India - Rajasthan Agricultural Development Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No: 21902 IMPLEMENTATION COMPLETION REPORT (IDA-24330) ON A CREDIT IN THE AMOUNT OF SDR 73.1 MILLION (US$ 106.0 MILLION EQUIVALENT) TO INDIA FOR THE RAJASTHAN AGRICULTURAL DEVELOPMENT PROJECT February 26, 2001 Rural Development Sector Management Unit South Asia 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 (Exchange Rate Effective 1992) Currency Unit = Rupees (Rs.) Rs. 26.00 = US$ 1.00 (at appraisal) US$ 1.00 = Rs. 45.60 (at completion) Completion Year (September 2000) FISCAL YEAR April I - March 31 ABBREVIATIONS AND ACRONYMS ADP Agricultural Development Project ASP Agricultural Strategy Paper CLIS Community Lift Irrigation Scheme DOA Department of Agriculture DOAH Department of Animal Husbandry DOH Department of Horticulture ERR Economic Rate of Retum FAO/CP FAO/World Bank Cooperative Program GIS Geographic Information System GOR Government of Rajasthan GOI Govemment of India GWD Groundwater Department ICB International Competitive Bidding ICR Implementation Completion Report ID Irrigation Department IDA Intemational Development Association IGNP Indira Gandhi Nahar Project IMTI Irrigation Management Training Institute KSK Krishi Sewa Kendras (Farmer Service Centers) MIS Management Information Systems MOT Maintain, Operate and Transfer System MTR Mid-Term Review NABARD National Bank for Agriculture and Rural Development NCB National Competitive Bidding NGO Non-Government Organisation O&M Operation and Maintenance O&MP Operation and Maintenance Plan PIM Participatory Irrigation Management PWD Public Works Department QAG Quality Assurance Group RAU Rajasthan Agricultural University RSAMB Rajasthan State Agricultural Marketing Board RWSRP Rajasthan Water Sector Restructuring Project SAR Staff Appraisal Report SDP Strategic Development Plan SDR Special Drawing Rights SRSAC State Remote Sensing Application Centre SSIRD Special Schemes and Integrated Rural Development Department VO Veterinary Officers WB World Bank WUA Water Users Associations GLOSSARY Kharif Monsoon season (mid-June to early December) Rabi Winter season (early December to mid-March) Vice President: Mieko Nishimizu Country Manager/Director: Edwin Lim Sector Manager/Director: Ridwan Ali Task Team Leader/Task Manager: Deepak Ahluwalia  FOR OFFICLAL USE ONLY IMPLEMENTATION COMPLETION REPORT INDIA RAJASTHAN AGRICULTURAL DEVELOPMENT PROJECT (Credit No. 2433-IN) CONTENTS Page No. 1. Project Data 1 2. Principal Performance Ratings 1 3. Assessment of Development Objective and Design, and of Quality at Entry 2 4. Achievement of Objective and Outputs 3 5. Major Factors Affecting Implementation and Outcome 10 6 Sustainability 11 7. Bank and Borrower Performance 12 8 Lessons Learned 13 9. Partner Comments 14 10. Additional Information 14 Annex 1. Key Performance Indicators/Log Frame Matrix 15 Annex 2. Project Costs and Financing 17 Annex 3. Economic Costs and Benefits 18 Annex 4 Bank Inputs 19 Annex 5. Ratings for Achievement of Objectives/Outputs of Components 22 Annex 6. Ratings of Bank and Borrower Performance 23 Annex 7. List of Supporting Documents 24 Annex 8 Borrower Evaluation of the Project (unedited) 25 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not be otherwise disclosed without World Bank authorization.   IMPLEMENTATION COMPLETION REPORT INDIA RAJASTHAN AGRICULTURE DEVELOPMENT PROJECT (Credit No. 2433-IN) Preface This is the Core Accountability Implementation Completion Report (CAI) for the Rajasthan Agriculture Development Project in India, for which Credit 2433-IN in the amount of SDR 73.1 million (US$106.0 million equivalent) was approved on November 12, 1992, and made effective on January 28, 1993. The Credit closed on September 30, 2000, one year later than planned at appraisal. At the time of closing, the Credit of SDR 73.1 million was equivalent to US$102.5 million. Final disbursement was SDR 67.6 million (US$95.3 million equivalent), and SDR 5.5 million (US$7.2 million equivalent) was canceled. The ICR was prepared by John Weatherhogg (FAO/World Bank Cooperative Program) and Deepak Ahluwalia, and peer reviewed by Bemard W. Van De Poll (AFTR1) and Albert Nyberg (Consultant). The Borrower contributed to the ICR by preparing an Evaluation Report of the project which is attached as Annex 8 to the ICR. The September 25-October 4, 2000 ICR Mission Aide Memoire and the Economic Analysis of the Rural Roads Component are available in the ICR file.   Project ID: P010407 Project Name: ADP - RAJASTHAN Team Leader: Deepak Ahluwalia TL Unit. SASRD ICR Type: Core ICR Report Date. March 7, 2001 1. Project Data Name ADP - RAJASTHAN LIC/TF Number IDA-24330 Country/Department INDIA Region. South Asia Regional Office Sector/subsector AL - Livestock; AQ - Annual Crops; AR - Research; TR - Rural Roads; WR - Rural Water Supply & Sanitation KEY DATES Original Revised/Actual PCD, Effective 01/28/93 01/28/93 Appraisal: 05/15/92 MTR 02/24/97 02/24/97 Approval 11/12/92 Closing 09/30/99 09/30/2000 Borrower/lmplementing Agency: Government of India/Government of Rajasthan Other Partners. STAFF Current At Appraisal Vice President: Meiko Nishimizu Joseph Wood Country Manager Edwin Lim Heinz Vergin Sector Manager: Ridwan Ali Shawki Barghouti Team Leader at ICR: Deepak Ahluwalia Ralph Hanan ICR Primary Author: John Weatherhogg (FAO-CP staff); Deepak Ahluwalia. 2. Principal Performance Ratings (HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HL=Highly Likely, L=Likely, UN=Unlikely, HUN=Highly Unlikely, HU=Highly Unsatisfactory, H=High, SU=Substantial, M=Modest, N=Negligible) Outcome S Sustainability" L Institutional Development Impact SU Bank Performance S Borrower Performance S QAG (if available) ICR Quality at Entry S Project at Risk at Any Time No  3. Assessment of Development Objective and Design, and of Quality at Entry 3.1 Original Objective: 3.1.1 The project objectives were to help GOR implement agricultural policies set out in its Agricultural Strategy Paper (ASP), namely: (a) to accelerate agriculture growth through improved technical, financial and economic use of resources; (b) to enhance long-term sustainability of growth through appropriate management and conservation of natural resources; and (c) to improve equity by better targeting of development programs to the poorer strata of the rural population, including greater opportunities for women. Policy reforms were expected to be undertaken to support these objectives. These included: (i) pricing public sector goods and services at true cost; (ii) reducing or eliminating subsidies; (iii) improving efficiency of water use and sustainability; (iv) reviewing constraints to development of agro-industries and marketing; (v) increasing emphasis on livestock to exploit its potential for growth and poverty alleviation; (vi) institutional reformns of rural co-operatives to make them more democratic and responsive to their members; (vii) strengthening GOR's capacity to evaluate public investments; and (viii) strengthening environmental oversight for agriculture. 3.1.2 The objectives selected, and investments proposed, were correctly identified as priorities for the sector's development in the state. The project stressed policy reforms included in the ASP drawn up by GOR and approved by the State Cabinet in 1992. 3 2 Revised Objective The project objectives remained unchanged throughout the implementation period, although there was some adjustment in the size of the components at the Mid-Term Review (MTR). 3 3 Original Components 3.3.1 The project consisted of seven main components. Project costs are given in Annex 2. At ICR, Crop Husbandry accounted for 13% of project costs, Horticulture 4%, Animal Husbandry 6%, Water Resources 16%, Agricultural Research and Training 15%, Rural Roads 44%, and Project Coordination 2%: (i) Crop Husbandry included demonstration and training in land rehabilitation (gypsum application), increased efficiency of water use (sprinkler and drip irrigation) and development of community lift irrigation schemes; fodder development (promotion kits, forage and alley cropping demonstrations); promotion of new crops (sunflower, safflower, castor, ratanjot, tumba and jojoba); information media support, computerisation, development of regional training institutes, training of women farmers, participatory development, and training of artisans. (ii) Horticulture supported Department of Horticulture (DOH) nurseries, progeny and demonstration centers, plant raising, demonstrations, training of staff and farmers, horticultural marketing and processing studies. (iii) Animal Husbandry included breed improvement, markets, management inforrnation systems (MIS) and media support, disease surveillance and diagnostic services, technology dissemination and training, promotion of private clinics and community based veterinary volunteers (gopals), training and reorganization of the State sheep breeding farms, and upgrading of the existing sheep population through import and use of exotic breeds. (iv) Water Resources studiesltechnical assistance aimed at (a) improved data collection for both surface and groundwater; (b) completion of groundwater investigations; (c) commissioning a Water Resources Planning Study; (d) strengthening the Remote Sensing Application Centre at Jodhpur; (e) experiments and studies on artificial recharge and conjunctive use. Pilot schemes tried various approaches to O&M of tertiary canals by farmer groups including participation in planning and implementation of the scheme rehabilitation and formation of WUAs. - 2-  (v) Agricultural Research and Training aimed to improve the Rajasthan Agricultural University (RAU) and included preparation of a Strategic Development Plan (SDP) as a basis for investment in buildings, equipment and materials. (vi) Rural Roads covered construction and improvement of about 2,350 km of all-weather roads in rural areas. (vii) Environmental Strengthening, included within Project Coordination, provided for the establishmnent of a permanent Environmental Cell to assess and monitor the environmental and sociological impact of the project and for continued monitoring of the sector in the future. 3.3.2 With the benefit of hindsight the project design created some significant problems. First, the wide range of investments meant that some 12 government departments/agencies were responsible for project implementation, which made implementation a heavy task. Second, some aspects were not adequately prepared and reviewed, in particular, proposals for upgrading indigenous sheep breeds through crossing with imported exotic breeds and assessment of land acquisition needed for rural roads. Third, it was a mistake to have the RAU SDP prepared during implementation - it should have been drawn up as a part of project preparation. 3 4 Revised Components. The general design of the components remained as set out at appraisal. At the MTR, savings from the depreciation of the rupee were used to increase the size of the roads component from 1,600 km to 2,350 km. The participatory irrigation management component, originally envisaged for 6 pilot schemes, was increased to 23 schemes in order to test a greater number of models in different locations. 3 5 Quality at Entry Quality at entry is rated as satisfactory on balance, though there were some significant shortcomings. The policy reform agenda was emphasized in project design, and achieved. Government ownership and commitment to the project was strong. Another positive aspect of project design was that it avoided creation of any new institution or increase in Government staff establishment. However, greater attention could have been paid to preparation and design of some of the investment components. Monitoring and evaluation was not adequately emphasized and project performance indicators were not prepared. Project economic analysis was limited only to the rural roads component. A financial analyst did not accompany the appraisal mission and accordingly no special assessment of the borrower's capacity to provide adequate financial management of the project was carried out, as is now required under current Bank operations policies. A Project Implementation Plan was also not prepared, as is now required under Bank policies. 