Malawi - Fourth National Rural Development Program (NRDP Dedza Hills and Lilongwe Northeast Development Areas) Project

Dotmt of The World Bank FOt OMCIAL USE ONLY MlGRPOF'IC$ 1;COPY Report l0. iO211-H&I Typet (PCR) SAP.H19NT0,/ X31680 / T9032/ OEDIAl Ripm o. 10211 PROJECT COMPLETION REPORT MALAWI NATIONAL RURAL DEVELOPMENT PROGRM, PEISE IV PROJECT (CREDIT 1343-M1) DECEMBER 31, 1991 Agriculture Operations Division Southern Africa Department Africa Regional Office This document has a restricted distribution and may be ased bv necipients only in the performance of theit official duties. Its contentss may not otherwise be disclosed witbout World Bank authoriation,  CURRENCYEOIALENTS Fiscal Yar U Malawi Kwach (MK) 1982/83 1.0 1.09 1983/84 1.0 1.23 1984/85 1.0 1.49 1985/86 1.0 1.76 1986/87 1.0 1.95 1987/88 1.0 2.30 1988/89 1.0 2.61 1989/90 1.0 2.70 1990/91 1.0 2.55 WEIGHTS AND MEASURES I hectare (ha) = 10,000 square meters Metric System GOVERNMENT FISCAL YEAR April I to March 31 ACRONYMS AND ABBREVIATIONS ADD Agricultural Development Division ADMARC Agricultural Development and Marketing Corporation CADO Chief Agricultural Development Officer (MOA) CARO Chief Agricultural Research Officer (MOA) CTO Chief Technical Officer CVO Chief Veterinary Officer (MOA) DH Dedza Hills (RDP) DLVW Department of Lands, Valuation and Water DS Deputy Secretary DTC Day Training Center EPA Extension Planning Area (part of an RDP) ERR Economic Rate of Return FAO/CP FAO.'World Bank Cooperative Program FC Farm Club Ha Hectare ICB International Competitive Bidding IDA International Development Agency LADD Lilongwe Agricultural Development Division LH Land Husbandry LHA Land Husbandry Assistant L-NE LOlongwe Northeast (RDP) MOA Ministry of Agriculture MOWS Ministry of Works and Supplies NARP National Agricultural Research Project NEAPS National Extension and Agricultural Planning Support Project NRDP National Rural Development Program PCR Project Completion Report PM Program Manager (Head of an ADD) PPAR Project Performance Audit Report RDP Rural Development Project (part of an ADD) RTC Residential Training Center SACA Smallholder Agricultural Credit Administration SAR Staff Appraisal Report SDR Special Drawing Rights STO Senior Technical Officer TO Technical Officer VA Veterinary Assistant WD Water Department (MOWS) WP Water Point  THE WORLD BANK FOR OMCIAL USE ONLY Washington, D.C. 20433 U.S.A. 06Ze ni N*C!(-.*W1 OpsfAtWm Evakatitm December 31, 1991 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECT: Project Completion Report on Malawi - National Rural Develoiment Program. Phase IV Proiect (Credit 1343-MAI) Attached, for information, is a copy of a report entitled "Project Completion Report on Malawi - National Rural Development Program, Phase IV Project (Credit 1343-MAI)" prepared by the Africa Regional Office. No audit of this project has been made by the Operations Evaluation Department at this time. Attachment This document has a restricted distribution and may be used by recipients only In the performance of their oMcial duties. Its contents may not otherwise be disclosed without World Bank authorizstion.  FOR OFFICIAL USE ONLY PROJECT COMPLETION REPORT MALAWI NATIONAL RURAL DEVELOPMENT PROGRAM (NRDP). PHASE IV PROJECT (CREDIT 1343-MAI) Table of Contents Page No. Preface ............................. i Evaluation Summary ............................. iii PART I PROJECT REVIEW FROM THE BANK'S PERSPECTIVE 1. Project Identity ............................. 1 2. Background ............................. 1 The Agricultural Sector ................................ 1 The Agricultural Development Strategy ............................ 2 3. Project Objectives and Description ............................. 2 4. Project Design and Organization ............................... 2 5. Project Implementation ...................................... 4 Extension Services. 5 Training. 6 Research. 6 Horticulture ............................................. 6 Land Husbandry .......................................... 7 Veterinary Services and Livestock Production ......................... 7 Credit. 8 Markets. 9 Water Supplies. 9 Project Administration .10 Procurement .10 6. Project Results and Inpact ............. ............... 10 Crop Production ............................ 11 Credit .............................. 13 Livestock Development .......... .................. 13 Social Services ............................ 13 Environment ............................ 13 Strengthening Project Administration ............................ 13 Financial and Economic Returns .............................. 14 7. Project Sustainability ............................ 15 Funding by Governmant ........... ................. 15 Crop Production ............................ 15 Livestock Production ............................ 15 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.  Cr e di t ................................................ 15 Maintenance of Buildings .................................... 16 Maintenance of Water Supplies ................................ 16 8. IDA Performance ........................................ 16 Lessons Learnt . ......................................... 17 9. Borrower Performance ..................................... 