Nepal - Second Agricultural Extension Project

D)ocument of The World Bank FOR OFFICIAL USE ONLY Report No. 14995 IMPLEMENTATION COMPLETION REPORT NEPAL AGRICULTURAL EXTENSION II PROJECT (CREDIT 1570-NEP) SEPTEMBER 21, 1995 Agriculture and Water Operations Division Country Department II South Asia Region This document has a restricted distribution and may be used by recipients onlv in the performnance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS Nepalese Rupee (NRs) US$1 0 NRs 18.50 (1985 project appraisal) NRs 42.30 (1991 original project completion) NRs 49.26 (1994 actual project completion) WEIGHTS AND MEASURES I hectare (ha): 2.47 acres (ac) I kilometer (kmi): 0.62 miles (mi) I metric tons (mt): 2.205 pounds (lb) I kilogram (krn); 2.2 pounds FISCAL YEAR OF BORROWER July 1 6 - July 15 ABBREVIATIONS AND ACRONYMS AA Agricultural Assistant ADBN Agncultural De-velopment Bank of Ncpal AEP H Agricultural Extension 11 Project AERP Agricultural Extension and Rcsearch Project AIC Agricultural Inputs Corporation AO Agncultural Officcr APROSC Agncultural Projects Scrnice Centcr ASC Agricultural Scrvice Ccnter DADO District Agriculture Developmcnt Officer DCA Development Credit Agreement DOAD Department of Agricultural De clopment HFPP Hill Food Production Project HMGN His Majestv's Government of Ncpal [DA International Devclopment Association JT Junior Technician JTA Junior Tcchnical Assistant M&E Monitoring and Evaluation MOA Ministry of Agnculture NARC Nepal Agricultural Research Cotmcil PC/PS Problcm Census/ Problcm Solxing Tcchnique RARS Regional Agncultural Research SLation SAR Staff Appraisal Repon SDR Special Drawing Rights SMS Subject Matter Specialist RATC Regional Agncultural Training Ccnter T&V Training and Visit System of Extension USAID United States Agency for International Dcvelopment VDC Village Dcvelopmcnt Committee  FOR OFFICIAL USE ONLY IMPLEMENTATION COMPLETION REPORT NEPAL AGRICULTURAL EXTENSION II PROJECT (Credit 1570-NEP) TABLE OF CONTENTS PREFACE .................................................i EVALUATION SUMMARY ............................................... ii PART 1. PROJECT IMPLEMENTATION ASSESSMENT ............................1 A. Statement/Evaluation of Objectives ....................................1 B. Achievement of Objectives ..2....................................... 2 C. Major Factors Affecting the Project ................................................ 6 D. Project Sustainabilitv ..............................................8 E. Bank Performance ................................................8 F. Borrower Performance ................................................9 G. Assessment of Outcome ..............................................9 H. Future Development ..............................................9 I. Lessons Learned ............................................... 10 PART II. STATISTICAL TABLES Table 1: Summary of Assessment .......................................... 12 Table 2: Related Bank Loans/Credits ........................................... 14 Table 3: Project Timetables ........................................... 16 Table 4: Credit Disbursements ........................................... 16 Table 5: Key Indicators for Project Implementation .................................... 17 Table 6: Key Indicators for Project Operations .......................................... 18 Table 7: Studies Included in the Project .......................................... 1 8 Table 8A: Project Costs ........................................... 19 Table 8B: Project Financing .......................................... 19 Table 9: Economic Costs and Benefits .......................................... 19 Table 10: Status of Legal Covenants .......................................... 20 Table 11: Compliance with Operational Manual Statements ....................... 21 Table 12: Bank Resources: Staff Inputs ........................................... 22 Table 13: Bank Resources: Missions .......................................... 23 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.  APPENDICES Appendix 1. FAO/CP Mission Aide-Memoire ........................................... 24 Appendix 2. Borrower's Evaluation ................................................... 39 Appendix 3. Borrower's Comments on Implementation Completion Report ................................................... 47 Map IBRD I 7960R  IMPLEMENTATION COMPLETION REPORT NEPAL AGRICULTURAL EXTENSION PROJECT II (Cr. 1570-NEP) Preface This is the Implementation Completion Report (ICR) for the Agricultural Extension Project II (AEP II) in Nepal for which Cr. 1570-NEP in the amount of SDR7.4 million (US$7.2 million equivalent) was approved on March 7, 1985 and made effective on September 9, 1985. The IDA Credit was closed on December 31, 1994, after three one-year extensions to the original schedule. The Credit was not fully disbursed, with SDR870,650 (US$1.20 million) being canceled on May 13, 1994. Final disbursement took place on April 5, 1995, at which time a balance of SDR582,789.00 (US$838,681.00) was canceled. This ICR was prepared by a mission from the FAO/World Bank Cooperative Program which visited Nepal in March 1995. It was finalized by the Task Manager, Mr. Yung K. Choi, Agriculture and Water Operations Division, and reviewed by Mr. Shawki Barghouti, Chief, Agriculture and Water Operations Division, and Ms. Kazuko Uchimura, Project Advisor. The Borrower provided comments that are included as an appendix to the ICR. Preparation of the ICR is based on a review of the Staff Appraisal Report and legal documents, supervision reports and project files. as well as field investigations and discussions with the Bank staff and government officials associated with the project. The Borrower contributed to the preparation of the ICR by commenting on the mission's aide-memoire, preparing its own evaluation, and commenting on the draft ICR.   ii IMPLEMENTATION COMPLETION REPORT NEPAL AGRICULTURAL EXTENSION II PROJECT (Credit 1570-NEP) Evaluation Summary Introduction 1. The project was a continuation of IDA support to complete the introduction of the Training and Visit (T&V) system of agricultural extension in all twenty Terai districts in Nepal. Earlier support for extension development was provided in conjunction with several irrigation projects under which the T&V system of agricultural extension was introduced in six districts of the Terai region over the period 1975-79. This was followed by the Agricultural Extension and Research Project (AERP; Cr. 1 100-NEP, closed July 15, 1990) and the Hill Food Production Project (HFPP; Cr. 1101 -NEP, closed July 15, 1990), which introduced the T&V extension system in eight Terai and four Hill districts, respectively. Project Objectives 2. The overall objective of the project was to reorganize and strengthen the agricultural extension services in eleven administrative districts in the Terai with the objective of achieving early and sustainable improvement in agricultural productivity. This was to be accomplished through: (i) strengthening and improving project management and supervision at central and regional levels; (ii) introducing monitoring and evaluation of project activities; and (iii) provision of additional staff, offices, housing, vehicles, equipment and staff training. 3. The project was restructured in 1990/91, reflecting the need to adapt the original T&V approach to the realities of the post-panchayat era which included the abolition of Agricultural Assistant (AA, the grassroot level extension worker) position and the reorganization of the Ministry of Agriculture (MOA). To further strengthen extension and research activities, the restructured project included eight Terai districts covered under AERP and four Hill districts covered under HFPP. While the project was based on a sound foundation that would ensure an uniform approach and complete the coverage by improved extension of all Terai districts, the original objective of introducing the T&V system was abandoned in 1991 for a number of reasons (para 5).  Implementation Experience and Results 4. The project experienced considerable difficulties during implementation. Construction of staff quarters-cum-training halls were delayed, and a number of staff housings remain unfinished. The procurement of training facilities and vehicles was also delayed. Insufficient budget allocations and their delayed release were the main causes of the procurement inefficiencies, while poor tendering and contracting procedures severely affected building construction. The project substantially met the quantitative targets in incremental staff recruitment. 5. The project achieved its principal development objective of reorganizing and strengthening extension services aimed at increasing agricultural productivity. It was less successful in realizing its secondary objectives of strengthening adaptive research and staff training. Although an institutional framework of extension services was established, the qualitative improvement lagged. This was due mainly to lack of managerial capabilities, and deficiencies in the policy environment of His Majesty's Government of Nepal (HMGN) with regards to staff appointments, job responsibilities and accountability, supervision, and other incentive structures. MOA's physical target-oriented approach to extension also hampered qualitative improvement of the extension services. During 1990/91, HMGN abandoned the T&V extension system. The following factors contributed to the demise of the T&V system: (i) abolition of the position of AA; (ii) a switch from contact farmer approach in T&V system to farmer group extension; (iii) integration within a single Department of Agricultural Development (DOAD) the hitherto separate agriculture, livestock and veterinary, and horticulture departments each with their own parallel structure down to the field extension worker; and (iv) initiation of a pilot program for a farmer-centered problem census and problem solving (PC/PS) approach to extension program formulation and budgeting. Under this extension system, Junior Technician (JT)/Junior Technical Assistant (JTA) became the front-line extension workers. 6. Few studies conducted' in the project areas compared to non-project areas have reported encouraging outcomes with regards to technological information dissemination among various groups of farmers (marginal, medium and large) within the project area. The extent of adoption of new technology and consequent increases in productivity were difficult to quantify because several factors have to be taken into account including sufficiency of supply and access to inputs, credit, market and prices. However, the Bank's analysis2 of crop yields for paddy and other cereal crops in the Terai over the ten-year period (1979/80 - 1989/90) showed that yields increased significantly in districts covered by the project, and were in excess of those yields which were estimated at appraisal. Sustainability of Training and Visit System of Agricultural Extension in Nepal, APROSC, May 1988. 2 Project Performance Audit Report (Report No. 10661) on AERP (Cr. I 100-NEP), HFPP (Cr. I 101-NEP) and Cash Crop Development Project (Cr. 1339-NEP), May 1992.  iv 7. Project sustainability. The important change made during project implementation was the introduction of the farmer-centered participatory approach in extension. Judged by this revised project approach, the project has been particularly successful in recent years in demonstrating the validity of the PC/PS approach, seeing it formally adopted by the MOA as a key element of its national extension strategy, and building a basis for a new national extension system. The PC/PS is built on the concept of self-help, self-reliance and mutual cooperation among farmers in the group. By judging the performance of some successful activities of the matured farmer groups in the village, this group approach is sustainable, if properly facilitated by MOA. 8. Actual cost, financing and implementation timetable. The exchange rate movements of the Nepalese Rupee versus U. S. dollar, and the U. S dollar versus Special Drawing Rights (SDR) during the period permitted significantly increased actual expenditures. The final cost of the project was NRs 571.55 million (US$15.23 million at current annual exchange rate), compared to the appraisal estimate of NRs 157.90 million (US$ 8.5 million) which was 262% above the original estimated project cost in Rupee terms and 79% above in U. S. dollar terms (Part II, Tables 8a and 8b). Of the total IDA Credit of SDR 7.40 million, SDR 1.4 million (US$2.1 million equivalent) was canceled. 9. Key factors relating to achievement of project objectives. The significant deficiencies which hampered project implementation were: (i) weakness in extension management skills; (ii) frequent changes of project coordinator; (iii) a high staff turnover partly due to the temporary nature of the posts; (iv) insufficient budget allocation; (v) lack of staff mobility and extension materials; and (vi) poor coordination linkage between research and extension. With regards to extension management, it was entirely a top-down process based on the achievement of physical targets and results. Key management problems associated with poor staff performance were poor supervision, low motivation of staff, little accountability and lack of any performance-related reward system. 10. Performance of the Bank and the Borrower. The performance of the Bank during supervision was mixed as it was less successful in instituting the effective M&E system, and unable to resolve the chronic problems associated with the misuse of project vehicles by non- project related agencies. The Bank was flexible in readjusting appraisal targets and extension approaches when it became apparent that the appraisal proposal could not be achieved. The supervision reports were perceptive and helpful in relation to problems which occurred and suggestions for improvements in implementation. 11. The borrower and implementing agency have also encountered implementation difficulties. Implementation was slow in the earlier years in part as a result of the Trade and Transit impasse with India in 1989/90, the political instability in 1990/91, and frequent reorganizations of MOA during the 1989-92 period.  v 12. Project outcome assessment. The project achieved most of its major objectives. The project's main impact lies in improved extension management accomplished through the reorganization of the extension service towards a farmer group approach. It promoted a more demand-driven service to farmers. The integration of three departments, namely. agriculture, livestock and veterinary, and horticulture into one department to consolidate extension services under one umbrella system was the most important achievement of HMGN, providing a framework to build on a reoriented and strengthened national extension service in Nepal. Summary of Findings, Future Operations and Key Lessons Learned 13. Important findings. Three important findings are: (i) the successful introduction of the farmer group approach to extension in pilot districts has demonstrated that this provides a more direct interaction of extension workers and farmers, than the T&V system; (ii) project implementation and performance of extension staff has been constrained by lack of managerial capability and commitment; and (iii) inadequate and inappropriate training for JT/JTAs and SMSs has limited their effectiveness in providing the necessary support to farmers. 14. Plans for future project operations. HMGN has provided a future operation plan based on the experience and outcome of the project. Future developments would be in line with the national agricultural extension strategy and the success of the group approach to extension. It would aim to expand the use of PC/PS techniques in farmer groups, further encourage women's participation in groups, expand a bottom-up approach to planning and budgeting at district levels, and bring increased numbers of Water User groups under the PC/PS approach. The plan would also provide more training for extension staff in the group approach, strengthen District Agricultural Implementation Committees, and complete the unfinished civil works program. 