4. Achievement of Objective and Outputs 4 1 Outcome/achievement of objective 4.1.1 The project has largely achieved its development objectives of supporting sustainable growth of agriculture in Rajasthan and improving equity. The share of capital expenditures in GOR agricultural public expenditures increased from 34% in 1991/92 to 40% in 1999/2000 meeting expectations of a shift in public expenditure composition towards growth enhancing capital spending that would favor more sustainable growth. Between 1992-99 Rajasthan's agriculture grew at a trend rate of 5.4% per annum which compares favorably to the 3.6% per annum all India average during the same period and also to the 4.1% per annum growth achieved between 1982-92 in Rajasthan. Project interventions were generally state-wide rather than focussed on particular geographical regions. Most key aspects of the reform agenda were met and contributed to improved resource use and growth. Available estimates suggest that specific activities financed under the project in agriculture, horticulture and water resources have led to substantial productivity and income benefits (see 4.2 below). - 3 -  4.1.2 The agreed policy reforms have been achieved, including full cost recovery in agreed goods and services (seeds, horticulture planting material, fish fingerlings, day old chicks, fodder seed, artificial insemination), phasing out or applying subsidies more effectively (including raising agricultural power charges), and enhancing development planning and technical assistance for agricultural research and training. The share of private sector increased in provision of foundation and certified seed (from 34% in 1992/93 to 53% in 1999/2000), horticulture planting material (33% to 45%), fish fingerlings (15% to 75%), and day old chicks (over 990/o by end of project). In the livestock sub-sector, actions to double the number of veterinary students were partially met, but intentions to significantly privatise veterinary services have not materialised. The studies and pilot activities in water resources have proved particularly useful and have been largely instrumental in the formulation of the State Water Policy and the recent passing of the Irrigation Act. The same work has also materially helped preparation of the proposed Bank financed Rajasthan Water Sector Restructuring Project (RWSRP). Overall, the project has had substantial impact on sector policies. The Agriculture Strategy Paper was updated by GOR in 1997 with policy reforms extended to new areas, including removing trade licencing restrictions for inputs like seeds and fertilizers, closing down of a few loss making parastatals, and further encouragement to private sector participation in agriculture related areas. Irrigation water charges, not part of the policy agenda agreed under the project, were increased three to five times, depending on crop, in 1999. Formation of WUAs, successful demonstration of sprinklers and reclamation of saline/alkaline land have promoted better and more sustainable resource use. A number of project components have had a beneficial impact in improving equity, including the training of 1.2 million rural women, development of 315 community lift irrigation schemes where over 80% of the beneficiaries are small and marginal farmers, better and wider dissemination of extension advice through mass media reaching the remotest areas, and rual road connections contributing to improved agricultural marketing in hitherto neglected areas. 4 2 Outputs by components 4.2.1 Output indicators are presented in Annex 1, linked to project components and development objectives. Appraisal or MTR estimates are compared with actual achievements, or estimates based on project monitoring data and implementation experience. 4.2.2 Crop Husbandry. This component broadly achieved its original objectives. The number of farm demonstrations proved excessive and at MTR these were reduced to focus on quality and replicability. Impact of demonstrations has been mixed. Of six new crops demonstrated, only castor proved relevant for farmer adoption in Jodhpur division. Some 107,000 demonstrations and 95,000 seed kits promoted various green fodders, alley cropping and urea/molasses treatment of dry fodder. Of the green fodders, multi-cut fodder sorghum. proved most popular, especially for dairy enterprises, but alley cropping and urea/molasses treatment were not adopted. Gypsum treatment of saline/alkaline land successfully covered 3,400 ha. at some 6,300 sites. Early problems with gypsum supply and soil testing were resolved; impact is visually obvious and incremental financial benefit significant. Project data from a sample of 325 beneficiaries reported near doubling of yields in crops like wheat, mustard and barley, and per hectare returns increasing, on average, by about 75%. The program is now being expanded through a Centrally Sponsored Scheme that provides a 50% subsidy on gypsum cost. Sprinkler demonstrations targeted some 970 sites in districts where adoption levels had been low. Subsequent uptake was excellent and the demonstrations were discontinued. Pilot drainage demonstrations were to be run by the IGNP Command Area Authority. Responsibility was transferred to DOA but following delays and farmers refusal to contribute to costs the activity was dropped. 4.2.3 The Farm Women's Training Programme successfully reached about 1.2 million women, mostly through one day courses given by DOA field staff. An external evaluation reported positive responses by - 4 -  the women, significant adoption of technologies taught, and improved farm incomes. Efforts to develop a cadre of Gram Sathins (volunteer women motivators) had limited success as most farm women are already fully occupied with household and agricultural activities. Rural Artisan Training was given to some 600 local artisans in agricultural equipment repair and manufacture. Its success is documented in an extemal evaluation which reported improved skills and knowledge, improved repair services and a 50% increase in artisan income after the training. 4.2.4 Infornation, media and management information system (NIS) capacities of DOA have been strengthened at all levels -- at HQ, 7 regions, 32 districts, and 62 sub-districts. The central unit established at Jaipur is impressive with outputs of high quality. Indications are that TV and video productions are popular and reaching a broad section of the agricultural community. Much skill training can now be effectively transferred through these media, replacing to some extent the village extension worker. Output is focussed on agriculture and horticulture, but could become broader based. Steps have already been taken to turn the unit into a registered society so as to retain its income for future maintenance and further development. 131 offices of DOA have been provided computer facilities and HQ, regional and district offices are now electronically linked. This has enormously enhanced the Department's capacity to handle a broad range of data in a timely manner. Strengthening Krishi Sewa Kendras (KSK) was piloted after the MTR at 30 sites. Since these have only recently been completed it is too early to judge their impact but such agricultural service centres could become increasingly important focal points for extension provided they are strongly supported by the infonmation/media unit. Pilot programs to introduce more client driven extension, first, by contracting pilot areas to NGO extension management and, second, through direct cost sharing arrangements with farmers have not succeeded. 4.2.5 Horticulture. Performance in the horticulture component has been satisfactory. Some 28 departmental nurseries and 83 registered private nurseries have been established. Effective plant quality verification and a shift from seedling to grafted plants have also been successfully promoted throughout the state. Around 39,000 fruit demonstrations and 33,000 vegetable demonstrations were conducted, about 40% on small and marginal farms, and their impact has been significant. An evaluation carried out by the Departrnent of Horticulture of a sample of 650 demonstrations showed that per hectare returns increased by 45%, and area adoption in subsequent years increased by 101%-212%. Overall, fruit and vegetable area in the state has almost doubled during the course of the project. Integration of drip irrigation into demonstrations has led to promising results and highly satisfactory farmer uptake. Performance is impressive, impact on growth substantial and opportunities for further significant growth demonstrated. DOH nurseries have significant income from sales and services and GOR is considering their conversion to self-financing registered societies. 4.2.6 Both DOA and DOH made very good use of external and internal evaluation studies to make program adjustments or drop failing activities during project implementation. 4.2.7 Animal Husbandry. The Animal Husbandry component has had limited impact on project objectives and overall performance is rated unsatisfactory. Privatization of veterinary services reached only eight of the fifty hospitals proposed. Similarly the Gopal (paravet) program, after a promising start, has been disappointing. Of the 1,100 gopals trained, just 12 are still operational, partly because once the government stipend ceased the income obtained from Al and castration proved unattractive. Recent changes have been made to the program to broaden the responsibilities of gopals with consideration of financial support from the National Bank for Agriculture and Rural Development (NABARD). Animal exchange markets, originally planned for 50 panchayati samitis, 30 municipalities and at 300 panchayats, were reduced in consultation with the Bank to 41 at the panchayati samiti, 25 at municipal level and none at panchayat level. These have been successfully completed and are now being run by the local bodies on a - 5 -  self-sustainable basis. The sub-component for improvement of diagnostic and animal husbandry services and development of an information system has made satisfactory progress. DOAH has established a Rajasthan Institute of Livestock Management at Jaipur with hostel accommodation. Completed in 1999, it has to date provided 14 induction courses (15 days duration) for a total of around 350 Veterinary Officers (VOs) and 3 courses for about 75 district level staff (7 day courses). Further 7 and 10 day courses are planned for orientation for Senior VOs, Joint and Deputy Directors. 4.2.8 The Sheep and Wool component had major problems. First year mortality of imported exotic ewes and their lambs was over 35% and over 80% respectively. Exotic ewe lambing percentage was only 50-60% instead of 120-150%. Body weight of surviving ewes is around 45 kg. instead of an expected 60 kg. The half-bred sheep is not popular since it does not thrive under the local harsh migrant system. As a result, after the initial import of 1,340 ewes, the original program to import a total of 3,000 ewes was stopped. Efforts to develop the DOAH sheep farms failed to produce adequate feed for the stock, and pasture establishment and feed purchase costs are high (around Rs. 1,500 per sheep per annum.). This component was ill conceived and has failed to contribute to project objectives. This is especially regrettable as sheep owning societies tend to be amongst the poorest and a chance to meet poverty alleviation and equity objectives was lost. In 1999, learning from the experience,GOR sheep breeding policy was amended to concentrate on improvement through selection of superior animals in the local sheep breeds. Consideration is also being given to disposal of the departmental sheep breeding farms. 