17 Lessons Learnt . ......................................... 18 PART 11 PROJECT REVIEW FROM THE BORROWER'S PERSPECTIVE ....... 19 PART III STATISTICAL INFORMATION Table 1 - Related Bank Loans and/or Credits ............................ 21 Table 2 - Project Summary ...................... ................ 22 Table 3 - Project Cost and Phasing . .................................. 23 Table 3A- Project Financing . ...................................... 24 Table 3B- Total Project Cost and Financing ............................. 25 Table 4 - Estimated and Actual IDA Credit Disbursements ................... 26 Table 5 - Key Implementation Indicators - Dedza Hills RDP .................. 28 Table 5A- Key Implementation Indicators - Lilongwe NE RDP ................. 29 Table 6 - Project Results ......................................... 30 Table 7 - Status of Covenants . ..................................... 32 Table 8 - Use of Bank Resources . .................................. 33 ANNEX 1: Tables I to 29 MAPS: IBRD 16547 IBRD 16548 IBRD 16549  PROJECT COMPLETION REPORT MALAWI NATIONAL RURAL DEVELOPMENT PROGRAM (NRDP). PHASE IV PROJECT (CREDIT 1343-MAI) PREFACE This is the Project Completion Report (PCR) for the National Rural Development Program (NRDP) Phase IV Project in Malawi, for which Credit 1343-MAI in the amount of SDR 9.80 million (USD 10.6 million equivalent) was approved on 20 May 1983.* The Project was closed on 30 April 1991, some two years and seven months behind schedule. Disbursements from the Credit totalled SDR 8.84 million (USD 11 million equivalent). At the time of the last disbursement on 20 September 1991, an amount equal to SDR 0.96 million (USD 1.3 million equivalent) remained undisbursed; this balance was cancelled as of 20 September 1991. Parts I and III were prepared by the FAO/World Bank Cooperative Program (FAO/CP) for the Agriculture Operations Division of the Southern Africa Department of the Africa Regional Office. The Bank sent the Borrower Parts I and III with the request to prepare Part II. No comments were received. Preparation of this PCR was started during a visit by a team from FAO/CP in February/March 1991 and is based, inter alia, on information gathered in Malawi, discussions with Project staff and officials of the Ministry of Agriculture, the Ministry of Works and Supplies, Bank staff associated with the Project, the Staff Appraisal Report, the Development Credit Agreement, supervision reports, correspondence between the Bank and the Borrower and internal Bank memoranda. * A recent Project Performance Audit Report (PPAR) by OED (Report No. 9750, dated June 28, 1991) includes a cluster of four NRDP projects of which this Phase IV Project was one. This PCR provides more detailed project-specific data that usefully supplements the Audit Report.  - iii PROJECT COMPLETION REPQRT MALAWI NATIONAL RURAL DEVELOPMENT PROGRAM (NRDP) PHASE IV PROJECT (CREDIT 1343-MAI) EVALUATION SUMMARY Background. Obiectives. Design Tne NKational Rural Development Program (NRDP) Phase IV Project was the eleventh Bank Group assisted rural development project in Malawi and was located in two of the Rural Development Projects (RDPs) which form part of the Lilongwe Agricultural Development Division (LADD). The main objectives of NRDP are to raise agricultural production, incomes and the standard of living in the smailholder sector. Following the recommendations of an NRDP Review Mission mounted by the Bank in 1981, the Project was designed to be less complex than previous projects by keeping the main emphasis on production-related agricultural activities. The Project included components to strengthen and support: the extension services responsible for crop production; horticulture; training; adaptive research; the women's program; land husbandry; and livestock production; and made provision for improved credit and marketing facilities. Though most non-production oriented components such as roads, health and forestry were deliberately omitted, a large water supplies component was included to help alleviate the unsatisfactory water supply conditions prevailing in many parts of the Project area. Provision was also made to strengthen the management capacity of LADD, including special support for the monitoring and evaluation unit. A further provision was made to carry out a livestock policy and program review to determine production constraints in the livestock sector. Implementation The Project faced several major constraints which impeded implementation. The more significant of these were: (a) There were severe shortages of qualified personnel to fill key positions, especially in the earlier years, and even when posted, frequent transfers of staff caused considerable disruption; (b) Procurement under International Competitive Bidding (ICB) procedures was unsatisfactory and seriously delayed the delivery of essential transport; (c) There were considerable delays in the building construction program resulting from .nadequacies in the preparation and processing of tender documents, the late payment of contractors, and shortages of materials; (d) There were serious shortfalls and delays in the release of counterpart funi^% which, during the last two years of