to install 200 health posts throughout the country during 1976. Organizational problems and curtailment of government spending reduced the number actually developed to 114, still an impressive accomplishment. 14. Evaluation of this initial experience has been delayed because of earlier difficulties encountered but now resolved in implementating a proposed complex monitoring and evaluation system. In order to utilize experience gained during the first two years as feed-back to adjust pclicy and influence future planning, the Government agreed that the MOH would carry out a limited but intensive evaluation in 1977 of 50 existing health posts in different regions. The evaluation covers the training, coverage and workload of health workers and with special reference to food coupon distribution of the degree of integration between health care and other nutrition services and adequacy of financing and provision of material goods. In addition, the Colombian govern- ment with UNICEF assistance has completed an overall health system evaluation and monitoring methology which should be operational by 1978 (see Annex 9).  ANNEX 4 Page 5 17. Health post implementation has proceeded faster than development of appropriate curricula for training of personnel. The role of the health worker is new while the auxiliary nurse has been reassigned from the role of providing primary care under the physician to that of teacher and supervisor herself. The physician at the local hospital or health center hitherto has been primarily a clinician accustomed to giving individual care; he will now be expected to add to his responsibilities the leadership, instruction, and motivation of paraprofessionals. The training, function, and interrelation- ships of these three members of the new health team are currently under study by the Human Resources Division of the Ministry of Health. Continued research by qualified experts, of whom there are many in Colombia, is still essential for the design of optimal curricula, supervisory schemes, and a system of quality control. 16. The new health plan is expected to reduce morbidity and mortality with resultant long-range benefits to the economy. On the other hand, in- troducing 40X of the population into the present health care network will substantially increase recurrent costs of the health sector. Community participation will be necessary to help meet these costs. Moreover, only through effective community organization and incorporation of the recipients into the design and operation of the local health system can the preventive and educational goals of the program be achieved. The Division of Community Participation has been established at the Ministry of Health to develop policy and methodology for enrolling the community in the diagnosis and solution of their own health problems. The office, along with the Division of Planning of MOH, is also charged with supervising the organization of health posts throughout the country. The National Food and Nutrition Plan (PAN) Health Component 17. PAN aims at improving the health and nutrition status of the poorest half of the population through a combination of programs organized around the new health care system. A major component of PAN is the strengthen- ing of that system to reach the poorest segments of the population through the nutrition program, initially in poverty areas of the three USAID-financed regions and the seven regions and the Federal district of Bogota which con- stitute the communities under the proposed nutrition project for Bank-support. Food coupons are to be provided in these areas for infants, pre-school children and pregnant and lactating mothers by auxiliary health nurses, who also will identify these beneficiaries, monitor their nutritional status and impart nutrition education. Safe water supplies and latrines also will be installed in project communities, and nutrition education will be provided. Primary health care activities and preventive measures under the new poverty-oriented health policy are expected to reinforce the impact of the other nutrition interventions in combating the synergism of malnutrition and disease. Data obtained by community health workers will be used to monitor and evaluate the program.  ANNEX 4 Page 6 Health Services Under the Project 18. The Bank-aided project would implement 213 rural and 68 urban health posts covering about 90% of the total population of around 2 million in those areas. The average population reached per project health post would be b,400. A schedule for health post implementation during the first project year is in Appendix 1. Implementation schedules for resmaining project years will be guided by the findings of a study of health system implementation to be completed by September, 1978. The table below gives aggregate annual implementation proposals by region for rural and urban health posts. Proposed Project Health Post Implementation by Project Year and by Region Year 1 Year 2 Year 3 Year 4 TOTAL Region Rura.I Urban Rural Urban Rural Urban Rural Urban Rural Urban Total Atlantico 3 2 7 - 4 4 1 7 20 13 33 Bolivar 9 - 12 - 15 - 16 - 52 - 52 Caldas 5 - 5 - 5 - 1 - 16 - 16 Hagdalena 9 - 7 - 6 - 4 1 26 1 27 Risaralda 3 - 4 - 4 1 - - 11 1 12 Tolima 8 - 12 - 14 - 14 - 48 _ 48 Valle 12 - 15 - 5 9 6 10 38 19 57 Bogota - 4 - 10 2 10 - 10 2 34 36 TOTAL 54 6 62 10 55 24 42 28 213 68 281 Construction and Upgrading 19. Approximtely 56 health posts would be constructed under the project, along with structural upgrading of the remaining 225 existing posts. The cost of rural health post construction is around US$].17.93 per square meter, while in urban areas construction costs are US$89.49 per square meter. The Rural Health Post 20. The basic rural health post is a rectangular, one-story structure with a total area of 79 square meters. It will have a porch for small meetings and demonstrations which also will serve as a waiting room. Inside will be an  ANNEX 4 Page 7 examining room equipped with an examination table and chairs, a pharmacy and storage area, and a room for the auxiliary