4.2.9 Water Resources components performed satisfactorily and contributed significantly to achieving project objectives. Performance of the Studies sub-component was as follows: (a) Water Resources Planning Study was undertaken by consultants and resulted in the preparation of a State Water Policy, approved by the State Cabinet in September 1999. GOR has so far initiated action in 7 of the 13 study recommendations; (b) Hydrometeorological data collection, processing and use were strengthened by establishing 14 regional focal offices, provision of 49 raingauges, 11 automatic weather stations, 71 water level recorders and 30 telemetry stations. The supply of equipment was supported by technical assistance and staff training, and all the equipment has been commissioned. Further testing is required next monsoon season; (c) O&M Study was carried out by consultants in 11 schemes covering 640,000 ha and has been reviewed and accepted; (d) Pricing of Water Study by consultants provided the information required to formulate an appropriate water cost recovery policy; (e) Basin Investigation Studies under the Ground Water Department (GWD) provided precise information on aquifers, safe well-spacing, optimum well yields, static and dynamic ground water reserves. Ground water resources reports for all the 32 districts and basin wise water resources reports of all the 15 basins have been prepared. In addition a ground water atlas containing hydrogeomorphological maps of all the districts of Rajasthan has been published by the State Remote Sensing Application Centre (SRSAC), Jodhpur on the basis of the data collected by the GWD - in all a highly satisfactory result; (f) Conjunctive Use Studies by GWD included sinking 30 exploratory tubewells and 250 piezometers in the Mahi and Chambal commands and preparation of a useful report with recommendations for reduction of waterlogging; (g) Artificial Recharge Studies by GWD established five structures, equipped with seven piezometers and carried out a small pilot hydrofracturing programme on five wells. The latter was curtailed as disappointing and it is too soon to evaluate the recharge structures; (h) Remote Sensing. The project provided digital image processing equipment to SRSAC to enable production of the hydromorphological and arable land use maps for all districts in the State as well as developing a Geographic Information System (GIS) and provision of consultant services; and (i) Indira Gandhi Nahar Project (IGNP) studies have been largely completed with only the field trials for pilot drainage and evaporation studies, which were planned to be completed before Credit closure, delayed by an unexpected cloudburst. Overall, technical assistance provided through studies carried out under the project has contributed significantly to an improved understanding of the water sector in Rajasthan and have also materially assisted preparation of the proposed Bank financed 6 -  Rajasthan Water Sector Restructuring Project (WSRP). 4.2.10 Community Lift Irrigation Scheme (CLIs). 315 schemes have been established, one more than the MTR target. CLIs performance is very encouraging. Capital cost sharing of 20% by beneficiaries was introduced under the project, and worked successfully after initial delays. This feature is now adopted for all CLIs being developed by GOR. Over 15,000 ha of hitherto rainfed area is being irrigated and WUAs are, by and large, successfully operating and maintaining the schemes. An external evaluation of 10 CLIs reported a 270% increase in per hectare net income with 84% of beneficiaries being small and marginal farmers. The Participatory Irrigation Management (PIM) sub-component started as part of the policy reform program with six pilot schemes under the Irrigation Department (two each in major, medium and minor irrigation schemes). Subsequently, three schemes were taken up by the Command Area Development Department in the Chambal command which was increased to 13 at MTR. Further, the Irrigation Management Training Institute (IMTI), under ID took up another four minors in Gudha medium irrigation scheme for the PIM program. Various models have evolved over time, generally with increasing participation of the WUAs. Presently the latter are registered under the Societies Act, and for the future will come under a new act introduced by GOR as a direct result of the pilot scheme experience. The WUAs will continue to need technical and monitoring assistance from GOR for some more time to become self-sufficient, sustainable institutions responsible for O&M of self financing schemes. 4.2.11 Agricultural Research and Training Implementation of this component was delayed due to delays in commissioning and starting the Strategic Development Plan (SDP) - which was a key condition of disbursement - and frequent changes in RAU management. Overall performance is rated marginally satisfactory. Civil works started only from September 1997, with contracts being awarded between January and April 1998. As a result RAU has been primarily concerned with buildings and equipment, most of which have only been completed recently and are ready for use. Withdrawal of a contractor slowed two contracts so that despite re-tendering some buildings are yet to be fully operational at Credit closing. State level financial constraints emerged after the MTR impeding fund flows to RAU. As well as physical development, the SDP set a comprehensive twenty year agenda of over 200 policy refonns for higher education, research priorities, and institutional change. Wisely, World Bank/RAU agreed upon 47 major short-term reforms and RAU has been addressing mainly these and has made encouraging initial progress in their introduction. However, the expected return to this substantial investment in research and education will only be fully realised if the complete reform agenda is implemented, the new buildings and equipment are fully operationalized after project closing, and RAU can ensure financial sustainability to run and maintain the facilities. RAU has made a good start in income generation including recent increase in fees, sale of laboratory and veterinary services, seed sales, rental of excess capacities, consultancy, etc, and it is important that management continues to give this highest priority. One early positive feature of the upgraded facilities is that they have enabled scientists to make more competitive bids for external work and given them the confidence to do so. Further attention is also needed to ensure complementarity between the two state agriculture universities (the second was created recently while the SDP was prepared with only one university in mind), and ensure adequate staffing in some of the new departments that have come up. RAU has commissioned an external review of its progress in implementing the SDP reforms and this provides an excellent action plan for further progress. 4.2.12 Rural Roads component performed satisfactorily and contributed significantly to achieving project objectives. The size of the component was increased at the MTR from 1,600 km to 2,350 km, equally divided between Public Works Department (PWD) and the Rajasthan State Agricultural Marketing Board (RSAMB). Achievement has been 2,228 km linking about 600 hitherto unconnected villages. The roads program has been very well accepted by the rural communities. Agricultural marketing has improved and incomes of agricultural markets linked to these villages have more than doubled. - 7 -  4.2.13 The main implementation issue has been land acquisition. At appraisal no significant land was expected to be needed. During implementation land was required for widening alignments and compensation had to be paid. There were initial delays in announcing awards and making payments, but with persistent Bank supervision the situation has been largely addressed. Of a total estimated cost of Rs 320.8 million, about Rs 232.6 million has been paid and the balance is at different procedural stages of award declaration and payment. Progress is being monitored at senior GOR levels. As part of its fiduciary responsibility the Bank should also continue to monitor progress in this area till it is fully resolved. 4.2.14 Provision of mobile laboratories, appointment of a Technical Examiner and staff training programs assisted smooth implementation. Further close inspection will be required to ensure that the roads and their drainage are not damaged and that any defects in newly finished work is brought to the contractor's notice. One further important contribution of the project has been the adoption of Bank specifications, bidding and contract practices by PWD and RSAMB in their other road works. Quality control facilities established during the project are also being adopted for other works. 4.2.15 Environmental Strengthening through the creation of an Environment Cell was intended to enhance GOR's capacity for environmental oversight of agriculture in the State. It was, inter alia, to: provide clearance for environmental and social aspects for all investments under the project and progressively cover all sector investments in the State; establish detailed guidelines for the preparation and monitoring of environmental assessments; and to undertake a range of studies. On balance, the Cell has failed to establish a strong environmental oversight capacity in the state and has not established intemalised environmental review procedures. These concems have been consistently raised by Bank supervision missions but have not been adequately addressed in the course of implementation. Significant outputs have been limited to review and clearance of the project's Annual Action Plans, and a consultant study in May 2000 in which guidelines for enhancing the Cell's capacity and screening future investments in the sector were proposed. GOR needs to ensure these are reviewed with the concerned land/water based executive departments - the Department of the Environment and the Pollution Control Board - and internalized in future investrnent planming and review procedures. 4.2.16 Project Coordination. Although implementation was by respective line departments/agencies the Project Coordination Unit (PCU) played a key role in coordinating/facilitating various tasks which included preparation of annual action plans, monitoring and reporting on progress, commissioning special studies from time to time, vetting procurement processes, consolidating and submitting reimbursement claims, ensuring timely audit, and acting as the nodal unit for interaction with the Bank. Given that there were 12 implementing departrnents/agencies involved the PCU did a commendable job. GOR maintained continuity of key staff in the PCU which was an important contributory factor to its success. 4.2.17 Overall, the Crop Husbandry, Horticulture, Water Resources, Agriculture Research and Training, Rural Roads and Project Coordination components are rated Satisfactory. Animal Husbandry and Environmental Strengthening are rated Unsatisfactory. 4 3 Net Present Value/Economic rate of return- At appraisal an economic analysis was carried out only for the rural roads component, economic rate of return for which was calculated at 17%. For comparability, the analysis was repeated at ICR and the ERR is recalculated at 26% (Annex 3), the increase being largely due to higher than anticipated traffic volumes. While an economic analysis was not done for other components, evidence from evaluation studies carried out during implementation suggest substantial benefits accruing from investments in CLIs (270% increase in per hectare net income of beneficiary farmers), land reclamation through gypsum application (75% -8-  increase in per hectare returns), and horticulture demonstratons (per hectare returns increased by 45%). 