15. Lessons learned. The main lessons learned from the project are as follows: (i) While encouraging results have been obtained from the group approach to extension, the full advantages will only be realized if JT/JTAs are better trained in the principles and techniques of the group approach. (ii) Farmer training needs to be greatly expanded with course curriculum designed to provide both increased knowledge in new technologies and more fundamental principles of agricultural production processes so that they are empowered to become better and more independent decision makers. (iii) SMSs are generally under-qualified. Their potential value to provide technical back-stopping to JT/JTAs and to farmers and to provide an essential link between research and extension is limited, and therefore must be improved.  vi (iv) Management training and policy initiatives are required to overcome the inherent weaknesses associated with lack of: detailed operational plans, individual job descriptions and associated duties, and lack of staff and unit operational accountability. (v) Special attention is required to introduce mechanisms to strengthen and formalize research-extension linkages to ensure that technologies recommended are appropriate to local farming situations and farmer needs. (vi) Increased emphasis has to be given to the utilization of modem media production technologies to provide adequate extension materials for field staff. (vii) A major reason for procurement inefficiencies was a lack of procurement plan for the whole project. The bidding documents and land availability for the physical work should have been ready before negotiations. It should pay sufficient attention to the implementing agency's capacity to supervise the quality of construction works.   IMPLEMENTATION COMPLETION REPORT NEPAL AGRICULTURAL EXTENSION II PROJECT (Credit 1 570-NEP) PART 1: PROJECT IMPLEMENTATION ASSESSMENT A. STATEMENT/EVALUATION OF OBJECTIVES 1. Project Objectives and Scope. The objective of the Agricultural Extension II Project (AEP II) was to reorganize and strengthen the agricultural extension services in eleven districts in the Terai with the objective of achieving early and sustainable improvement in agricultural productivity. The project aimed to bring about these increases by advocating adoption of low cost and labor intensive agricultural practices and sound irrigation water management, thus facilitating better cropping patterns, greater crop diversification and more efficient fertilizer usage. The project was designed to: (i) reorganize agricultural extension in six new districts and strengthen the existing extension organization in another five irrigation project districts, (ii) provide training for all extension staff and farmers; (iii) enlarge two extension training centers at Jhumka and Parwanipur; (iv) improve staffing in four regional agricultural development offices; (v) provide production officers in selected areas at subcenter levels to coordinate input, credit and irrigation water supply; (vi) construct office accommodation and housing for staff, (vii) furnish and equip field extension and training facilities; (viii) provide vehicles and travel allowances to ensure greater staff mobility; (ix) provide incremental operating costs; and (x) undertake baseline studies in the six new districts, and project monitoring and evaluation (M&E) in all project districts. 2. AEP II was the second phase of an IDA-supported introduction of the Training and Visit (T&V) extension system in Nepal. Earlier support for extension development was provided in conjunction with several irrigation projects (Credits 373, 654, 812, 856 and 1055-NEP) in six districts of the Terai, commencing in 1975. This was followed by the Agricultural Extension and Research Project (AERP; Cr. 1100-NEP) and the Hill Food Production Project (HFPP; Cr. 1101- NEP), which introduced the T&V extension system in eight Terai and four Hill districts, respectively, both commencing in 1981. 3. Proiect Changes after Appraisal. AEP II was originally designed to cover the eleven' districts of the Terai not covered by AERP. However, the district of Dang Deukhuri did not participate in the project because of the presence of a continuing USAID funded project. With the completion of the AERP and HFPP in 1990, it was decided to restructure AEP II to include Bara, Parsa and Rautahat (previously under Birganj and Narayani Irrigation I Project; Crs. 373 and 856- NEP), Sunsari and Morang (previously under Sunsari-Morang Irrigation Project l; Cr. 812-NEP), and six new districts, Kanchanpur (previously under Mahakali Irrigation Project; Cr. 1055-NEP), Kailali, Dang Deukhuri, Bardiva, Siraha and Saptari.  2 the eight Terai districts2 covered in the AERP, four Hill districts (Tanahu, Gorkha, Syangja and Lamjung) covered in the HFPP and the irrigation district of Rupandehi in the Terai which was not originally included3 . Under the amended Development Credit Agreement (DCA), agreed on December 6, 1990, provision was made to provide financing to support extension, adaptive research and training activities in the thirteen additional districts, as well as to complete on-going civil works not completed in the previous projects. Furthermore, provision was made to improve facilities of two Regional Agricultural Training Centers (RATCs) at Khajura (Banke district) and Bhairawa (Rupandehi district) under the restructured project. 4. Evaluation of Project Objectives. The project was based on a sound foundation that would ensure an uniform approach and complete the coverage by improved extension services of all Terai districts. It also responded well to the borrower's circumstances and the development priority for the agricultural sector oriented towards increasing agricultural production with emphasis on the agriculture of the Terai. The timing of the project, its scope and the relative size of project components were appropriate. The risks to successful project implementation were identified as minimal. B. ACHIEVEMENT OF OBJECTIVES 5. Overall Achievement. The project achieved its principal development objective of reorganizing and strengthening extension services aimed at increasing agricultural productivity. It was less successful in realizing its secondary objectives of strengthening staff training. (a) Physical Objectives 6. The project target was to provide 209 units of office buildings, housing and improved facilities at RATCs. However, during project implementation, this target was sharply reduced to 123 units because of the rapidly changing policy environment of HMGN. Even so, at completion, only 81% of the revised target was completed. Of these, 17 offices and houses were not officially handed over to HMGN due to litigation by contractors for additional payments to accommodate sharp rises in material costs. The project provided 19 four-wheel drive jeeps, 60 motorcycles and 165 bicycles. (b) Institutional Development Objectives 7. Establishment of Effective T&V System of Extension. The T&V system of extension was satisfactorily institutionalized and became operational in all project districts. The T&V system was based on AAs, being responsible for visiting 10 selected "contact farmers" in each of nine wards of one Village Development Committee (VDC), previously a Panchayat area, during each 2/ Jhapa, Sarlahi, Mahottari, Dhanusha, Kapilbastu, Chitawan, Nawalparasi and Banke. 3/ The district was earlier covered by Bhairawa-Lumbini Groundwater Project Stage I (Cr. 654-NEP) and Stage lI (Cr. 1316-NEP).  3 fortnight period. The AAs within 3-5 VDCs were to receive technical support from three JTAs, one of whom provided overall guidance and supervision, with one JT guiding and supervising the work of three JTAs. To strengthen technical back-up, the project provided two SMSs in each district, one each in agronomy and plant protection. The AAs, JTAs and JTs received training in recommended crop production practices and "packages" from SMSs on one day each fortnight. The documented evaluation of the T&V system4 indicated that compared to other extension systems in Nepal, it had relatively higher numbers of visits to farmers, more provision for supervision of field extension workers, better research-extension linkages, was more oriented to smaller farmers and had the lowest cost per household, but had a higher client to agent ratio (I to 621). Following abolishment of AA positions, this ratio widened and is now between 1,300-1,600 farm families. 8. Introduction of Group Extension Approach. During 1990/91, a number of factors contributed to the demise of the T&V system, including (i) the abolishment of AA positions ( a critical element of the T&V system as they were the front-line extension workers); (ii) the reorganization of the MOA, where the Departments of Agriculture, Livestock and Veterinary Services, and Horticulture were joined together in a newly established DOAD; and (iii) the completion of the AERP and HFPP. As an alternative to the T&V system, in December 1991, the MOA introduced a farmer group based extension system to incorporate problem census/problem solving (PC/PS) techniques in order to make extension responsive to farmers needs. In June 1992, the PC/PS technique was introduced in two VDCs in three pilot districts, with technical assistance provided by the project. These pilot activities were subsequently extended to six other districts. Farmer groups have now been formed in all project districts. 9. Field visits were made to assess group activities in some 27 farmer groups comprising 14 districts during the preparation period of this report. The groups can be classified into three main types in terms of stage of group development: (i) initiating/mobilizing; (ii) consolidating; and (iii) maturing, indicating a gradual move towards sustainable, self-initiating and self-helping entities. These groups included mixed gender groups as well as separate men and women farmer groups. The women farmer groups were primarily involved with livestock raising, goats and dairying, and were very active in and had benefited from extension advice and assistance. Most farmers are satisfied with the group approach but at present, it seems to produce more benefits for those with specific opportunities to exploit, particularly those systems producing higher value products, such as vegetable growing, seed production, dairying and goat production, but less benefits for other farmers. In order to enhance all group activities, considerable emphasis has to be given to providing training to JT/JTAs in group formation, the motivation, facilitation and the PC/PS technique, as well as farmer awareness programs on the advantages of group formation. 10. Block Production Program. The project was also designed to further intensify the pilot production programs implemented successfully in previous irrigation projects. Forty-three Production Officers (POs) were appointed to coordinate production inputs and prepare action plans for individual farmers in selected intensive crop production areas. Each PO was responsible 4 / Sustainability of Training and Visit System of Agriculture Extension in Nepal, APROSC, May 1988.  4 for 1,000 ha covering 2-6 blocks. Comparative assessment of extension approaches indicated that farmers in these areas were visited more frequently, had greater knowledge and higher adoption of improved varieties and cultural practices, and productivity than under the T&V system, but required higher extension costs and manpower strength. This program, however, was found to be poorly integrated with extension and worked directly with input suppliers, such as Agricultural Development Bank of Nepal (ADB/N) for credit and Agricultural Inputs Corporation (AIC) for fertilizers. The program was discontinued. 11. Strengthening of Regional Agricultural Training Centers (RATCs). The project expanded the facilities at Jhumka and Parwanipur RATCs by providing incremental staff and supplementing equipment and furniture. However, vehicles and important items of audio-visual equipment were not supplied. At Jhumka RATC, farm facilities on the center campus were handed over to AIC for seed production during implementation of the project, leaving the center with no land or facilities to carry out practical training. The Parwanipur RATC was closed down during the course of the project and regional training transferred to another site. Assistance was to be extended to Khajura and Bhairawa RATCs under the restructured project, but assistance was minimal. Each RATC, on average, provided regular training courses on crop technologies for selected farmers (between 500-750 per year). Frequent transfer of staff to and from RATCs has reduced the quality of training since staff are mainly SMSs who have received some trainer training, rather than specialist trainers with long teaching experience. Two minibuses needed for field trips were canceled. Some audio-visual aids were purchased, but not as envisaged in the SAR in terms of individual items. 12. Staffing and Training. Most incremental staff positions such as AAs, Junior Technical Assistants (JTAs), Junior Technicians (JTs), and Subject Matter Specialists (SMSs) were filled. Positions for three Senior Agricultural Extension Officers (SAEOs) at regional offices were not filled which weakened monitoring and supervision of district's activities from the Regional Agriculture Directors. Under the T&V system, field level extension staff received regular training but the quality of this training was below that intended and required for AAs, JTAs and JTs to undertake their duties satisfactorily. Specialization in a particular discipline was not regarded as a prerequisite for appointment as a SMS. Frequent staff changes considerably reduced the effectiveness of SMSs in training of field staff and providing the necessary technical expertise and information to assist farmers. Some special training programs were conducted and a number of seminars/workshops were held in relation to various aspects of the group extension system and PC/PS techniques. A total of 58 staff undertook study tours to become acquainted with research and extension activities, agricultural problems and technologies used in northern India. (c) Objectives of Sector Policies 13. The objectives of sector policies relevant to the project were concerned with the HMGN's Seventh Plan (1985/90) and the Eighth Plan (1992/97). The Seventh Plan set specific objectives of increasing agricultural production, increasing rural employment, fulfilling basic food needs, and increasing production and self-reliance in production of agro-based raw materials. The Eighth  5 Plan (1992/97) had the principal objectives of achieving sustainable economic growth, poverty alleviation and reduction of regional imbalances. Emphasis has been given to diversification and commercialization of this sector to raise income and employment opportunities of farmers. Thus, specific objectives for agricultural development were to contribute to the national economy through increased agricultural production and productivity through: (i) meeting the growing domestic food demand, (ii) expanding agro-based industries, (iii) increasing employment opportunities to the majority of small farmers, and (iv) maintaining a balance between agricultural development and environmental protection. The project contributed to both eventualities of increasing agricultural production and productivity. (d) Project Benefits 14. The outcomes of the investments in this type of project are difficult to measure, since it is not possible to determine what proportion of increased agricultural production is due to extension services alone and what is due to additional purchased inputs and other factors. In practice, it is a combination of a number of factors, with extension playing the role of a catalyst that spurs the desired achievement. During Bank supervisions, significant diversification of cropping and movement to higher valued crops was observed particularly in the irrigated areas. However, agricultural data is out of date and unreliable, making it difficult to demonstrate these visual observations of progress in this ICR. However, the comparative yields study of five selected districts to represent the T&V system under AERP in the early 1980s (1982 and 1983) and four districts to represent those recently introduced to the AEP II system in the late 1980s was presented in the Bank's Project Performance Audit Report (PPAR, Report No. 10661, May 1992) on AERP and HFPP. The PPAR revealed that in the case of paddy from 1982/83 to 1989/90, the yield trend in the AERP districts is significantly greater than the other districts. PPAR also indicated that an increasing trend in wheat yields is apparent from the latter half of the 1970s irrespective of extension treatment, and there is no significant yield difference between the extension treatments. These results suggest that factors other than the intensive T&V services were largely instrumental in the changes in wheat productivity occurring in the Terai, but that the T&V services could have contributed to yield increases in rice.  6 C. MAJOR FACTORS AFFECTING THE PROJECT (a) Factors not Generally Subject to Government Control 15. Implementation of the project was slow in part as a result of the Trade and Transit impasse with India in 1989/90, the political instability in 1990/91, and frequent reorganizations of MOA during the 1989 - 92 period. (b) Factors Generally Subject to Government and Implementing Agency Control 16. The political instability mentioned above exacerbated the effects of recurring implementation problems, including delayed procurement processing, inadequate and delayed release of counterpart funds, and frequent reassignment of Project Coordinators and field staff. The significant deficiencies which hampered project implementation included: delays in the appointment of key staff, weak professional capacity of field extension workers, a high staff turnover, and inadequate annual budget allocation. Many of these deficiencies identified earlier, however, were substantially improved from 1991 onward. 