Uganda - Livestock Services Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No.: 19480 IMPLEMENTATION COMPLETION REPORT UGANDA LIVESTOCK SERVICES PROJECT (Cr. 2176-UG) June 24, 1999 Rural Development Operations Eastern and Southern Africa 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 Currency Unit = Uganda Shillings (UShs.) At Appraisal: US$1 = UShs. 440.00 At Completion US$1 = UShs. 1,293.50 WEIGHTS AND MEASURES Metric System FISCAL YEAR OF BORROWER July 1- June 30 ABBREVIATIONS AND ACRONYMS APC Agricultural Policy Committee ARTP II Second Agricultural Research and Training Project CBPP Contagious Bovine Pleuro Pneumonia DAR Directorate of Animal Resources DCA Development Credit Agreement DTC Department of Tsetse Control ECF East Coast Fever FAO Food and Agriculture Organization FMD Foot and Mouth Disease GOU Government of Uganda ICR Implementation Completion Report IDA International Development Association LSP Livestock Services Project MAAIF Ministry of Agriculture, Animal Industry and Fisheries MAIF Ministry of Animal Industry and Fisheries MIS Management Information System MTR Mid Term Review O&M Operations and Maintenance PARC Pan African Rinderpest Campaign PC Project Coordinator PCU Project Coordination Unit PIC Project Implementation Committee PMC Project Management Committee PPF Project Preparation Facility PSC Project Steering Committee SDR Special Drawing Rights UVA Uganda Veterinary Association W/A Withdrawal Application' Vice President: Callisto Madavo Country Director: James W. Adams Sector Manager: Sushma Ganguly Task Team Leader: Taqi Sharif  FOR OFFICIAL USE ONLY LIVESTOCK SERVICES PROJECT (Cr. 2176-UG) TABLE OF CONTENTS PREFACE .................................................................i EVALUATION SUMMARY ................................................................ ii PART I: PROJECT IMPLEMENTATION ASSESSMENT ........................................1 A. STATEMENT/EVALUATION OF OBJECTIVES . ..................................................1 B. ACHIEVEMENT OF PROJECT OBJECTIVES .......................................................3 C. IMPLEMENTATION RECORD AND MAJOR FACTORS AFFECTING THE PROJECT .................................................................5 D. PROJECT SUSTAINABILITY .................................. .............................. 12 E. BANK PERFORMANCE ................................................................ 13 F. BORROWER PERFORMANCE ................................................................ 14 G. ASSESSMENT OF OUTCOME .14 H. FUTUTRE OPERATIONS .................... ............................................ 15 1. LESSONS LEARNED ................................................................ 15 PART II: STATISTICAL TABLES ................................................................ 17 Table 1: Summary of Assessments ...................................... .......................... 17 Table 2: Related Bank Loans/Credits ................................................................ 19 Table 3: Project Timetable ................................................................ 19 Table 4: Credit Disbursements: Cumulative Estimated and Actual .............................. 20 Table 5: Key Indicators for Project Implementation .................................................... 21 Table 6: Key Indicators for Project Operation ............................................................. 24 Table 7: Studies Included in Project ........................................... ..................... 24 Table 8A: Project Costs ................................................................ 25 Table 8B: Project Financing ................................................................ 25 Table 9: Economic Costs and Benefits ................................................................ 26 Table 10: Status of Legal Covenants ................................................................ 28 Table 11: Compliance with Operational Manual Statements .................. ...................... 30 Table 12: Bank Resources: Staff Inputs ................................................................ 30 Table 13: Bank Resources: Missions ................................................. ............... 31 Appendix A - Aide Memoire ................................................................ 32 Appendix B - Government's Terminal Evaluation Report - Evaluation Summary .... 43 Maps: IBRD 22158, 22159 22160 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.  IMPLEMENTATION COMPLETION REPORT UGANDA LIVESTOCK SERVICES PROJECT (Cr. No. 2176-UG) PREFACE 1. This is the Implementation Completion Report (ICR) for the Livestock Services Project (LSP) in Uganda, for which Credit 2176-UG in the amount of SDR 16.1 million (US$21.0 million equivalent) was approved by the International Development Association (IDA) on September 11, 1990, and made effective on November 4, 1991. 2. The Credit was closed on September 30, 1998, twenty-seven months after the original closing date of June 30, 1996. About 81% of the Credit was disbursed by the end of March, 1999. This is expected to reach about 91% when all the outstanding withdrawal applications will be processed. 3 . The ICR was finalized by Taqi Sharif (AFTR1), and reviewed by Sushma Ganguly (AFTR1). It was based on an earlier draft prepared by staff of the FAO/World Bank Cooperative Program, who undertook an ICR mission to Uganda in October/November 1998.1 The Borrower contributed to the ICR by preparing a Draft Project Implementation Completion Report and providing input to the Aide Memoire prepared by the ICR mission. A copy of the Aide Memoire of the ICR mission and of the Executive Summary of the Government's Terminal Evaluation Report are attached as appendices A and B, respectively. Messrs. Pietros Kidane (Mission Leader/Economist, FAO, and S. Shanthaikumar (Livestock Specialist, Consultant).  - ii- EVALUATION SUMMARY Introduction 1. Livestock services had deteriorated in Uganda following the political turmoil and economic difficulties of the seventies and early eighties. As a result of this, rapid spread of many devastating diseases, such as rinderpest, contagious bovine pleuro pneumonia (CBPP) and east coast fever (ECF) occurred, and caused high livestock mortality. This led to a drastic reduction in the livestock population and in meat and milk production. Project Objectives 2. The project had two main objectives: (a) to reverse the decline in livestock numbers by dealing with the alarming animal epidemic disease situation, and supporting production enhancement measures; and (b) to bring about improvements in the then Ministry of Animal Industry and Fisheries (MAIF) - now Ministry of Agriculture, Animal Industry and Fisheries (MAAIF) - which would lead to a smaller, more effective, and efficient organization. It was envisaged at appraisal that the 5-year Livestock Services Project (LSP) would need to be followed by a second operation to broaden and consolidate institutional reform, ensure sustainability, and provide assistance to MAAIF's animal health and production services. 3. The project originally comprised the following six components: (i) a national animal disease control program, including the establishment of three mobile service units equipped to control disease outbreaks; (ii) tsetse fly control in four districts; (iii) forage development through seed production and services covering about 7,500 milk producing farms, 12,000 ha of communal and ranch areas, and about 10,000 km of grass strips in Kabale district; (iv) veterinary privatization through the provision of credit and training to assist in the establishment of private veterinary practices; (v) institutional development, including technical assistance to help execute a program to streamline MAIF's organizational structure and reduce its staffing levels; and, (vi) project management support to MAIF in the areas of financial management, procurement, and monitoring and evaluation. 4. Following a severe drought in 1992/93, and uncontrolled livestock movements in the "cattle corridor" (Luwero to Mbarara), a Water Supply component (US$2.1 million) was added after the Mid Terrn Review (MTR - February 1994). Initially, the MAAIF proposal was to construct or rehabilitate 100 small valley dams/tanks. After the completion of a study in 1997, which concluded that it was more cost effective to build valley dams instead of tanks, a policy decision was taken to construct and rehabilitate 20 valley dams/existing tanks. 5. The project was appraised in December 1989, signed in November 1990, and became effective in November 1991. This time lag was mainly due to the delay by the Government of Uganda (GOU) in meeting the conditions of Credit effectiveness. The project, which provided for an IDA Credit of SDR 16.1 million (US$21.0 million), was expected to be implemented within 5 years, but was extended for another 27 months.  - 111 - Implementation Experience and Results 6. Project implementation was slow due to several constraints. These included: a one year delay in meeting the conditions of Credit effectiveness; cumbersome arrangements for project organization and management, which created a parallel set-up to the then MAIF; shortage and delayed release of counterpart funds by GOU, including no release of counterpart funds in FY94 when LSP was declared a "non-core" project; weaknesses in the procurement of goods and services; organizational changes resulting from GOU institutional reforms, which merged MAIF with the Ministry of Agriculture in 1991; the decentralization of government in 1993, which transferred staff accountability and responsibility for project implementation from the center to the districts; and the unification of agricultural extension in 1995, which entailed the transfer of the forage component from Directorate of Animal Resources (DAR) to the extension service. 7. Following a joint GOU/IDA MTR in February 1994, a major restructuring of the project was agreed to take account of the emerging priorities and GOU funding constraints, and the project was reclassified as a core operation. The proposed changes included: simplified organizational arrangements; introduction of a new water supply component; reduction of funds for the forage component and its transfer from the project to the extension service; exclusion of the long-term technical assistance personnel; increased IDA disbursement for operational expenses; and expansion of the credit component's scope to include livestock related enterprises, in addition to private veterinarians. However, it took another 17 months to amend the DCA (in part because of changes required in the credit program to adapt it to the new policy framework for rural finance), and this aggravated further the slow implementation progress, as no expenditures could be made regarding the new and modified components. During the MTR, the expected preparation of terms of reference for a follow-on project did not take place. Achievement of Objectives 8. Overall, whilst the project has made some important contributions, it partially achieved its objectives. According to DAR figures, there was a modest increase (6.6%) in livestock population (para.25). Production of meat and milk has also increased due to improved animal health and husbandry practices, including feeding. The major animal diseases, such as rinderpest and CBPP, which spread throughout the country unchecked during the difficult political and civil strife of the 1970s/1 980s, have been brought under control, albeit with significant financial support (US$ 24 million) from other donor projects. Noteworthy results were achieved in introducing improved forage production technology, and in the establishment of private veterinary practices. On the other hand, key project objectives and quantitative targets were either not met, or were significantly below the planned figures (Table 5). The achievements and key project objectives and targets not achieved under various components are summarized below. 