4.4 Financial rate of return- The project was expected to have a significant impact on farm incomes as a result of its policy reforms and investments, but since the effects were generally state-wide no financial analysis was attempted. Project data from sample beneficiaries suggests substantial income gains from demonstrations, CLIs, and increased income from agricultural marketing (para 4.2 above). The project has provided good opportunities for wage employment to the rural communities in two ways: (a) direct employment of rural labour during implementation of the project; and (b) increased labour requirement through irrigation and intensified agriculture. 4 5 Institutional development impact The institutional development impact of the project is rated substantial. Starting with the preparation of the Agricultural Strategy Paper (ASP) the project had a significant impact on GOR's capacity to address agricultural policy issues and formulate specific proposals for a reform agenda. The support for media and MIS systems for DOA has had a very satisfactory impact. The pilot program for strengthening 30 KSKs to provide extension services has also been successfully completed. In horticulture, the increase in number of departmental nurseries and private nurseries has dramatically increased the availability of high quality planting material. In water resources, the studies financed have contributed to a much deeper understanding of the water sector in Rajasthan and materially helped in the formulation of the proposed RWSRP. Formation and successful functioning of WUAs for both the CLIs and the PIM components has been a significant institutional development in Rajasthan. It has improved the self-sufficiency and sustainability of the beneficiaries and their irrigation systems and has prepared the way for a wider adoption of the devolved operation and management system based on WUAs to be supported by the RWSRP. Implementation of the agricultural research and training proposals, in particular the preparation of the SDP and development of RAU, has improved the latter's ability to plan and implement development programs. Similarly the rural roads program has improved the competence and procedures of the PWD and RSAMB. Even in the case of the less successful livestock components the project has left the implementing agencies in a sounder position for carrying out future training activities. Finally, the PCU has been remarkably successful in bringing such a complex project to a successful conclusion. With no less than 12 implementing agencies this was indeed a daunting task, particularly when the PCU had no direct implementation powers and only a very small staff. 4 6 Environmental Impact: The project contributed to improvements in natural resource management through better use of water and rehabilitation of alkaline soils through the application of gypsum. The roads financed by the project predominantly follow the previous alignments, are sealed and have improved drainage. The roads component should therefore improve on the environmental effect of the unimproved roads. Isolated cases of tree felling were reported in a couple of districts to accommodate road widening, and compensatory plantations were carried out. Overall, the project environmental impact is rated positive, albeit modest. 4.7 Other Outputs: The project has been of great assistance in the formulation and preparation of the proposed Bank financed Rajasthan Water Sector Restructuring Project (RWSRP). -9-  5. Major Factors Affecting Implementation and Outcome 5 1 Factors outside the control of governnment or implementing agency Steady devaluation of the Rupee against the US$ (the Rupee devalued from Rs. 26 per US$ at appraisal to Rs. 45.6 per US$ at ICR) meant that, despite incurring greater rupee expenditures than estimated at appraisal, with most of the additionality being used to finance a larger rural road program, the IDA credit was not fully used. 5 2 Factors generally subject to governmient control Initial project implementation was materially helped by a good sense of ownership by senior GOR staff. The ease and pace of implementation was adversely affected by the large number of project implementing agencies, and slowness in budget releases owing to the tight fiscal situation in the state in the period after the MTR. 5 3 Factors generally subject to implementing agency control 5.3.1 Lack of staff familiarity with IDA procedures for procurement, late recruitment of RAU SDP consultants, frequent changes of Vice-Chancellors at RAU, and delayed payment of compensation for land taken up by the roads component slowed project implementation and performance. 5.3.2 Given the small number of staff at the Project Coordination Unit, the project has done a commendable job in accounting, financial reporting and meeting audit requirements. Audit reports were submitted on time in most years. There have, however, been large audit disallowances in most years, which were persistently followed up by project staff and subsequently dropped by the auditors. Audit disallowances for 1996/7, 1997/8, 1998/9 amounted to Rs. 275.85 million of which Rs. 253.36 million were subsequently dropped and claims, earlier disallowed, admitted for reimbursement. Disbursements were not suspended at any time in the project. Independent consultants appointed by the Bank carried out random post-award review of contracts and SOE financial review and did not find any serious shortcomings. 5 4 Costs andfinancing- 5.4.1 At appraisal, total project costs were estimated at US$130.3 million. This was to be financed by US$24.3 million (equivalent) from GOR/beneficiaries, and a Credit of SDR 73.1 million (equivalent to US$ 106 million) from IDA. At closing, the original Credit was equivalent to US$ 102.5 million on account of depreciation of SDR vis-a-vis the US$. Final disbursements were SDR 67.6 million (about 92.5% of original Credit and equivalent to US$ 95.3 million). The balance of SDR 5.5 million (equivalent to US$ 7.2 million) was canceled. Final project cost is estimated as US$121.3 million with GOR/beneficiary and IDA shares estimated at US$26 million and US$95.3 million respectively. 5.4.2. It is important to note that despite the lower cost in US$ terms, actual expenditures in local currency increased from Rs.4,065 million at appraisal to about Rs.4,651 million at closing. Most of the increase was for rural roads (up from Rs. 1,301 million to Rs.2,046 million) due partly to the increase in the physical target at MTR (up from 1,600 km to 2,350 km) and partly to cost escalation. Some increase was also experienced for water resources (up from Rs.531 million to Rs.743 million) due to expansion of the participatory irrigation management sub-component, with some cost savings in the other components. - 10-  6. Sustainability 6 1 Rationalefor sustainability rating 6.1.1 Policy reforms set out in the ASP and agreed under the project have been largely met. Reforms related to increased cost recovery are unlikely to be reversed, and in view of the state's tight fiscal situation, likely to extend further. For instance, irrigation water charges, which were not part of the project reform agenda, were raised substantially (3 to 5 times) in 1999. GOR has also taken important initial steps in the reform of its power sector, including raising of power rates for agriculture and unbundling of the State Electricity Board. Participation of WUAs in the operation and maintenance of irrigation systems was successfully piloted under the project and the program is now set to expand under the proposed RWSRP.' Learning from experience under the project, GOR has modified its livestock policy to better suit state-specific conditions. 6.1.2 Sustainability of project investments depends on the effectiveness of the arrangements made for their future operation and management. GOR has accordingly already provided funds for the current year and drawn up an Operation and Maintenance Plan (O&MP) for the project. For the roads component cost of maintenance of the roads constructed by the project is estimated at around Rs. 8000-10,000/km annually for ordinary repairs for the next 5-6 years before some renewals become due - or total of Rs 18 to 20 million annually for each of the next five years. This is about one per cent of the State's road maintenance budget, which should not create difficulties. Thereafter this requirement would be of the order of Rs. 50 million annually to adhere to the renewal cycle, which would mean about 2-3% of the current maintenance budget. GOR is also introducing - initially on a pilot basis - a Maintain, Operate and Transfer (MOT) system, by which private contractors are responsible for maintaining sections of highway and all associated feeder roads, and are allowed to collect tolls on the highway. By this means road maintenance cost would be passed on to the users. For the irrigation components (both CLIs and surface schemes) responsibility for O&M rests with the WUAs and despite the fact that the latter are not very old the impression from field visits is that sustainability of the irrigation investments is likely with the WUAs in many cases already meeting full O&M costs. For crop husbandry and horticulture, seeds and planting material are now on a full cost basis and extension services are being supported by the mass media services developed by the project which should result in cost savings for the service as a whole. In animal husbandry further support is to be provided for the gopals through credit from NABARD. Livestock services such as Al are at full cost and should be fully sustainable. For sheep and wool the department is now concentrating on improvement of the local breeds through a selection program, and considering leasing out its sheep breeding farms. Both these measures are likely to increase sustainability of support to sheep flocks. The RAU civil works maintenance costs are estimated around Rs. 10 million annually, which should be within the means of RAU, particularly if it is successsful in generating extra-budgetary funds - a process which has already started. 6.1.3 The O&MP provides for additional actions required for completion of the project. These include registration of the WUAs under the CLIS. So far 230 have been registered under the Societies Registration Act, and by April 2001 it is planned that all 315 will be registered. In the PIM component, technical support will continue to be provided to WIJAs, and there are also plans to scale up the approach considerably under the proposed Bank financed RWSRP. There are also plans to extend the telemetry system established in two basins as part of the water resources component to cover all the basins in Rajasthan. Field trials for pilot drainage and evaporation studies for the IGNP study which could not be completed due to an unexpected cloud burst are planned for next year. GOR has also agreed that key PCU staff will be retained in position through to at least the end of March 2001 in order to complete the process of disbursements of the Credit and ensure timely submission of audit certificates to the Bank. - 11 -  6.1.4 On the basis of the above, the project's sustainability is therefore rated likely. 