China - Second Agricultural Research Project

Doctmnt of The World Bank FOR OM1CIAL USE ONLY RepRt No. 12228 PROJECT COMPLETION REPORT CHINA SECOND AGRICULTURAL RESEARCH PROJECT (CREDIT 1516-CHA) AUGUST 6, 1993 MICROGRAPHICS Report No: 12228 Type: PCR Agriculture Operations Division China and Mongolia Department East Asia and Pacific Regional Office 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 Currency Unit: Yuan (Y) Appraisal $1.00 = Y 1.9; 1984/85 $1.00 = Y 2.80 1986 $1.00 = Y 3.45 1987-89 $1.00 = Y 3.72 1990 $1.00 = Y 4.72 1991 $1.00 = Y 5.22 1992 $1.00 = Y 5.46 Y1.00 = $0.18 WEIGHTS AND MEASURES 1 meter (m) = 3.28 feet 1 kilometer (km) = 0.62 miles 1 hectare (ha) = 2.47 acres = 15 mu 1 kilogram (kg) = 2.2 pounds I ton = 1,000 kg = 2,205 pounds ABBREVIAT'rl)NS AND ACRONYMS ATES - Agrotechnical Extension Station CAAS - Chinese Academy of Agricultural Sciences CAS - Chinese Academy of Sciences CAST - Chinese Association of Science and Technology CMB - Central Meteorological Bureau CNTIC - China National Technical Import Corporation FAO - Food & Agriculture Organization ICB - International Competitive Bidding IDA - International Development Association LIB - Limited International Bidding MF - Ministry of Forestry MOA - Ministry of Agriculture MWREP - Ministry of Water Resources and Electric Power PC - Project Commission PIU - Project Implementation Unit PO - Project Office SAR - Staff Appraisal Report SPF - Specific Pathogen Free FISCAL YEAR January 1 - December 31  ]OX OfCIAL USE ONLY THE WORLD BANK Washington. D.C. 20433 U.S.A. Offls of DIr.otor-Genotal Operations Evaluation August 6, 1993 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIOENT SUBJECT: Project Completion Report on China Seaond Aaricultural Research Project (Credit 151 6-CHA) Attached isthe Project Completion Report on China: Second Agricultural Research Project (Credit 151 6-CHA) prepared by the East Asia and Pacific Regional Office. Part 11 of the report was contributed by the Borrower. Although it is too early to predict the eventual impact of this institution building project, most components were successfully implemented. The project outcome is rated as satisfactory and the benefits are likely to be sustainable. Some costly mistakes made in procurement could have been avoided with more intensive implementation assistance by the Bank; supervision missions were made only annually. Current problems are the poor repatriation rate of overseas trainees, and difficulties in maintaining and operating some of the more sophisticated laboratory equipment. A follow-on Agricultural Support Services Project was approved in February 1993. The Project Completion Report provides an accurate account of the project. However, the report should have elaborated more on how the pilot assistance to the country agrotechnical center model was integrated with the emerging Agricultural Service Companies at the township level and the technicians and "key households at the village level. The project may be audited as part of an OED study on the Bank's research and extension portfolio. Robert Picciotto by H. Eberhard Kopp Attachment This document has a restrcted distibution and may be used by recipients only In tve perfamance of their official duties. Its contents may not otherwlse be disclosed without World Basr authoriation.  FOR OMCAL USE ONLY PROJECT COMPLETION REPORT CHINA SECOND AGRICULTURAL RESEARCH PROJECT (CRIT 1516-CHA) TABLE OF CONTENTS Preface .. ....................................... i EvaluationSummay . ........................................ i PARTI: PROJECTREVIEW FROM BANK'SPERSPECTIVE .... ........ 1 1. ProjectI enity .................................. 1 2. Background ............ ........................ 1 3. Project Objectives and Description ...................... 3 4. Project Design and Organization ....................... 3 5. Project Implementation ............................. 5 6. Project Results ........... ....................... 6 7. Project Sustainability .............................. 8 8. IDA Performance ................................ 9 9. Borrower Perfornance ............................. 9 10. ProjectRelationships .............................. 10 11. Consulting Services ............................... 10 12. Compliance with Covenants .......................... 10 13. Project Documentation and Data ....................... 10 14. Lessons Learned .......... ....................... 10 PART II: PROJECT REVIEW FROM BORROWER'S PERSPECTIVE .... .... 12 iS. Introduction-Situation of the Project ....... ............. 12 16. Preparatory Work of the Project ......... .............. 12 17. Organization and Administration of the Project ..... ......... 12 18. Evaluation of Borrower's Performance ....... ............ 13 19. Training .................................... 14 20. Technical Assistance and Training ........ .............. 14 21. Disbursement ................................... 15 22. Preliminary Project Benefits and Lessons Learned .... ........ 15 23. Major Lessons Learned .............. ............... 18 This document has a restricted distribution and may be used by recipients only in the performance of their offlcial duties. Its contents may not otherwise be disclosed without World Bank authorization.  PART III: STATISTICAL INFORM ATION .......................... 20 1. Related Bank Loans and Credits 20 2. Project Timetable . . .20 3. Credit Disbursements . . .21 4. Project TmplFmentation-Key Indicators . . .22 5. Project Cost and Financing . . .23 A. Project Costs (including Contingencies) . .23 B. Project Financing .............. ................ 23 6. Project Results . . .24 7. Status of Covenants . . .25 8. Mission Data and Staff Inputs . . .26 A. Mission Data ..26 B. StaffInputs ..26 ANNEXES 1. List of Agricultural Research Institutes and Agrotechnical Extension Stations .......... ...................... 27 2. Rate of Return Analysis Based on Development of a New Cotton Variety ....................................... 28 3. List of Sophisticated Equipment Supplied .................. 30 MAP IBRD 25053  . i - PROJECT COMPLETION REPORT CHINA SECOND AGRICUL RESEARCH PROJECT (CREDIT 1516-CHA) PREFACE This is the Project Completion Report (PCR) for the Second Agricultural Research Project in China for which Credit 1516-CHA in the amount of SDR 24.3 million, equivalent to $25.0 million, was approved in March 1984. The credit was closed 2 years behind schedule on June 30, 1992, following extensions granted in June 1990 and May 1991. The total credit amount of SDR 24.3 million, equivalentto $29.0 million due to the depreciation of the US dollar aainst the SDR, was fully disbursed by the extended closing date. The Preface, Evaluation Summary and Parts I and m of the PCR were prepared by an FAO/World Bank Cooperative Programme mission 1/ that visited China during October 5-17, 1992. Part H was prepared by the Borrower. The PCR (Parts I and o) is based on the Staff Appraisal Report (SAR), the Development Credit Agreement, supervision reports, project files held in Washington contaning correspondence between IDA and the Borrower, internal IDA memoranda, documenation provided by the implementing agency (Project Proformas, statements of expenditure and achievements), field visits to four research institutes and two Agro-reclinical Extension Stations, and meetings with project and IDA staff in Beijing. 1/ C.J. Bevan, Agronomist and Mission Leader, and D.C.M. Corbett, Research Specialis Consultant.  - Iii - PROJECT COMPLETION REPORT CHINA SECOND AGRICULTURAL RESEARCH PROJECT (CREDIT 1516aCHIA) FVALUATION S Project Objectives 1. In line with the Government's aim of ensuring continued agricultural productivity, the main objective of the project was to support further agricultur?! uaensification through improved research and extension services. The project therefore provided funds to expand and improve 15 research centers tiroughout the country, and to support a pilot program to strengthen the exension work of 10 county-level agrotechnical extension stations (ATES). Centers were selected to reflect Government priorities for research (fbod and cash crops, livestock, aquatic products, forestry, hydrology and meteorology); and on the basis of their potential as demonstrated by past achievements, location, importance of research programs and staff competence. 2. The main activities to be supported were: (a) construction and renovation of research laboratories, offices, on-farm improvement and staff housing; (b) provision of scientific and farm equipment, materials and supplies and computers for the 15 research centers; (c) provision of library facilities, books and journs; (d) local training and overseas fellowships; (e) technical assistance to assist in review of research center programs and program formulation for the extension centers. The latter entailed assistance to develop an agrotechnical extension station model designed to conduct local field trials, train lead farmers and feed trial results back to researchers. Implementation Experience 3. With the exception of overseas technical assistance consultancies, all other key performance indicator targets were met or exceeded. Implementation of the civi works progeam (40 percent of total project cost) proceeded more or less on schedule, except for some delays experienced with the Specific Pathogen Free (SPF) facility at the Veterinary Research Center in Harbin. Ihe bulk of the equipment purchased under ICB was similarly delivered more or less on schedule. Delays were experienced with the supply of some of the directly purchased equipment. The local technical and language training programs were also implemented more or less on schedule. However, due to a large number of overseas trainees upgrading their studies to MSc, PhD or Post-Doctoral research, the average length of overseas study tours has more than doubled from that anticipated at appraisal, and this lengthened the overseas training programa. Delays were also experienced with the implementation of technical assistance (TA).  - iv - At the time of project closing (June 1992) it is estimated that less than 50 percent of the originallyplanned person-months of overseas consultancy had been utilized. The project period was extended twice in order to allow extra time for the purchase of equipment and spare parts, and to allow for completion of the overseas training program and TA. 4. The credit was fully disbursed at the time of project closing. However, the overall acta project expenditure was about $5.4 million less than originally anticipated, in part due to generous contingency allowances, especially for civil works. This was offset in the later part of project implementation to cover rising equipment and overseas training costs. The successful implementation of the project can largely be attributed to the lhard work of the Project Office established within the Min;stry of Agriculture. Results 5. The project was successful in meeting its principal objectives of improving the staffing and facilities of 15 research centers and 10 agrotechnical extensioa stations, which are now generally well equipped with offices, houses, laboratories and scientific equipment. The civil wotks program exceeded its original physical target by 13 percent; the US dollar value of equipment provided was some 40 percent more than originally anticipated-due largely to transfer of funds from the technical assistance category and depreciation of the US dollar against the SDR over the project period. The local and overseas degree programs exceeded their person-year targets by 35 percent and 160 percent, respectively. In contrast, the technical assistance program only achieved some 42 percent of its target. No attempt was made at appraisal to calculate a rate of return for the project because of the difficulty of eisaggregating the contributions of investments and benefits of research, extension, irrigation and training to overall Increases in yields and production. For the same reasons, and because there are as yet no discrete technologies that can be attributed to the project, no rate of return analysis for the completed project was undertaken at project completion. 6. It is too early to expect the project to have resulted In the development of new improved technologies and their uptake by the farming sector. The project has, however, contributed substantially to raising the standards of scientific staff attairnents and there are signs of increased research productivity or output-thus the number of research programs/projects and of published papers has increased. There is also evidence of an increase in the rate of selection and development of new crop varieties (e.g., cotton and wheat). 7. The agrotechnical extension centers supported by the project are now suitably housed and equipped. Evidence suggests a significant improvement in the organization of extension services, training of extension agents and "key' farmers, and the provision of supporting technical services either from their own resources or through contacts with neighboring university laboratories or research institutes. There are signs that Extension Committees set up at the ATESs are working reasonably well, providing a two-way means of communication-feeding technical messages from researchers to extension workers and feeding back farmers' problems to researchers. 8. Somewhat less encouraging is the apparent underutilization of much of the scientific and extension equipment supplied under the project, especially in the early part of  v - project Implementation. This can be attributed pardy to the inevitable time lag between the arrival of new equipment and the modification and development of research programs to make full use of new facilities; it also reflects a shortage of trained technicians and delays associated with the return of students trained overseas familiar with the use uf such sophisticated equipment. However, it Is also the case that much of the equipment is very sophisticated (see Annex 3) requiring stable, high wattage power, which is not always avaflable, and expensive reagents and separation media. Given the modest operational budgets of many of the institutes, it is difficult for them to afford full utilization of such equipment. The situation improved in many of the research centers towards the later part of the project, and lessons relating to equipment have already been reflected in recent projects. Project Sustalnabllity 9. The project was designed to ensure an increase in technologies available to the farmer by enhancing the physical capability of research institutes and agrotechnical extension stations and providing better trained staff. In very large measure, these improvements have been made and there are already encouraging signs of an Increased output from the system that will be sustained by regular research funding. There is, however, some concern about the ability of the instittes to maintain and repair some of the sophisticated equipment, given the Government's present failure to augment maintenance funds at institutes provided with sophisticated nstrumentation under the project. Of greater concern is the nonreturn of many research staff trained overseas. An estimated 50 percent of trainees are not expected to return. This represents a huge loss of manpower to the research system, and will result in continued underutilization of equipment, and a much slower than anticipated development of new technologies. mndings and Lessons Learned 10. Experience under the project indicated: (a) the need for greater effort to encourage the return of students who have completed their studies; and (b) the need for greater efforts to identify and recruit overseas speciatists for technical assistance consultancies. Other lessons mainly relate to equipment. First, IDA should have made greater efforts to ensure that sufficient funds were provided for the operation and maintenance of equipment provided under the project. Secondly, it would have been advantageous to establish a central maintenance and repair facility for specialist equipment, as repeatedly recommended by supervision missions, for which there is no service agency in China. Thirdly, project expert opinion should have been provided during project implementation with regard to equipment selection and procurement. This would have prevented some of the unfortunate purchases made in the project (see para. 4.4), and might have resulted ir a better balance between sophisticated and more routine equipment. Although potentially very useful, much of the equipment supplied is sophisticated for many of the research programs currently being undertaken. Fourthfly, for individual items of specialized equipment, greater use should have been made of Limited International Bidding rather than International Competitive Bidding. This would have helped to prevent the supply of low-cost obsolete equipment, as occurred with computers.  PROJECT COMETION REPORT CHINA SECOND AGRICULTURL RESEARCH PROJECT (CREDIT 1516-CHA) PART I: PROJECT REVIEW FROM BANK'S PERSPECTIVE 1. Project Identity Project Name : Second Agricultural Research Project Credit Number 1516-CHA RVP Unit : East Asia and Pacific Region Country China Sector Agriculture Subsector Agricultural Support Services 2. Background 2.1 Agriculture. Agriculture in China provides sustenance to over one billion people, and accounts for about one third of the country's GDP. Agricultural development has been accorded high priority since the founding of the People's Republic. Over the period 1955-78 the sector grew by about 3.2 percent per annum, with grain yields doubling between 1952 and 1978 and the basic food requiremens of the population being met In normal years. 2.2 Since that time, goverment priorities have been aimed at mainang self- sufficiency In grains and improving output of cash crops, livestock and fisheries, and increasing the area of forests. With only about 14 percent of the nation's 960 million ha in arable cropland, however, and with a growing population, these aims can only be achieved by firher intensification of agriculture. Key elements of the Government's strategy to achieve these aims have therefore included: designation of speci production areas for marketable crops, improved distribution and marketing, improvement of producer icentives, construction of irrigation systems, expansion of agricultural research activities, increased use of modern inputs and technology, and strengthening of the agricultural extension system. 2.3 Agricultural Research. The Chinese Academy of Sciences (CAS) is the nation's premier research agency responsible for over 100 National Research Institutes undertaking primarily basic research, including some important work in the agricultural sciences. At the time of project preparation, the Chinese Academy of Agricultural Sciences (CAAS) of the Ministry of Agriculture (MOA) was the most Important agen involved in applied and adaptive agricultural research at the central level; it was responsible for soe 31 research institutes, 3 research laboratories and a central library and information service. Total staffing numbered nearly 9,000, of whom 45 percent were research scientsts. As well as CAAS, a nmber of smaller ministerial agencies sponsor research in such specialized fields as aquatic producs and tropical crops; forestry, wate resources and meteorology research are colled by other relevant Ministries. At the provincal level, provincial academies of agricultura science take the lead in conducting applied/adaptive research. These academies are supervised and fimded by provincial  -2 - governments, but guidance in research planning is provided by CAAS or other central ministry affiliates. At appraisal, there were 393 agricultural research institutes at the provincial level and above (icluding those of CAAS), with a total staff of about 60,000. 2.4 Since the 1950s there have been some impressive research achievements, with notable advances in such important areas as high-yielding rice and wheat varieties. Overall, however, the quality and volume of research has been variable. Tle service was badly disrupted during the long Cultura Revolution (1966-76) when it was cut off from the international scientific community, and was subject to political rather than scientific management and direction. During the Revolution, many research centers were closed or repossessed and minimal funding w's provided for equipment, supplies and maintenance. The Cultural Revolution through its anti-elitist ideologies also affected the quality of CAAS staffing and the trning of scientists at universities. Thus in 1983, only 40 percent of research staff at the institutes to be helpfd by the project had bachelors degrees, and only 13 percent had PhD degrees. 2.5 AgrIculural Colleges and Universides. In 1979 there were 85 i of higher learning in agriculture enrolling about 100,000 students, including 1 percent at the postgraduate level. In addion w participating in short-tem research projects assigned by central agencies, a number of agricultural colleges have played an advisory role in designing and setting up special regional research units. 