implementation, seriously impaired the mobility and effectiveness of staff; and  - iv - (e) There was inadequate provision for resolving inter-departmental and inter- ministerial (lifferences. Resutia Despite the many constraints, implementation was generally successful insofar as operations under the direct control of Project management were concerned. The various extension services were satisfactorily strengthened, livestock facilities installed, input stores and markets established, an effective mechanism for the issue and recovery of seasonal credit established, and protected water supplies provided for around 180,000 people. Despite these achievements, the increase in agricultural production did little more than keep pace with the increase in population. While it is probable that climatic conditions, input supply and marketing problems, and sampling errors may have contributed to low production data, there were other important factors which had a major bearing on production. These were: (a) For the greater part of the implementation period almost two-thirds of smallholders remained outside the ambit of the extension and credit services and therefore contributed little to increased production; (b) Actual yields of hybrid maize varieties (produced mainly for sale) were less than predicted mainly because management priority was given to local varieties, grown for food; (c) Land expected to be released through increased production from higher yielding varieties of maize was not forthcoming and this, in turn, prevented the anticipated development of cash crops. Over the last two years there has been a marked increase in the area of hybrid maize, estimated to cover about 23% of the total maize area in the 1990/91 crop season. Further increases are expecteo,' as a result of the introduction of new varieties in 1991/92. Due to its reoent occurrence, however, it is too early to estimate the trend accurately and what role the extension services played to bring it about. Sustainability The services/investments supported under the Project are considered essential for sustainable agricultural growth. The greatest threat to sustainability is posed by inadequate funding under the recurrent account which, over the last three years of Project implementation, has shown imbalance in favor of personal emoluments, with relatively low provision for the operational effectiveness of the personnel concerned. While funding constraints are often encountered in countries having per capita GDP as low as Malawi's, this has adversely affected the mobility of the extension services from LADD level through to the field-level workers. Newly introduced extension systems, which show promise of reaching even some of the smaller farmers, are threatened because the intensive supervision and additional training essential for successful establishment have been restricted. The introduction and development of promising new varieties of hybrid maize during the 1991/92 season is at risk. Shortages of transport threaten credit recoveries since large amounts of cash accrue in field stations, where security arrangements are often inadequate. IDA has started to address this problem by providing operating funds through the Agricultural Extension and Planning Support Project and funding operating costs for  - v - extension is an Important issue being addressed during preparation of the proposed Agricultural Services Projxt. A further threat to sustainability rests in the depletion of the credit revolving fund which is administered by the Smallholder Agricultural Credit Administration (SACA) and which services credit requirements including those in the Project area. This fund has been depleted largely because of falling recovery rates and increases in fertilizer prices over the past two years, and SACA estimates that the upward trend in issues of seasonal credit will not be sustainable in :991/92 without the substantial injection of additional resources into the fund. Findings and Lessons Learnt The Bank is fully awarm of the imperfections in the design of the Project and, in particular, of the need for the extension services to reach and influence a greater proportion of the smaller and poorer farmers, and for the introduction of a more acceptable (flint) hybrid va.iety of maize. Considerable progress has already been made in both respects through the complementary ---a:rch and extension projects currently being assisted by IDA. NRDP IV is one of the !ast of the rural development projects to be funded by IDA since most parts of Malawi are already covered by NRDP projects. Sectoral projects that have in recent years taken the place of area-based projects can address problems (such as research to improve technology) that the earlier projects did not cover, whiile continuing to support NRDP services on a national basis. A further factor which will influence future policy (both of the Government of Malawi and IDA) and future project design, is the need for resources to pay increased recurrent expenditure inherited from NRDP projects.  