17. Implementation Delays. The project was to be completed over six years from September 1985, with a closing date of December 3 1, 1991. After three one-year extensions, it was closed on December 31, 1994. 18. Project implementation experienced continuous problems, having been rated "2" since inception in September 1985 - February 1991, when its rating dropped to "4" for about a year before improving to "3" and subsequently to "2" rating until Credit closure. Several factors have contributed to this modest performance and the delays in project implementation (see paras 15 and 16). 19. The T&V system of extension successfully introduced a single extension system in the Terai to replace several extension systems used previously. Many managers had received little or no training in management techniques and were frequently technical specialists acting in a management role. Management was entirely a top-down process based on the achievement of physical targets and results. Key management problems associated with staff performance were low motivation, little accountability, and lack of any performance related reward system. Weak supervision also meant that many JTs and JTAs reportedly attended training but rarely visited the field. The introduction of the PC/PS technique to farmer groups has the potential to promote participatory program planning for extension at village level and participatory implementation of plans by mobilizing farmer's own local resources. In addition, under this farmer-centered group approach, JTs and JTAs were required to interact directly with farmers as a facilitator to improve farmer access to inputs, credit and markets, making them better motivated for early adoption of new technologies.  7 20. Although planning, monitoring and evaluation division was established in the MOA, it was poorly equipped and understaffed to carry out effective monitoring functions. Although belated, recent acquisition of several computers, copying machines, facsimile facilities as well as vehicles will enhance M&E activities. 21. The T&V system and subsequently the group approach to extension produced good results for those farmers who could access sufficient resources to implement the technologies promoted. Livestock rearers reported significant improvements in production due to improved health services, introduction of improved breeds and in some instances, improved forage production and feeding. The introduction of the PC/PS technique in pilot areas has certainly focused extension needs on solving problems identified in participatory discussions with farmer groups, which should ultimately make extension activities more relevant and demand-driven. 22. Extension Materials and Field Demonstrations. The project made no specific use of more advanced media such as radio, film and video. Field staff were consequently largely dependent on the leaflets and posters produced centrally by DOAD. Most field staff lacked adequate leaflets for their own use, far less to distribute to farmers. Also, leaflets describing recommended crop varieties and cultural practices for individual crops were not available to farmers. Demonstrations were carried out across the whole project area. It was noted that demonstrations often exhibited poor field plot techniques, were poorly located with little use of sign boards. 23. Research - Extension Linkages. Research-extension linkages were established as planned but their effectiveness was less than anticipated. No clear definition existed of the relative and interacting roles of research and extension. Under the T&V system of extension, bimonthly meetings were held between SMSs and staff at regional research stations. These meetings were considered beneficial as they consisted of group discussions reviewing extension recommendations and discussing future research topics and field trials. However, bimonthly meetings were discontinued following the establishment of Nepal Agricultural Research Council (NARC) in 1991. During the latter part of the project there was little interaction between SMSs and research staff, except on the basis of informal personal initiatives. 24. Civil Works Program. The serious delays in the civil works program which adversely affected project implementation were due to lengthy procedural processes for design approval, tendering, and dispute resolution arising from civil works contracts. Furthermore, problems associated with poor design and quality of construction came from poor supervision. There was considerable delay in the appointment of personnel to positions designated as architects to supervise the civil works program, and those engineers appointed had little relevant experience or qualifications. 25. Actual Project Cost. Table 8A of Part II gives a comparative statement of appraisal estimates and final costs. The exchange rate movements of the Nepalese Rupee versus U. S. dollar, and also the U. S. dollar versus SDR during the project period, permitted significantly increased actual expenditures. The final cost of the project was NRs 571.55 million (US$ 15.23 million at current annual average exchange rate), compared to the appraisal estimate of NRs  8 157.90 million (US$ 8.5 million) which was 262% above the original estimated project cost in Rupee terms and 79% above in U. S. dollar terms. The Credit was not fully disbursed. Of the total IDA Credit of SDR 7.4 million, SDR 870,650 (US$ 1.2 million) was canceled on May 13, 1994. Final disbursement took place on April 5, 1995, at which time a balance of SDR 582,789.00 (US$ 838,681.00) was canceled. D. PROJECT SUSTAINABILITY 26. The recent introduction of the farmer group approach to extension has created an opportunity for greater collective farmer participation and involvement in defining needs for extension support. Experience to date indicates that the self-initiated farmer groups, especially in the pilot VDCs, are moving strongly towards self-reliance and self-help which would be a great asset for the sustainability of the approach. However, without considerable additional donor project support, the capacity of the extension system to respond effectively to farmer needs will remain at an undesirably low level. The current level of budgetary support is inadequate in relation to expanding extension facilities in all Terai and limited Hill districts, and to upgrading staff skills and knowledge in group facilitation and technical information. E. BANK PERFORMANCE 27. Project Preparation and Appraisal. The conceptual framework for the project was based on earlier experience with the T&V system introduced under various irrigation projects in the Terai. The project was well in line with HMGN's development priority and with the Bank's strategy for the country. The project was prepared by HMGN with some technical advice from the Bank. The SAR identified the key project components required to overcome deficiencies in the existing systems. The SAR also outlined a balanced agricultural extension program for overcoming constraints that could otherwise impede improvement of agricultural performance. The implementing capacity was appraised and found to be satisfactory as DOAD had previous experiences of implementing other similar projects supported by other donors. However, during the appraisal, the Bank did not pay sufficient attention to procurement planning, designs and cost estimates (para 24). A switch from the T&V extension system to the farmer-centered group approach in extension, which was not envisaged during appraisal, could be the key ingredient for sustained operation of the project. 28. Supervision. The Bank undertook eighteen supervision missions during the course of project implementation, at an average of one every six months. Generally, their reports were perceptive and helpful in relation to problems which occurred and suggestions for improvements in implementation. The Bank staff showed flexibility in suggesting or approving needed modifications. The relationship between the Bank and the implementing agency was cordial. Although the project was supervised by a number of Task Managers during implementation, staff of the Bank resident mission in Nepal provided the necessary continuity and support for the project. Some chronic issues raised during supervisions were: (i) the slow progress of the construction of JT and JTA quarters; (ii) the need to strengthen planning, M&E activities; and (iii)  9 the misuse of project vehicles by non-project related agencies. On these issues, HMGN did little to direct the project towards rectifying the deficiencies. F. BORROWER PERFORMANCE 29. Preparation. The Project Coordinator's office of the AERP formulated a draft outline of the project. No external technical assistance was provided in preparing the project. The borrower and the implementing agency had done a satisfactory job in preparing the project. 30. Implementation Shortfalls. The performance of the implementing agency was deficient in the actual implementation of the civil works. It lacked criteria for selecting the construction sites for ASCs, JT and JTA quarters, and also in selecting the qualified civil works contractors. The engineer's cost estimate for the construction works was not always based on actual surveys in a given locality, but on merely applying HMGN's standard unit cost. In addition, there were problems with the lengthy approval of procedures for procurement, and poor supervision of construction work (para 24). All these factors impeded implementation progress and resulted in delay and poor quality of civil works. 31. Studies. Reporting. and Covenant Compliance. All the studies proposed under the project were completed. Bi-annual project progress reports were regularly submitted, and annual accounts and audits reports were submitted. Compliance with important covenants was satisfactory. The covenants dealing with the appointment of the Senior Agricultural Extension Officer in the three regions was not complied with because of personnel adjustment difficulties of MOA. G. ASSESSMENT OF OUTCOME 32. The project achieved most of its major objectives. Although project implementation progress was only partially satisfactory for the reasons described in paras 15 and 16, overall, the project outcome is rated satisfactory. The reason for this rating is that the ultimate goal of the project was not so much whether all project components were completed on time, but whether the institutional framework and extension policy guidelines were properly established, responding to the need of beneficiaries to enhance farm productivity and incomes. To support this rating, several commendable achievements made by HMGN since early 1992 can be listed. These are: (i) the introduction of farmer participatory approach in extension through the PC/PS practice to promote a more demand-driven service to farmers (paras 8, 9 and 26), (ii) the amalgamation of three separate extension departments under one umbrella system (para 8); (iii) the formulation of national agricultural extension strategy and its implementation plan; (iv) the preparation of the follow-on project by their own initiatives and efforts; and (v) the strong commitment to implement the future operational plan (para 33).  10 H. FUTURE DEVELOPMENT 33. HMGN has prepared a future operational plan based on the experience and outcome of the project. Future developments would be in line with the national agricultural extension strategy and success obtained using the group approach to extension. It would aim to expand the use of PC/PS techniques in farmer groups, further encourage women's participation in groups, expand a bottom-up approach to planning and budgeting at district levels, and bring increased numbers of water user groups under the PC/PS approach. The plan would also provide more training for extension staff in the group approach, fill vacant SMS positions, strengthen District Agricultural Implementation Committees, and complete the unfinished civil works program. HMGN has requested financial assistance from the Bank for a follow-up project which would aim to further strengthen extension services. HMGN has prepared a project preparation report which is under review by IDA. I. LESSONS LEARNED 34. The main lessons learned from the project are as follows: (i) The group approach to extension has significant advantages over the T&V system as follows: (i) it is demand-driven in the resolution of farmers' problems; (ii) it provides for wider coverage of extension contact with farmers and is more cost effective; and (iii) it provides greater direct interaction of technicians and SMSs with farmers. These potential advantages will, however, only be fully realized if: (i) JT/JTAs are better trained in the principles and techniques of the group approach; (ii) an awareness campaign is mounted to inform farmers of the advantages of forming groups; (iii) the activities of the field extension services are better organized and regularized; and (iv) the availability of technical services and information is increased. (ii) Farmer training needs to be greatly expanded with course curriculum designed to provide new technologies and more fundamental principles of agricultural production processes and marketing information. (iii) The potential value of SMSs to provide technical back-up to JT and JTAs to introduce new technologies, to provide technical information to farmers and to provide an essential link between research and extension is greatly under-exploited. SMSs are generally under-qualified for their tasks and responsibilities, and need specialized in-service training to upgrade their specialist knowledge and skills. (iv) Management of extension services at all levels is weak due to lack of: (i) detailed operational plans; (ii) budget for travel and daily allowances; (iii) individual job descriptions and associated duties and responsibilities; and (iv) scope for effective reward and punishment. It is essential that managers at all levels be given  ii appropriate management training, clear job descriptions be detailed for all staff, and proper planning and M&E systems be introduced to ensure individual and collective accountability in staff performance, achievement and output. (v) ASCs were established in the districts without due consideration of localities and target groups. There is a need for future projects to rationalize the number of ASCs in each district such that ASCs