2.6 lInks between Research and Extsion. The provinces, counties and townships are primarily responsible for extension, demonstation and training. MOA, through its General Extension Bureau in Beijing, administers a vast extension network responsible for supevising a hierarchy of agencies/uts reaching down to the specialized or demonstration household level. In 1979, the Government began a major program to further upgrade extension services and pesonnel in order to expedite the transfer of new technology to farmers. IMis was to be achieved by replacing the county research institute in each of China's 2,300 counties with a new agotechnical extension staion which would combine under one administration such previously independent services is soil testing, seed production and plant protection. By 1983, over 300 staions had been established, two-thirds financed by provinces, municipalities and counties. Extension personnel at the time numbered about 170,000, of whom only 35 percent had formal training. Primary functions of the new stations are: (a) to conduct local testng and demonsation-bodt at the etsion stations and selected fiam sites-of research cente fidingp, (b) to promote acceptance by farmers of tested packages of new technotogy, (c) to provide or-term training courses to "key farmers who would be expected to relay new knowledge to other farmers, and (d) to inform research centers of additional production constraints which may arise as the new tecbnology is widely adopted. 2.7 Bank Group Lending for Agriculture. ITe first Bank Group operation in the agriculure sector was a $60 million IDA credit fr the North China Plain Agriculture Project (Credit 1261-CHA) which was approved in June 1982, and aimed at providing irrigation and drainage for 200,000 ha covering part of nine counties in three provinces. The second project, the Agricultural Education and Research Project (Credit 1297-CHA), for which an IDA credit of $75 million was approved also in 1982, spported the Government's program to strengthen higher education and research in the agricultre sector by providig civil works, equipment and technical asistance to selected agricultral coUleges and rearch Instutes. Since 1982, over 30 projects (oaos and credits) have been approved in the sector, financing investmes in land reclamation, rural credit, economic tree crops, agroprocessing and virtualy the entire  -3 - range of agro-industries, livestock, aquaculture and marine fisheries, irrigation and drainage, flood control, fertilizers, seeds, rural policy reform, forestry and integrated area development. In addition to Credit 1297-CHA, related support service projects include the University Development Project (Loan 2021/Credit 1167) for $100.0 million approved in 1981; and the Second Agricultural Education Project (Loan 2444/Credit 1500) for $45.3 million approved in 1984. The Agricultural Support Services Project, much broader in scope and in geographical and organizational coverage, but based in part on the experience of this project, was approved for $115 million on February 23, 1993. 3. Project Objectives and Description 3.1 Objectives. An Agricultral Research Study undertaken in 1984, under the IDA-financed Agricultural Education and Research Project (Credit 1297-CHA), identified the main needs of the system as fiuther improvement of physical facilities and development of requisite high level manpower to increase the volume and quality of research, strengthened research planning and management, and improved communication of research results to farmers. The main objectives of the Second Agriculturl Research Project were to meet these needs by expanding and improving 15 Research Centers throughout China (see Figure 1 and Annex 1) responsible for priority research in food and cash crops, livestock, aquatic products, forestry, hydrology and meteorology. In addition, the project aimed at supporting a pilot program to strengthen the extension work of 10 county level agrotechnical extension stations. 3.2 Project Description. The project provided for: (a) construction or renovation of 112,000 m2 of laboratories, offices, farm facilities and staff housing for the research and information centers; (b) acquisition of scientific equipment, both standard and specialized items, farm equipment and computers for the research centers and audiovisual and analytical equipment for the extension stations; (c) library equipment, books and materials to upgrade research center library facilities; (d) local and overseas training for both center and station staff in the agricultural and related sciences, management and library science as well as English language training for reseach staff, and (e) technical assistance to assist in review of research center programs, program formulation for the extension stations and future project preparation. 4. Project Design and Organization 4.1 The project, as prepared by MOA and reviewed by an IDA mission in April 1983, was designed to provide support for research centers that: (a) were located in six different agrocological zones; (b) were carrying out research reflecting government priorities of raising crop yields, developing underutlized resources and improving research/information management; and (c) had the potent based on past achievements, location, and staff competence to generate new technologies capable of Increasing agricultul productivity. By and large, support was provided to Research Centers that did not receive support under the first Agricultural Education and Research Project.  -4 - 4.2 Simultaneously, the project included support for a pilot program of assistance to 10 recently formed agrotechnical extension stations (ATES) in 10 different county cultivation areas. The stations are primarily responsible for organizing extension efforts through townships, villages and demonstration households, and conduct training courses at all these levels. They also undertake field trials with new crop varieties/packages of practices to select those best adapted to local use and test other research findings. Each station was to be supplied with a standard package of audiovisual equipment, simple laboratory equipment and soil testing materials; a field vehicle was also to be supplied to each station. The equipment included 16 mm film projection equipment and an extension trailer, with a variety of equipment inside. Technical assistance was to be provided under the project to assist the 10 ATES in program formulation and establishment of Extension Committees to oversee and advise on all aspects of their operation. 4.3 Given the rundown state of much of the service in the 1960s and 1970s and the government priorities to raise agricultural productivity through developing new technologies, the overall project concept and design was appropriate and timely. No major problems were experienced that can be attributed to poor design in respect of the civil works program, all of which had been approved by MOA at the time of project appraisal. 4.4 There were some problems associated with equipment procurement and provision of technical assistance, which can be attributed partly to weaknesses of project design. In the early years of the project some difficulties were experienced in selecting the right equipment. For example, the choice of minicomputers was inappropriate given the limited application software available for such machines; the mobile audiovisual/training trailers supplied to the ATES have proved to be almost useless; and the 16 mm film projectors were virtually obsolete on arrival given the emergence of video equipment in the early 1980s. These difficulties could have been minimized if the project had made greater use of technical assistance to advise on specialist equipment selection and sourcing (as in the case of the Specific Pathogen Free facility in Harbin). 4.5 In view of the substantial costs in foreign exchange associated with repair and maintenance, a second design weakness associated with equipment was the failure to either covenant a requirement for MOA to increase operational funding to cover increases in equipment maintenance costs, or to build in mechanisms to provide for funds to maintain and repair the equipment upon project completion. A specific design weakness concerns the Veterinary Research Center (established in 1948) in Harbin in Heilongjiang province in the northeast of China. Before project implementation, this center had successfully developed numerous vaccines and diagnostic procedures, the most significant being the production of the world's first vaccine for equine infectious anemia. Nevertheless, it was felt necessary to construct a new animal laboratory building, including facilities for the production of Specific Pathogen Free (SPF) animals for research and the production of vaccines and antisera. This decision apparently overlooked the lack of experience in the specialized technology involved which, coupled with slow release of counterpart funds, has led to significant delays in the completion of the facility. The lack of specialized expertise, together with estimated annual operating costs of $1.0 million needed by the new laboratory building, may jeopardize full use of the facility. A further design weakness was the failure to covenant the requirement to recruit the target number of technical assistance experts. 4.6 At the national level, the organizational arrangements called for MOA to have primary responsibility for the project, with the Director of MOA's Education Bureau serving as the Project Director. A Project Office (PO), staffed by the Bureaus of Education, Science and Technology and  - - headed by a Project Coordinator, was responsible for day-to-day project management. The PO had five subsections responsible for Liaison and Coordination, Projects, Finance, Fellowships and Equipment Procurement. Tbis organizational structure was based on that developed for Credit 1297-CHA, and generally appears to have functioned well throughout the project. The P0 was assisted by Project Implementation Units (PIUs) established at each of the 15 research institutes and 10 ATESs. These units were responsible for local planning, budgeting and monitoring. The PIUs were all established early in the life of the project. Ihe Project Coordinator paid a number of visits to the project institutes during the project, and the five subsections played a major role in equipment selection and the fellowship program. Interagency coordination was provided by a project panel comprising senior officials from MOA, the Ministry of Forestry, Ministry of Water Resources and Electric Power, and Central Meteorological Bureau. 