PROJECT C:OMPEINPORT MALAWI NATIONAL RURAL DEVELOPMENT PRQGRAM (NRDP). PHASE IV PROJECT (CREDIT 1343-MAD PART I: PROJECT REVIEW FROM THE BANK'S PERSPECTIVE 1. Eroect Identju Project Name:National Rural Development Program (NRDP) Phase IV Project Credit No.: 1343-MAI RVP Unit:AF6AG Country: Malawi Sector:Agriculture 2. Background 2.1 The Project was prepared by the Planning Division of the Ministry of Agriculture (MOA) and submitted in February 1982 for consideration by the Bank. It was appraised by the Bank in April/May 1982. The IDA credit was successfully negotiated and the Credit Agreemen; signed on May 20, 1983, and became effective on August 22, 1983. 2.2 The Project was scheduled to extend over five years, starting in 1983/84, and expected to cost SDR 11.56 million of which IDA would provide SDR 9.80 million by way of credit, and the Government of Malawi would locally fund the remaining SDR 1.76 million. The Project was extended three times beyond the original closing date of 30 September 1988 to September 1989, September 1990 and finally to 30 April 1991, mainly to permit disbursement undeir the delayed water supply component; to utilize a portion of unexpeiued funds remaining under the credit for other expenditures associated with the Project and approved by IDA to fill construction and equipment gaps overlooked at appraisal; and to support a newly introduced pilot operation to improve extension work. The Agricultural Sector 2.3 As is the case in Malawi today, at the time of Pr(,ject formulation, agriculture dominated the country's economy. It contributed 40% of GDP, 89% of export earnings, and 45% of wage employment. Export earnings during 1981 included the sale of tobacco (48%), followed by sugar (26%), tea (12%) and grouadnuts (4%). Maize was not regarded as an export crop because of Government's established policy of maize self-sufficiency and retention of strategic reserves. 2.4 Though agricultural production derived from both the smallholder and estate sectors, and the former accounted for 81% of all production, production was largely geared towards meeting the country's food staple requirements (predominantly maize but including groundnuts, cassava, sweet potatoes, beans and rice). Within the smallholder sector, average farm holdings amounted to about 1.7 ha per farm family but holding sizes were skewed and about 70% of the holdings were in fact below 1.0 ha. In order to meet basic family food requirements, the overriding emphasis of the vast majority of these relatively small farmers was of necessity to concentrate on the production of food staples.  -2 - 3he_Ag i!turl Development Strategy 2.S '_ ament's strategy was a continuance of long-standing efforts designed to achieve and maintain self-t.-...ciency in food staples, increases in livestock production in order to minimize dairy imports, increases in agricultural exports, and improvement in rural incomes. In view of increasing land pressures in many dreas, resulting from an average annual increase in the population of over 3.0%, the major thrust of Govermnent's policy was towards a sustained rise in productivity from existing cultivable areas, and increased emphasis on soil conservation and afforestation in order to restore soil fertility. The proposed Project was to be part of the ongoing National Rural Development Program (NRDP) with the overall objectives of: raising smaliholder production to meet domestic needs and provide exports; assuring smallholder access to inputs and services; preserving Malawi's natural resources; and providing basic social service infrastructure. 3. Project Objectives and Description 3.1 The Project, which constituted the fourth phase of NRDP, aimed at increasing agricultural productivity and improving rural living standards in the Dedza Hills (DH) and Lilongwe Northeart (L- NE) districts, drawing on the experience gained from previous rural development projects in Maiawi, while incorporating a number of NRDP Review recomnnendations. The Project was expected to increase Dedza/Lilongwe Northeast maize production by 10%; tobacco, 50%; groundnuts, 3%; and intoduce wheat as a new crop. Specifically, the Project over a five-year period, included components to: (a) improve and expand district-level extension and training programs; (b) strengthen district-level research and horticulture activities; (c) support land husbandry including agroforestry; (d) construct three new diptanks and seven slaughter facilities, improve seven existing livestock dips and establish an animal drug bank; (e) expand smallholder credit and build marketing facilities; (f) provide potable water supplies; and (g) strengthen Project management and evaluation capacities. 4. proiect Design and Organization 4.1 The Project was effectively designed to support the strengthening of key agricultural services. Following the recommendations of an NRDP Review mission mounted by the Bank in 1981, the Project was designed to be less complex than previous rural development projects, with the main emphasis on production-related agricultural activities. Though water supplies were still included as an important component, roads, forestry and health were excluded, and the proposed farmer:extension agent ratio of 1:800 reflected the unsustainability of that of 1:350 adopted under the NRDP III Project. Nevertheless, the main Project objective still remained the same as that which the Bank had been advocating for well over a decade - to reduce the areas under food crops (predominantly local maize) by the introduction of higher yielding packages (mainly hybrid maize) thereby releasing land for the  production of cash crops. Agricultural production would also be increased through the strengthening of the support services and provision of seasonal and medium-term credit. Provision was also made to carry out a livestock policy and program review to determine livestock production constraints. 