are used more effectively as farmer information and training centers in the districts. (vi) Monitoring and evaluation of the agricultural performance data deserves high priority as a critical tool for rectifying deficiencies. (vii) MOA requires a clearly defined staffing program linked to a coherent manpower development policy and planning and career structure. (viii) Research-extension linkages are weak. It is necessary to introduce mechanisms to ensure formal linkages between extension and research. Such mechanisms should include: (i) re-introduction of bi-monthly meetings at the district level between DOAD and NARC research stations; (ii) joint diagnosis of farmer problems; (iii) cooperative involvement in production, implementation and evaluation of mini-kits and other demonstrations; and (iv) joint operation of laboratories for soils analysis, plant protection, and seed testing. (ix) Field extension staff are inadequately supplied with extension materials. Increased emphasis has to be given to the utilization of modern media production technologies to quickly produce leaflets tailor-made for local situations as well as supplying pamphlets and brochures on recommended cultural techniques. (xi) There is a need to strengthen the activities of the Agricultural Communication Division of DOAD to make better use of modern communication systems, especially radio, television and video for transferring the farming technologies and marketing informations to farming communities. (xii) The Civil Works program did not meet the anticipated standards. Sufficient attention should be paid to appraisal of implementing agency's procurement capability. There is a need to review a procurement plan for the whole project, including detailed design and bidding documents prior to negotiations. M:\CHO1\NEPICR\mtx2.doc  12 Table 1: Summary of Assessments A. Achievement of objectives Substantial Partial Negligible Not Applicable Macro policies E9 E E9 Sector policies D E Financial objectives [7] Institutional development Physical objectives E7 Poverty reduction El7 Gender issues n E [II Other social objectives 77 El E Environmental objectives |l l 7E Public sector management El E E E Private sector development E E E E Other (Human Resources Development) D DD B. Project sustainability Likely Unlikelv Uncertain C. Bank performance satisfactory Satisfactory Deficient Identification 9 E 9 Preparation assistance E E E Appraisal E E E Supervision E E E  13 Highlv D. Borrower performance satisfactory Satisfactorv Deficient Preparation F9 Implementation 7 F] Covenant compliance F 1 Operation (if applicable) Highly HigbhY E. Assessment of outcome satisfactory Satisfactory Unsatisfactorv unsatisfactory  14 Table 2: Related Bank Loans/Credits Loan/credit title Purpose Year of Status Approval Preceding operations 1. Birganj and Narayani To develop imgation resources on 12,700 ha and 1973 Closed on Irrigation Projects thereby raise agricultural production and farm June 30, (Crs. 373 and 856-NEP) incomes and increase food security in Bara, Parsa 1981 and Rautahat districts of the Central Region of the Terai. 2. Bhairawa-Lumbini To develop irrigation resources on 7,600 ha through 1976 Closed on Groundwater I Project construction of 64 deep tubewells and therebv December (Cr. 654-NEP) develop agricultural production in Rupandehi 31, 1982 district of the Western Region of the Terai. 3. Sunsari-Morang Irrigation I To develop irrigation resources in Sunsari and 1978 Closed on Project (Cr. 812-NEP) Morang districts of the Eastern Region of the Terai. June 30, 1987 4. Mahakali Irrigation Project To rehabilitate, upgrade and extend irrigation 1980 Closed on (Cr. 1055-NEP) resources on 6,000 ha in Kanchanpur district of the December Far Western Region of the Terai. 31, 1988 5. Agriculture Extension and To reorganise extension services in eight districts in 1981 Closed on Research Project the Terai and strengthen applied and adaptive July 15, (Cr. 1 100-NEP) research. 1990 6. Hill Food Production Project To increase food production in four Western Hill 1981 Closed on (Cr. 1101-NEP) districts of Gorkha, Lamjung, Syanja and Tanahu July 15, through improvement ot extension services, credit 1990 and fertilizer inputs, improved marketing and development of irrigation resources on 3,000 ha. 7. Bhairawa-Lumbini To further develop irrigation resources on 7,000 ha 1983 Closed on Groundwater II Project through construction of tubewells in Rupandehi October (Cr. 1316-NEP) district of the Western Region of the Terai. 31, 1990 8. Cash Crops Project To promote the commercial production of 1983 Closed on (Cr. 1339-NEP) sugarcane, tobacco and oilseeds in the Terai, initiate December pilot development of sericulture (Hills) and 31, 1988 groundnut, and strengthen ginger research (Hills).  15 Following operations 1. Narayani Irrigation III To complete the development of the irrigation and 1986 Closed on Project (Cr. 1715-NEP) drainage system of the 37,000 ha Nepal Eastern June 30, Canal Command. 1995 ICR under preparation 2. Sunsari-Morang Irrigation To extend irrigation to an additional 16,700 ha and 1987 Closed on II Project (Cr. 1814-NEP) provide initial desilting facilities for Stages I and II March 31, in Sunsari and Morang districts of the Eastern 1995 Region of the Terai. ICR under preparation 3. Mahakali Irrigation II To raise agricultural production and farm incomes 1988 Closing Project (Cr. 1924-NEP) through expansion and management improvement date of public irrigation system, through construction scheduled and rehabilitation of private schemes, and for March restoration and river protection works in 31, 1997 Kanchanapur district of the Far Western Region of the Terai. 4. Bhairawa-Lumbini To further develop irrigation resources on 8,000 ha 1990 Closing Groundwater Irrigation III through expansion of deep tubewell irrigation date Project (Cr. 2144-NEP) system and construction and rehabilitation of scheduled private schemes to raise agricultural production, for June farm incomes in Rupandehi and Nawalparasi 30, 1999 districts of the Western Region of the Terai.  16 Table 3: Project Timetable Steps in project cycle Date planned Date actual/ latest estimate |Identification (Executive Project Sununary).__ FiPreparation SeptemberrOctober, 19b3 Appraisal March 17-23, 1984l |Negotiations July 9, 1984 February 15-20, 1985l Letter of developi ent policy (if applicable) n.a. n. l Board presentation September 11, ]984 March 7, 1985 Signing June 10, 1985l Effectiveness Septernber 9, 1985l First tranche release (if applicable) n.a. n.a. Midlenn review (if applicable) n.a. n.a. t Second (and third) trache release (if applicable) n.a. n.a. Project completion June 30, 1991 June 30, 1994 2 Credit closing December, 1991 December, 19943' Although no mid-term review was scheduled, the Credit Agreement was amended on December 6, 1990 following IDA agreemnent with HMGN proposal to restructure the project to: (i) provide continued financing for incremental extension, adaptive research, and training activities in 12 additional districts; (ii) complete civil works in original II districts, (iii) strengthen adaptive research in projed areas; and (iv) increase the percentage disbursement for salaries and allowances for project staff. 2 Project completion date was extended three years to June 30, 1994, following three I -year extensions to Credit closing. 3" Requests for one-year extensions of Credit closing date were agreed by IDA on December 18, 1991, December 29, 1992 and December 20, 1993, respectively. Table 4: Loan/Credit Disbursements: Cumulative Estimated and Actual (US$ million) FY88 FY87 FY88 FY89 FY90 FY91 FY92 FY93 FY94 FY95 (USS million) Appraisal Estimate 0.3 1.0 2.8 4.8 8.7 7.2 Actual 0.05 0.45 147 1.77 2.34 2.92 4.08 4.96 6.68 8.30 Actual as % of Estimate 17 45 57 38 35 41 58 69 93 108 comment iDA agreed on May 13, 1984, to HMGN request to cancel US$1.2 million (SDR870,6Fi) ot Credit and to reallocate the remainig balance according to proposed categones of expenditure. The Bank has allowed disbursements on expenditures incurred prior to closure of Credit, to be drawn until 30 Aprl, 1995. Appraisal estimate used an exchange rate of SOR1 .0 = USS0.97 while actual estimates are based on current exchange rates which changed throughout project period.  17 Table 5: Key Indicators for Project Implementation I. Key implementation indicators Approval Revised Unit Target Target Actual 1. Civil Works offices No. 46 15 911 Rest House No. I 0 0 Houses - Gazetted No. 120 61 58,' Houses - Non-gazetted No. 27 32 32 Training Centre No. I I 13/ Garages No. 13 3 3 Compound walls No. 0 9 9 2. Vehicles Jeeps No. 14 19 14 Minibus No. 2 2 0 Mlotorcycles No. 141 141 33 Bicycles No. 165 165 165 3. Equipmnent l Office Unit 19 65 184 Fumiture Unit 146 Audio-visual and other Unit 1,265 1,529 1,501 4. Incremental Staff3' PLAA No. 810 0 JTA No. 263 320 JT No. 93 246 Production Officer No. 43 0 SMS No. 27 100 ADO No. 10 0 AADO No. 10 0 SAEO No. 4 0 Civil Engineers No. 5 5 Training Staff No. 11 21 Economists No. 6 10 Support Staff No. 159 II. Modified indicators (to include AERP and HPFF districts) l. Civil Works Offices No. 0 1 06/ ASC No. 0 4 27 Houses No. 0 4 Os/ Suspension bridge No. 0 1 1 Garages No. 0 2 2 2. Vehicles Jeeps No. 0 5 5 L Motorcycles No. 0 27 27 " Six offices still under construction. 2/ Five JT quarters not yet handed over and one IT quarter still under construction. 3/ Improvements to Jhumka Training Centre included construction of motor garage, fencing and electrification. 4/ Office equipment was revised to include computers with printers (5), photocopy machine (5) and facsimile machines (3). 5' Target staff in SAR are for 10 districts included in project, while actual staff at end of project in those same districts included additional staff brought under DOAD due to orgarisational restructuring. 61 MOA headquarters building completed but not handed over. An additional two ASCs completed but not handed over. " Four JT quarters completed but not handed over.  18 Table 6: Key Indicators for Project Operation (Not applicable to this project) Table 7: Studies Included in Project Purpose as defined Study at appraisal/redefined Status Impact of study 1. Benchmark studies in To collect data concerning Completed in 3 districts Provided detailed six new project districts cropping patterns, yield data, in June 1986 and 2 analysis of agricultural availability of inputs, other districts in March production, socio- marketing facilities, present 1988 economic and status of extension support demographic features in and its impact, and farmers project districts. technological constaints. 2. Sustainability of To evaluate the approach of Completed May 1988 Work was of insufficient Training and Visit system T&V system in a national analytical rigour, of agricultural extension perspective as to its although good in Nepal. suitability, applicability and description of extension contribution to agricultural modalities in Nepal development in context of were given. various existing extension approaches. 3. National Agricultural To provide financial Completed 1994 Provides sound Extension Strategy assistance to Task Force to guidelines for future prepare the strategy development of document. extension services in Nepal. 4. Operations Manual for To provide detailed Completed December, Manual guidelines now Participatory Census and operational plan for 1994 being simplified and Solving Techniques implementing the translated into Nepali Participatory Census and language. Solving technique in farmer groups. 5. Preparation of To provide financing for Completed December, Six working papers and Agricultural Extension preliminary preparation of 1994 main project report were and Marketing Project new extension project by prepared and to be used HMGN. as a basis for further preparation work.  19 Table 8A: Project Costs Appraisal estimate (US$M) Actual/latest estimate (US$M) Item Local Foreign Total Local Foreign Total costs costs costs costs 1. CivilWorks 1.3 1.3 2.6 2.60 - 2.60 2. Vehicles & Equipment 0.2 0.8 1.0 0.27 0.47 0.74 3. Incremental Staff 1.6 - 1.6 7.28 - 7.28 4. Incremental Operating Cost 0.5 0.3 0.8 2.29 - 2.29 5. Training 0.4 - 0.4 6. Monitoring& Evaluation 0.1 - 0.1 2.14 0.19 2.33 TOTAL BASE COSTS 4.0 2.4 6.5 Physical Contingencies 0.4 0.3 0.7 Price Contingencies 0.9 0.5 1.4 TOTAL 5.3 3.2 8.5 14.58 0.66 15.23 Table 8B: Project Financing Appraisal estimate (US$M) Actual/latest estimate (US$M) Source Local Foreign Total Local Foreign Total costs costs costs costs IBRD/IDA 4.0 3.2 7.2 7.77 0.66 8.43 Domestic contribution 1.3 - 1.3 6.80 - 6.80 TOTAL 5.3 3.2 8.5 14.58 0.66 15.23 Table 9: Economic Costs and Benefits There was no net present value (or economic rate of return) estimated, as such measures are not relevantfor this type of project.  20 Table 10: Status of Legal Covenants NEPAL Agricultural Extension II Project Original Revised Agreement Coven- Status fulfillment fulfillment Description of Section ant type date date covenant Comments DCA 3.01 5 C - The Borrower shall carry out the Project with due diligence and efficiency DCA 3 02 5 CD 12/31/85 - Employ architects to assist with civil works Complied with only February 1988. program DCA 3.03 (a) 5 C - Insurance of imported goods against hazards incident to acquisition, transport and delivery DCA 3 03 (b) 13 CP Goods and services to be used exclusively for Not completely complied with the Project. during project, as regional offices from time to time commandeered vehicles DCA 3.04 (a) 5 C Preparation of plans, specifications, reports, contract documents and construction and procurement schedules of Project. DCA 3.04 (b) 5 C Fumish IDA semi-annual progress reports DCA 3.04 (d) 5 CD - Submit compILtion report not later than 6 months after closing date. DCA 3 05 5 C Take action to acquire land and land rights required for carrying out the Project. DCA 3.06 (a) 5 C 8/11185 - Maintain in DOA the professional posibons Professional positions not always existng in the project area and shall continue filled with suitably experienced to fill such positions with suitably experienced officers officers. DCA 3 08 (b) 5 Ensure that the Panchayat-level agriculture By HMGN decision of November assistants appointed for prolect be qualified/ 17, 1991, agriculture assistants experienced and residents of Panchayats in posts were abolished which they are assigned to work. DCA 3.08 (c) 5 3/311/87 Review with IDA adequacy of staff assigned for By HMGN decision of November carrying out project, in particular, Panchayat- 17, 1991, agriculture assistants level agnculture assistants posts were abolished. DCA 3.07 (a) 5 C 12131/85 - Establish/maintain a District Technical Disttict Technical Committees did Committee for each district, chaired by not perform satisfactorily Agriculture Development Officers shall meet at least every six months. DCA 3.07(b) 5 1231/85 - Appoint/maintain Sr Agric. Ext. Officers in the As monitoring functions of the Reg. Eastern. Central and Western regions of Nepal. Director of Agriculture Office was adequate, HMGN decided not to appoint SAEOs. DCA 3.07 (c) 5 831/86 - Appoint/maintain Sr. Agnc. Ext. Officers in the As monitoring functions of the Reg. Far-Westem and Mid-Western regions of Director of Agriculture_ Office was Nepal. adequate, HMGN decided not to appoint SAEOs. DCA 3.08 (a) 5 C Appoint/maintain incremental staff required Created and appointed new pursuant to a staffing schedule. JTlJTAs. DCA 3.08 (b) 5 C - Upon complebon of project, maintain Incremental SMS staff not incremental staff employed, maintained and AO positons abolished on Nov. 17. 