5. ProJect Implementation 5.1 Loan Effectiveness and Project Start-Up. The Credit Agreement was signed in December 1984 and the Credit became effective soon afterwards in March 1985. However, implementation of the civil works program began as soon as the Credit was signed. 5.2 Inplemnentation Schedule. The project was originally scheduled for completion in December 1989, five years after signing. Most of the civil works program, the largest single expenditure category accounting for 40 percent of total project cost, was implemented on schedule. There were, however, serious delays in the construction of the SPF facility at the Veterinary Research Center in Harbin due to slow release of counterpart funds and technical difficulties. The equipment to be procured by International Competitive Bidding had been delivered more or less on schedule by the end of 1989, with most of the deliveries taking place between 1986 and 1988. Considerable delays were, however, experienced with the supply of directly purchased equipment. At the end of 1989, some 60 percent of this equipment had still to be delivered. The project closing date was extended twice, in 1990 and 1991, in order to allow extra time for the purchase of equipment and spare parts, and to allow for completion of the training program. 5.3 The local and overseas training program was to be implemented from the end of the first year until project completion, and it started as planned in 1985. The local technical training and language training programs were implemented more or less on schedule. However, due to a large number of overseas trainees upgrading their studies, either from advanced studies to MSc, from MSc to PhD or from PhD to Post-Doctoral research, the average length of overseas study tours has more than doubled from that anticipated at appraisal, and this prevented implementation of the overseas training program on schedule. Considerable delays were also experienced with the implementation of technical assistance. At the time of project closing (June 1992), it is estimated that less than 50 percent of the originally planned person-months of overseas consultancy had been utilized. In part this can be attributed to a reluctance on the part of MOA to use hard currency project funds to recruit expatriates, and partly to the political distrbances in 1989 that discouraged visitors to China. 5.4 Procurement. This was handled by the Project Office in cooperation with the individual Project Implementation Units at each of the institutes. The bulk of the equipment purchased overseas was purchased through International Competitive Bidding (ICB) which presented few administrative problems. By the end of 1989, some 181 contracts, consisting of 1,192 packages or sets valued at $12.5 million, had been procured under ICB. The balance of the equipment purchased locally and overseas was  -6 - procured by direct bidding because the size of the contracts awarded was too small to justify ICB. Overall ICB procedures resulted in satisfactory supply of equipment. However, problems were experienced with the ICB supply of certain items that failed to meet technical specifications (see para. 4.4), were defective on arnival (e.g., infrared analyzers, and growth chambers) or have been difficult or impossible to get replaced or repaired by the original suppliers. There is a feeling in some quarters, supported by the mission, that ICB procedures may have exacerbated those problems by enabling suppliers to offload obsolete items by competitive pricing, and that for some specialized research equipment other procurement methods, such as Limited International Bidding (IB) or International Shopping, might be preferable. 5.5 Disbursement. This was higher than anticipated in the first two years of the project owing to the establishment of a special project account in the second year. Subsequently disbursement slowed, in line with delays in equipment purchase and recruitment of consultants. The IDA Credit was fully disbursed by the time of the twice-extended closing date. However, the overall project expenditure is estimated to be some $5.4 million less than anticipated at appraisal. This is largely attributed to what proved to be unduly generous allowances for contingencies at appraisal, especially for the civil works program that proceeded largely on schedule, thereby minimizing price contingency needs. 5.6 Credit Allocation. The original, revised and actual allocations of funds by expenditure category are shown in Section 5 of Part m. By and large, allocation was as anticipated, with a modest reallocation of equipment and technical assistance funds to enable an expanded training program. Most of the additional $4.0 million funding arising from depreciation of the US dollar against the SDR was allocated to equipment purchase, equipment service contracts and some extension of training from MSc to PhD. The purchase of additional equipment was consistent with the objectives of the project. 6. Project Results 6.1 Objectives. Overall the project was successful in meeting its principal objectives of improving the staffing and facilities of 15 research centers and 10 agrotechnical extension stations. 6.2 Physical Results. With the exception of the technical assistance program, the project met or exceeded its physical targets as indicated in Section 4 of Part m. The civil works program exceeded its original physical target by 13 percent; the US dollar value of equipment provided was some 40 percent more than originally anticipated-due largely to depreciation of the US dollar against the SDR over the project period, transfer of funds from the technical assistance category and the use of unallocated funds. The local and overseas degree programs exceeded their person-year targets by 35 percent and 160 percent respectively, the latter being due to the large number of trainees who upgraded their studies. In the case of these upgrades, many trainees augmented their project fellowships by acquiring financial support from host country sources. In contrast, the technical assistance program only achieved some 42 percent of its target. 6.3 Rnancial Impact. No attempt was made at appraisal to calculate a rate of return for the project because of the difficulty of disaggregating the contributions of investments and benefits of research, extension, irrigation and training to overall increase in yields and production. It was, however, indicated that comparable investments in agricultural research elsewhere had geneaed rates of retrn from 35-90 percent. No attempt has been made to undertake a rate of return analysis for the project as a whole at this stage for the same reasons given at appraisal, and also because there are as yet no discrete  - 7 - technologies that can be specifically attributed to the project. It is, however, worth bearing in mind that it only requires the development of one significantly improved rew crop variety to more than cover the investment costs of the project. For example, if one of the new cotton varieties that have been developed using the new equipment supplied to the Cotton, Wheat and Maize Institute, has a yield advantage of only 5 percent over existing varieties, and if it were planted on half the national cotton acreage over a period of four years, the incremental value in cotton output would more than cover the total project cost and would generate an overall rate of return of over 21 percent. The assumptions and calculations made in this analysis are provided in Annex 2. 6.4 Project lmpact. In general, the research institutes supported by the project are now well equipper' with laboratories, offices, housing and scientific equipment. The project has also contributed substantially to raising the standards of scientific staff attainments through local and overseas training, and through the technical assistance program. It is too early to expect the project to have resulted in the development and uptake of new improved technologies by the farming sector, but there are signs of Increased research productivity or output-thus the number of research programs/projects has increased and the number of papers published and awards received has increased at many of the centers and there is some evidence of an increase in the rate of selection and development of new crop varieties (e.g., cotton and wheat). Researcher morale, especially in the case of returned overseas trainees, appears to have improved substantially. 6.5 The agrotechnical extension centers supported by the project are now suitably housed and equipped. Evidence presented to the mission suggested a significant improvement in the organization of extension services, taining of extension agents and "key" farmers, and the provision of supporting technical services either from their own resources or through contacts with neighboring university laboratories or research institutes. There are signs that the Extension Committees set up at the ATESs are working reasonably well, providing a two-way means of communication-feeding technical messages from researchers to extension workers and feeding back farmers' problems to researchers. 6.6 Somewhat less encouraging is the apparent underutilization, at a few research centers, of much of the scientific and extension equipment supplied under the project. At all the centers visited by the mission much of the equipment, although operational, was clearly not in regular use, and the supervision reports indicate a similar situation at many of the other centers. This can be attributed partly to the inevitable time lag between the arrival of new equipment and the modification and development of research programs to make full use of new facilities; and also to a shortage of trained technicians and to the delays associated with the return of students trained overseas familiar with the use of such sophisticated equipment. However, it is also the case that much of the equipment is rather sophisticated (see Annex 3), requiring stable, high wattage power, which is not always available, and expensive reagents and separation media. Given the modest operational budgets of many of the institutes it is difficult for them to afford full utilization of such equipment. In retrospect, it might have been more appropriate to limit the supply of very sophisticated equipment to leading centers and/or to have provided centers with a more balanced mix of sophisticated and more basic equipment. 