9. National Disease Control: Whilst the project succeeded in controlling the major animal diseases through massive vaccination, with vaccines provided by the Pan African Rinderpest Campaign (PARC), the objectives under this component were partially achieved. During the project period, total animals vaccinated against rinderpest and CBPP amounted to about 6.36 million and 6.14 million, respectively, against targets of 5.8  - iv - million under each disease. Important achievements were also attained in the control of other animal diseases such as trypanosomiasis, FMD, rabies, and Newcastle disease, but the targets under these latter diseases were not achieved. The project did not: (a) establish three mobile service units in priority disease control districts to contain the major epidemic diseases; (b) strengthen MAIF's diagnostic control program with TA and technical equipment; (c) construct six new district veterinary offices and renovate 27 existing office and laboratory facilities, mainly due to weaknesses in procurement. 10. Tsetse Fly Control: The objectives under this component were partially achieved. A total of 9 well equipped and functional survey units (against a target of 22) have been established under the project, enabling the Department of Tsetse Control (DTC) to have reliable information on species distribution and densities of tsetse flies. Some 1,750 farmers have been sensitized on tsetse and trypanosomiasis control measures. With regard to the actual control activities, about 4,000 odour-baited (6% of 62,000 planned) insecticide impregnated targets and 400 insecticide impregnated pyramidal traps (target 76,000) were deployed, and about one million cattle (only 45% of 2.2 million target) have been treated with live-bait technology. The project has opened up about 200 km of motorable access routes (40% of target of 500 km) in two districts reclaimed from tsetse infestation. At project completion, the tsetse area cleared amounted to only 1,000 sq. km (1 1 %) of the 9,000 sq. km envisaged. The civil works program for the improvement of buildings and facilities under the component was not carried out due to weaknesses in finalizing the detailed designs/specifications. 11. Forage Development: The development objectives were only partially achieved. The forage production system was affected by the budget freeze of 1993/94, and by the unexpected transfer of the forage unit to the Extension Department in FY 1995/96. In addition, at the MTR, funding for the forage component was reduced to cater for the new water supply component. All these factors had a negative impact on the forage program. The program was not integrated within the extension service, and there were no funds specifically allocated for continuing the forage development activities. Therefore, the development of a sustained seed production and distribution system could not be achieved by the project, and the seed testing and processing equipment has not been installed. The forage program has succeeded in demonstrating the profitability of forage production for both cut and cany (zero grazing) and pasture development for grazing. At completion, the project had procured locally from farmers and distributed 48 tons of forage seed, and established about 1,540 zero grazing units, 6,800 farm household grazing units (against a target of 7,500), 390 farmer groups, and 14 bull stations to improve dairy production. Over 50% of farmers practising zero grazing are women. While the increased milk production in the milk shed area is believed to be, in part, due to the project's forage development activities, it should be noted that the area covered (6,500 ha of a target of 44,000 ha of fenced areas) under this component was well below the target envisaged. 12. Support to Private Veterinary Practice: At appraisal, US$ 4.5 million (18% of total project cost) was set aside to provide credit and training to assist in the establishment of private veterinary practices. In spite of the time consuming efforts made in preparing the credit scheme, not a single loan was taken from the project funds by the veterinarians, enterprises, or the Uganda Veterinary Association (UVA). This occurred because some  commercial banks did not qualify for participation in the project, and those which qualified did not agree to the terms and conditions of the on-lending plan. The credit scheme was, therefore, cancelled in mid-1997. However, veterinarians were not discouraged by this situation, and they started to open private practices, particularly in the high potential districts, where improved dairy fanming was growing. So far, about 80 veterinarians have established private practices, which is more than the target of 60 that the project had aimed for. The project provided funds for sensitization which induced the emergence of private veterinary practices. A crucial factor that encouraged veterinarians was the favorable policy environment created by the Government, which allowed import and sale of veterinary drugs and some vaccines. 