4.2 MOA had overall responsibility for implementation through the direction of a Deputy Secretary (DS) in the role of NRDP Coordinator, with the Program Manager (PM) of Lilongwe Agricultural Development Division (LADD) reporting directly to him. The PM would have day-to-day operational responsibility for the Project, to be supported by existing and additional technical officers both at LADD headquarters and in the two RDPs (Lilongwe North East and Dedza Hills), which formed the Project area. The staff at RDP level were to be headed by Project Officers, though lines of responsibility in respect of technical matters were to be to specialist staff in the technical departments or ministries. In this respect, the Chief Agricultural Development Officer (CADO), Chief Veterinary Officer (CVO) and Chief Agricultural Research Officer (CARO) would respectively retain technical lines of responsibility for agricultural extension, livestock and veterinary services, and agricultural research though the Project's administrative linkage would be with the DS. The Project was to have working relationships with other technical departments and ministries such as the Departnent of Lands, Valuation and Water (DLVW) in respect of the water supply con)ponent, and Ministry of Works and Supplies (MOWS) in respect of the building construction program. To assist in the implementation of the building program, 3 firm of consultant architects was to be appointed to coordinate and manage the civil works. 4.3 rn retrospect, there were various shortcomings in design, notably: (a) The statistical data available at the time of project formulation were inadequate and/or unreliable particularly in respect of agricultural production, with the result that many targets were either unrealistically low or highly optimnistic. Data on trends in the uptake of improved crop varieties and the uptake of credit were either unreliable or, more probably, discounted. (b) It was assumed that the extension service coverage would include the majority of smallholders, yet no measures were introduced to vary the established practice of channeling extension support to the relatively better-off Farm Club members (which effectively debarred the smaller farmers from access to seasonal credit for crop production). (c) L1 Husbandry Assistants and Farm Home Assistants were posted to Extension Plaiading Area (EPA) Centers but only provided with bicycles to cover operational areas with radii of about 20 km. (d) Though NRDP IV was largely production oriented in comparison to previous NRDP projects, the Project would still result in substantially increased recurrent expenditure on completion, and while there was full awareness of the mounting difficulty on the part of Government in meeting the recurrent commitment already accruing in respect of previous NRDP projects, the magnitude of this was still not fully appreciated and the sustainability of the Project was not fully addressed. (e) There was inadequate specific provision for resolving inter-departmental and inter- ministerial issues which arise during the impletnentation of integrated rural development projects. For example, the inadequate communications between  Project management and the Water Department of MOWS that caused delay in implementing the water component could have been avoided had there been a suitable forum for Project coordination. (f) Implementation targets were overly optimistic. For instance, it was unrealistic to expect much development activity during year one of the Project, yet physical objectives were set for this period, which were virtually unachievable. 5. Proj Implementation 5.1 The Project faced several major constraints which impeded the rate of implementation and, though most of these were particularly damaging during the earlier stages, several persisted throughout much of the implementation period. The more significant problems were: (a) Shortages of adequately trained staff particularly at LADD management level; (b) Frequent changes in the staffing of key posts; (c) Serious delays in the procurement of essential transport; (d) Inadequ!ate provision for the maintenance and repair of Project transport in general, and motorcycles in particular; (e) Delays in the tendering and award of building construction contracts; cumbersome lines of responsibility for timely payment of contractors' accounts; and periodic shortages of building materials; (f) Inadequate knowledge of IDA disbursement and reimbursement procedures and reporting formats, which differ substantially from standard Government practices; (g) Inadequate and unpredictable funding by Government; (h) Initial unsatisfactory liaison between LADD and the Water Department (WD) of MOWS which delayed borehole construction; and (i) The effective lack of a Project Steering Committee which should have served as a forum for resolving inter-departmental and inter-ministerial differences. 