Senegal - Small Rural Operations Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 9332 PROJECT COMPLETION REPORT SENEGAL SMALL RURAL OPERATIONS PROJECT (CREDIT 991-SE) JANUARY 25, 1991 Agriculture Operations Division Sahelian Department Africa Region 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 Monetary Unit : CFA Franc (CFAF) Per US$ 1.00 Appraisal Year CFAP 210 Intervening Years CFAF 350 Completion Year CFAF 300 WEIGHTS AND MEASURES Metric System ABBREVIATIONS BNDS Banque Nationale de D6veloppement du S6n6gal (National Development Bank) CRA Capital Replacement Account FAC Fonds d'aide et de coop6ration (France) FED Fonds Europ;en de D6veloppement (European Development Fund) NGO Non-Governmental Organization PMU Project Management Unit RMWA Resident Mission in West Africa SAED Soci6t6 d'Am6nagement et d'Exploitation des Terres du Delta du Fleuve S6n6gal et des Vall6es du Fleuve S6n6gal et de la Fal6m6 (Senegal River Valley Development Authority) SERAS Soci6t6 pour l'Exploitation des Ressources Animales du S6n6gal (National Animal Resource Development Agency) SODEFITEX Soci6t6 pour le D6veloppement des Fibres Textiles (Cotton Development Agency) SODESP Soci6t6 pour le D6veloppement de l'Elevage dans la zone sylvopastorale (Livestock Development Agency) SODEVA Soci6t4 de D6veloppement et de Vulgarisation Agricole (Agricultural Extension Agency) SOMIVAC Soci6t4 de Mise en Valeur de la Casamance (Casamance Regional Development Agency) SONED Soci6t6 Nationale d'Etudes pour le D6veloppement (National Consulting Firm) SRO Small Rural Operations Project FISCAL YEAR Government: July 1 - June 30  FOl. OMCIAL USE ONLY THE WORLD SANK Was:iington, D.C. 20433 U.S.A. Office of DOteemW-Ckiwal Opetatmns Ivaluasrn January 25, 1991 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECT: Project Completion Report: Senegal - Small Rural Overations Proiect (Credit 991-SE) Attached, for information, is a copy of a report entitled "Project Completion Report: Senegal - Small Rural Operations Project (Credit 991-SE)" 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 official duties. Its contents may not otherwise be disclosed without World Bankc authorization.  FOR OFFICIAL USE ONLY PROJECT COMPLETION REPORT SENEGAL SMALL RURAL OPERATIONS PROJECT (Credit 991-SE) Table of Contents Preface . . . . . . . . . . . . . . Evaluatior Summary . . . . . . . .. . . . . . . . . . PART I: PROJECT REVIEW FROM BANK'S PERSPECTIVE 1. Project Identity . . . . . . . . . . . . . . . . . 2. Background .... . . . . . . . . . . .. .... . . . ... 1 3. Project Objectives .... . . . .. . . . . . . . . . . . . . . 2 4. Project Design and Organization . . ..... . . . . . . . . . . 2 5. Project Implementation .... . . . . . . . . . . . . . .... 5 6. Project Results . . . . . . . . . . . . . . . . . . . . . . . . . 8 7. Project Sustainability . . . . . . . . . . . . . . . . . . . . . 11 8. Bank and Borrower Performance .... . . . . . . . ...... . 11 9. Documentation and Data .... . . . . . . . . . ...... . . 12 PART II: PROJECT REVIEW FROM BORROWER'S PERSPECTIVE . . . . . . . . 13 PART III: STATISTICAL INFORMATION 1. Related Bank Loan/Credits .... . . . . . . . . . . ....... 15 2. Project Timetable . . . . . . . . . . . . . . . . . . . . . . . . 15 3. Credit Disbursements .... . . . . . . . . . . ........ 16 4. Project Implementation .... . . . . . . . . ........ . 17 5. Project Costs and Financing A. Project Costs . . . . . . . . . . . . . . . . . . . . . . . . 18 B. Project Financing .... . . . . . . . . . . . ...... . 19 6. Project Results A. Direct Benefits . . . . . . . . . . . . . . . . . . . . . . . 20 B. Economic Impact .... . . . . . . . . . . . . . . ...... 20 C. Financial Impact . . . . . . . . . . . . . . . . . . . . . . 21 D. Studies . . . . . . . . . . . . . . . .. . . . . . 21 7. Status of Covenants .... . 22 8. Use of Bank Resources A. Staff Inputs . . . . . . . . . . . . . . . . . . . . . . . . 23 B. Missions . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Map: IBRD 14615R 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.  PROJECT COMPLETION REPORT SENEGAL SMALL RURAL OPERATIONS PROJECT (CREDIT 991-SE) PREFACE This is the Project Completion Report (PCR) for the Senegal Small Rural Operations Project, for which Credit 991-SE in the amount of $11 million was aiproved on March 11, 1980. The project was closed on September 20, 1988, over three years behind schedule. It was virtually fully disbursed, with just $5,500 cancelled, and the last disbursement was on September 20, 1988. The PCR was prepared by the Agriculture Operations Division, Sahelian Department, Africa Region Office (Preface, Evaluation Summary, Parts I and III) on the basis of the Borrower's detailed completion report of April 1988. On April 6, 1990, the Bank sent the Borrower Parts I and III with the request to prepare Part II by June 1, but no reply was received. Preparation of this PCR was started in mid-1989, after project closure, and is based on the Staff Appraisal Report, the Credit Agreement, supervision reports, correspondance between the Bank and the Borrower and internal Bank memoranda, the Borrower's own Completion Report of April 1988, and the Staff Appraisal Report for the Second Small Rural Operations Project of February 6, 1989.  - iii - PROJECT COMPLETION REPORT SENEGAL SMALL RURAL OPERATIONS PROJECT (CREDIT 991-SE) EVALUATION SUMMARY Introduction 1. The Small Rural Operations Project was designed in response to Government's statements of objectives for the rural sector, and the objectives underlying iajor policies, which included: (i) the promotion of greater cohesiveness in rural society; (ii) increased production of home-grown food and making output less dependent on rainfall; (iii) diversification of exports; (iv) increased rural incomes and mitigation of urban-rural income differences; and (v) promotion of savings in the rural sector. Oblectives 2. The broad objectives of the project were to encourage local initiatives and tI.ereby broaden popular participation in investment decisions in the rural sector, and to undertake only those small rural projects that were manifestly in the interest of the beneficiaries. More specific objectives were to render small groups of producers creditwzrthy in the judgment of the local banking system, and to strengthen the existing Senegalese capacity for identification and preparation of small rural projects. Increased crop and animal production were additional, but incidental, project objectives. Implementation Experience 3. After a two-year preparation period, the project was appraised in July 1979 and the Credit became effective on September 10, 1980. The original closing date of June 30, 1984 was postponed twice, and the project closed on September 20, 1988. The project's difficulties included: producers' lack of familiarity with the innovative financial arrangements, discrepancies between different aid agencies' operating procedures, design errors that necessitated the reorientation of some sub-projects, and f -i,ent changes of sub-project managers. Sub-project performance was uneven, as was che attainment of project objectives. The Capital Replacement Accounts, which were devices to provide for forced saving toward renewal of mcdium-term assets, had mixed success; payments into such accounts were low but variable in the sub-projects in the north of the country, but high and more uniform in the south. Performance was judged sufficiently satisfactory with regard to the other objectives -- i.e, encouragement of creation of producer groups, reinforcement of the national project preparation capacity, and stimulation of interest in this sort of activity in the population -- to justify a follow-on project.  - iv - Resrilts 4. In terms of the number of activities undertaken, project outcomes exceeded appraisal estimates (Part III, Section 4) but the total number of beneficiary families is estimated at 2900 (para 36) ins'ead of 4200 (para 12). The recalculated economic rate of return is estimated at 13% as the weighted average for the five directly-productive subprojects (excluding village water supplies) instead of 17% at appraisal; including management overheads, the recalculated return is 10% instead of 14% at appraisal (para 38). Sustainabilitv 5. The Project appears to be sustainable: most farmer groups are willing to do their share of manual labor, investment proposals are plentiful, and acceptance of the Capital Replacement Accounts is 3.ncreasing. The sustainability of particular subprojects is not yet assured, in those cases where payments into Capital Replacement Accounts are lagging behind the costs of renewal of medium- term assets. Findings and Lessons Learned 6. The main lessons learned from this project are as follows: (a) The scattering of heterogeneous subprojects over very disparate areas makes implementation difficult, since effective supervision is difficult, yet the success of this type of project depends to a great extent on close supervision. There is a conflict, however, between the desirability of good supervision and spatial concentration, and demand-driven participation that may be spatially quite diverse. A difficult ci.aice has to be made, although implementation can be improved by (b) and (c) below. (b) Executing agencies for identified operations should be closely involved in the preparation and appraisal of subprojects for which they are later responsible. A necessary but insufficient condition for success is that contracts linking the Project Management Unit and the agencies must spell out clearly: (i) super-ision responsibilities during both construction and project execution; (ii) inputs expected from the agencies in preparing procurement documents and the selection of contractors; and (iii) the departments within the executing agencies to be responsible for backing up the subproject head and his team. (c) Attention must be paid to farmer training in management of collective assets and in making provisions for renewal of medium- term assets. This is a necessary but r.ot sufficient condition for success since collective management, even where there are clear scale economies, is a particularly tricky business.  PROJECT COMPLETION REPORT SENEGAL SMALL RURAL OPERATIONS PROJECT (CREDIT 991-SE) PART I: PROJECT REVIEW FROM BANK'S PERSPECTIVE 1. Protect Identity Name: Small Rural Operations Project Credit No.: 991-SE Regiont Africa Country: Senegal Sector: Agriculture 2. Background 1.01 Senegal has a population of about 6.8 million (5.2 million at the time this project was appraised) of which 70Z derive their livelihood from the rural sector. The country covers 200,000 km2, of which about 70% is suitable for rainfed production. Irrigation potential is substantial, exceeding 200,000 ha along the Senegal Valley alone. Aboat 60% of the rural population is concentrated within about 150 km of Dakar in the central Groundnut Basin. In this area, local population densities often exceed 100/km2 and there is little scope for further expaneion of extensive farming. Despite poor soils and erratic rainfall, and although its contribution to GDP is much lower than in most West African countries, the rural sector remains crucial to the Sengalese economy, and will remain in the foreseeable future the main source of employment and revenue for most of the population. 