6 2 Transition arrangement to regular operations With the exception of RSAMB constructed roads, all implementation has been by the same agencies responsible for subsequent operation and therefore no difficulties are anticipated. The roads constructed by RSAMB have been taken over by PWD for maintenance. The borrower has prepared an Operation and Maintenance Plan for the operational phase of the project which includes technical guidelines, financial requirements, and performance indicators for operation and maintenance of all the key components. A dated action plan for completing the RAU reform agenda has also been prepared, and maintenance plans agreed with WUAs where O&M has been handed over to them. 7. Bank and Borrower Performance Bank 7 1 Lending: At preparation/appraisal the Bank concentrated more on policy reform - in line with the ASP - than on project technical and operational feasibility. As a result, some investment components, in particular the sheep improvement proposal were inadequately developed and reviewed, and the arrangement by which the RAU proposal depended on the SDP to be developed during implementation was unrealistic and exposed the component to risk of delay. With the benefit of hindsight SDP preparation should have been made a condition for appraisal/negotiations. Borrower capacity in procurement and financial management was not fully assessed during appraisal, and this created implementation delays in the first year as staff had to be trained and capacity established. Monitoring and evaluation design focussed mainly on reporting arrangements and physical and financial monitoring of progress, with comparatively little attention to assessing development outcomes. Learning from earlier projects, the main project risk correctly identified was timely implementation of the agreed policy reforms, with GOR commitment fostered to mitigate the risk. On balance, Bank performance in lending is rated satisfactory. 72 Supervision: Staffing of pre-MTR supervision missions was inadequate for livestock, fmnancial management and social/environmental issues. Had more adequate and consistent technical support been given, problems under the livestock component may well have been identified earlier, remedies identified, or funds withdrawn. Supervision was effective in monitoring and supporting reform actions. Post-MTR, continuity was maintained in the Bank task team with long term involvement of field office staff of different skills (economist, agriculturalist, water resources engineer, roads engineer, procurement, finance, environment, social). Apart from bi-annual Bank supervision missions, short visits were made, depending on need, by individual Bank staff or project staff were encouaged to visit the Bank's Delhi office to follow up on particular issues. Overarching implementation issues like funds flow problems in the post-MTR phase were identified in a timely manner and followed up at senior GOR levels. Prior to the MMR, project perfornance indicators were developed in consultation with GOR using a log-frame matrix, and updated regularly. Although project accounts were routinely qualified no serious accountability problems were noted. No significant deviations from Bank policies and procedures were noted. Covenants status was updated regularly and there were no major instances of non-compliance. The Bank showed understanding in allowing the one year extension of the project period. Bank performance in supervision is therefore rated satisfactory. 7 3 Overall Bank performnance Preparation of the ASP provided a sound basis and direction for the project. Despite some design deficiencies and the large number of implementing agencies the project has generally achieved its development objectives. The Bank's overall performance is assessed as satisfactory. - 12 -  Borrower 7 4 Preparation GOR was strongly engaged in preparation of the project and drawing up the ASP provided a very valuable focus for the overall scope and direction of the project. Making the project quite so broad and consequently including so many implementing agencies was a mistake, only retrieved by high-level GOR interest in the project and good coordination by the PCU. Borrower perfornance in preparation is therefore rated satisfactory. 7 5 Government implementation performance GOR performance was good in overall support to project implementation, operation of the PCU and carrying out the agreed policy reforms. Weak points were the frequent changes of Vice-Chancellors at RAU, and GOR budgetary difficulties and reduced flow of funds in the period after the MTR. Government performance in project implementation is therefore rated as satisfactory. 7 6 Implementing Agency: Performance of the twelve agencies implementing the project varied. Implementation by the State Remote Sensing Application Centre, and the Departments of Agriculture, Horticulture and Rural Development was particularly successful. Implementation of the livestock component was more problematic, partly due to inadequately developed designs and partly due to weak ownership in the implementing departments. Performance of the PCU was highly satisfactory, given the difficulty of the task, with key staff continuity playing an important role. Overall performance of the implementing agencies is therefore rated satisfactory. 7 7 Overall Borrowerperformance Based on the above assessments the overall borrower performance is considered as satisfactory. 8. Lessons Learned Based on the review of the project implementation experience the list of lessons learned are as follows: - Any hybrid policy reform cum multi-sectoral state-wide investment project is bound to be a complex operation and in this case 12 departments of GOR were involved. This made Borrower co-ordination and monitoring and World Bank supervision difficult. Investments would have better been concentrated on fewer critical areas (3-4 maximum), that responded most directly to objectives, were technically robust, and had a high chance of success. * The use of externally conducted component or activity evaluation studies in the course of implementation as a means of informing managers on progress and problems is a positive lesson. Performance was generally better in those departments that commissioned such studies early enough and then took decisive remedial actions (e.g. DOA and DOH). * Continuity of key staff (e.g. PCU) contributes to successful implementation. Frequent staff changes (e.g. RAU) delay progress as valuable time is lost while new staff familiarize themselves with main implementation issues. * Under typically harsh field conditions of Rajasthan, especially when migratory practices are followed, animal breeding programs should avoid use of exotic stock and focus upgrading on selection within the locally adapted breeds (except for intensive dairying). * The SAR demonstration programs involved unnecessarily large numbers (165,000 demonstrations were proposed for agriculture and horticulture alone). It is impossible to maintain quality on such numbers and a new technology can be demonstrated with far fewer. Future programs should, as was ultimately agreed in the MTR, focus on fewer high quality demonstrations of technologies with good replication - 13 -  prospects. * Whilst the project reform agenda successfully focussed on the introduction of full cost recovery on selected farm inputs, relatively little was included to promote income generation and financial sustainability of the implementing departments. This process is being initialized by the information and media unit of DOA and the RAU. There is scope to extend this to horticultural nurseries, and other service providers such as animal and crop extension. To provide incentives, rules would have to be modified to allow providers to retain the funds raised for their own operations-- rather than be deposited in a general treasury account. 9. Partner Comments (a) Borrow'er/implementing agency The draft ICR was reviewed by GOR and "agreement with the observations made in the ICR" was expressed. No comments have been received from the Government of India on the ICR. The Borrower's evaluation of the project is attached as Annex 8 to the ICR (b) Cofinanciers (c) Other partners (NGOs/private sector) 10. Additional Information The September 25-October 4, 2000 ICR Mission Aide Memoire, and the Economic Analysis of the Rural Roads component are available in project files. - 14 -  Annex 1. Key Performance Indicators/Log Frame Matrix Outcome/Impact Indicators Indicator Projected in SAR Actual/Latest Estimate I.Agriculture growth through improved resource use. I Increased share of capital expenditures in I Not specified I Share of capital expenditures increased from agriculture sector expenditures 2 Not specified 33.9% in 1992/93 to 40 2% in 1999/2000 2 Agricultural growth rate 3 Full cost recovery 2 Agriculture SDP grew at trend rate of 5 4% per sustained/accelerated 4 Full cost recovery annum between 1992-99 compared to 4 1% per 3 Rajasthan State Seed Co (RSSC) to charge 5 Not specified annum between 1982-92 true price for seed. 6 Full cost recovery 3 RSSC net profit (before Central subsidies) 4 Sales of plants by Horticulture Dept to be 7 Full cost recovery steadily improved from Rs.2.1 billion loss in at true cost. 8 Full cost recovery 1992/93 to breakeven currently 5 Encouragement to establishment of private 9 Not specified 4 During implementation period sale price has nurseries. 10 Not specified increased from around 78% to 100% currently. 6 Artificial insemination (Al) services to be t I Not specified 5 83 private nurseries have been established during at true cost theproject period 7 Day-old chicks to be sold at true cost 6 Proportion of Al cost recovered increased from 7% 8 Fodder seed sold at true cost in 1992/93 to full recovery currently 9 Increased private participation in seed 7 Cost recovered increased from 70% to 100% supply, horticulture planting material, fish 8 Fodder seed sold at full cost fingerlings, day-old chicks 9 Between 1992/93 and 1999/2000 share of private 10 Percentage improved breed of cattle to sector increased from 34% to 53% for foundaton total cattle population in state and certified seed, from 33% to 45% for 11 Increase in area under fruits and horticulture planting material, from 15% to 75% vegetables for fish fingerlings, and to 99% for day-old chicks 10 Increased from 1% in 1992 to 1.8% in 1999 11 Area under fruits and vegetables increased from 80,000 ha in 1992/93 to 155,000 ha in 2000/01 (equals from 0.39% to 0.73% of cropped area) 2. Sustainable growth through management and conservation of resources. I Treatment of alkaline areas 1 2,000 ha to be 1 3,320 ha treated with gypsum 2 Improved water use through treated with 2 730 sprinkler/drip set demonstrations installed demonstration of sprinklers and better gypsum 3 See below in output indicators on-farm water management 2 240 sprinkler/drip 4 WUAs have taken O&M responsibility for 315 3 Improved statewide planning and data sets installed Community Lift Irrigation Schemes (CLIS) and 23 collection on water resources (see Output 3 (See below) surface irrigation schemes Indicators below) 4 6 pilot schemes in 4 Formation of Water Users Associations surface irrigation (WUAs) to operate and manage schemes. 