nurses. In some locations the structure may be connected by a walkway to a minimal living unit for the auxiliary nurses, consisting of a living room, dining room, kitchenette, bath and sleeping quarters. Urban Health Posts 21. An urban health post is a 183 square meter building that consists of two examining rooms, a dental treatment room, a small pharmacy, an office for the sanitation officer, a waiting room with capacity of 20 persons, warehouse and file areas and toilets for the public and staff. When two urban health posts are based in the same health center because of population densities, the building will encompass 219 square meters and will include two additional examining rooms. Equipment 22. Each rural and urban health post would be provided with essential equipment and furnishing. The cost of equipment per rural health post is expected to be around Col$781,000 and per urban health post around Col$528,000 at July 1977 prices. The schedule of equipment and its costs is in Appendix 2. Recruitment and Training of Personnel 23. Health Workers. Health workers will be drawn both from presently available maternal and child health workers and from the outside. All applicants must fulfill the following requirements: (i) age 18-40 years, (ii) minimum of four years of grammar school and a maximum of two years of high school, (iii) good health, (iv) residents of the village or barrio where they have been selected to serve, and (v) willingness to work for at least five years, although no written binding commitment is required. All candidates must be available for, and willing to attend, a training program at an assigned location and must have the approval and support of her family. Because of the socio-economic benefits accruing to the position of health worker, there is a wide choice of applicants. 24. The community would be informed of the recruitment program through the local radio station and/or community leaders such as school teachers, community action groups, Colombian Agricultural Institute (ICA) extension agents, auxiliary nurses and sanitation workers. Candidates are asked to apply through an organization that represents their neighborhood. Selection consists of two steps: (a) a written examination; and (b) a personal interview. 25. The training course for the new health workers takes place at the regional or local hospital and lasts 10 weeks. Each course is for 25 persons. The teaching team consists of a physician/coordinator, a nurse, an auxiliary nurse and a teaching aide. Appendix 3 summarizes for both new and retraining courses the subjects covered and the hours employed in developing each theme.  ANNEX 4 Page 8 26. The refresher and retraining course to be givan for the health workers currently working in maternal and child health services will follow closely the outline of the course for the training of the new health workers. Subjects new to those personnel will be emphasized, particularly delegation of health care to community health workers from auxiliary nurses and physicians. The course would last six weeks and would include 264 hours of theoretical and practical instruction. A total of 2,026 health workers would be trained; allowing for a 25% drop-out rate, the average cost of full training per candidate is estimated at Col$5,453. 27. Auxiliary Nurses. The project would provide for two weeks' re- training of 315 existing auxiliary nurses. The other 247 auxiliary nurses would be recruited and would receive 18 months training at a per capita cost of around Col$64,500. The auxiliary nurse, unlike the health worker, is a familiar figure in Colombia where she has been the backbone of health projects and medical services as well as nursing programs in regional and university hospitals. 28. A total of 32 schools of auxiliary nurses operate in Colombia: 28 for the National Health Services and four for the National Apprenticeship Service (SENA). The last curriculum revision took place in 1976 to reflect the new national health policy. Applicants must be female, 17-30 years of age, and have completed the equivalent of two years of high school. The training program consists of theory and practice for a total of 1,880 hours, followed by six months of supervised practice. Training is also divided into medical and surgical nursing and maternal and child care. Training in MCH consists of 645 hours divided as follows: theory 118, demonstration 117, practice 410. The medical and surgical program consists of 1,200 hours divided as follows: theory 187, demonstration 187, practice 826. Practical training takes place at university hospitals, regional and local hospitals, heialth centers and health posts. Clinical facilities of the Institute of Social Security and private clinics are also utilized. 29. The retraining and refresher course for present auxiliary nurses, which forms part of the proposed project, would last t:wo weeks (86 hours), divided as follows: introduction to the new national health system (5 hours), community organization (6 hours each for theory and practice), MCH (theory 16, practice 25), nutrition (theory 5, practice 10), training and supervision of health workers (theory 2, practice 4), administration (theory 4, practice 3). As in the case of the health worker curriculum, the function performed by the auxiliary nurse in handling food coulons is not yet reflected fully in the curriculum design. Experience gained in 1976 will be used to design this curriculum component. 30. An in-depth revision of training programs is nearly completed and the new curriculum will be available for general use by SENA and schools for auxiliary nurses at the regional office of the Ministry of Health in 1977.  ANNEX 4 Page 9 31. Physicians. Under the proposed project, one physician would be required for every five rural health posts and for every two urban health posts. The performance of these physicians as leaders, teachers, and moti- vators is key to the success of the new system. Colombian medical school graduates are not yet trained for this role; some of them are expected to be reluctant to accept the new policy of delegation of functions of auxiliary personnel. 