1.02 The Small Rural Operations (SRO) project was conceived as a follow-up to the Drought Relief Fund (Credit 446-'SE) which, through an innovative financial procedure, had financed rural water supplies, firebreak construction and fire- fighting equipment, as well as a one-year livestock vaccination campaign. Government and the Bank agreed that a follow-up project should emphasize more directly productive activities, and hence more direct participation by project beneficiaries. Under a PPF, detailed preparation studies were undertaken in March 1978 by the national consulting firm, SONED, with help from staff of the Ministry of Rural Development and the Bank's Regional Mission for West Africa (RMWA). Preparation was unusually long due to difficulties in deciding on an appropriate institutional framework and on effective means of providing guarantees for credit to be extended to beneficiaries. Preparation was completed in early June 1979, and ar. ap'raisal mission visited Senegal in June-July 1979.  -2- 1.03 As proposed, the project focussed on channelling funds and technical services to small groups of rural producers who were to provide labor and cash for the development of a variety of directly productive activities, of which five types were appraised. The project also included village water supplies, management services, and an allocation for other directly-productive activities to be identified and prepared during implementation. 3. Proiect Obiectives 1.04 The broad objectives of the project were to encourage local initiatives and thereby broaden popular participation in decisions concerning investments in the rural sector, and to undertake only those small rural projects that were manifestly in the interest of, and solicited by, the beneficiaries. The more specific objectives were to render small groups of producers creditworthy in the judgement of the local banking system, and to strengthen the existing Senegalese capacity for identification and preparation of small rural projects. Increased crop and animal production wias an additional, but incidental, project objective. 4. Proiect Design and Organization 1.05 The SRO project was designed against a backdrop of stagnation in the rural sector. Output from rainfed farming was stationary, since land intensification themes, as then defined, were not being adopted. The performance of the regional development agencies had thus far beeu disappointing, and Government recognized the need to make their top management and structure more effective. Decentralization of decision-making was being implemented by SAED, and similar steps were being considered for other agricultural parastatals. The provision for recurrent cost financing was also inadequate and the scope for increasing public revenue was severely limited. Government had recently tightened up on agricultural credit, refusing it for the 1979/80 season to cooperatives that had not paid at least 65% of all repayments due; the possibility of levying user charges was also being seriously examined. Finally, the cooperative movement as then constituted had not engendered local farmers' organizations capable of organizing joint endeavors. It was thus increasingly recognized that approaches other than cooperatives should be explored. 1.06 At the 1976 Annual Meetings, the Minister of Plan and Cooperation requested a follow-up project to the Drought Relief Fund Project (Cr. 446-SE). Terms of reference for a study were drafted by the RMWA in early 1977 in agreement with the Government, and Senegal's technical agencies were asked to submit project ideas. Preparation was delayed by disagreements between the Ministries of Plan and Rural Development on who should take the lead, and by subsequent disagreements on the need for outside consultants. 1.07 Other rural sector projects had already been implemented in Senegal, many with components similar to ones proposed for the SPO Project. Performance under those projects had been patchy and expected benefits increasingly unrealized. The main shortcomings mentioned in the completion reports related to: (i) the quality of engineering design and supervision of construction of project works; (ii) marketing problems, unremunerative prices and ineffective input distribution; and (iii) the need to investigate more thoroughly the social aspects involved in project planning and execution. During appraisal of the  -3- Smell Rural Operations Project, particular attention was therefcre paid to sound engineering preparation and supervision of small rural works, and to delivery of effective technical assistance to beneficiaries during and after construction. 