3. Improve equity through better targeting of poor. I Not specified I 1 2 million women and 600 male artisans have I Human resource development through 2 Not specified been trained by the project training 2 592 villages connected with all-weather roads 2 Expand road network to unconnected vilvages - 15 -  Output Indicators: Indicator AppraisalUMTR Estimate Actual/Latest Estimate (Aug. 31, 2000) 1. Crop Husbandry Component Land development demonstrations (no '000) 2 67 6.38 New crop demonstrations (no '000) 24 5 41.4 Fodder crop demonstrations (no.000) 107 7 132 5 Training: - Women (no '000) Not specified 1,332 - Artisans (no.) Not specified 681 2. Horticulture Component Greenhouse/drip irrigation (no.) 39 39 Vegetable demonstrations (no.'000) 28 33 Fruit demonstrations (no '000) 35 39 Rural youth training (no. '000) 37 48 3. Animal Husbandry Component Animal exchange markets (no) 80 66 Officer training (no ) 120 559 Women/youth training (no '000) Not specified 26 Purchase of breedable rams (no '000) 15 7 Import of exotic ewes (no '000) 3 0 1 3 Improvement of sheep breeding farms (ha) 2,700 1297 Youth training (no ) 4,500 5,745 Nutrition and health control (no) 7,500 19,034 Paravets trained (no.) 1,090 1,108 4. Water Resources Component Basin Investigation: Exploratory tubewells (no) 471 511 Piezometers (no.) 410 757 Pump tests (no ) 220 224 Conjunctive Use Study: Exploratory tubewells (no.) 30 30 Piezometers (no.) 250 256 Pump tests (no ) 10 24 Community lift schemes (CL IS)(no) 314 315 Participatory irrigation management (PIMXno.) 23 21 5. Agricultural Research and Training Component Development of RAU Not specified RAU developed as planned Construct Zonal Training Centres(no.) 9 9 6. Rural Roads Component Length of rural roads constructed by RSAMB (kn) 1,181 1,171 Length of rural roads constructed by PWD (kn) 1,064 1,056 Total length (km) 2,246 2,227 7. Environmental Strengthening Component Establish environmental cell in the Development Commissioner's Establish cell Cell established Office - 16 -  Annex 2. Project Costs and Financing Project Costs by Components (in US$ million equivalent) Project Component Appraisal Estimate Actual/Latest Estimate Percentage of Appraisal Crop Husbandry 20.3 15.2 75 Horticulture 7.9 4.8 61 Animal Husbandry 14.9 7.4 50 Water Resources 17.3 19.4 112 Ag. Res.& Training 20.8 18.7 90 Rural Roads 41.0 53.3 130 Project Coordination 8.1 2.5 31 Total Project Cost 130.3 121.3 93 Project Costs by Pro urement Arrangements (in US$ million equ ivalent) * Expenditure Procurement Method Procurement Method Categories Appx aisal Estimate Actual/Latest Estimate ICB NCB Other NBF Total ICB NCB Other NBF Total 1. Civil works: 60 5 2 65 3 68.5 8 4 76 9 2 Vehicles, equipment 8 5 16 9 14 6 40 0 15 5 7 5 8 7 31.6 and materials 3 Consultancies and 20 6 20 6 12 2 12 2 training ___ __ _ _ 4 Incremental 44 444 4 0 5 0 5 operating costs Total 8.5 76.9 44.9 130.3 15.5 76.0 29.8 121.3 * Note: NBF = Not Bank Financed (includes elements provided under parallel co-financing procedures, consultants under trust funds, any reserved procurement and any other miscellaneous items) "Other" includes force account for roads, shopping and direct contracts for vehicles, equipment and materials Project Financing Component (in US$ million equivalent) Component Appraisal Estimate Actual/Latest Estimate Percen tage of A praisal Bank Govt. Other Bank Govt. Other Bank Govt. Other Crop Husbandry 15.9 3.3 0.7 11.8 2.0 1.3 75 61 189 Horticulture 6.1 1.5 0.3 4.1 0.7 0 67 50 0 Animal Husbandry 12.1 2.6 0.2 6.1 1.3 0 50 50 0 Water Resources 13.3 3.2 0.6 14.4 4.8 0.2 108 151 27 Ag. Research &Tmg 17.2 3.5 0 15.9 2.8 0 92 80 0 Rural roads 34.6 7.1 0 41.2 12.1 0 119 171 0 Project Coordination 6.8 1.4 0 1.8 0.7 0 27 47 0 Total Project Cost 106.0 22.5 1.8 95.3 24.5 1.5 90 109 83 - 17 -  Annex 3: Economic Costs and Benefits Present Value of Flows Economic Analysis Financial Analysis Appraisal/MTR Latest Estimates Appraisal Latest Estimates Rural roads (km) 2,350 2,223 . ERR/rural roads (%) 17 26 1/ Calculated in September 2000 constant prices - 18-  Annex 4. Bank Inputs (a) Missions: Stagc of Project Cycle No. of Persons and Specialty Performa ce Rating (e.g. 2 Economists. I FMS, etc.) j Implementation Development Month/Year Count Specialty Progress Objective Identification/Preparation Appraisal/Negotiation May 1992 10 Economist(3),Agriculturist( I);Livestock Specialist(l), Horticulturist( 1 );Irrigation Engineer(l ),Civil Engineer(l); Private Sector Specialist( 1 );Environmental ist(l) Supervision Jan 1993 4 Agriculturist(l); Civil HS HS Eng (1); Procurement Sp.(l); Irrigation Engineer( 1) April 1993 5 Agriculturist(l);Civil HS Eng (1 );Economist(l );Procureme nt Sp. (1),Research Specialist(l) July 1993 2 Agriculturist(I),Procurement Sp HS (1) Dec 93 6 Agriculturist(1);Economist(1); S Irrigation Engineer(l), Civil Eng. (1); Research Sp (1),Procurement Sp. (1) May 94 4 Agriculturist(l);Economist(1); S S Research Sp. (1), Procurement Sp.(1) Oct 94 6 Agriculturist(l),Economist(l); S S Irrigation Engineer(2); Research Sp (1),Procurement Sp (1) May 95 5 Agriculturist(I),Economist(I); S S Research Sp. (1); Irrig. Eng (1), Procurement Sp (1) Jan/Feb 96 5 Agriculturist(l),Economist(I), S S Civil Eng (1); Ag Research Sp. (1);Procurement Sp. (1) June 96 2 Agriculturist(2) S S MTR 8 Agriculturist(l);Economist(I); S S Feb/Mar. 97 Irrigation Engineer(l), Civil Eng.(l); Ag Research Sp. (1),Environmentalist (1); Procurement Sp. (1), Livestock Sp. (1) - 19-  Oct. 97 5 Economist(l); Livestock S S Sp (1);Irrigation Engineer(l), Civil Eng.(l); Ag.Research Sp. (1) May 98 7 Economist(1); Water Resources S S Sp (1); Civil Eng (1); Ag.Research Sp (I)Financial Analyst (1); Procurement Sp. (I); Social Dev Sp.(l) Dec 98 8 Economist(l); Irrigation Eng (1), S S Civil Eng.(1); Ag Research Sp. (I)Financial Analyst (1); Procurement Sp (1), Environmentalist(I); Information Tech. Sp (I) May 99 7 Economist(l), Irrigation Eng.(l), S S Civil Eng (1); Ag.Research Sp. (1), Procurement Sp. (1); Environmentalist(l); Social Dev.Sp (1) 6 Economist(l); Irrigation Eng. S S Nov. 99 (1);Ag Research Sp. (1); Financial Sp. (1); Environmentalist(1), Social Dev Sp.(1) April 2000 7 Economist(l), Irrigation S S Eng.(1), Roads Eng. (1), Ag.Research Sp. (1); Financial Sp.(l), SocialDev.Sp (1); Procurement Sp. (I) ICR Sept /Oct. 2000 6 Economist( 1 );Financial S S Analyst (1); Ag Economist (1), Agronomist/Ag Res.Sp.(I); Irrigation Eng (1); Civil Eng. (1) (Including FAO/CP team of 4 persons) - 20 -  (b) Staff: Stage of Project Cycle Actual/Latest Estimatc No, Staff weeks USS (,000) Identification/Preparation 100.5 207.2 Appraisal/Negotiation 29.6 115.2 Supervision 240.9 270.4 ICR 9.0 38.0 Total 380.0 630.8 Also includes Bank-financed and trust fund consultants. - 21 -  Annex 5. Ratings for Achievement of Objectives/Outputs of Components (H=High, SU=Substantial, M=Modest, N=Negligible, NA=Not Applicable) Rating n Macro policies O H OSUOM O N * NA 3 Sector Policies O H * SU O M O N O NA O Physical O H * SU O M O N O NA O Financial O H * SU O M O N O NA a Institutional Development 0 H * SU 0 M 0 N 0 NA E Environmental O H OSUOM O N O NA Social 0 Poverty Reduction O H *SU O M O N O NA O Gender O H *SU O M O N O NA O Other (Please specify) O H OSUOM O N * NA 0 Private sector development 0 H * SU O M 0 N 0 NA O Public sector management 0 H O SU0M 0 N 0 NA 0 Other (Please specify) 0 H O SU O M 0 N 0 NA - 22 -  Annex 6. Ratings of Bank and Borrower Performance (HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HU=Highly Unsatisfactory) 6 1 Bank performance Rating O Lending OHS *s OU OHU El Supervision OHS OS OU OflU O Overall OHS OS O U O HU 6 2 Borrower performance Rating O1 Preparation OHS OS OU O HU L Government implementation performance O HS O S 0 U 0 HU El Implementation agency performance O HS O S 0 U 0 HU El Overall OHS OS O U O HU - 23 -  Annex 7. List of Supporting Documents The following documents are available in ICR file: 1. ICR Mission (September-October 2000) Aide Memoire 2. Economic Analysis of the Rural Roads Component. 3. Operation and Maintenance Plan: Agricultural Development Project (Cr 2433-IN), Project Coordination Unit, GOR, October 2000. 4. Letter from GOR (F. 1 l(l) ADPIPCU/2000 pt 1) dated January 23, 2001 giving GOR comments on the draft ICR prepared by the Bank. - 24 -  Additional Annex 8. Borrower Evaluation of the Project (unedited) About the Credit: The Agriculture Development Project (ADP) was negotiated on 17 December, 1992. The credit (Credit 2433-IN) became effective from 28, January 1993 under retroactive financing. Project cost fixed was Rs. 4065.48 million while utilization of credit till 30 September 2000 was Rs. 4651.87 million. Repayment period of the Project is 35 years. I. Project Objectives: The essence of ADP is that both the World Bank and the GOR agreed on a broad strategy for agricultural growth and on specific reforrn measures. The strategies and most of the reforms in ADP are included in the Agricultural Strategy Paper prepared by the GOR which was also approved by the State Cabinet. Briefly, the ADP addresses the problems of agricultural development in Rajasthan through a broad approach linking policy reforms and public investments. The project objectives are to: accelerate the growth of agriculture through improved technical, financial and economic use of resources; enhance sustainability of the productive resource base and improve equity within the sector. Policy reforms included: full cost recovery for publicly provided goods and services; reduced input subsidies, improved efficiency and sustainability of water use, institutional reforms of rural cooperatives, alleviating constraints to private investment in agroindustry and strengthening GORs environmental oversight for agriculture. The reforms to be implemented by the GOR were mutually supporting investments under the Project. The investments identified under the project preparation were most likely - technically, financially and environmentally - to contribute to the objectives of the Project. The Project financed the following components: a) Crop Husbandry; b) Horticulture; c) Livestock; d)Water Resources; e) Agriculture Research and Training; f) Rural Roads; g) Project Coordination; h) Environmental Strengthening. For (a), (b) and (c), the Project was to support the GOR in reallocating resources from production subsidies to a stronger focus on demonstrations, field trials and training because these activities have proven less costly than subsidies in encouraging the farmers to adopt new technologies. The Water Resources Component strengthened GORs knowledge and planning for sustained use of surface and ground water throughout the State. Expansion of the rural road network is considered essential to GORs production and social objectives. Through reduced input costs and increased farmgate prices, the roads make new technologies more financially attractive to farmers, facilitate expansion of agro-industry, marketing and rural commerce, and enhance opportunities for the poor sections of rural Rajasthan to contribute to agricultural growth for the poor sections of rural Rajasthan to contribute to agricultural growth. Environmental strengthening would be important to ensure that all the investments in agriculture, both within and outside the Project, would be carried out according to sound environmental principles. The objectives of the Project and the investment plan present a comprehensive picture of the ADP. At the time of the formulation of the project, the overridding consideration was to make the objectives broad based and still do so many things in so little a time. At the end of the day, the realization is that the multiplicity of sectors included in the project made the task somewhat difficult. Though the Project objectives were enshrined in the SAR, however, in practice these were seldom referred to by the sectoral implementing agencies, which concentrated more on implementation of the investment plan. A project with a multiplicity of sectors was not in line with the line administrative pattern of the State. Although the Project Coordination Unit was in place, it could not arrogate to itself the role of an - 25 -  implementing agency. The resultant situation was that there were upteen implementing agencies, but without any overall agency responsible for implementation. The objectives would have been more meaningful if there were an inbuilt mechanism to refer to project objectives in the context of the sectoral objectives. In the existing scheme of things, the investnent plan came into the fore and sectoral and project objectives got slightly relegated to the back. II. Achievement of Project Objectives: Assesment of the achievement of these objectives of a project, with such a multiplicity of sectors, at macro level, is a somewhat difficult proposition. All the same it can be said that practically all the major relevant objectives with substantial development results have been achieved without major short comings. Strictly speaking the project cost initially fixed was Rs. 4065.48 million which at the MTR was refixed at Rs. 4536. 