6.7 Some concern also exists regarding the appropriateness of some of the institute research programs. For example, the Grassland Research Center program gives special attention to work on grassland management systems, development of new grasses and pasture improvement, and the problems associated with fodder and grassland development. Remarkably, however, for a part of the country with  -8- a mean annual temperature of W-6eC and only 127 frost free days per year, there Is as yet no program on cold tolerance in grasses and forage legumes. 7. Projed Sustlanability 7.1 The project was designed to ensure an increase in technologies available to the farmer by enhancing the physical capability of research institutes and agrotechnical extension stations and providing bener trained staff. In very large measure, these Improvements have been made and there are already encouraging signs of an increased output from the system (see para. 6.4). There is general concern, however, about the ability of the Institutes to maintain and repair equipment, given the Government's present failure to augment maintenance funds at insutes where there has been a large increase in sophisticated instrumentation provided under the projec. Some service contas have been. entered into with suppliers for 2/3 years but it has also not proved feasible to establish a central facility operated by CAAS to repair specialized equipment provided by the project for which there are no service agents in China. There is also concern about the lack of thought given to provision of the annual operating expenses of the animal laboratory building at the Veterinary Research Center, Harbin (not visited by ihe mission), which was calculated by the 1991 Supervision Mission to amount to an equivalent of $1.0 million per year. Some of these costs can be recovered from the sale of vaccines but only if production output increases substantially. 7.2 Many research staff have been sent abroad on training grants under the project. Few of these (see para. 5.3) have, at the present stage, returned. These scientists represent a serious loss to agricultural research in China, particularly as a number of them were expected to make ful use of the new equipment provided under the project, thus justifying its purchase. Iheir coinued absence raises doubts about the sustainability of research at the high levels envisaged at the time the project was formulated. 7.3 China has at present a research management system that develops research programs wihin the declared policy of the Five-Year Plans, modified on a local basis by farmers' needs. This is achieved by a panoply of commitees at national, provincial and institute level together with feedback from the extension service through the agrotechnical extension centers and institute contacts providing information about problems in the field and farmers' needs. Both the policy/straegy and research programs appear to be reviewed annually at appropriate levels. Research proposals appear to include atl the information necessary to enable informed judgments to be made and the research to be funded and managed. Evaluation of the research is made regularly and in sufficient depth to be able to judge excellence and award prizes. Most importantly, projects not meeting their targets can be identified and are terminated, so there should be little poor-quality research ongoing. The research management system, therefore, is effective though cumbersome. There is, consequently, no reason to believe that because of a failure to fully utilize the proposed technical assistance input the system as a whole witl suffer from poor management. Indeed before attempts are made to interfere with it or "streamline' it, there is a need for a study of the system such as that being carried out by the International Service for National Agricultud Research (ISNAR), so that improvement can be made only where needed such as at specific instiutes (see para. 6.7). There is a risk otherwise of losing the benefits of the present system without providing a viable alternative.  -9- 8. MDA Performance 8.1 Through the Second Agricultual Research Project IDA has made a significant contribution to the development and strengthening of agricultural rosearch and extension in China. IDA was heavily involved in the project from review of original project proposals, preparation and appraisal through to project supervision during implementation. During preparation and appraisal IDA made a number of suggestions regarding the type of equipment to purchase, training needs, the use of technical assistance and the establishment of Extension Committees to link researchers and extension workers. 8.2 The supervision missions, which took place on a regular basis once a year over the period 1985-91, were regarded as most useful by MOA and institute staff. Supervision mission staff were able to resolve issues conceing equipment, procurement and in reallocating funds saved from the underspent tedhical assistance to additional equipment and training, and to recommend two extensions of the project. The missions were also able to accelerate the establishment of Extension Committees and to alert MOA to the need to raise the operating budgets of project institutes to enable them to operate and mainta the new equipment. The missions also contributed to the design and modification of research programs by suggesting changes in priorities, and in encouraging an acceleration of the process of varietal release. The missions were, however, unable to advance the completion of the SPF facility at Harbin satisfacorily, and were able to assist MOA in recruiting only some of the overseas technical assistance originally targeted. 8.3 A minor shortcoming of IDA supervision missions, as reported by IWntute staff, was the infrequeny of visits and the number of different mission members. To a large extent, this can be attributed to the amount of time required for traveling to the 15 institutes which were located throughout China, often in remote locations, several days' travel from one another. Even though some time was spent with project staff in between missions, however, greater problem-solving assistance could have been provided if supervision missions had been every six months, as was once commonly the case. Current Bank Group budgeting practices apparently make such intensive supervision virtually impossible. 9. Borrower Performance 9.1 Ihe Borrower performed well. With the main exception of the SPF at Harbin, counterpart fuds were released on time and the civil works were completed ahead of or on schedule. Ihe Project Office was competey staffed throughout the project and PIUs were established at the centers early in the life of the project, although early supervision reports indicated that Project Office staff did not visit the research institutes frequenty enough. Some delays were experienced in the establishment of Extension Committees at some of the agrotecnical centers. The main area of contention between ilA and the Borrower concerned the use of overseas technical assistance, and in particular the use of consultants to advise on research program development and review. 'Te two-year extension of the project was due mainly to delays associated with the release of trainees-it was not possible to release too many at one time-and the need for extra time to complete order of equipment and spare parts. Audit reports were received on time.  - 10- 10. Project Relationships 10.1 Ihroughout the project, relationshios between the Borrower and IDA were good as a result of regular communication between the Project Office and IDA. This was greatly assisted by the continuity of the IDA Task Manager supervising the project. 11. Consulting Services 11.1 The project originally included $1.132 million for technical assistance from Chinese and overseas consultants. Initially, the use of consultants, especially from overseas, was slow and in 1989, following the political troubles, there was an almost complete cessation of consultant employment. However, in the later years of the project, the input from consultants increased considerably and at project completion there had been 99 person-months of consultancies, of whom approximately one third were overseas consultancies at a total cost of $585,000. All institutes claim to have benefited considerably from the consultant visits they received. More use of project funds for international consultants could have largely compensated for the constraints on technical assistance provided by IDA supervision missions, limited by Bank Group administrative budgets. Some compensation was ptovided anyway by bilaterally funded teams (e.g., from the Australian Center for International Agricultura Research), arranged through considerable effort by the IDA Task Manager. 12. Compliance with Covenants 12.1 There were only five project specific covenants-see Part m, Section 7. By and large, they were all adhered to, although there were delays in establishing some of the PIUs at the ATESs Wnd in preparing some of the annual Institute Research Programs. It is also questionable whether sufficient finds have been or will be provided to maintain adequately the equipment purchased, as called for by one of the covenants (Clause 4.02 of the Credit Agreement). 13. Project Documentation and Data 13.1 The SAR, as well as the legal agreements for the project, provided a useful framework for IDA and the Borrower during project Implementation. On closing of the project, all Institutes were requested to prepare an execution or final report, outlining their experiences and achievements. It is understood that 13 of the 15 institutes had submitted such a report by the end of September 1992. Those institutes visited by the PCR mission had produced their reports in English and Chinese. These provide a concise summary, listing the facilities and training provided under the project and of the concemed institutes' recent achievements. Adequate records were kept of expenditure classified by major expenditure categories. 