1.08 While most rural development projects work more r less directly with producers and a limited number of suppliers, and concentrate on a few themes in a homogeneous geographic zone, the design of the SRO Project was considerably more complex: (i) it worked with producers through implemei.ting agencies and producer groups; (ii) the project was involved simultaneously in se,eral far- flung and dissimilar ecological zones (Fleuve, Sine-Saloum, Casamance, coastal belt) and handled disparate themes (rice, vegetables, wells, bananas, beekeeping, fishing); (iii) instead of handling only elements that had already been identified and appraised, a considerable portion of project financing had to do with operations to be identified and appraised in the course of implementation; and (iv) instead of providing producers with productive investments on no other condition than that they be properly used and maintained, the Project aimed to have producers contribute to those investments and to their renewal; (v) its basic objective -- the stimulaticn of entrepreneurial initiatives and self- management in the rural populati..a -- was Ltself much more subtle and complex than the delivery of irrigated perimeters, bbtz'ives or f'.shing boats. Such a strategy was ambitious, given the mediocre results obtained previously in Senegal with far simpler projects. 1.09 The location of the project in the Ministry of Social Development was a second-best compromise reached during appraisal. NGOs in Senegal deal primarily with this Ministry, while the execut4ng agencies responsible for the subprojects deal with the Ministry of Rural Development. The Project Director, who had also been the Director of the Drought Relief Project, felt that such an arrangement would afford him important leverage and bs-aining power that would be lost if the project were submerged _n the Ministry of Rural Development. 1.10 The criteria used for selection of the appraised operations under the project were that they be: (a) directly productive; (b) financially and economicallv profitable, with a net income per labor-day at full development of at least CFAF 275 (US$ 1.31 at the then-prevailing exchange rate), which was 25% more than the nationwide average rural income, and an internal economic rate of return of at least 10%; and (c) requested by, and manifestly in the interest of, a group or groups of producers. Those criteria were to be retained, during implementation, for the as-yet unidentified activities. An exception to the selection criteria was made for village water supplies, because of the difficulty in assessing the benefits of this investment. 1.11 As appraised, the Project included the following specific components: a) construction, equipment and technical services for 30 perimeters of 20 ha each for irrigation of rice in the Ngalenka Valley in the Fleuve Region; b) construction, equipment and technical services for 18 perimeters of 2 ha each for irrigation of vegetables in ThiOs and northern Sine Saloum Regions;  -4- c) construction, equipment and technical services for 15 perimeters of 4 ha each for irrigation of bananas at Sedhiou in Casamance Region; (d) construction, equipment and technical services for beekeeping and processing of honey and wax for four groups of beekeepers at Bignona in Casamance Region; e) provision of 20 small fishirg boats with outboard motors and ancillary equipment in Louga Region; f) provision of equip;ent for an open well brigade, construction of 50 new wells and deepening of 50 other wells in Sine Saloum Region; g) unidentified activities; h) provision of a management structure with the required technical and administrative staff and logistical support, including the capability for identifying, preparing, appraising and evaluating small rural projects. 1.12 It was estimated at appraisal that the Project's directly-productive, appraised activities, namely operations (a) through (e) above. would benefit some 2.400 families or 24,000 people. When unidentified activities were factored in, the total number of beneficiaries was estimated at 4,200 families or 42,000 people. In addition, abouit 100,000 people were to benefit from permanent village water supplies. 1.13 The extent to which the apprassed operations had really been reauested by groups of producers was in all cases problematic, since the identification initiatives came largely from regional development agencies and Government technical departments. Their proposals did, however, reflect ideas expressed in meetings between field staff and producers/beneficiaries. Once the project was underway, one of the main tasks of Project Management was to disseminate information on sub-project selection criteria and procedures. Producers were, moreover, better able to propose inivestment ideas once a tangible entity was in place with funds available. Up to then, there had been no clear procedures, little information available and only vague prospects of obtaining funds. The allocation for unidentified operations was to be used for small rural projects in which the producers had taken the key initiatives. The same tests of manifest i-terest on the part of the beneficiaries applied, namely: (a) a commitment to -rovide all unskilled labor during construction with no remuneration, either in cash or in kind; (b) lump sum cas3h payments into special Capital Replacement Accounts prior to the initial installation of medium-term assets; and (c) undertaking to provide for veplacement of such assets by making an annual payment, calculated at replacement cost, into each group's Capital Replacement Fund. An assurance was obtained at negotiations that the three above-mentioned criteria and the three tests of manifest interest would be applied in the selection of additional small rural projects to be financed from the allocation for unidentified activities.  