23 mnillion. Against this, the expenditure incurred till September 2000 has been to the tune of Rs. 4651 million. Around 5.58 US $ million of the credit is expected to remain unutilized due to the falling value of Indian Rs. vis-a - vis US $ and delayed start of the development works at the RAU because the SDP was available from the Consultants in June 1996 and approved by the Bank and the GOR in September 1997 leaving insufficient time for implementing reform agenda. That the growth of agriculture is registering a steady rise despite the vageries of monsoon is enough proof of improved technical, financial and economic use of the resources. The CLIS and Women training have achieved the objective of equity in a big measure. Practically all the policy reforms have been implemented. Sector wise assessment of achievements is given below. Crop Husbandry: Broadly speaking, the crop husbandry component can be divided into three: Demonstrations, HRD and Institutional strengthening. Demonstrations - 38,000 new crop, 37,000 forage and 6,300 gypsum treatment of saline/alkaline land demonstrations were held which yielded varying results. Among the new crops, only castor was popular; the same was true about sorghum and green fodder, gypsum treatment as a measure of land reclamation has succeeded in emphasizing the need for gysum treatment born out by the increasing demand. The number of Diggi based sprinkler demonstrations was 970. Looking to increasing popularity of the sprinkler, the demonstrations were discontinued. Both in terms of the number of demonstrations and impacts, the achievement can be rated as highly satisfactory. Human Resource Development: On the whole, this has been a very successful component - 1.2 million women and 600 local artisans were trained. External evaluation findings suggest that impact has been positive. For achievement of equity, the number of women trained was impressive. Utility of nine Zonal Training Centres recently created is no in doubt. Having been completed only recently, it is too early to conmment on the impact part. Information and Media Support: With strengthened information media and MIS capacities at HQ, 7 regions, 32 Districts and 62 Sub - districts, new era of information management has ushered in. The Agriculture Department is now better equipped to handle a broad range of data in a timely manner. The achievement has indeed been highly satisfactory. Krishi Sewa Kendras provided at 30 places at MTR are likely to become focal points for extension. Having been created only recently, it will be premature to add in terms of impact. Results of NGO extension management have not been encouraging. Horticulture: At the time of the introduction of ADP, horticulture development in the State was insignificant. During the project period, 28 departmental and 83 registered private nurseries were established which distributed 173 million plants during the project period. Shift from seeded to grafted plants has been a major achievement. The area under fruits has registered a rise of 75% and vegetables, - 26 -  100%. On the whole, the achievement was highly satisfactory. Animal Husbandry: Gopal, para veterian concept, was an innovative approach initiated with twin objectives of providing employment to local educated youth on the one hand and providing cross-breeding facility at the grass-root level on the other. Though the drop out rate was high, 12 Gopals were still working. The potential of this programme is not in doubt, and taking lessons from the experience for the modified form of the programme, financial support from National Bank for Agriculture and Rural Development is being considered. In privatization of veterinary services, against a target of 50 hospitals, only nine could be established. Progress in diagnostic services and animal husbandry services including development of information system has been very satisfactory. Livestock Training Institute and Para-veterinary schools have done a good job in providing training to a large number of persons of different levels. The training facilities created will continue to meet the training needs of the department in future also. Animal Exchange Markets (AEMs) were created at 41 Panchayat Samitis and 25 Municipalities with modest infrastructural facilities like boundary wall, office, troughs etc. This has provided strength to the traditionally held AEMs. Management coming to the local bodies (Panchayats/ Municipalities), the AEMs will be self sustaining and also sustainable. Required amendments in panchayats and municipalities act are being done. Achievements has been satisfactory. Sheep and Wool: For improvement in body weight and quality and quantity of wool in the indegineous breeds, cross - breeding was proposed to be done. With this end in view, target of importing 3000 exotic ewes was kept. However, till December 1993 only 1340 were imported. Keeping in view the high mortality rate in the exotic ewes and the lambs, and difficulties in adaptation of the cross bred in grazing conditions and migration, the import of exotic ewes was stopped. Taking lessons from this experience, now the thrust is on selective breeding. May be that the sector has failed to contribute to the project objectives but has helped the Governmnent of Rajasthan in evolving a more pragmatic policy. Water Resources: For a water deficient state like Rajasthan, importance and contribution of studies initiated can hardly be over emphasized. Water Resources planning study led to the formulation of State Water Policy which has been approved by the Cabinet. Hydrometeorological date collection process has started. The staff of Irrigation Department has been trained to operate the imported equipments. O&M study findings have been accepted by the GOR. Similarly, the Study on Cost Accounting and Pricing of water supply from surface water schemes has provided data necessary for vital policy decisions. The studies have provided very significant input for RWSRP being appraised by the World Bank. The Basin Investigation Studies provide reliable data base for acquifiers, safe well spacing, static and dynamic ground water resources etc. Under the project, 408 exploratory tube-wells and 765 piezometers have been sunk. Ground water resources reports for all the 32 districts and basinwise resources report for all the 15 basins have been completed. Ground water atlas containing hydrogeomorphological maps for the districts has been an outstanding contribution of State Remote Sensing Application Centre (SRSAC). For addressing the problem of water logging in Chambal and Mahi command area, GWD sunk 30 exploratory tube wells and 250 piezometers. Report has been very useful. But for field trials for drainage and evaporation studies that could not be carried out before the credit closing date, due to unusual excessive rains in the area, the IGNP studies for feasibility of irrigation in stage II are complete. These provide a very useful input in the RWSRP being appraised by the World Bank. All the above works meet the project objective to enhance long term sustainability of growth through appropriate management and conservation of natural resources. This is also true about the formation of - 27 -  Water Users Associations (WUAs). As a matter of fact, formation of WUAs was taken up on pilot basis as a policy reform. Formation of WUAs has been a very educative experience. To begin with, two models were tried - one each by the Irrigation Departnent and CAD. In the light of the experience gained, the third model was evolved in the form of Guda model. Experience of WUAs in ADP has been of great use in formulation of RWSRP. The GOR has already promulgated The Rajasthan Farmers Participation in Management of Irrigation Systems Act, 2000 making membership of WUAs compulsory. On the whole experience was highly satisfactory. In a water scarce State like Rajasthan, a low cost and short gestation period scheme like CLIS using impounded water otherwise going waste has not only augmented agricultural production but also promoted equity as 80% of the cultivators in the CLIS are small and marginal farmers. Agriculture Research and Training is the component dealing with Rajasthan Agriculture University (RAU). In the agro-climatic conditions of Rajasthan, RAU has to play a meaningful role in increasing agricultural production. Since the expenditure in RAU under ADP was subject to the approval of Strategic Development Plan (SDP) report of which was received in 1996 and approved by the Government of Rajasthan and the World Bank in September 1997 greater thrust was on physical infrastructure and procurement of equipments for strengthening of laboratories and other things and out of 212 recommendations of policy reforms, appreciating the limitations of time, 47 major short term agreed reforms were implemented. Agreed that the objective of developing RAU a centre of excellence has temporarily remained eluded, but there is no denying the fact that the SDP has provided a vision of RAU which will assist RAU in its development as a centre of excellence. Achievement has been satisfactory. Since the beginning of the project, the road sector has been doing well. Therefore, the SAR target of constructing 1600 Km of rural roads was raised to 2350 Km at the MTR which has since been achieved. The roads are conforming to IRC standard and have been appreciated by the people. The roads have given many economic and social benefits to the population served. An evaluation study shows that traffic intensity has increased, marketing of perishable commodities like milk and vegetables has been facilitated, farmers now easily transport the agricultural produce when good prices available and there is steady rise in the consumption of agricultural inputs. In addition, social benefits have been many: children can cycle down distances to go to school in neighboring places and patients taken to hospital in emergency. Cycle and motor cycle repair shops are also coming up. Achievement can be easily assessed as highly satisfactory. Policy Reforms: An important feature of ADP is its linkage with policy reforms which along with the Agriculture Strategy Paper were approved by the State Cabinet prior to appraisal of the Project in May 1992. Practically all the policy reforms have been implemented. Mention of the reforms has been made at different places earlier. It will suffice to mention here that full cost recovery has been ensured for all goods and services by RSSC, horticulture plants, fish fingerlings, day-old chicks and Al by Animnal Husbandry Department. Cost calculations are done on yearly basis. With the studies under water sector, water policy has been prepared and data available for future policy decisions. 