13. Water Supply. Since only three of the total 19 valley dams/tanks being constructed were operational at project completion, and the remaining 16 reservoirs required varying degree of work to become operational, the objectives under this component were partially achieved. Whilst the inclusion of the water supply component was compatible with the project's objectives, the implementation of the valley dams/tanks was problematic from the start. There was no prior preparation of the component's activities or detailed technical, social, economic and environmental appraisal. The only information provided by the MTR was that about 100 valley dams and tanks would be constructed and rehabilitated with the cooperation of the local communities. Following IDA's advice, and based on the results of a technical study in 1997, which showed that it would be more cost effective to build the relatively larger valley dams instead of the smaller tanks, and because of resource and time constraints, a policy decision was taken within MAAIF to construct/rehabilitate only 15 valley dams, instead of 100 tanks. This decision does not appear to have been widely discussed with the districts and the local communities, and led to the perception that funds ear-marked for valley dams were not being properly managed by MAAIF. Contracts for the 15 valley dams were awarded to two firms in September 1997, following a competitive bidding procedure, and the valley dams were to be completed by June 30, 1998. In view of the delays experienced on account of El Nino rains, and an assurance provided by MAAIF that the remaining civil works would be completed within an additional three months, IDA agreed to a final extension of the water supply component until September 30, 1998. 14. Because of the delays in the completion of these valley dams, a Parliamentary Select Committee initiated a fact-finding review. Following the start of this review, and negative reporting in the press since October 1998, that questioned the existence of the valley dams and alleged possible misuse of public funds, IDA sent a special mission to the project area. 15. Based on a visit to eleven sites in January, 1999, the IDA mission's main conclusions were that: (a) eleven valley dams and one valley tank did exist, albeit they were at different stages of construction. Because of poor planning and supervision, however, only three valley dams were functional with some defects; (b) in all cases, the possibility of water use by the local population was not adequately considered; (c) the delay in the completion of the valley dams was partly due to adverse weather conditions, but largely due to poor contract management by DARJMAAIF; (d) the primary stakeholders (communities and districts) are willing to maintain the valley dams because it  - vi - is one of their priority needs (there were, however, still gaps in information relating to transfer of ownership to the beneficiaries -- these gaps should be addressed); and, (e) MAAIF needed to provide additional information regarding cost overruns, and on how it intended to complete the remaining civil works, given the high expectation of the beneficiaries and advanced stages of construction of most of the valley dams. IDA also sought, and received, a formal assurance from MAAIF that if further funds are reimbursed against pending withdrawal applications (W/As), such funds would be used specifically to complete these valley dams. In view of the adverse findings of the recent parliamentary report on the valley dams, GOU intends to conduct engineering and value for money audits of these dams. An interim report of a GOU engineering audit team which visited seven sites (March 1999) has generally confirmed the findings of the earlier IDA mission, and concluded that "substantial work has been done on the ground, and there is need to urgently resume construction to avoid loss of Government resources already spent". 16. The three operational valley dams, and the remaining twelve valley dams on contract once completed, will certainly benefit the local beneficiaries by supplying water to the people and their livestock, particularly during the dry season. The valley dams are considered appropriate technology for holding larger quantities of water for longer periods, as provided by the project area's topography. Animal diseases will be checked by avoiding long distance travel to grazing areas with watering points. To this end, farmers are being organized into water users' group. The lack of any environmental assessment study leaves these communities unprepared for any eventual negative side effects resulting from the valley dams' construction. 17. Institutional Development: Overall, the objectives under this component have been partially achieved. The training funds were fully utilized. The strengthening of DAR was, however, undertaken at a time when GOU had decided that the implementation responsibility for projects shall rest with the districts, and the sector ministry headquarters would be responsible only for setting policy, monitoring, and technical backstopping. For institutional development under the project to have the desired impact, most of the trained staff at DAR should have moved to the districts. The TA and other support envisaged to help streamline MAIF's organizational structure, and to put in place staff structures to serve the subsector more effectively (e.g. in such key areas as veterinary epidemiology, laboratory technology, organization and management) within a reduced spectrum of services, was not achieved. This was postponed on account of, inter alia, the decentralization strategy, and the desire to tackle capacity building under the proposed Agricultural Sector Management Project (which did not materialize because of GOU's decision to seek grant funds instead of borrowing from IDA). The project also did not succeed in strengthening MAAIF's financial management and procurement capabilities, resulting in procurement delays and cancellation of many civil works. 