5. Project Implementation 1.14 The project was exac! ed by the Project Managemenrt Unit (P!IU), existing technical service agencies, and producer groups. The PMU was established in the Department of Small Rural Projects in the Ministry of Social Development. Execution included the six appraised operations, as well as the identification, preparation and appraisal of as-yet unidentified operations and their subsequent execution. F,ach operation was confined to a limited geographic area, with fiel4 execution undertaken by one technical ser,vice agency and any number of producer groups. Producer groups averaiged about 30 participants per group. 1.15 Responsibilities of the PMU. For each appraised operation, the PMU was responsible for: (a) drawing up a contract for technical services with the relevant technical ageacy; (b) drafting a contract between the technical agency and each producer group; (c) acting, wherever appropriate, as procurement agent for the technical agency; (d) supervising the project's physical and financial execution; and (e) performing adequate monitoring and evaluation. For unidentified operations, the PMU was responsible for disseminating information on selection critera, terms and conditions of financing and procedures to be followed, as well as for assisting technical service agencies and producer groups in project preparation by providing guidelines and formal training. The PMU also had to appraise each new operation proposed and report thereon to the Interministerial Committee, which was set up to ensure broad project oversight. The PHU's other main responsibilities included preparation of the annual work program and budget, and semi-annual and annual progress reports, including the consolidated project account and a statement of the status of each Capital Replacement Account. These reports were to be submitted simultaneously to the Interministerial Committee and to IDA. To carry out these tasks, the 'MU had six, people working exclusively on the Project: the Project Manager, two rural engineers, two agricultural economists, and an accountant. 1.16 Responsibilities of the Technical Service Agencies. For the appraised operations, the agencies responsible for providing technical services were: Smell rice perimeters SAED Small vegetable perimeters Rural Development Centers Small banana perimeters SOMIVAC Beeke. sing Livestock Department, Casamance Fishing Fisheries Department, Louga Village water supplies Water Supply Dept., Sine Saloum Depending on the complexity of the operation and the producer groups' activities, the extent of the agencies' responsibility ranged from direct management of the first year's establishment of plantations in the small banana perimeters to a relatively light managerial input in fishing. For each operation, the relevant technical service agency was to keep accounts for project-financed expenditures, verify the .apital Replacement Accounts maintained by producer groups, and report on a quarterly basis to the Project Manager. 1.17 Responsibilities of the Producer Groups. The responsibilities of producer groups varied as a function of those of the technical service agencies. For all operations, however, the producer groups were supposed to organize themselves to: (a) provide all unskilled labor required during construction; (b)  - 6 - collect the cash deposit required prior to initial installation of medium-term assets, and subsequently to collect the annuity; (c) allocate land; (d) devise and apply rules ior access to common goods and services; and (e) col'ect the cash and/or provide the labor for operation and maintenance of shared facilities. To exercise these responsibiliti-s, the group required only a de facto identity with an appropriate operational structure, including the capacity to enter into contracts with the technical agencies that were providing assistance. A group's operational structure was to include, as appropriate, a general assembly, a management committee, and members elected for particular functions such as financial control and water distribution. Each group had to maintain simple accounts for common expenditures and receipts, and draw up an annual or seasonal financial statement and forecast. The technical service agency offered help on a demand basis. Each group had at least one bank account, the Capital Replacement Account and, at the option of the group, a second operating account for recurrent activities. While the PMU and the technical service agency advised groups of producers on an appropriate legal status and operational structure, the ultimate decision was the responsibility of each group. 1.18 Capital Replacement Accounts (CRAsO. One of the innovative features of this project was the provision of medium-term assete to groups of producers through Capital Replacement Accounts (CRAs) instead of through medium-term credit. The idea behind CRAs was to avoid some of the shortcomings experienced in Senegal with conventional medium-term lending for rural equipment. Banks could not get adequate guarantees on such lending, and were reluctant to channel funds. Also, collection performance of such medium-term credit extended by institutions other than banks had been disappointing and such loans were no longer perceived as being necessarily repayable. Finally, small rural projects had often begun well and then collapsed because the original medium-term equipment was not replaced. Under the system of CRAs, the PMU retained ownership of the equipment loaned to producer groups, and each group was required to accumulate enough savings to purchane replacement equipment when needed, which was generally four years after installation of the original equipment. 