14. Lessons Learned 14.1 There are several lessons to be learned from experience in this project. The more significan include: (a) The Bank Group should make greater efforts to enforce covenants to ensure that sufficient funds are made available for the repair and maintenance of equipment purchased. Further, under this project it would have been advantageous if a central repair facility had been  -11- estalished for maintenance of specialist equipment for which there are no service agents In China. (b) During implementation of projecs such as this, expert opinion should be provided in are where local expertise is sparse or lacking, including with regard to equipment selection and procurement. (c) Research traineess overseas for further traing should be actively encouaged to return on the completion of their agreed study program (e.g., through covenatn). (d) Reluctance to use credit funAds for the employment of badly needed foreign tehical assistance should be overcome by building appropriate conditions into project implementation, which would then be covenanted in the legal documents. (e) An acceptable alternatve should be sought for ICB for the purchase of speclized equipment or items such as computers, where technical advance is rapid, and compatibility with existng systems is important. (t) More staff time should be cenally budgeted for supervision to resolve issues/problems as they develop.  - 12 - PART I: PROJECT REVIEW FROM BORROWER'S PERSPECTIVE 15. Introducton-Situation of the Project 15.1 Background. Owing to China's actual condition of too many people with too little land, the only way out to solve the existing problems is to increase the input of science and technology in agriculture. 15.2 Composidon of the Project. The entire project is composed of 16 project units with 15 scientific research, information and training centers and one extension unit formed by 10 countylevel agricultural technical extension centers. 15.3 Objectives of the Project. The emphasis is to strengthen the building of the agricultural research institutes so as to form a scientific system with a closely coordinated crop firming industry (grain and economic crops); increase the post-production of processing and the comprehensive utilization of those agroproducts; establish the supervision and monitoring centers to protect environment and raise the quality of agroproducts; find ways to improve equipment used for agrotechnical extension to promote the transformation of achievements obtained from research; and strengthen the coordination and development of science and technology research institutes in the field of agriculture, forestry, water conservancy and meteorology. 15.4 Investment of the Project. It was estimated by the Appraisal Report that the total cost of the project was $69 million, among which the fund provided by MDA was SDR 24.3 milion; and the counterpart fund provided by the Chinese Government was paid in renminbi which was equivalent to $44 million. 16. Preparatory Work of the Project 16.1 The feasibility study of the project and detrmination of project plan and inspection and appraisal carried out by the World Bank were completed smoothly and accurately as plamed, and conformed with the actual situation and easy to implement. It benefited from experience obtained in the first Agricultural Education and Research Project (Credit 1297-CHA) and many of the staff members continued serving in the Project Office (PO). 17. Orgaza"tion and Administration of the Project 17.1 OrganIation of the Project. The organization of the project is the same as that for the first Agricultural Education and Research Project, supported by the Project Committee and the equipment procurement expert sections of the PO. Because there were three projects to be carried out at the same time, the PO was thus strengthened. 17.2 Readjustment and Extension of the Project. During the latter part of project implementation, the readjustment of the categories of project items was carried out. It was approved by the World Bank. IThe final execution of the project complied with the readjusted categories. Owing to the political situation in 1989, and the readjustment of China's economy, a great deal of time was taken  - 13 - up In implementing the project, and making It more difficult to implement the project. The project closing date was extended twice, and the fia closing date was June 30, 1992. 18. Evaluation of Borrower's Performance 18.1 'he civil works had exceeded the planned target of the Staff Appraisal Report (SAR). It was estimaed that 118 688 m2 of laboratory and office buildings and dormitories were completed, compared to 111,793 m;)in the SAR, and 984 ha of farmands and grassland compared to 463 ha. 18.2 Procurment of Equipment. By the end of 1991, procurement was completed for 5,748 sets of intument and equipment, including computers and equipment for engineering, chemistr, biology and audiovisual aids, at a total cost of $21,584,000. (Another $2,667,000 was disbursed for procurement of the equipment in the fis half of 1992.) The total cost for equipment was $24,247,400 (82.9 percent of the credit). 18.3 Acceptance Test and Operation of the Equipment. Through acceptance test, 5,716 set, accouning for 99.4 percent, were good and usable. After the acceptance test, 5,709 sets were put into operation, of which 5,679 sets (99.5 percent) proved to be in good condition. It is evident that the purchase of instruments and equipment for the project is quite successful with only 128 inferior equipment. There are still 30 sets of. equipment unresolved following damage claims. Ihe iurchas of the microcomputer from a company in France and a 16-bit microcomputer fom another company was a mistake, since they are not compatiole with other computers. 18.4 Purchase of Bookss NMazlnes and Materials. Six of the project units have used $242,000 to buy 5,245 copies of foreign books, magazines and materials in different languages; 10 of the project units have also used Y 2.85 million to purchase 230,077 copies of Chinese books and magaines and merials for the information and research centers. 18.5 Construction of laboratories. Sixty-one laboratories at the 15 centers were newly built or renovated. However, 69 laboratories, Including 36 new and 33 renovated laboratories, have been completed by the end of 1991. Besides, other buildings have also been constructed, In ing a new medium-size germplasm bank, a cotton-gimning workshop and a spinning pilot-plant test workshop, a specialty processing workshop, a potato chips workshop, and a modem SPF experimental animal house. Up to the present, the experimental animal house has not been put into operation and the spining pilot- plant test workshop is expected to be operational by late 1993. 18.6 AHocation of Laborator Personnel and the Utilzation Ratio o Equipment. Appropriate technicians have been allocated to various newly built or renovated laboratories. IThe training of the technical personnel and the utilization of the instrumets and equipment should be farther strengthened. Ihe present utlization ratio of the equipment has reached the primary level without hindern the research work. Due to the fact that the number of returned students who were sent abroad by the project had been less than expected, this affected the allocation of finds and electricity, especially for some of tIhe unit that are located in remote areas. Further improvement should also be carried out in the utilization ratio of the equipment.  -14- 19. Tranin 19.1 Ovas Trainng. According to the requirement of the Apprasl Report, was prposed to send 119 mrsons abroad, Inuding 25 postgaduates and 94 nondegree students (equivalent to 98 person-yCrs). As a relt of tho Implementaion of tho project, 38 postgraduates have been sent out, and 96 for adanced study ncluding senior visiting scholars. In all, 134 persons have been sent oveas, equivalent to 158 person-years. At the time of closing date of the project, 58 students studying abroad have reun, ac for 43.3 percent of the total, Including 3 doctorates, S masters and 50 advanced study studt and senior visiting scholan. Te returned saudents have become laesds in their respecdve disciplines or key academic resah peasonnel. Many of them have also become the leading adminitraive members of their Institions. 19.2 IAl Trainin. According to the estimated plan, 293 students were to be trained locally, Including 53 postgaduates and 240 nondegree studets (equivalent to 275 person-years); and 1,596 person-months of language training. During implementation, 1,118 students have been trained (equivalent to 610 person-years), including 73 postgraduates and 1,045 nondegree students. In addition, 285 persons from various research units have taken part in language training, equivalent to 1,912 person- months. The target for local training has been exceeded, thus upgrading the quality of the techical persone and their foreigp lage capability. 19.3 Study Tours and Intrnatioal Conferenas. Study tour groups sen <ounder the project were nicty controlled. Generally, no more than four persons partcipated in a study tour goup to one couny for about three weeks. Altogether, 89 staff members have been sent out from 16 project units, equivalent to 76 person-montbs. On average, about 5.6 mangement and tehnical stdy tours were sen out ftom each unit. The target was attained by carefil selection and dispatching of the study groups. During implementaion of this project, 55 staff were sent out to take part in 33 international academic coerences. A total of $445,000 for study tours and $220,000 for intenatdonal conferences were disbursed. 20. TecnIal Assstance and Training 20.1 Lecurr and Comultants. According to the SAR, the 11 centers and 10 county-evel aot cal extension statons were to engage 96 person-months of consulting serices. During the eary and middle stages of project implentation, we had invted only lecturers. As soon as it was reinded by the World Bank officials, we std to invite consultants. Finally, 155 lecturers and consultants (equivalent to 98 person-months) were engaged under the project. Among them, 127 were lecrers and 28 consultan, with a total cost of $733,400. The Iost difficult problem in making use of foreign experts, especially consultants, is that the foreign consultan are not familiar with the Chinese siuation, so some of the suggestions are not practical in China; and there is a wide gap in the salaries betwee foreign and Chinese experts. 20.2 Forig Language Training. The foreign language training project of this project was carried out in the two foreig language trning centers set up under the first Agricul Education Projec (Credit 1297-CHA). A total of 285 students were set to the training ceters at a cost of $271,000. Research staff from the different centers were also sent to study foreignlanguages at the two centers.  - 15 21. Disbursement 21.1 DIsbursmets. The total amount of funds approved under the project was $69 million, of wbich the disbursed credit was SDR 24.3 million, equivalent to $25 million; the counterpart fimd from the Chinese Goverment was $44 million, equivalent to Y 86.68 million. 