1991. DCA 3 08 (c) 5 C Ensure that all ext. staff of DOA assigned to project shall carry out exclusively agric ext. work under project DCA 3.09 5 C 8130/95 - Furnish to IDA. a statement of progress in location of sites for offices, training sub-centres and staff housing to be constructed undr the project. DCA 3.10 5 C Provide facilities/incentives to field prolect staff. After project restructuring credit including establishment of credit scheme scheme was not extended to pursuant to which all Jr. Technical Assistants livestock extension staff. may purchase bicycles and provide maintenance allowance to encourage optimum use of such bicycles. DCA 3.11 (a) T C 37131/87 Provide results of benchmark studies in six new Benchmark studies completed in project districts to IDA for review and comment. five districts  21 DCA 3.11 (b) 5 C - Establish a Monitoring and Evaluation System Satistactory M&E system never to provide reports to IDA on semi-annual basis, established DCA 312 5 CP - Efficiently maintain at all times buildings, Poor standards and maintenance of vehicles and equipment provided under the buildings and vehicles. project DCA 4.01 2 C - Maintain appropriate accounting practices IDA agreed on March 8, 1989 to amend OCA to extend submission deadtines for audit reports to 12 months after end of each fiscal year Covenant Type Present Status 1 = Account/Audits 8 = Indigenous people C = covenant complied with 2 = Financial/peforlmance/revenue 9 = Monitoring, review, and reporting CD = complied with after delay generaton from beneficiaries 10 = Protect imptementation not CP = complied with partially 3 = Flow and utilization of protect funds covered by categories 1- 9 NC = not complied with 4 = Counterpart funding 11 = Sectoral or cross-sectoral 5 = Management aspects of the budgetary or other resource protect or executing agency allocation 8 = Environmental covenants 12 = Sectoral or cross-sectoral policyl 7 = Involuntary resettlement regulatory/institutional action 13 = Other Table 11: Compliance with Operational Manual Statements The project is in compliance with the applicable Bank Operational Manual Statements.  22 Table 12: Bank Resources: Staff Inputs Planned Revised Actual Stage of project cycle Weeks US$ Weeks US$ Weeks US$ Preparation to appraisal - n.a. - n.a. 52.2 n.a. Appraisal - n.a - n.a. 9.9 n.a. Negotiations through Board approval - n.a. - n.a. 3.6 n.a. Supenrision - n.a. - n.a. 151.1 n.a. Completion - n.a. - n.a. 10.01/ n.a. TOTAL 216.8 planned  23 Table 13: Bank Resources: Missions Performance rating Number Specialized Implementabon Development Stage of Month/ of Days in staff skills status objectves Types of project cycle year persons field represented problems Through appraisal Sep./Oct 1 28 A - - 1983 November 1 E - - 1983 Appraisal through Board March 1984 1 7 - _ approval May 1985 1 Supervision Mission 1 Jan./Feb 2 10 A,E 2 1 1986 Supervision Mission 2 Sep/Oct 4 7 A(2).E(2) 2 1 F 1988 Supervision Mission 3 October 1987 2 8 A(2) 2 1 F Supervision Mission 4 January 1988 1 5 F - - Supervision Mission 5 February 2 15 A(2) 2 1 F 1988 Supervision Mission 6 Sep/8Oct 2 21 A,E 2 2 F 1988 Supervision Mission 7 February 2 7 A,E 2 2 F,M,T 1989 Supervision Mission 8 Nov/Dec 3 23 EC(2),E 2 2 F,M,T 1989 Supervision Mission 9 March 1990 2 29 E,A 3 2 F,M,T SupeMsion Mission 10 November 4 20 E,A,EN,F 3 2 F.M 1990 Supervision Mission 11 Mar/Apr 3 20 A,EN,F 4 3 F,M,T 1991 Supervision Mission 12 November 2 19 E,A 4 3 F,T 1991 Supervision Mission 13 Mar /Apr 2 18 A(2) 3 3 F,T 1992 Supervision Mission 14 November 2 15 A(2) 3 3 F,M,T 1992 Supervision Mission 15 Mar /Apr 2 17 A(2) 2 2 F,M,T 1993 Supervision Mission 16 Sep/Oct. 3 28 A(2).EC 2 2 F,T 1993 Supervision Mission 17 Feb/Mar. 3 27 A(2),EC 2 2 F,T 1994 Supervision Mission 18 Nov/Dec. 2 28 A(2) 2 2 F,T 1994 Staff Skills: A = Agnculturist: E = Extension Specialist EC = Economist; EN = Civil Engineer, F = Financial Analyst Types of Problems: F = Financial: M = Management; T = Technical  24 Aopendix 1 NEPAL: Agricultural Extension Project (Phase II) (Credit 1570-NEP) FAO/World Bank Cooperative Programme ICR Mission 28 February - 21 March 1995 Aide-Memoire A. INTRODUCTION 0.1 At the request of the World Bank, an FAO/CP Mission l visited Nepal from 28 February to 21 March 1995 to meet with officials of His Majesty's Government of Nepal (HMGN) concerned with the implementation of the above project and to obtain relevant information for the preparation of the Implementation Completion Report (ICR) for this project. Meetings were held with the Coordinating Unit for the project in the Department of Agricultural Development (DOAD), the World Bank Resident Mission, the FAO Representative and other government officials. Field visits were made to thirteen project districts in the Terai area and one district in the Hills area. New facilities constructed under the project were inspected and meetings were held with government officials and farmers in these districts. 0.2 The mission wishes to thank all staff of HMGN involved in the meetings and field visits for giving generously of their time, information and assistance with the preparation of the ICR for this project. The views presented in this aide-memoire reflect those of the mission, based on discussions with staff of HMGN and farmers and from extensive consultation of project documents, and has been amended slightly to take into account points raised in a final wrap-up meeting, chaired by the Secretary of Agriculture and attended by Joint Under-Secretaries of Divisions and heads of sections within the DOA on March 21, 1995. B. THE PROJECT 0.3 The general project objective was to reorganise and strengthen the agricultural extension service in 11 administrative districts of the Nepal Terai in order to provide an institutional framework within which all agricultural development programmes, aimed at achieving early and sustained improvement in production and incomes, would be incorporated. The improvements in agricultural production were expected to come from the wide adoption of low cost and labour intensive agricultural practices, proper irrigation and water management, and use of appropriate crop varieties and levels of fertilizer. 0.4 The Agriculture Extension Project II (AEP II) was a continuation of IDA support for the introduction of the Training and Visit (T&V) system of agricultural extension to " Messrs. D. A. Ivory (Mission Leader) and A. F. Willens (Extension Specialist, Consultant).  25 various districts of Nepal. Earliest support for extension development was provided in conjunction with several irrigation projects (Credit Nos. 373, 654, 812, 856 and 1055-NEP) in a number of districts in the Terai area, commencing in 1973. These were followed by the Agricultural Extension Research Project (AERP; Cr. 1 100-NEP) and the Hill Food Production Project (HFPP; Cr. 1101-NEP), which introduced the T&V extension system in nine Terai and four Hill districts, respectively, both commencing in 1981. 0.5 The AEP II was originally designed to cover the eleven districts of the Terai not covered by AERP, namely Bara, Parsa and Rautahat (previously under Birgang and Narayani Irrigation Project; Crs. 373 and 856-NEP), Sunsari and Morang (previously under Sunsari- Morang Irrigation Project I; Cr. 812-NEP), Kanchanpur (previously under Mahakali Irrigation Project; Cr. 1055-NEP), Kailali, Bardiya, Dang Deukhuri, Siraha and Saptari. The district of Dang Deukhuri did not participate in the project at any time because of the presence of a continuing USAID funded project. With the completion of the AERP and HFPP in i990, both after three annual extensions, it was decided to restructure AEP II to include the nine Terai districts covered in the AERP (Jhapa, Sarlahi, Mahottari, Dhanusha, Kapilbastu, Rupandahi, Chitawan. Nawalparasai and Banke) and four hill districts (Tanahun. Gorkha, Syangja and Lamjung) covered in the HFPP. Under the amended Development Credit Agreement (DCA), agreed on 6 December, 1990, provision was made to provide financing to support extension, adaptive research and training activities in the thirteen additional districts, as well as for completion of on-going civil works not completed in the previous projects. Under the original project design, AEP II was to support the development of two Regional Agricultural Training Centres (RATC) at Ihumka (Sunsari district) and Parwanipur (Bara district), and this support was extended to Khajura (Banke district) and Bhairahawa (Rupandehi district) RATCs under the restructured project. The project became effective on September 9, 1985 and after three annual extensions of the IDA Credit, closed on December 31, 1994. 0.6 The specific project objectives were to: (i) reorganise agriculture extension in six new districts and strengthen the existing extension organisation in the five project districts to bring them into line with extension districts included in the AERP and HFPP; (ii) provide frequent training for all staff; (iii) enlarge two extension training centres at Jhumka and Parwanipur; (iv) improve staffing in four Regional Agricultural Development Offices; (v) provide Production Officers in selected areas at subcentre level to coordinate input, credit and irrigation water supply; (vi) strengthen the Extension Training and Planning Sections of the Director General of Agriculture; (vii) construct office accommodation and housing for staff; (viii) furnish and equip field extension and training programmes; (ix) provide vehicles and travelling allowances to ensure greater staff mobility; (x) provide incremental operating costs; and (xi) undertake baseline studies in the six new districts and project monitoring and evaluation (M&E) in all project districts. C. MISSION FINDINGS Achievement of Objectives 0.7 The design of the project placed emphasis on physical achievements in establishing and strengthening the T&V extension system, but failed to emphasize general objectives concerned with activities and outcomes. While the criteria set for judging project achievements in terms of institutional and physical targets were found to be generally  26 satisfactory, the extreme weakness or non-existence of M&E activities meant that it was very difficult to assess the effectiveness of the extensior. system introduced and its impact on agriculture production and farm incomes. 0.8 The specific project objectives were only partially achieved, even after three annual extensions. The project failed to reach any of the physical targets set in the Staff Appraisal Report (SAR) by the original scheduled end of the project (31 December, 1991) and all were considerably delayed according to the original implementation schedule. The SAR providel for 210 units (office buildings, housing and improved facilities at RATCs). During project implementation, targets for civil works were sharply revised downwards. Even so, at project completion, after three annual extensions, the revised civil works programme was only 81% completed. with office and house construction 13% and 91% completed and handed over, resuectivelv. Ir. addition. many offices and houses were compietelv constructed but not handed over to HMGN or uncompleted, due to litigation by contractors, which has been pending for more than two years, for additional payments to accommodate sharp rises in material costs. Assistance to RATCs was minimal. A number of civil works which were uncompleted under the previous AERP and HFPP were scheduled for completion under AEP II following project reconstruction and financed by AEP II. The headquarters building for the Ministry of Agriculture (MOA) was completed, but is still not handed over to HMGN, two Agricultural Service Centres (ASCs) were completed, while five JT quarters were completed but none have been handed over to HMGN. 0.9 The target for vehicle purchases was revised upwards by 36% during the project and at project closure was 100% completed. Two minibus purchases were cancelled, however, and while 100% of bicycles were purchased, only 43% of motorcycles were procured. Some office, furniture and audio-visual equipment was purchased, but not as envisaged in the SAR in terms of individual items. 0.10 Most incremental technician staff positions, such as Agricultural Assistants (AAs), Junior Technical Assistants (JTAs) and Junior Technicians (JTs) were filled, together with positions for Production Officers (POs), Subject Matter Specialists (SMSs), Assistant Agricultural Development Officers, Agricultural Development Officers (ADOs) and Sub- Centre Chiefs (Agricultural Officers; AOs) at the district level. Positions for Senior Agricultural Extension Officers (SAEOs) at regional offices were never approved. All incremental positions were temporary positions which were not converted to sanctioned positions until April 1992. PO and AO positions were never sanctioned and the services of staff appointed to these positions were terminated at this time. AA positions were abolished in 1991. 0.11 Establishment of Effective T&V System of Extension. The T&V system was satisfactorily institutionalised and became operational in all project districts. The only documented evaluation of the T&V system" showed that there was no difference in crop yields in districts which had received extension advice for 5-6 years compared with others which did not have the T&V system. Mission interviews with extension staff indicated that in the early years the T&V system seemed to have worked well. Mission interviews with farmers indicated the system had worked less well. Problems cited by farmers included; lack Sustainability of Training and Visit system of agriculture in Nepal, APROSC, May 1988.  27 of adoptable messages, some farmers were not aware they were contact farmers while others who did were not contacted, and many contact farmers did not pass on messages to non- contact farmers and thus were widely regarded by other farmers as favoured recipients of government assistance rather than as a source of information. The system of using AAs to pass on recommended messages provided from the fortnightly training programmes to contact farners. aiso meant that the extension system was not adequately responsive to its beneficiaries, except where they were progressive farmers and/or had particular resources or opportunities which could be developed. Active contact farmers did, in fact, rapidly adopt recommended practices appropriate to them, where they were not already using them. Since these altered only slightly from year to year the AAs had little new technologies to pass on. However, the system as developed had neither built-in flexibility to allow for reduced frequencv of visits to such farmers nor regular rotation and recruitment of new contact rarmers. 0.12 Group Extension Approach. During 1990-91, a number of factors contributed to the demise of the T&V system, including the abolishment of AA positions (which were critical to the T&V system) because of political agitation and increased pay claims, the reorganisation of the MOA, where the Departments of Agriculture, Livestock and Veterinary Services and Horticulture were joined together in a newly established DOAD, and the completion of the AERP and HFPP. The realisation that at the field level there was inadequate motivation and resourcing of field staff and poor management control led to the HMGN to eventually abandon the T&V system, claiming "Agricultural production is still staggering in spite of decades of these projects... Several thousand AAs, and even JT/JTAs, are found contributing very little to generate any economic return and mass awareness"". HMGN then introduced a farmer group based system to incorporate problem census/problem solving (PC/PS) techniques in order to make extension responsive to farmers needs. Initially the PC/PS technique was introduced in two VDCs in three pilot districts and subsequently extended to six other districts. Technical assistance to develop the PC/PS group approach was provided directly by WB (an international consultant for 10 days) and project funds were utilized to provide periodic inputs from one international consultant and continuing assistance from three local consultants from March 1993 to December 1994. Farmer groups have now been formed in all project districts, according to targets based on geographical areas of wards in Village Development Committees (VDCs), with ten farmer representatives from each of three wards forming one group of 30 members. Each group elected a group leader to act as a pivotal link between the group and the extension department. Three such groups were formed to cover all nine wards of each VDC throughout the project area. 0.13 The mission interviewed some 26 farmer groups in 13 Terai and one Hill district. These groups included mixed gender groups as well as separate men and women farmer groups. The women farmer groups were primarily involved with livestock raising, goats and dairying, and were very active and had benefited from extension advice and assistance. The farmers cited many advantages from forming groups. However, after more than two years experience with the group approach, only between 10% and 50% of groups are claimed to be active. Most farmers are satisfied with the group approach but, as with T&V, at present it seems to produce real benefits for those with specific opportunities to exploit, particularly " Letter from Acting Secretary of Agriculture to Director, Country Department, Asia Region, World Bank, November 16, 1989.  