5.2 Project costs were close to those estimated at appraisal. Overruns in the water supplies program were due to the expanded program and construction delays. Overruns experienced for the credit component and IDA financed operating costs were due to extension of the Project period. The notable underexpenditure by Government is described in par& 7.1 Project investments were all completed before the original Closing Date, except those for water supplies. The latter program was slow to get off the ground and required two additional years to complete. During this time, the equipment/vehicle procurement and construction programs were expanded to fill gaps overlooked at appraisal. The key SAR targets and the extent to which they were achieved are set out in Part HI, Tables 5 and 5A. The implementation of individual components is discussed below.  -5- Extension Services 5.3 During the first two years of implementation almost all of the crop extension effort was channeled through the well established Farm Club (FC) network which, as today, represented virtually the only access to seasonal credit for small to average smallholders. Because the vast majority of small farmers tended not to join the FCs, and were more or less precluded from appropriate extension advice and support, Government introduced the "block approach" under which every smallholder was included in an extension area, and extension was effected through group demonstrations within the blocks even though the FCs still continued to function in parallel. By 1987, with support from the IDA-supported National Extension and Agricultural Planning Support Project (NEAPS), an extension pilot scheme was introduced in Mzuzu ADD and later expanded to include parts of other ADDs including some EPAs in L-NE and DH RDPs. In view of the apparent success of this approach it was further extended to cover all EPAs in the Project area by the start of the 1989/90 season. Under the system, in addition to the normal block extension activities, a network of small, on-farm demonstration plots are established, extension workers' programs are more tightly structured, and regular staff training is intensified. Despite some operational problems there are indications that, in general, both the extension staff and farmers concerned support the new approach, which goes some way to widening the coverage of the extension service to poorer farmers who previously perceived little relevance in its messages. 5.4 It is unfortunate that the extension service was not able to effect this change in emphasis in approach until the Project was nearing the end of its implementation period. Though the proposed extension worker: farm family ratios of about 1:800 were achieved in both RDPs and the service was satisfactorily reorganized, from about 1988 onwards the crop extension service suffered increasingly from shortages of transport at all levels and from severe limitations on the funds provided for transport operation. Because the new extension approach initially entails more intensive support and supervision than the standard block approach, the situation is a cause for considerable concern. Some of the technical specialists and supervisory staff at both LADD and RDP levels have been office-bound at times and are sometimes obliged to share transport for field travel. " 5.5 All of the proposed building works under the extension component were completed though most were well behind schedule. Some of the standard staff housing designs were replaced by low-cost designs in order to restrict expenditure. There were long delays in the provision of the electric power supply to the L-NE headquarters complex and, as of March 1991, the supply had still not been connected because meters remained to be fitted. In addition, the telephone connection to this headquarters, though completed, is unreliable. Incremental staff were recruited as planned and transferred to the recurrent budget by 1989/90. This included support for the Women's Program, but the effectiveness of the Farm Home Assistants has been limited since they operate from EPA Centers using bicycles only and, under normal circumstances, have restricted impact outside operational radii of about five or six kilometers from EPA headquarters. (Most EPAs have a radius of about 20 km.) " Supplementary operating funds are to be provided from the ongoing Agricultural Extension and Planning Support Project in the first place and from the proposed Agricultural Services Project later, until the Government's capacity to fund the services improves.  