21.2 Disbursement of the Credit. By June 12, 1992, all of the SDR 24.3 million credit had been disbursed for an amount of $29,243,800 ($4,243,800 or 16.96 percent more than the estimated amount due to SDR versus US dollar exchange rate changes). 21.3 Disbursement of the Counterpart Funds. By the end of 1991, the actual counterpart funds disbursed amounted to Y 89.92 million, exceeding the budgeted amount of Y 86.68 million by Y 3.14 million. If calculated according to the exchange rate in each implementation year, it will only be $23.15 million, accounting for 52.61 percent of the budget. 22. PrelliInary Project Benefits and Lessons Learned 22.1 The input of the project funds have greatly improved the research environment, laboratory ibtruments and equipment, quality of the personnel, materials and information, and without precedent, upgraded the capability for scientific research, and thus the research achievements resulting in tremendous eonomic and social benefits. 22.2 Use of Modern Research and Technology to Establish a Number of Basic Facilties. The newly built and strengthened laboratories could carry out rapid analyses and tests with acurate data and in-depth observation, thus promoting the speedy development of scientific research. Another important fact is that, by making use of the modern instruments and equipment, the project was able to establish three ministral supervision, inspection and test centers for grain quality, cotton fiber and fodder, and a dam safety monitoring center. The water quality monitoring center established during the fimst project (Credit 1297-CHA) was furnher strengthened and perfected under this project. 22.3 Ihe constructionof the Tropical Crops Library Information Center was completed in Hainan Province; a water conservancy information center was built for the Ministry of Water Conservancy; the "Beijing-Tianjin-Hebel regional medium-range calamitous weather monitoring and short-term forecasting experimental base' has been completed for the State Meteorology Administration; and the remote sensing, monitoring and investigation systems have been established for studying resources in the fields of forestry, fishing grounds and grasslands. These are the important basic facilities necessary for technical modernization, and outtanding achievements have been obtained. 22.4 The quality of research workers has been upgraded, and their numbers increased, as well as improvement in the personnel structure. Foreign language capability and participation in international technical exchanges of research personnel have been rapidly upgraded through training at home and abroad, including participation in domestic and foreign scientific conferences, overseas study tours, lectures by foreign experts and consultants, and carrying out practical research activities. The skills of research workers have been upgraded and their numbers increased and the structure of the personnel more problem-oriented. According to the statistics published from the 12 project units, the total research staff in 1990 have been increased by 39.9 percent (compared to 1984). The level of their professional and academic positions have been upgraded. The percentage of senior, associate and assist mce technical staff  -16- have changed from the origiral 10.3 percent, 48.2 percet and 41.5 pecen to 22.5 percent, 37.6 pere and 39.9 percent, respetvely, in 19. The number of senior staff have more than doubled. Th numbe of persons with MSc degrees bave increased from 64 to 266 (tripled); and PhDs from 9 to 32 (2.5 tImes). It b obvious ta the personnel structure bas Improved and the problem of a shortage of senior and associate-level research staff has been solved. 22.5 The most Important beneficial return of the project is reflected in the upgrading of te research level, the quality and quantity of research achievements, and in technical extension. The Increase of research topics, articles (published In the Importantjourns and magazines) and achievements fully reflected the preliminary beneficial reurns of the project. According to statistics obtained from the 14 research centers, in 1990 (ast year of the Seventh Five-Year Plan), 1,A71 research projects were undetaken, 557 more than the 614 In 1985 (last year of the Sixth Five-Year Plan), I.e., up by 90.7 percent; of which, reerch projects at the national level have Increased from 66 to 273 within five years (3 times more than before); compared with 1985, the scientific aicles published In foreign journals or magazines In 1990 have Increased by 3.2 times; and the research achievements by 77.5 percent. 22.6 The new cotton variety, *Zhong-Mian No. 12,* bred by research fellow Tan Lianwag and the others at the Cotton, Wheat and Maize Research Center has combined disease resistance, high yield and good quality. The yield and disease-resistant characteristics of Zhong-Mian No. 12 has reached international advanced level. The area planted to this cotton variety has reached 1.28 mIllion ha, accounting for 25 percent of the cotton area in the country and 70 percent of the previously dise- affected cotton fields. The total extension area has reached 3.07 million ha, with a net increase of economic return of about Y 1.69 billion. It won the First Prize of the National Invention Award (the nation's highest scientific and technological award). This is only one of the many outstanding achievements obtained in % .Aous research centers, and have made great contibution to the development of China's agriculture. 22.7 Promotion of InternatIonal Exchanges and Cooperation. During implementation of the project, the consuction of the laboratories and the in-depth research have provided opportnie for nternational exchanges and cooperation; technical assistance, overseas study tours and training broad, and hosting and participating in intenional conferences have promoted international exchanges and cooperation in China's agricultural research. International cooperation has promoted exchanges of information and germplam resources and joint investgations. A number of joint research projects have been carried out, including Important topics such as: study of the drought-resistance mechanism. of gramlneae crops, application of water conservation In agriculture, study of soybean as fish feed, and study of cotton nutrition. This kind of cooperation was carried out with many foreign countries, such as: the Sino-US joint investigation of the Qlnghai-Tibet Plateau, sampling of tree growth-rings, investigation of atmospheric chemistry, study of water quality, sedimentation and underground water contamination; the SinJapan joint study of acid rain and water quality; joint investigation of graland construction and development of animal husbandry by experts from China, England, Australia, New Zealand and Argentina; the cooperation and collection of germplasm, screening of seed and distribution of Melbuas rwhenica; and the Sino-France jointly sponsored water-quality monitoring training classes. At the same time, some joint studies in advanced disciplines have also been car{ ed out. The research of the ACIAR 8813 wheat resistance to Barley Yellow Dwarf Virus (BYDV) was jointly caried out by the Crops Basic Research Center and the Plt Science Deparument of CSIRO, AusaL e glasm material of the common wheat, with resistance to BYDV, has been obtained and, at the same time, two  -17 - CDNA detectors were dicovered for use in the detection of the specific DNA in wheat. The research In these fields has reached Iernational advanced level. 22.8 The projec has Increased and promoted research In the field of agroprocessing tecnology and In the study of hightech products in China, thus enabling the establishment of a series of Industries and bringing direct increase In social and econowmic benefits. The establishment of the Specialty Research Center has strengthened post-production research. Ihe production technology for concentae of Hami melons, tomatoes and grapes has passed the pilot-plant stage. A production line for fried potato chips from the United States was introduced by the Enshi Potato Research Center. Tbe production line is now able to serve the poverty-stricken mountainous areas. The completion of the spinning pilot-plant test laboratory In Anyang's Cotton, Wheat and Maize Research Center will be China's only laboratory to have the capability of single-mark test-spinnig. When the experimental animal house at the Harbin Veterinary Research Center becomes operationcl, several types of vaccines wfll be produced by the Center. Tbe high-tech products will be subjected to SPF tests and would be sold on the international market. Based on the Introduction, mastering and adopting the system of irregular-wave generators imported from Denmark, the Nanjing Water Conservancy Research Center has designed and produced a better irregular- wave generator of their own with higher capacity. The Meteorological Observatory Center has completed research on several instruments, including China's first UHF Doppler radar for wind measurement. These products not only could substitute imported ones, but also form China's primary basic production. The construction of the irregular-wave generator has already resulted in direct economic benefit of more than Y 4 mIion. The generator could be built at a cost of only one sixth of the imported ones. 22.9 The credit has promoted the transformation to modern management in the following areas: (a) Research projects could be determined according to production needs and the integration of various disciplines, taking Into consideration the relationship between the basic and applied research. The system of open evaluation, anmnal supervision and appraisal of adcievement should be Implemented. The multidisciplinary team approach to research for before, during and after production should be established. (b) Concerning personnel management, the main task is to bring the initiatve of the scientists and tachnicians to fidl play in order to be fMly productive. The scientific and tecbological pool should be organized to combine the senior, middle-level and young scientists, which will foster the growth of young talents. The evaluation system for resarch pesonnel should also be carried out. By using economic and political means, the research talents should be divided to form two contigents, one for scientific research and the other for product development (c) The operation and maintenance of equipment should be stengtened. The organization should be improved; instruments and equipment serviced regularly; quality of laboraty technicians be upgaed; and work environment improved. The systems of laboratory regulations, operational inspection, and safe operation rules should be formulated. (d) Strengthen the collection and dissemination of Information; publish vaious kids of publications; complete construction of the data bank for library informadon; and gradually realize the computer network retrieval system. Promote the application of mic s for scientific research to carry out data processing and esablish various kinds of simulation  - 18- models and expert systems; and for administration of managerial activities: peronnel and financial matters, equipment, etc. 22.10 The establishment of 10 county-level agrotechnical extension centers has been successfiu. By making use of the simple broadcasting facilities, the extension centers have been able to carry out the agrotechnical extension activities. It is welcomed by farmers because it directly demonstrates live activities from videotapes, which is easy to learn and remember, thus accelerating the increase of grain yields and economic returns. 