32. Since curricular reform in medical schools will take time to imple- ment, retraining and supervision are necessary. The Human Resources Office at the Ministry of Health has concluded that a three-month course would be ideal but not feasible since physicians are assigned to public service only for one year. As a compromise, a one-month orientation course has been designed in collaboration with the Association of Colombian Medical Schools (ASCOFAME) and the regional health office of Cundinamarca, where it is being tried. The course emphasizes administration, rural service, team work and a multi-disciplinary approach to medicine and toxicology, all relatively neglec- ted in most Colombian faculties of medicine. In addition, the Office of Human Resources has made mandatory a monthly in-service training session for rural physicians which will be conducted by public health specialists from each regional health office. The objective is to complement the orientation course with informal education utilizing group discussions of field prob- lems. Both the course and in-service training program represent significant improvements although the outcome will depend on the quality of the instruc- tors and supervisors. Organization and Management for the Component 33. At the national level, the Programming Office of the MOH's Planning Division would be responsible for programming, coordinating and supervising the implementation and operation of project health posts in the reformed health care delivery system. 34. The Division of Community Participation of the MOH would monitor and evaluate community health post implementation, develop methods to ensure community participation in the organization of basic health services, and communicate the information and experience acquired to the Planning Division and other units in the MOH as well as to the regional health office. 35. At the regional level, the regional health office would be the executing agency and be responsible for implementing and operating this system. Within regions, the physician directors of regional hospitals are to be the chief administrators of sub-regional units (unidades regionales). At the local level, the resident physician at the local hospital/health center or the visiting rural doctor would be the leader of the health team. At the village level, the active involvement of the community in the development and operation of the health post system would be promoted by MOH personnel.  ANNEX 4 Page 10 36. In order to strengthen the organization and management of the MOH and the regional health offices, the project over four years would provide for (i) a health systems management consultant to the Programming Office of the MOH, (ii) a consultant with experience in community organization and development work to the Division of Community Participation of the MOH, and (iii) seven health systems management consultants to the regional health offices. Terms of reference for those positions appear in Appendix 4. An organization chart of the national health system and its regional and local branches is in Appendix 5. Component Costs 37. Investment costs for 281 community health pests would amount to around Col$153 million, of which around 29% would be for construction, 63% for furniture, equipment, local transport and radios, and 8% for training. Per capita investment cost would be around Col$82 and Col$67 for rural and urban health posts, respectively. Annual operating costs per capita would be around Col$129 in rural areas and Col$156 in urban neighborhoods. Salaries would represent between 63% and 72% of total recurrent. costs. Appendix 6 gives a break-down of annual operating expenses for typical rural and urban posts. The Bank would only disburse against operating costs during the initial 4 years of operation; total operating costs during this period (1977-80) amount to Col$382 million (US$10.6 million), The estimated base costs for this component are US$15.1 million. Details appear in Annex 13, Table 2. Implementation Schedule 38. An implementation schedule for this component is included in Appendix 7.  ANNEX 4 Appendix 1 COLOMBIA INTEGRATED NUTRITION IMPROVEMENT PROJECT Health Services Project Community Health Post Implementation Schedule-First Project Year (By Region and Municipio) By Quarter Region 1 2 3 4 Atlantico (10) Baranoa Baranoa Galapa Baranguilla (2) Juande Acosta Sto. Tomas Ponedera Tubara Pto.Colombia Bolivar (9) Calamar Morales Barrancadeloba Margarita Ma. la Baja Morales Mompos (2) San Fernando Caldas (5) Aguadas Pensilvania (2) Pensilvania Dorada Magdalena (9) Chivolo El Banco (2) Pivijay Cienaga Guamal Salamina San Zenon Tenerife Risaralda (3) Balboa- Tamboras Dos- Quebradas Pueblo Rico Tolima (8) Alpujarra Alvarado Natagaima Ortega Purificacion Prado Rovira Rioblanco Valle (12) Alcala Jamundi Alcala Palmira Bolivar Sevilla Buenaven- tura (4) Palmira Versalles Bogota (4) Bosa Meissen (2) Samaritana  ANNEX 4 Appendix 2 COLOMBIA INTEGRATED NUTRITION IMPROVEMENT PROJECT Schedule of Equipment for Rural and Urban Healt:h Post (Col$ 11) Number Unit Cost Cost Per Number Unit Cost Cost Per _________________________________ l _______ ___________ Health Post _ l Health Post 1. Furnishings and medical 213 151,380 151,380 68 275,964 275,964 equipment sets 2. Medical instruments for 426 3,696 7,392 136 3,696 7,392 health workers 3. Medical instruments and 1,278 5,371 21,483 272 3,480 13,920 supplies for health workers 4. Mobile dental units 36 152,419 25,403 68 152,419 152,419 5. Nutrition education kits 213 10,642 10,642 68 10,642 10,642 6. Two-way radios 213 52,800 52,800 Radios and transport not required for urban health posts 7. Bicycles 426 3,041 because of telephones and 90,500* ambulance availability from 8. Mules 867 21,027 urban hospitals. 9. Ambulance 53 230,208 57,552 TOTAL 417,152 460,337 1/ At January 1977 prices. * Average cost  ANNEX 4 Appendix 3 COLOMBIA INTEGRATED NUTRITION IMPROVEMENT PROJECT Health Services Curriculum for Training and Retraining of Health Workers