6- Training 5.6 The proposed construction of Day Training Centers (DTCs) was duly effected (under the extension component), and proposed improvements to the Residential Training Centers (RTCs) in both L-NE and DH RDPs were undertaken satisfactorily but, as with most of the Project's building construction program, completion of these works was well behind schedule. Until 1987, throughput of farmers and staff at the RTCs was reasonably satisfactory apart from disruptions to courses caused by the dry-season failure of water supplies at Dedza RTC (not rectified until 1989). After 1987, breakdowns of the ageing personnel carriers, provided under the training component, affected the throughput at the RTCs in both RDPs. This also restricted training of extension staff under th. pilot-scheme extension system. Just over 12,700 farmers and staff were trained at DH RTC between 1983 and 1990 (25% were women) and 8,125 at L-NE RTC (33% women). Attendance at the DH DTCs over the same period was almost 23,500 (of whom 28% were women) and that for L-NE DTCs was 26,825 (33% women) respectively. The DTCs were used mainly for training farmers. Course content appeared to be satisfactory in both the RTCs and DTCs and included agriculture, the women's program, primary health care, leadership, administration, credit and marketing, and evaluation procedures. Research 5.7 Research diagnostic surveys were conducted as proposed and established a basis for annuai adaptive research trials programs in both RDPs. The programs were established after close liaison between the RDPs, LADD management, and staff of Chitedze Research Station's Commodity Research Teams. Though only one Field Assistant (Research) was posted at each RDP, most trials appeared to be well conducted and generally reflected practical problems being encountered by farmers and extension staff. Whereas it was expected that Dedza Hills RDP would concentrate on horticultural trials, apart from several trials on Irish potatoes, the main emphasis was on wheat, maize and maize/legume mixtures. Trials on soyabean helped to pioneer the successful establishment of this crop, which now appears to have good potential in many parts of the Project area. 5.8 The additional Senior Technical Officer (STO) and Technical Officer (TO) were not recruited since these were provided by the Chief Agricultural Research Officer under funding from other sources. By 1988/89 transport problems were affecting the mobility of LADD and RDP adaptive research personnel. Despite this, the research component appears to have contributed significantly to improvements in crop technology in both RDPs. Horticultur 5.9 There was little activity under the horticultural component until 1984/85 in DH RDP and 1986/87 in L-NE RDP but progress since then has been good. The main focus of attention has been the production of fruit-tree seedlings - mainly of tropical species at L-NE and temperate species at DH RDP - and the demonstration of improved cultural practices for both fruit and vegetables at RTCs and DTCs. The DH RDP nursery distributed over 3,470 improved seedlings between 1984/85 and 1990/91, and L- NE over 9,950 between 1987/88 and 1990/91. Vegetable production (tomatoes, onions, cabbages, greens and Irish potatoes) in DH RDP has increased from around 570 ha in 1984/85 to 7160 ha in 1990/91, benefiting an estimated 10,000 growers.  -7- Land Husbandiy (LH) 5.10 Because of staffing constraints, the posts of Chief Technical Officer (LH) and Senior Technical Officer (LH) were never filled. The DH RDP Land Husbandry Section is headed by a Technical Officer (LH) who is supported by four LHAs - one per EPA. In L-NE a Technical Officer (LH) was appointed together with five Land Husbandry Assistants (LHAs) - one per EPA. Because the LHAs were only provided with bicycles much of their effectiveness has been restricted because of logistical constraints. This effectively ruled out the introduction of a long-term plan to control the degradation of the highly erodible and ecologically fragile areas along the hills and escarpments, which came under increasing pressure throughout the implementation period. Planning has, of necessity, been on an ad hoc basis and has been largely based on an extensive campaign of pegging contour marker ridges, and encouraging farmers to plant live buffer-strips along the contours, mainly in conjunction with crop extension workers and through the training centers. Catchment conservation took place in several areas and farmers were encouraged to use compost and FYM. In retrospect, the component suffered from under funding in relation to its imporiance, particularly in view of the relentless increase in the rural population which is forcing farmers iJlto areas which should not be cultivated in the absence of appropriate soil conservation measures; and from inadequate pressure from the national level to date, to mobilize the commitment and resources for a major soil conservation effort that is needed to protect the endangered Dedza Hills area. Veterinary Services and Livestock Production 5.11 Stallfeeding progra . Whereas the supply of stallfeeders in DH RDPs exceeded the SAR target (target 750 - actual 755) there was a considerable shortfall in supply in L-NE RDP (target 1,500 - actual 966). Most of the stock was supplied from Dzalanyama Cattle Ranch, and the remainder came from local cattle markets, other farmers and Likadzi Breeding Station but this proved to be inadequate since demand far exceeded supply in both RDPs. Transport of stock was often a problem since the onus for providing this rested almost exclusively with LADD, which experienced periodic breakdowns of its cattle transporters. The program was popular because, apart from the profitability relative to the short fattening period (normally 4 -5 months), stalifeeding is normally a dry season operation when there is spare labor as well as a supply of crop residues. (See Part III Annex I Table 7 - Stallfeeder Model.) 