28 those systems producing higher value products, such as vegetables, seed production, dairying and goat production, but only limited benefits for other farmers. In order to enable activation of all groups, considerable emphasis has to be given to providing training to JT/JTAs in group formation, motivation. facilitation and the PC/PS technique, as well as farrmer awareness programmes on advantages of group formation. 0.14 Strengthening of Regional Training Centres. The project was to provide funds for expanding the facilities at Jhumka and Parwanipur RATCs by providing incremental staff and supplementing the equipment and furniture available. While some of the furniture and equipment was supplied according to the project design, vehicles and important items of audio-visual equipment were not. This substantially reduced the effectiveness of training at the centres. At Jhumka RATC. farm facilities on the centre campus were handed over to Agricuitural Input Corporation (AIC) for seed production. leaving the centre with no land or facilities to carry out practical training. In addition, it had to reduce its external venues and restrict its training schedules due to shortages of staff. The Parwanipur RATC was closed down during the course of the project and regional training transferred to another site. Assistance was to be extended to Khajura and Bhairahawa RATCs under the restructured project, but assistance has been minimal. 0.15 Frequent transfer of staff to and from RATCs has reduced the quality of training since staff are mainly SMSs who have received some trainer training rather than specialist trainers with long teaching experience. Minibuses, needed for field trips were cancelled as were cassette tape recorders. Slide and film projectors had not been procured by the intended completion date of the project and the National Planning Commission did not agree to their procurement in the extended period of the project. 0.16 Provision of Regular Training for Staff. Under the T&V system, field level extension staff received regular training and this was felt to be useful by the staff involved, although the quality of this training was well below that intended and required. Training was based on improving knowledge of recommended practices and technologies and failed to develop practical skills and comprehension needed to enable field staff to adapt recommendations to local conditions and fully interface with farmers. Training of more senior staff was equally unsatisfactory. Whilst the actual training was of reasonable quality, though again lacking in practical content, training was widely perceived as a means of obtaining promotion rather than as a means of developing skills. This largely reflects the lack of a coherent manpower development and staffing structure within DOAD, to the extent that expertise and experience in a particular discipline is not regarded as a prerequisite to appointment as a SMS in that discipline. Coupled with frequent staff changes this considerably reduced the effectiveness of SMSs in training of field staff and providing the necessary technical expertise and information to assist farmers. 0.17 Strengthening of Extension Training and Planning Sections of DOAD. The Planning Section has received the equipment intended. Many districts have no Planning Officer or if posted are located elsewhere. There is no evidence at the District Level that any comprehensive planning is being carried out but rather that planning is treated as an annual exercise in target programming and implementation reporting. 0.18 Monitoring and Evaluation. Although budgetary line items were provided for M&E in the project design and on several occasions WB supervision missions insisted that  29 M&E units be established and appropriate M&E activities should be undertaken, the project failed to establish any effective M&E system and no guidance was given to establishing appropriate M&E survey, data collection, analysis and evaluation procedures. Project Implementation Record and Major Factors Affecting the Project 0.19 Overall. the project only partially achieved its objectives. A number of factors" contributed to substantial delays in achieving physical targets during implementation. resulting in the need for three annual extensions to the project. Frequent implementation problems recorded by WB supervision missions included: inadequate fund release and slow disbursement of funds; the use of the special project account remained problematic; procurement was slow and considerable delays occurred in the civil works programme; positions of incremental staff were not regularized; and professional capacity ot field staff workers weak and inadequate supervision at that level. 0.20 Total Project Costs. Of the total IDA Credit (SDR7.4 million), SDR870,650 (US$1.2 million) was cancelled on 13 Mav, 1994, and at Credit closure on 31 December, 1994, SDR5.65 million had been spent and SDR877,503 remained unspent. The Bank has allowed disbursements on expenditure incurred prior to closure of Credit to be withdrawn until 30 April, 1995. Total project cost was NRs571.55 million (estimated US$15.23 million at current annual exchange rates), which was 262% above the original estimated project cost in Rupee terms, due to a 268% devaluation of the Rupee against the Dollar and SDR, three annual project extensions and to an expansion of project area caused by project restructuring, and was 79% above estimated project costs in Dollar terms. 0.21 Extension System. A number of factors associated with management and implementation of the T&V extension system affected project performance and impact. 0.22 Management. Line management of the extension service was weak. Many managers had received little or no training in management techniques and were frequently technical specialists acting in a management role. Management was almost entirely a top-down process based on the achievement of physical targets and results. No account was taken of impact, which in the absence of any M&E system could not be accurately determined. Setting of management targets was only a participatory process in relation to discussing technical issues and activities but not in quantitative or budgetary terms. 0.23 Key management problems were low motivation of staff, little accountability and lack of any performance related reward system. Problems particularly arose with supervision of JTs and JTAs whose numbers are considered excessive under the T&V system and who made the link from technical specialists to the farmer too long for effective communication. Supervision was so lax that many JTs and JTAs reportedly attended training but rarely visited the field. This was undoubtedly a major cause of the AAs going on strike for better remuneration and regularisation of their positions. Despite the AAs being widely recognised as the key frontline staff making the greatest contribution to the success of the extension system, the borrower decided to abolish their positions and retain the JTs and JTAs. There was also a high staff turnover, partly due to the temporary nature of the posts. " Mostly subject to Government/lmplementing Agencies control.  30 0.24 Impact and Relevance. Some of the activities set out in the SAR appear to have received less attention than was envisaged: very few low cost, labour saving technologies were introduced and advice on proper irrigation water management was left almost entirely to irrigation projects. The extension messages under the T&V system were largely technology based, focusing on a package approach involving improved seed, fertiliser and pest and disease control. It was generally geared to farmers with access to irrigation and followed the, then standard practice of carrying out all variety trials with recommended applications of fertiliser and plant protection. Results were recorded as physical yield and profitability to the farmer was not determined. 0.25 Certainly the T&V system and subsequently the group approach of extension produced good results for those farmers who could access sufficient resources to implement it. Where particular opportunities existed. as with high vaiue vegetable crops or seed production, and later in the project in relation to certain livestock activities, most farmers found the advice from extension helpful and profitable. Livestock rearers reported significant improvements in production due to improved health services, introduction of improved breeds and in some instances improved forage production and feeding. However, where these opportunities did not exist, farmers reported that the improved technologies were not cost effective due to the low prices prevailing at harvest, such that they were considering ceasing use of the improved technology. This was mainly a problem of financing the production inputs, though coupled with lack of skills and physical facilities for efficient crop storage. Technologies such as row planting of maize, which had no direct cost, were widely adopted, but there were few of these. 0.26 The SAR did not adequately address the need for extension materials. Emphasis was on low cost aids such as charts, flannelgraphs and flipcharts which extension staff were to design themselves. This pre-supposed that SMSs had the ability and experience to produce effective extension materials but no specific training was built in for this. The project made no specific use of more advanced media such as radio, film and video except where individual staff took the initiative to rent TVs and VCRs. Field staff were consequently largely dependent on the leaflets and posters produced centrally by DOAD. This was not supported under the project and most field staff lacked adequate leaflets for their own use, far less to distribute to farmers. Good colour posters showing pests and diseases were particularly lacking and could not therefore be displayed at ASCs and subcentres where farmer training took place. 0.27 Demonstrations were carried out across the whole project area. While many farrners benefitted from minikit demonstrations of new varieties the impact of other demonstrations was not as great as anticipated. Many were located away from roads or main tracks and had no sign boards describing them. This was in marked contrast to those organised by commercial sugar and tobacco companies which were sited to be clearly visible from main highways. Shortage of operating funds, particularly for transport, severely restricted the number of farmers who could be taken to visit demonstrations and also constrained field days and visits. 0.28 Staff Skills. The technical skills and level of competence of staff employed in the project was very variable. The AAs reportedly had generally good practical skills and were able to interact well with contact farmers. The general educational level of the JTs and JTAs was not high enough to enable them to interpret the components of the technology packages to be able to recommend individual components to farmers. The training which they received  3 1 was, therefore, primarily a passing on of factual information for them to pass on to AAs and farmers. In any event, none of the components were tested individually so that the performance of improved varieties without fertiliser or plant protection was not known. 0.29 Under the T&V system, SMSs were supposed to spend one third of their time in training groups of AAs, JTAs and JTs, one third in field visits to provide technical support and monitor adoption and non-adoption of recommended practices and the remaining third of their time in building their own stock of knowledge through regular dialogue with research workers and attending short training courses. The extent to which this latter activity took place was relatively minor, partly due to lack of mobility and partly to weak research-extension linkages. The ability of the SMSs and indeed most officers to keep up to date with advances in their field was also constrained by extremely low availability of technical joumals and up to date Wooks. The mission observ,ed that no district offices had any reference materials beyond the personal collections of staff themselves. 0.30 Research - Extension Linkages. Research-extension linkages were established as planned but their effectiveness was less than anticipated. No clear definition existed of the relative and interacting roles of research and extension. Neither organisation perceived a need to keep up to date with and draw on information and technologies developed in other countries and neither was adequately resourced to do so. As a result, the more progressive farmers were often better informed than extension staff on developments in India and even on technologies from other research stations located elsewhere in Nepal. 0.31 Provision was made for bimonthly meetings between SMSs and staff at regional research stations. According to the SAR these were to be training sessions crucial to the success of the project but in reality, as set out in the SAR, they were group discussions reviewing extension recommendations and discussing future research topics and field trials. Whilst these were a valuable exercise, they were not training per se. 0.32 Inadequate SMS training was reflected in inadequate training of the JTs, JTAs and AAs and ultimately farmers. The regular training sessions served primarily to pass on seasonal cropping information which hardly changed from year to year. This led field staff to complain that they had nothing new to pass on to farmers, a direct result of only dealing with the same contact farmers. This also applied to pre-season workshops for AAs, JTAs and JTs which were often delayed so that they took place after farmers had planted the crops. Research staff conducting the training were generally inexperienced in practical field problems and wvere rarely trained as trainers. 0.33 Extension leaflets and posters are produced centrally, though district offices do have some very limited funds for local production. Thus even where research-extension linkages generate area specific recommendations these are not necessarily incorporated in the extension material available to field staff. 0.34 Civil Works. The serious delays in the civil works programme was due to lengthy procedural processes for approval of design and estimates for construction, tendering, recosting and dispute management of construction contracts. Additional problems associated with poor design, quality of construction and finish came from poor supervision. Initially there was considerable delay with the appointment of personnel to positions designated for architects to supervise the civil works progranmme and then agricultural engineers were  32 appointed to these positions. Problems associated with legal disputes still continue with many buildings remaining partially constructed or completed but not handed over to HMGN. This had a continuing negative impact on project activities, as such buildings were unoccupied and their condition is deteriorating as little or no maintenance funds are provided in district budgets. 0.35 Vehicles. Lack of adequate transportation proved to be a problem throughout the life of the project. There were several reasons for this. Vehicles provided under the project were unavailable for project use for an excessive percentage of time. Some of the vehicles purchased were inappropriate having excessive engine capacity and hence fuel consumption and being of a standard of luxury which made them over-attractive to other organisations for use by senior officials. Vehicle maintenance costs were high due to the poor standard of roads and budgetcd maintenance xas inadequate. M\Ianagement control of vehicles was often poor. Motorcycle procurement and distribution was well below intended levels (43%) and far less than required to provide appropriate mobility to field staff. This made it extremely difficult for SMSs and JTs to properly supervise JTAs and ultimately AAs. Bicycle loans generally proved to be successful and were widely used. However since the staff owned the bicycles, they took them with them when they transferred out of the project area so that the number of project staff having bicycles rapidly declined and mobility problems retumed. 