18. Organization and Management: The organization and management of the project, as provided in the original design, was too complex due to the numerous management levels created outside the then MAIF's normal structure. Its complexity was further exposed when the Government decentralized most of the activities to the districts. The modification of the project organization and management by integrating the project into the normal MAAIF program improved implementation by reducing the steps in the  - vii - management chain and by placing responsibility and accountability on the departments' heads. Instead of managing the project within the original allocation of US$ 1.2 million, however, US$ 4.5 million has been expended on project management, thus limiting expenditures under the capital budget. Project Costs and Financing 19. At completion, total project costs amounted to USh. 21,375 million or US$20.3 million, i.e., 82% of the appraisal estimates in US$ terms. The reduction in project costs was mainly due to the exclusion from the project of the credit component and the international technical assistance personnel. Disbursement as of March 31, 1999, amounted to US$18.4 million, excluding outstanding withdrawal applications. If all the outstanding applications for reimbursement are accepted, total disbursements are expected to reach US$19.1 million, equivalent to 91% of the original credit amount, or 77% of total costs. An amount of US$2.27 million from the credit component was cancelled. Partly because of the SDR's appreciation vis-a-vis the US$, the Credit still has undisbursed funds of about US$1.9 million. Project Sustainability 20. Although, the different components may have varied levels of sustainability, overall, project sustainability is considered as unlikely. In general, the development activities and technologies that have been introduced to farmers or private individuals are likely to be continued by the people concerned as they are convinced of their usefulness. Some doubts remain, however, with regard to the sustainability of animal health and disease control through field veterinary services, as private sector services are limited, and this will now depend on the discretionary allocation of funds for these services by each district. As the districts currently have very limited means of supplementing the block grants from the central government by raising their own revenues, the sustainability of the level of animal health services that have been strengthened by the project (with support from other donor projects) is regarded as unlikely. This notwithstanding, it is expected that DAR, which is still responsible for the major epizootic diseases, i.e., rinderpest and CBPP, will provide sufficient funds out of its budget to control these diseases. However, problems are likely to remain regarding the control of other animal diseases by the districts on account of their limited resources. Sustainability of clinical treatment is likely as veterinary drugs will continue to be imported and distributed by the private sector, and the treatment will be given by private veterinarians. This will, however, be limited to districts served by the private sector. Similarly, the sustainability of private veterinary practice is also likely on a rather limited basis. 21. While some farmers have realized the value of pyrethroids and adopted the control measures, the sustainability of tsetse control is unlikely on account of the limited capacity of the district administrations to provide guidance to the farmers in the whole country. With regard to forage production, nutritious forages are being produced, on a limited scale, either from own seeds or by purchasing these from other farmers. Farmers' groups which produce forage seeds are now exploring means of producing and distributing seeds in an organized manner. Although most of the valley dams/tanks are not yet operational, the  - viii - establishment of "users associations," currently being organized, is essential if the operations and maintenance of these valley dams/tanks are to be sustained. Bank Performance 22. Overall, IDA's performance is regarded as less than satisfactory. Such a rating reflects IDA's shortcomings both during appraisal and supervision. For instance, the organization and management proposed for the project was too complex. It was also decided at appraisal to put three conditions for project effectiveness (e.g., revision of the national credit guarantee scheme), which delayed the project start-up for about one year. Subsequently, it became clear that these conditions were not indispensable. While the project organization and management was restructured during the MTR, and efforts were made to address implementation problems subsequently, the supervision intensity needed for a project of this complexity was absent (generally only one mission per year). The anticipated gain from assigning task management to staff in the Resident Mission in the last year or so did not materialize. Further, based on the borrower's view, the supervision reports were generally brief and lacked technical details that could be used as guidance by the implementing units, and implementation was affected on account of delays experienced in IDA's approval of amendments to the DCA. In spite of the problems encountered in implementing the water supply component, IDA supervision missions did not include an engineer until March 1998, when the project was approaching completion. Borrower Performance 23. The Borrower's performance is, overall, also regarded as unsatisfactory. The delay in project start-up resulted from GOU's (i.e., the then MAIF's) inaction on the conditions set for effectiveness. During implementation, GOU not only provided inadequate counterpart funds for executing the project, but was also slow in releasing these funds. Hence, implementation progress was seriously hindered. The declaration of the project as a non-core operation, and the subsequent budget cut for the entire 1993/94, should be considered as GOU's reduced commitment to the project. GOU's insistence on the inclusion of a water supply component without sufficient technical preparation and adequate consultation with stakeholders was a source of problems to the project, although there were legitimate grounds for its inclusion, particularly after the country's experience of severe drought during 1992 and 1993. The delay in the completion of the valley dams can also be largely attributed to poor contract management by DAR/MAAIF. 