5.12 Daiy cattlg. As in the case of stallfeeders, the supply of dairy cattle was inadequate to meet demand. Only 102 pairs of half-bred dairy cows were provided in L-NE RDP against a target of 525 (no provision was made for DH RDP). Milk production was often adversely affected by the reluctance of farmers to relinquish adequate areas of cultivable land for the production of essential forage/fodder crops even though planting material of Napier and seed of Rhodes grass were generally available. The program also suffered because of breakdowns of cooling equipment at the collection centers, shortages of suitable feeding concentrates, and the losses incurred from East Coast Fever in the early years of implementation (until the successful introduction of a vaccine). Lack of experience in the management of improved stock resulted in low average annual yields (about 1800 lit, s). The cost to farmers of improved dairy animals (normally Malawi Zebu x Friesian) was, and continues to be, subsidized almost to the extent of 50%, even though the enterprise is still profitable at unsubsidized rates. (See Part Im Annex I Table 8 - Dairy Cow Model.) There still remains considerable scope for increased milk production in the Lilongwe catchment area which has an annual shortfall in the supply of fresh milk (about 20% in 1987/88) which is made up by imported skimmed milk powder.  -8 - 5.13 Drugs and vaccines. Though animal drugs and vaccines were provided under the Project the drugs revolving fund failed to operate effectively because of lax control and accounting procedures and the consequent shortfall in revenue necessary to effect the replacement of supplies. The unsatisfactory situation was exacerbated through the inability of Veterinary Assistants (VAs) to issue receipts to farmers for drugs provided. Furthermore, drugs were often held until well beyond expiry dates. 5.14 Diptanks. slaughter slabs and poultry houses. These structures were constructed as proposed using LADD building construction teams operating under force account, and have been operated effectively. The proposed additional VAs, dip attendants and laborers were recruited and have since been transferred to the recurrent budget. Low-cost staff housing was also constructed under force account. 5.15 National livestock development study. Considerable divergence of opinion on the need for the proposed National Livestock Development Study and difficulties in agreeing on Terms of Reference delayed the execution of the study, and the final report was not issued until August 1988. The total cost was US$ 194,224. It remains to be seen how much this study will contribute to improvements in the livestock sector. 5.16 Transport. From 1989 onwards, the transport situation was becoming critical in terms of both vehicles and operating funds. For example, as of March 1991, six senior members of staff of LADD's Veterinary Division reportedly had only one vehicle between them, and the 14 Al Technicians and Dairy Assistants were reliant upon highly unreliable motorcycles. 5.17 Seasonal credit. The Project was successful in establishing an efficient organization for the issue and recovery of seasonal credit. The only data available from LADD, however, are in respect of issues of credit which include some which were funded from sources in addition to the Project and it is not possible to isolate the amounts and cost of the various inputs attributable solely to the Project. This has resulted from the operation of the National Credit Fund which is controlled by the Smallholder Agricultural Credit Administration (SACA) and which forms a pool for all sources of credit. Because of this, some RDPs may have their credit funds supplemented by others having funds surplus to their requirements. SACA asserts that the Project area (and L-NE RDP in particular) was in fact assisted in this way, but it has not been possible to ascertain the extent to which this has occurred. The following information should be regarded with this situation in mind. 5.18 In L-NE RDP the number of recipients of seasonal credit packages rose from 9,120 in 1983/84 to 16,500 in 1990/91. Issues of fertilizers sold under credit rose from 485 tons to just over 3,000 tons in the same period, and inputs of hybrid maize seed from 36 tons to 158 tons. In DH RDP, seasonal credit recipients rose from 2,590 in 1983/84 to 7,870 in 1990/91 (but reached 11,000 in 1989/90). Fertilizer inputs rose from 680 tons to 1,800, and hybrid maize seed from 21 tons to 83 tons over the same period. Recovery rates were exceptionally good between 1983/84 and 1987/88 (being at or near 100% in most seasons) but, in common with the national trend, rates began to fall in the 1988/89 and 1989/90 seasons. During 1989/90 the recovery rates had fallen to 85.1 % in L-NE RDP and 87.6% in DH RDP. This increase in default was largely attributable to depressed yields caused by adverse weather conditions, increases in the costs of inputs (fertilizers in particular) and the raising of the credit charge from 10% to 12