0.36 Project Benefits. It is not possible to determine the real impact of the project activities on beneficiaries since no M&E of impact was done, although specified in the SAR, and because of concurrent improvements in other factors of production, such as irrigated area. Undoubtedly many farmers in project areas who were in direct contact with extension workers increased their crop production and incomes. Increases in yields of major crops that would be required to obtain a 50% ERR from the proposed project investments were estimated in the SAR. Analysis of crop yields for paddy, wheat, maize, millets and sugarcane in the Terai over the I 0-year period 1984-94 showed that yields increased significantly and were in excess of those estimated to be required in the SAR to obtain high rates of return to project investment. Since 1990, however, yields for paddy and wheat have declined. This has resulted in farmers being placed in a cost price squeeze with input costs rising faster than product prices. Further analysis of paddy and wheat yields before and during the project (1980-89) showed no significant differences in trends between new districts where T&V was introduced, districts where extension was strengthened and non-project districts. The baseline surveys carried out for the project indicate that most farmers already knew of improved varieties of wheat and of the value of using chemical fertiliser such that 85% of those growing wheat already followed the recommended practices. With paddy, around 60% of farmers knew of recommended practices but less than 40% actually used them. Project Sustainability 0.37 It is likely that in purely physical terms the extension system is sustainable, but without considerable additional support it will remain at a low level of effectiveness. While the current level of budgetary support for extension has been maintained at project levels, it is inadequate for proper maintenance of existing resources and is extremely limited in relation to replacement or purchase/investment in new resources needed for development of the extension services.  33 Bank Performance 0.38 The WB undertook 18 supervision missions during the course of project implementation. Generally, their reports were perceptive and helpful in relation to problems which occurred and suggestions for improvements in implementation. Although the project was supervised by a number of Task Managers and project supervision staff changed frequently, staff of the WB resident mission in Nepal provided the necessary continuity and support for the project. The Bank performance was, however, weak in several key areas. The saga of vehicles being requisitioned by other organisations runs right through the implementation period. While the Bank persistently complained to the Secretary of Agriculture the Bank appeared to fail to come to terms with the fact that the MOA could not of itself do anything and the matter should have been taken to a higher level. Supervisory missions, apart from in the early years of the project. did not consistently point out the absence of M&E nor give it appropriate prominence. The Bank consequently failed to insist that the M&E necessary to determine project impact and effectiveness be carried out. A number of problems have arisen for HMGN in maintaining a proper set of accounts in terms of WB reporting requirements. Appropriate guidelines should have been provided at the beginning of the project. Borrower Performance 0.39 The Borrower recognised that the extension system, as introduced, was not working well. Thus at their initiative the extension system was changed to a farmer group approach with PC/PS used as the key technique to promote a more demand-driven assistance to farmers. This approach, while still in an evolutionary and widening stage of development, is potentially more effective than the previous approach. Also the Borrower has supported and assisted the preparation of an Agricultural Perspective Plan and National Agricultural Extension Strategy for Nepal to provide guidance and direction in development of agricultural services and agricultural development. 0.40 Some aspects of Borrower performance were, however, unsatisfactory and would have to be seriously addressed in any future project. The whole management of the civil works programme was unsatisfactory. Steps should have been taken to streamline the complete sequence of document preparation, processing, contract negotiation and approval, and supervision of civil works. Such action would have prevented the long-continuing situation of litigation by contractors against the Government. General management of the extension services has also been unsatisfactory and requires systems put in place to improve staff performance and accountability. Disbursement of project funds, particularly the operation of the Special Account, was often cited by WB supervision missions as problematic. WB reviewed the operation of these accounts in all IDA-financed projects in Nepal and made recommendations to improve their operation, but to date no action has been taken by HMGN. The Borrower also failed to respond to a number of requests from WB supervision missions to establish an effective M&E system and thus monitoring was confined to the physical implementation of the project, not its impact on agricultural production. Many of these deficiencies breached the covenants of the DCA.  34 Future Operational Plan 0.41 HMGN has provided a future operational plan based on the experience and outcome of the project (refer attachment). Future developments would be in line with the National Agricultural Extension Strategy and success obtained using the group approach to extension and would aim to expand the use of PC/PS techniques in farmer groups, further encourage women's participation in groups, expand a bottom-up approach to planning and budgeting at district levels, bring increased numbers of Water User groups under the PC/PS approach, provide more training for extension staff in the group approach, fill vacant SMS positions, strengthen District Agricultural Implementation Committees, and complete the unfinished civil works programme. Lessons LearnCd 0.42 There are a number of lessons to be drawn from the implementation and outcome of this project, including: (i) The group approach to extension has three major elements which potentially give significant advantages over the T&V system; more demand driven to resolution of farmerg problems, wider coverage of extension contact with farmers, and greater direct interaction of technicians and SMSs with farmers. These potential advantages will only be fully realized if JT/JTAs are better trained in the principles and techniques of the group approach, an awareness campaign is mounted to inform farmers of the advantages of forming groups, the activities of the field extension services are better organized and regularized, and that availability of technical services and information are improved. (ii) The change to the group approach to extension has meant that JT/JTAs no longer receive regular fortnightly/monthly training and district budget limitations severely restrict alternative in-service training for them. Consideration has to be given to establishing appropriate and regular in-service, short-course training programmes for all JT/JTAs at IAAS. (iii) Extension services can only interact directly with a minority of the farming community. Farmer training needs to be greatly expanded with course curriculum designed to provide both increased knowledge in new technologies and more fundamental principles of agricultural production processes and financial analysis so that they are empowered to become better and more independent decision makers. It is suggested that the RATCs should become solely responsible for farmer training. (iv) The potential value of SMSs to provide technical back-stopping to JT/JTAs, to lead the introduction, evaluation and promotion of new technologies, to provide technical information to farmers and to provide an essential link between research and extension is greatly  35 under-exploited. SMSs are under-qualified for their tasks and responsibilities and need specialized in-service training or post- graduate training to upgrade their specialist knowledge and skills. (v) Management of extension services at all levels is weak. due to lack of detailed operational plans. lack of individual job descriptions and associated duties and responsibilities, lack of staff and unit operational accountability, little scope for effective reward and punishment, weak supervision, and a system of service that allows rapid staff turnover in individual positions. It is essential that managers at all levels be given appropriate management training, job descriptions be detailed for all staff and proper planning and M&E systems be introduced to ensurc individual and ,oilective accountability in performance, achievement and output. (vi) Many of the problems associated with weak management are a result of very weak or non-existent M&E. M&E requirements for analysing the performance of the extension service, impact of extension services on agricultural development and needs for further extension and research programming, need to be spelled out precisely. It is essential that DOAD establish an effective and efficient system of survey, data collection, analysis and evaluation procedures and that this information feeds back to management at all levels. (vii) DOAD requires a clearly defined staffing programme linked to a coherent manpower development policy and planning and career structure. Staff need motivating and improved reward and remuneration has to form a key element. Provision of housing and transport and associated allowances can achieve this while benefitting project effectiveness. The quality and skills of staff at all levels need to be substantially upgraded by further training. Consideration should be given to the possibility to substantially increase salaries and benefits through performance related pay. (viii) Research-extension linkages are extremely weak. Urgent attention is required to introduce mechanisms to ensure formal linkages between extension and research, such as: reintroduction of bi-monthly meetings at district level between DOAD and NARC research stations; joint systematic diagnosis of farmers problems and opportunities to improve agricultural production; joint budgeting and activity responsibility in research outreach programmes of NARC; joint involvement in production, implementation and evaluation of mini-kits and other demonstrations; joint operation and provision of support services, such as laboratories for soils analysis, plant protection, etc.; and establishment of a joint Research/Extension Liaison Office in DOAD or NARC at regional level. (ix) Field extension staff are inadequately resourced with extension materials. Increased emphasis has to be given to the utilisation of  36 modem media production technologies to quickly produce leaflets tailor-made for local situations as well as supply pamphlets and brochures on recommended cultural techniques and technologies, and to reference printed materials from commercial suppliers of seed, fertiliser, chemicals and equipment. These materials together with graphic reference materials, such as full colour posters of crop pests and diseases, need to be widely available for farmers to see in district offices and ASCs. (x) Better use needs to be made of modem communications, especially radio and video. Both TV and radio can be used, outside normal broadcasting hours. to transmit material for recording and later use. Video materials are available from libraries and agricultural input suppliers. (xi) Operating budgets need to be realistically set and updated annually in line with inflation. Overall project impact will be greatly improved by properly funding a reduced number of activities rather than by spreading resources too thinly. D. FOLLOW-UP 0.43 On return to Rome, the mission will prepare the ICR for submission to World Bank by about the end of April, 1995. HMGN agreed to provide the mission with their own assessment of the project as a separate Implementation Completion Report by HMGN within two weeks of the wrap-up meeting. The mission aide-memoire, with any amendments required, and a copy of the HMGN Implementation Completion Report will be attached to the ICR document prepared by the FAO/CP mission.  37 Proposed Operational Plan of the Project after its closure (Dec. 31, 1994) 1. INTRODUCTION The Project closed on Dec. 31, 1994 after three extensions of its closing date each for one year. The project during its operation helped to strengthen agicultural extension service in the project districts by providing basic infrastructures and institutions for staffs and farmers training staff mobilitv and supervision and research-extension-fanner linkages. It provided financial supports for constructions of office buildings, staff quarters, and other needed civil works and procurement of furnitures transport facilities and equipments. In the later part of the project phase the project initiated Farmer Centered Group Approach (FCGA) of Extension with Problem Census / Problem Sohing (PC/PS) methodology as a suitable replacement for the individual contact by the Training & Visit ( T & V ) System in the three Pilot Districts. Encouraged by the experiences of FCGA and PC/PS in the three pilot districts the approach has already been expanded to six more districts . The National Agricultural Extension Strategy for future has been developed with mass consensus based on the experiences in the pilot districts and an Operational Manual on PC/PS has also been finally drafted. HMG/MOA in future would persue the approach for further strengthening of the extension service and consolidate the gains achieved during past eight years of the implementation of the project. The following operational plan is proposed to achieve the above stated objectives. 2. Operational Plan S.N. Activities Time Frame Responsibilities Monitoring (what to do?) (When to do?) (Who to do?) Indicators. Taking Inventory of total Will continue DOADlDADOs DADOs will groups in the districts and in phased provide reports expanding PC/PS in self manmer as eveIy four month initiated effective groups. planned in on number of AEMP groups practising preparation PC/PS in the report districts, on an I agreed format 2. Encouraging women do do do participation in the group by facilitating them in meeting .___ their needs throuh PC/PS  38 3. Expanding bottom-up do do Yearly programme planning & budgeting process and budget for the in districts directly with farmer districts will be beneficiaries groups through based on PC/PS. PC/PS 4. Bringing increased nos. of Continuous DOI/DOAD Four monthly Water Users Group (WUG) in starting from /DIOs/DADOs report by DADOs the in-igated area within the Jan. 1, 1995 indicating WUGs group approach & PC/PS involvement in ex-tension. extension groups. 5. Expanding use of transiated Widthin i995 DOAD - for Extension staffs at version of Operational Manual translation & all level will be in Nepali language in circulation and oriented on FCGA orientation of extension RADDs, CATC, & PC/PS service and training of staff at RATCs, all level DADOs - for ___________________ __________ training of staffs. 6. Filling up vacant positions of Within 1995 MOA/DOAD AU SMSs important SMS in the districts. positions will be filled up in the districts. 7. Strengthening District Within 1995 MOA/DOAD More effective co- Agricultural Implementation ordination links Committee (DAOIC) in will be established districts. among agriculture development related Govt. agencies, NGOs and private sectors in the districts. 