22.11 Implementation ot the Pilot Project. By the end of June 30, 1992, the 10 extension centers had disbursed $1,197,200, of which $1,116,300 is for equipment, $64,000 for traning centers and $16,400 for technical assistance. The agrotechnical centers purchased 297 sets of simple broadcasting equipment, film projectrs, slide projectors, microcomputers and all-terrain vehicles (about $40,000 of equipment has yet to be delivered). Two students were sent abroad to study extension. The agrotechnical ension centers also organized one overseas study tour, and the three extension consultants were invited to advise on extension matters. 22.12 The 10 extension centers have used local counterpart fund amounting to Y 8,800,000 to build new and renovate about 30,000 m2 of buildings, thereby changing the situation inthe past of relying only 'on one's mouth and pair of legs' to carry out the extension work. 22.13 Beneficdal Returns of the Centers. The quality of the extension personnel and farmers has been upgraded; and the transformation of research achievements to productive forces has been accelerated, thus promoting the development of agriculture in the 10 counties. More than 2,000 technologies have been popularized; about 819 extension personnel, 20,000 county-level techncians and 520,000 farmers have been trained. Through strengthened extension, an increase of 3.094 million tons of grain, and Y 4.331 billion of economic benefits from grain and economic crops have been obtained. The newly established Extension Committees have played an important role in the extension work of the various centers and in the agricultura production plans of various counties, including promotion of linkages among research, teaching and extension Institutions. 22.14 Two important lessons should be taken into consideration. It is necessary to purchase all- terrain vehicles, without trailers, for extension work because the area covered by a coutAy in China is rather large. The film projectors and audiovisual equipment purchased were outdated. These two lessons should be take into consideration in later projects. 23. Major Lessons Lened 23.1 Through the preparation and implementation of the three World Bank projects in the past 10 years, we have learned many experiences and measures for implemendng agricultural education and research projects following World Bank project implementation guidelines. 23.2 From the local point of view, we are clear about how to carry out preparatory work for the feasibility studies of projects, and handling of main items such as: location of the project unit, housing condition, technical considerations, engineering work to be carried out, couterpart fnds, repayment of the loan, and drafting project plans; we fully understand the contents of project construction outlined in the World Bank appraisal report, including civil works, procurement of equipment, training at home and  - 19 - abroad, consultant services, amount of credit needed, credit repayment; and we have realized the following aspects from project effectiven ,ss to completion regarding: project organization during implementation, allocation of personnel, degree of difficulty of the project, important links and project data, the main points for supervision and inspection, and most importantly, the standardized management and supporting project data. 23.3 From the point of view of external relations, firstly, it is necessary to cooperate with World Bank officials, listen attentively to the requirements and suggestions, without avoiding disputes and expressing our own opinions; and secondly, cooperation among the cooperating units should be strengthened; and, at the same time, it is necessary to make appropriate use of the consultative organizations and to actively seek the support from international institutions, organizations and companies, etc., thus ensuring the success of the project. 23.4 It does not mean that we do not have any problems now. It only means that we have an overall view and experience of the entire process. If any new problems occurred, we could face them calmly, and not assume a passive position. Our ability in seeking for the best interest and avoiding risls has been strengthened. In future, we would be able to carry out an overall training program for project personnel and to achieve computer management for future projects. 23.5 Owing to the credit and counterpart funds, and seven years of tireless construction, the project has completed smoothly the civil works, procurement of equipment and Instumens, books and journals, construction of laboratories, overseas training for professional and administrative personnel and invitation of experts, thus improving the 15 research and information centers and the 10 countylevel agrotehnical extension stations' working and living environments, raise the level of research and extension to international standards, upgrading the quality and capability of research and extension personnel, opmizing the organizational strucre, and establishing close links and coopation wi scientsts in foreign countries. All these have rapidly upgraded the research level, and is reflected In the increase of research projects and publications, expansion and widening of the research field, emergence of many achievements, establishment of the extension system, speedy transformation of research findings into farm practices, reaping of direct economic and social benefits, and development of many potenti scientific and technological discoveries. 23.6 Along with the modernization of the research centers, and management work, many important experiences and lessons have been leaned. These experiences and lessons could be used not only for later projects, but also for China's reforms and opening to the outside world and in agricutural economic development. 23.7 Overall, the Second Agricultural Research Project has been successful. According to the fiute prospects of development of China's agriculture, which depends on science and technology and education, the Government of China will continue to seek World Bank loans to establish agriculdtural research units, and hope that the World Bank will continue to support us in the futurel  -20 - PART II: STATISTICAL INFOMTION 1. RELATED BAN LoANs AND CREDrTs Year of Credt No/Project Name Purpose approval Sat Cr. 1297-CA Sten hening hher education and research in the 1982 Complded Ag 8iculural Educan agriuta sciences by prvdig civil works, and Rsearc Project equment and tehnial assistan to 11 seloetd (SDR 67.8 minion) agoulual colleges and 7 esb instues. La. 2121/Cr. 1167 S ening higher oducation to inocrase output 1981 Complded University Develpment and quality of grduate education and research in Ptoiect sience and engineeing and the imprvement of (La. $100.0 minion/ planning and managemen capabilities of SDR 81.4 million) universities and the Miisty of Education. Poject acivitie inoluded impovwing aff thaning, prision of building, equipment and facilities, stanein developing ula and management prcedurs at 28 unvesiies in 1S provinces. La. 2444/Cr. 1500 Exndsion and up_gra prokfsonal and middle 1984 Complded Second Agricultural levd manpower by providing assistance to 12 Eduation Project colleges, 8 taining and eension cenes, technical (La. S45.3/ schoob and diance laning foilis. SDR 22 miDion) 2. PROJECT TIMTABLE .Date Planned Date Revised Date Actual Identification - - 01/00/83 Preparation 05/01/83 04/16/83 04116/83 Appraisal 10/15/83 09/25/83 09/30/83 Negotiation 07/15/84 - 07/09/84 Board Approval 08/30/84 08/28/84 09/11/84 Credit Signing - - 12/03/84 Credit Effectiveness 03/25/85 - 03/25/85 Project Completion 12/31/89 - 12/31/90 Credit Closing I& 06/30/90 06/30/90 06/30/91 06/30/92 La Project closing eteded 2 times.  -21 - 3e CREDIT DiSEuMvRS IDA Cumulative Disbureements Actual, or Latest Fiscal Actual la Appraisal Disbursement " S of Years estimate Appraisal Estlmto 1985 2.4 1.3 18S 1986 12.3 8.8 140 1987 15.0 17.5 86 1988 16.7 22.5 74 1989 18.9 25.0 76 1990 22.5 25.0 90 1991 25.1 25.0 100 1992 29.0 25.0 1t6 La Higher actu disbursements in US dollar terms than estimated at appraisal were possible bocase of depreciation of the US dollar against the SDR  -22 - 4. PaOwCr IMPiMEM TATION-KEY INDICATORS Appraisal I Eoetmato Actualo comple- Unit Quantity Cost Quantity Cost tion $8000 $,000 A. Cvil VsM Laboraties & offices m! 59,671 11,534 71,000 12,800 120 ranm bulldl4 s Qa 3,140 480 10,300 2,275 328.2 Staff bausdng m 48,762 11,089 44,600 7,134 90 Construction subtotal ma 111,573 23,103 125,900 22,210 113/b Parm Development ha 463 330 n.d. 1,061 Subtotal 23.433 23.272 B. Eguimet Laboratoty and Other Scientific Equipment LS - 15,470 - 22,451 14514 Naterials and Supplies LS - 740 - 389 521c Office Equipment and Furniture LS - 655 942 143Lc Parm Equipment LS - 665 983 148/c Subtotal 17.520 24.765 141/c C. LlbrarY Develomnent Books and Publications LS - 870 500td 571& Equipment and Supplies LS - 670 553 821c Subtotal 1.540 ifl6k D. TSsim Overseas Training Degree years 55 144 2601k Non-Degree months 517 1,342 534 2,585 193J& Study Tours months Internal Training Degree years 106 143 135/b Non-Degree months 2,783 791 3,162 785 991C Study Tours months - - - Confereneas and Seminars US 375 3751d 10010_c Language Training months 1,596 271 27114 100IL4 Subtotal 2.779 4.016 145/c 1. Teebhical Assistance Program Review months 96 1,402 991a 585 421