1.19 For each medium-term asset to be provided, the producer group would open a CRA at the nearest branch of BNDS, power of withdrawal being vested exclusively in the group. As a condition for receiving the asset, the group had to pay into its CRA an amount equivalent to at least 5% of the delivered cost of the asset. The asset remained the property of the PMU until the group had deposited sufficient funds into the account to replace it. 1.20 Overall, the project got off to a fair start, with only minor administrative problems. The project's mid-term review (June 1983), however, deplored the fact that implementation of the subprojects had begun to bog down. Two subprojects -- the vegetable and banana perimeters -- were held up by the need for redesign of the pumping systems. Two others -- beekeeping and fishing - - were held up by easily-avoidable mistakes in the specifications of the beehives and the fishing boats. Many avoidable delays in all the subprojects arose essentially from poor planning by the PMU. This poor planning created friction between the PMU and the technical agencies, hampering the alreauy difficult task of coordination and causing further delays. The case of the fishing boats illustrated Project Management's tendency to concentrate power too much. Procurement of the boats was a top-down rather than a consultative process, and  -7- the boats proved unsuited to their intended users. Technical difficulties with the construction of bunds at the rice perimeters of Ngalenka were also partly attributable to difficulties of coordination between the PMU and SAED. 1.21 Despite the existence of implementation contracts between the PHU and the executing agencies, project implementation was actually carried out by the PMU in collaboration with subproject teams nominated by those agencies. The teams often consisted of low-level technicians who were more extension agents than "project managers" and the PMU therefore began to fill this perceived managerial void by making most decisions about procurement, construction, creation of producer groups and technical control of works. This situation led to a lack of interest on the part of the executing agencies, and to insufficient follow-up on works. 1.22 The executing agencies had a tendency to consider the subprojects attached to them, and for which they were supposed to take virtually full responsibility, as marginal activities. The opening of the CRAs was also delayed by some inconsistencies in the agencies' approach to farmers. For most of the subprojects, farmer groups contributed some money to their CRA, but the initial lump sum payments were almost all tardy, either because the PMU was unable to install the equipment or to calculate how much the groups should pay into the account, or because the subproject teams failed to insist on payments. In many cases, farmer groups were found to be willing enough to open their CRAs, but were not receiving sufficient help in doing so. In this, as in most other things, the PMU was obliged to take the lead. 1.23 This lack of commitment on the part of the agencies was particularly noticeable in the case of SAED, which became uneasy in the course of project execution with the idea of a 5% initial deposit from producer groups, since the rules SAED applied to its own rice perimeters were different, depending on the source of donor funding. Sound conditions, such as the initial deposit into Capital Replacement Accounts, were driven out by lenient conditions admitted elsewhere. The degree of commitment to the basic principles of the project was somewhat greater with the other executing agencies. although they all had a tendency to view the project from a distance. 1.24 Slow execution of sub-projects was also partly attributable to the inadequate travel allowar.ce paid to local staff for supervision missions to the remote subproject sites. Since there was great reluctance to set a precedent with regard to incentives for project personnel, it was ultimately decided to have the IDA credit finance travel allowances and bonuses. Implementation may well have been easier if the sub-projects had been less disparate, both technically and geographically, and had been started in a phased manner. i.e., two per year, rather than all at once. 1.25 The main handicaps of the PMU were (i) a lack of planning and programming; (ii) a lack of technical know-how and, consequently, ineffective supervision and control of subprojects; (iii) too much concentration of power, even if by default; (iv) a lack of understanding of the project's administrative and financial requirements and (v) an ad-hoc decision-making process. The mid- term review mission made detailed proposals for improving the PMU, including the international recruitment of a rural engineer and of a project administrative and  - 8 - financial manager. These proposals were adopted in spirit if not to the letter; competent nationals were appointed to these positions. 1.26 As subproject proposals ("unidentified projects" component)