8. Completion of unfinished civil Approximately MOF/MOA Incomplete works witdin 1996 DOAD building construction will I be completed.  39 Appendix 2 His Majesty's Government P' 1:l j ~~~~~~~Miwistry of Agricul SkUsh mdubar Ref: <tz'; ri=-'t sXx KATHIIMANOU, NE Date: May 18, 1' Dr. David Ivory, OMAY 1995 c r, C r;:-.Ia, ICR Mi5sion Kathmandu. Subject:- Implementation Comoletion Reoort of AEP !I. Please find a_tached herewith a copy of ICR of AEP - II, Sorrower' .vieu point, to be ineluded in the final ICR prepared by you for IC This report has been prepared as per the Aide-Memories af dated April 30, 1995 of the IDA Mission. Thanking You. With Seat Regards. Sincerely Yours, Joint Secretary c C: C/o Tha I4orld Bank Kathmandu. Mr. 0. Manickavasagum, The World Bank KathmandU. : Plaase send one copy to LJ9 Washington tbroLgh your regular pouct  40 ON AGRICIJLTURAL EXTENSION PROJECT - 1I: Borrower's View Point Upon compicting the impircmcntation of the Agricuhurai Extension Project II ( 1985- 1994 ), this report attempts to (a) assess project objctives, design, implementation and operanon experience and (b) evahlate its own and BankCs peiformancz during the evolution and impicmcntaion af the project, as per section 9.06 (c) of general condition of the DCA. The report consist of four sections. Tle frst section presents MOAS evaluaton on the overaa performance of the projee- The second section comments on project objecives, d implementation and opcration expenence. Mhe third section evahates its own and Banks peifomianc. FmaUy, the fourth section states some major lessons leamed from the implementation of the project Proiect's Overall Assessment Mhe Agricultural Fxtension - U Project (AEP-1I), which onginaly was a second phase of IDA support to complete introduction of Training and Visit (T & V) System of Agulural Exension in the reminig eleven disticts in the Temr became effecwtie in September 1985. It wis restrucred and amended in December 1990 to mclude additional ight Terai and four Hill districts previously covered under Agricultural Extension and Research Project (AERP) and Hill Food Production Project (HFPP) respectively aftcr their closure. Tho Prcject closed on December 31, 1994, after three extension of closing dates, each for one calendar year. The ovrall achievement of the project could be sumunarized as below: 1.1 Despite the fact that the project could not achieve most of is physical targets of civil work constructions, procurements of vehicles and equipments, it has significanty contributed to institutional development of MOA's agicultural extension service and 7taf'farmcrs trairings, and to strgthening research-exrension linkage and intr- agncies co-ordination to a certain degree. All these have considerably contn-buted to increases in agicultural production and growth that have occurred over the past years in the country. 1.2 The project could provide a basic institutional frame work and significant number of manpower for extension services from the center to villages and wards and introduccd an effecttve systm of extension. However, implcmentation lacked the cxpectations due mainly to management deficicncics and lacuna in quaty manpower associated with appropriate technological support. Efforts need to be geared to further consolidatc and improve on thems foundaions. 1.3 People's interest in public sector extesion services got heightenedi As a result the aovernment is put into increasing pressure by the people to raise investmcms in  41 extension, and stengLhen it fiurthcr to make it mo responsive to farmers necds, priorities and problems. Prnject activities such as initiation of a farmercenteed group approach with Problcm Cersus/Soling tcchniqu m agricultal c=nsion and its contribution to formuiate National Agriculhral Extension Stratey provide a few examples. 1.4 Importance of improving rcscarch-extension linkages and co-ordiation with other related azencics (fl-aion. 1n-- sunpy, crca, :naLetimg e=c.) has ocen reaiid and ned to continue ailampms to further strngthen these linkages and co-ordnaionL 1.5 The conccpts of rcgional agricuural trairing centers have been itutionalzed thrugh a regional agciuural aing not work of tranig centers under the Department of Agriculture Developmcnt 1.6 Provision of Subject Matter Specialists in Districn Agiculture Dvelopmnt OEce dmining the project period was one of the major strcngths. This has been extended in the structure of the reorganized district agriculturv devlopment ofesi 1.7 The Project was very much helpful in human resources development at villages and local levels. Besides the group leadersfnnbe:rs tho large number of d-aied PLAAs and AAs even after beig rcivd Som their contact sevics are stM contributing sigificantly to Aanzontal tasfer of technology among faimers in the VDCs. Mazy -E-PLAAs and'"As are actively engaged m mobiliwg and providing leadships for frm=er groups and private production and distribution of agriculture inputs and marketing of agriculture products. 2. On AsEricultural Extension Proiect El 2.1 Proiect obiectives In generaL projcmt objectives appear sound. HIowever, the extnsion approach, which was supposed to reorgnize and stengthen tho extension servics on a iustainod basis in the countmy had shalow and temporary foundation. For examplo, on the one hand, the Project mtended to make the then Panchayat Level Agdcultural Auistants (PLAAs) funl time extension workers at village leveL On the other hand, the PLAAs were appoited temporariy on contract wih very low financial remuneration, not commnuranng with their responsi'iwes and work load. Thcse PLAAs complined abour remunration and other facilities avaiable to them. Moreover, in 1990 after the restoration of multiparty democracy, they petitoned the governimnt to recognize thum as civil servants, inarease thao remImeraflon conmcsurating with an appropnate leve of ciyll servic cadrc and provde other reled benefits. As the demand was unffordae, the govcment decided to teminate themn from the contact service. This necessated not only seamcing for an alternative arrangement, but also brought about discomninuadon of fornighlty uri which in tun, led to the cesation of schcduled vit to the farms of contact faame. Finay, this brought about the and of the T&V approach.  42 2.2 Project comyonqnt/desiM 2.2.1 Agicultural extension The promision of programmed visits to fazmers from rcgulariy trined feld staff nupporzed by professional advice from Subjcct Matter Specialists was well conceived. However. the project missed to understand that it was diffcult to find well trained and experienced Subject Mar Specialists in counny such as NepaL As a result, fresh B.Sc. graduatcs with no work experences were hired to the post of SMSs. As thcy were on temporary recrut1enL }they werc compelled to scarch of permanent job elsewhere. The countrs research system was also not stong enough to evolhe technologies on continuous mamer to support to SMSs. 2. 2 The e.xnsion methodology Making local people ( eight grade completed) PLAAs (full time extension workers) after a one-month long intensive ttaining could not prove to be a sound proposition. On one hand, AEP - 1I intended to professionaize extension service, and on dte other, extension work was left to local people who had completed merely eight years of schooling and taken to job on yearly contract service. Though many of the PLAAs due to thew practical experience wer quit competnt in dimnsination of imple toelmology among fanners but due to their low educational background were unable to grsp complex technology. In addition, they could not be raken into permanent civil senrice job- As a result, profss on of cxtnsion servie rcmaincd just an *attempt Due to lack- of sufficient provision of oxientarion and tra.iing to SMSs and fTlJTAs, .b~ extension approach remained "top down' and farmers knowlcdge skill and capabiities were not adequately addressed. Under the project support farmer - cenered group approach of extension with Problem Census/Solving technique during tho last two years of project period was consequently introduced. 2.2.3 Monitorin& and evaluadon - The project design realized the inportance of M&E and stated that under the project, farther monitorng /evaluation surveys would be caxied out on a regular basis covaing qualty of training programs, dcevlopment of appropriate recomrdationsn reguladity and quality m visits, adoption of recommendation, increased production and consequent increase in farm incomes and effectiveness of production oficcrsISMSs. However, M & E could not become regular acd%itics. Weak supervision and guidance reduced the effetvenss of the extension efforts. Filling the vacant posiDon of Senior Agdculual Offic n Regimal Directorates of Agriculture, and the position of Senior Agriculdral Extenion Ocr (SAEO) as pro-visoned in the Project Appraisad could not materialize. Specifically, SAEOs who wero to monitor, supenise and suppost extension activities could perhaps holps in cffective monitoring, whdch somehow remained unaccomplished.  43 3. Evaluation of Proiect Derformance 3.1 H IL formanc As has been stated earlier, the project missed to achieve many of the physical targets set in the project appraisaL Not only were then targets rCvisCd, but also project was restructured in 1990 to include twelve Terai and HIll districts making it all together 23 disricts covered by IDA funded other two projects, Agricultural Extension and Rosearch Project (Cr. 1100-NEP) and Hil Food Production Project (Cr. 1101- NEP). The Ifcloimzs were somc cf the factors affecting the peifornznce of the project, in gen=Ua 3.1.1 As the project was initiated in 1985, it could not remain unaectcd from the trade emba-go imposed by India during 198S189 and the subsequent policy of the then govemment which discouraged projects to purchase vehicles such as Minibus and Motorcycles to economize fuel consumpion. Construction of buildingiinfrastructure was aso haltrd 3.1.2 The project could not function properly during people's movemenr for democracy in 1989 and even after the rcstoraton of democracy in 1990 for about a yoar or so as the counny Was then polticaly disturbed . Besides this, in I99Z the nistry of dultur undertook a major reorganization, bringng parallel extension services of ed crops and fisheies, horticulture and lvestock under a sinle administratve managcment of the newly organized Depariment of Agriculture Development (DOAD). Thkv MOA was reorganizod with a view to re-orient it to deal with farmers' reliie. This ro n ad a significant impact on AEP - II and dectly affected project operations because of changes in staff positions and o tinal Utenors. 3.1.3 Frequent tumovcr of the Project Co-ordinators hmnpered timely implcmentacion of project actWies to certain degrees. 3.1.4 The infrastructures, mainly the buildings constructed by the project at service centers and village level did not match with the needs of the target groups and the new nization of development of Agricultural Development. 3.1.5 The quality of the civil works was not to the desired standards due to inadequare monitoring and supevision from the qualified enginees. There was problem of timly payment for the pnice escalation because of lack of provision in some of the contactual agreements.  44 Apart from aforementioned facts, tic project had several constraiuts such as the folloing. 1. Procurement under AEP II was slow, largely due to lengthy processing procedures. 2. The Subject Marer Specialists who were the most impor-anr actors for the relevant and responsive extension system, lacked specialized technical capacity and lack of diagostic abilty which affected the implementation process. 3. Aftr the establishment of the autonomous agricultural research system in the coun, rcsearch - extenon iinkages weakenen An NIMO' is in process to be si-ged between DOAD ana NARC ro strngthen the extension - research linkage for the fi:ture. Despite the aforemrntioned constrs and problems, the performance of the project over c last three vears period has been highly satisfactorv and gained outstanding momentum. During this later part, the project initiated Farmcr Centered Group Approach (FCGA) of Extension with Problem Census/ Problen Solving (PC/PS) methodology as an appropriate replacement for the individual contact by the Trairing & Visit (T&V) System in the three pilot districts. Encouraged by the experiences of FCGA and PCOPS in the threc pflot disticts the approach has alreadv been expanded to six more distrcts. Th National Aricultural Extension Strategy for future has been developed with consensus based on the experiences in the pilot districts and Operational Manual on PC/PS ha also been fnully drafted. HMGIMOA in future would pursue the approach for furnher savngthnisng of the'extension serice and consolidate the gauns achieved during past eight yeam of the m of the project. Thcre was a remarkable success in working with farning community with this approach. but, throe years of its tcnure could not be sufficicnt to test and apply the whole process of PCPS in thc pilot districts as well as in other districts too. An Operational Plan of the project has been proposed after its closure to achieve the above stated objectrves and lIMGN/MOA is following the Operational Plan. 3.2 - Bank's Perfonnance Iu general, Bank;'s performance during the implenentation of the project was higw satifactory. The Bank supersed the Project thoroughly and well, and made many constructive comments for improvements dusng implemcntation whic-h included actiities such as iitiation of farmer cente.red group approach (ICGA) and PC/S tccluuque in agricultural extension. Its support for the formulation of National AVicultural Extension Strategy was highly appreciated by HMGN. 3.2.1 Supervision and monitoring of project acti-vites were done rcgularly by the WB mison. The missions suggestions and recomnrnendations provided useful guidance to the implementing agency for improvements.  45 3.2.2 The Bankes contmued support for te project was highly appreciated as agais several problems and constraints with the borrower in the face of the polidcal changes in the coumty durnng the implementation of the project 3.2.3 The ovcrall credit disbursement was 92 percen which was due to the devaluaion of Nepaleso cunency as aainst US dollars. Otherwise m nerms of Nepaleac cency, the disbursement was at satisfactory leveL 3.2.4 The missions recommendations helped to simplify and improve some of the rigid and traditional bureaucratic rules such as procurement procedures and conveion of temporary project posts to permancnt posts. 4. Lessons learned 4.1. A clar vision/mission for agaculkiral development and its commiment for executin at all levels of governme arte sinequanon before startng a project Any new project should be in line with the total agncultural development polcics, objectives and sutraegies so as to uinst et and make project acivities sustanablc even after thu 4.2 The iipleenions and the beneficiaries of the project must be invled to identify the real nceds during project fonnulariozL 4.3 Oricntation meetngs and workshops of policy makers, implnemors and beneficianies are very important in the begining of the project so as to obtain all sorts of support and co-operation at different leveL 4.4 Auwnity and responsibiities for project unplementation at differcnt leIels must be specified. Monitoring plans and measurble indicators should be developed at different levels (vllage, serv:ice center, district, regional, central) and their verification and feedback by The concerned supervisors are very essenial to strengthen the proper nnplemctatiorL 4.5 Provision of TA Team from the donor side within the project secms crucial, if the project is to achieve its objectives effectively. 4.6 The cxtension approach wil not sustain if it is gromded on shalow and temporary foundation. 4.7 It requires dine, expedence and training to produce a 'Subject Matter Specialist4. 4.8 3Msmatch among vaious componcnts of knowledge system ( rcsarchers, fames, extensiomuts and their organization) will likely make a project "top down".  46 4.9 Untading of local processe of expi on and rmowtioin, and incorponion of indigous knowldge and kldls aro crucial if the project is to oome out for the donant uaecr of wchnogy mode of