24. GOU is to be, however, credited for the enabling environment created by its policy of liberalizing the importation and distribution of veterinary drugs and some vaccines. This has stimulated the private sector, such as the establishment of private veterinary practices, and enabled livestock producers to benefit from the opportunities created.  - ix - Assessment of Outcome 25. Given that there was limited achievement of the project's objectives - even the quantitative targets agreed at the MTR were only partially achieved (paras. 13-30 of Part I) - the overall outcome of the project is regarded as unsatisfactory. This notwithstanding, the project has made important contributions, as indicated earlier. Livestock population has reportedly increased by 6.6% since the project started. According to DAR, cattle population increased from 5.12 million in 1991 to 5.46 million in 1997, and milk production increased by 36% from 369 million liters to 500 million liters, during the same period. Economic analysis carried out for the project at completion by the FAO mission shows economic rates of return of 27% for the animal health component, 44% for the forage development and 31% for the whole project, compared with appraisal estimates of 60%, 52%, and 49%, respectively. Future Operations 26. With the decentralization of the Government administration, the field veterinary services and extension have been transferred to the districts. The districts will, therefore, plan activities and prepare budgets for their respective areas of jurisdiction. Only the major epizootic diseases, namely rinderpest and CBPP, will remain with DAR, which will carry out the surveillance and vaccination required to control these diseases. However, it is not clearly known for how long this responsibility will remain with DAR. The private sector activities such as forage seed production, clinical treatment of animals, tsetse control, and O&M of valley dams are expected to be carried out on a limited basis by the farmers individually, in groups, or in cooperation with other private sector operators like the veterinarians. However, district field extension services are still not fully operational to provide the necessary technical assistance to farmers. Based on an agreed GOU/IDA strategy for the future, these extension services are expected to become fully operational following the likely effectiveness of the IDA supported Second Agricultural Research and Training Project (ARTP II) in July 1999, and will be supported under a national extension project (Phase II), currently under preparation. Lessons Learned 27. Key lessons leamed are as follows: * The design for project organization and management should, as much as possible, adhere to the existing structure, so that there is no difference in importance between the way project and non-project activities are planned and implemented. Otherwise, confusion arises if responsibilities and modus operandi for project and non-project activities are given unequal importance. * Technically unprepared components such as the water supply component, are bound to lead to implementation difficulties, cost overruns, and delays. * For components such as the water supply component, under which the initial siting of, and the operations and maintenance of the valley dams/tanks is dependent upon the local communities, it is critical for Govemment  implementing agencies and Bank staff to ensuire that such decisions are fully discussed and agreed with the local stakeholders. * Conditions set for project effectiveness should be absolutely necessary and indispensable for the successful implementation of the project, as precious time is often wasted until they are complied with, or waived subsequently. * A thorough review of expected cash flows of would be veterinarian borrowers and of potential lending by commercial banks would have revealed that there was no basis for a credit component to cater for the private veterinarians. This would have saved project management time consuming efforts that were made to make the credit component operational, and enabled the release of funds that were tied to this component. * The creation of a favorable economic environment can go much further to stimulate private sector initiative than the mere supply of credit, as envisaged by the project. This was demonstrated by the progress in the establishment of private veterinary practices, following the liberalization of veterinary drug importation and sale policies. * The quality of IDA supervision fell short of expectations on account of infrequent supervision missions, the absence of an engineer to supervise the water supply component, and GOU's view that supervision reports were generally brief and lacked technical guidance. The frequency and skills mix of supervision missions should be commensurate with the complexity of a project to achieve the desired results. * The intended intensity of supervision expected by IDA management from the assignment of task management responsibility to staff in the Resident Mission during the last one year or so did not occur. Quality supervision of a project with components requiring specialized technical skills can only be assured through a team effort, and depends largely upon the judgment/experience of a task manager. * Transfer of responsibility for a component from one implementing agency to another, without due efforts to integrate it within the new program, may stall progress, as it happened with forage development when it was transferred to extension with no consideration for additional funding.