314 CLIS along with O&M responsibilities have been transferred to WUAs. Participatory Irrigation Management has been a rewarding experience. Different models for WUAs were tried. The experience has been useful in RWRSP being appraised by the Bank. Act for formation of WUAs has been issued. To begin with progress in reforms related to power sector was slow but lately process has been satisfactory. Power tariff has been substantially revised. Appreciating need for firther reforms, the RSEB has been divided into three companies; one dealing with generation, second dealing with transmission and the third with distribution. The GOR has successfully negotiated US $ 180 million credit for power sector restructuring project with the World Bank which is to become effective in February 2001. - 28 -  Environmental Strengthening: Environmental Cell was established for strengthening GOR's capability for environmental oversight for agriculture. It did not work up to the desired extent primarily because environment as such was a new subject and more so related to agriculture sector. It examined the Annual Plans prepared by the PCU and prepared environment indicators for the ADP activities. HI. Major Factors Affecting Implementation and Outcome: Fund Flow: Fund Flow, constraint of which became more acute after the MTR, has been an impeding factor. This has, to some extent affected implementation and outcome of the project. This is a factor though exclusively under Government control but, in the prevailing economic scenario in which the GOR is passing through a difficult financial situation, maintaining fund flow was a difficult thing. It will not be out of place to mention here that GOR is not the only State in the country to face financial crisis. Procurement Related Problems: There were a few procurement related issues, particularly related to irrigation (ID&R) and IGNP, where disputes led to delayed completion of the tasks. These have partially affected the outcome of the project. In the initial stages of the project, the pace of procurement instead of being fast was slow because there was not adequate preparation in terms of procurement procedure according to IDA guidelines and yearly break up of the items to be procured. This avoidably delayed the procurement process. Inadequate Time for Implementation of SDP: RAU is one of the very important sectors of ADP. Expenditures in the RAU was subject to the approval of SDP by the IDA. The SDP itself was received in 1996 and approved by the GOR and the World Bank in September 1997. Implementation of the recommendation of the SDP (covering reform agenda, civil works and procurement of equipment for an institution units of which are located at different places in the State) before the credit closing date was very difficult. This has affected the outcome of the project particularly related to implementation of reform agenda. High Turn Over of Vice Chancellors: Since the approval of SDP in 1997, there have been four Vice Chancellors of the RAU. High turn over of the Vice Chancellors impeded the pace of implementation of the SDP. IV. Project Sustainability: Assessment of sustainability of achievements in a project with a multiplicity of sectors is some what difficult particularly in a short space available. While detailed assessment has been given in Operation and Maintenance Plan, macro level assessment is given below briefly: Investment components were fixed keeping in view the project objectives and the policy reforms. Water Resources planning study, IGNP study, pricing of water study and O&M study have provided valuable input for RWRSP being appraised by the World Bank. Water policy has already been approved by the State Cabinet. Now the road map for future actions is available. Findings of O&M study have already been approved. Formation of WUAs was done on pilot basis. If the past experience is any guide, WUAs are sustainable for the simple reason that equity in distribution of water has been achieved and per ha yield increased. The GOR has already promugated the Rajasthan Farmer participation in Management of Irrigation Systems Act 2000 for formation of WUAs. Hydrometereological equipments are already in place and data collection and processing started. This will be very useful for flood forecasting. - 29 -  Besides investigation studies giving precise data on acquifiers, safe well spacing, static and ground water resources will help GOR take suitable policy decisions for judicious use of water resource and its conservation. CLIS for their low cost, short gestation period for augmenting agricultural production and equity factor will be popular among the poor farmers and will be promoted by GOR. The SDP has provided plan of development for next two decades. The infrastructure development and the procurement of equipments done for strengthening of laboratories will start yielding results. To begin with, 47 critical policy reform recommendations have already been implemented. The need of funds will be met from GOR resources and the ICAR and the possibility of more research projects due to enhanced capacity of the faculty and income from the farms. Rural roads will continue to be made according to GOR policy. RSAMB is already constructing roads from its own resources. So far the maintenance is concemed, the quality of the roads being high and good number of roads under defect liability period, maintenenace liability being less that 1% of Rs. 164.12 crores of maintenance budget of PWD for 2000-2001 not high. It has been ensured that the funds for maintenance are available. The GOR is also considering the policy of introducing maintain, operate and transfer (MOT) concept in the road sector in which a cluster of roads will be maintained by private enterpreneurs and will be allowed to collect toll tax during the contract period. Most of the activities initiated by the Agriculture and Horticulture Department will continue. Full cost recovery of horticulture plants has made the venture of providing quality plants from nurseries sustainable. Strengthened training institutions by Agriculture Department and RAU will help in HRD at different levels. In Animal Husbandry though Gopal does not form a success story, all the same lessons have been vital. Restructured Gopal is being planned to be continued with the assistance of NABARD. AEMs have become self-sustained. With O&M responsibility going to Panchayat Samitis and Municipalities and amendment in the Acts having been moved, there is no doubt about sustainability of the AEMs. Leaming from the experience of cross- breeding in Sheep, henceforth the policy will be selective breeding. Process of transferring the Environment Cell to the Planning Department has been initiated. The report entitled Enhancing Capacity of Environment Cell provided by a Consultant will be a useful document for providing guidelines. V. Bank Performance: Bank Performance in project identification, preparation assistance, appraisal and supervision has been highly satisfactory. As it is, multiplicity of sectors makes the ADP a category apart. At the Project preparation level and appraisal, it was difficult task to work with different departments which did not have the experience of working for such a project. Outstanding feature of the project is to see agriculture in its entirety entailing work with different but complimentary departments. The performance of the Bank particularly during the implementation phase has been outstanding. Procurement and reimbursements problems were attended to on a priority basis. On vital issues, concurrence of no objection of the Bank was obtained expeditiously. Visits of the Supervision Missions were of great help in expeditious implementation of the project components. The field visits by the Mission Members provided objective and useful feedback for remedial measures. The Task Manager never felt tired to impress upon the GOR in wrap up meetings and meetings with the Chief Secretary/Finance Secretary to maintain fund flow for full results from the project. But for the - 30 -  intervention and close monitoring by the Task Manager, the compensation of land acquisition issue would not have been resolved to a level done now. It was owing to the pragmatic approach of the Bank that the period of the Project was extended for a year more so that sectors like RAU get enough time to implement the recommendations of the SDP. VI. Borrowers Performance: Performance of borrower and implementing agencies in preparing and implementing the project has been satisfactory. At the conceptual level in the context of the agrarian economy of the State, agriculture was broadly defined which led to multiplicity of sectors in the Project. Due weightage was given to RAU, for its role in agricultural development. Rural roads (2-12 kmi) measuring 2300 km have been constructed this will bring revolutionary changes in agricultural development, judicious use of water resources is the need of the hour; this has provided invaluable data base for future decisions and RWRSP, not only PIM was introduced but lessons learned have been of great value for RWRSP; CLIS has promoted equity and agricultural production at low cost; the livestock sector has not been able to do well. Without any formal powers, the PCU played a meaningful role in maintaining coordination with line-departments. Thus, in totality, the performance of borrower and the implementing agencies has been highly satisfactory. Fund flow did impede the progress. But this was a factor beyond GOR. Rajasthan is not the only State in the Country in the grip of financial crisis. Till MTR fund flow was not a problem. VII. Lessons Learned: a) Multiplicity of Sectors should be avoided: After handling a project involving a large number of line-departments (12) it was realized that implementation of a project dealing with one or a few departments is better. The number of line departments being many, a Project Coordination Unit (PCU) was in place but implementation agencies were as many as the departments. This resulted in dual control. It was difficult for the project coordination unit to be associated with all the details of project aspects of all the line departments while the line departments thought that no objection/reminders from the PCU virtually meant that everything was in order. For example, the land acquisition problem. While the PCU thought that since the roads were constructed either no land acquisition was involved or payment of land compensation done, the implementation agency accorded priority to achievement of targets and thought that land compensation was not to be charged to ADP budget, the data was not reported to the PCU and the PCU did not intervene till at a later stage. Similarly, the implications of high mortality rates in exotic ewes became an issue for PCU intervention at a late stage. Restructuning of Gopal Scheme being done now, could have been done earlier if there were no separate coordination and implementing agencies. b) Adequate Time for Implementation of SDP: SDP provides a comprehensive programme for the development of RAU as a centre for excellence. SDP having been approved by the World Bank in September 1997 implementation of the recommendations started after this crucial date. However, the remaining period was thoroughly inadequate for implementation of the recommendations before the Credit Closing date. In such cases, two options were open: (a) the consultancy for SDP should have been given at the approval stage so that with the commencement of credit, approval of SDP would have been given. Purpose of such a good work is defeated for want of time, it could not be implemented; or (b) separate time lirnits fixed for sectors like RAU. c) Procurement Training: Training for IDA procurement procedure should be organized on half yearly basis in which besides the nodal officers, officers of the Accounts Service and Officers of the Finance - 31 -  Department should also be deputed. d) Advance Planning: Externally Aided Projects are time bound programmes. Therefore, advance planning in terms of items of procurement, training for procurement procedure and placement of staff should be done for completing the job in the given period of time. - 32 -