Cambodia - Agriculture Productivity Improvement Project

Document of The World Bank Report No. 15984-KH STAFF APPRAISAL REPORT CAMBODIA AGRICULTURE PRODUCTIVITY IMPROVEMENT PROJECT January 31, 1997 Agriculture and Environment Operations Division Country Department 1 East Asia and Pacific Region  CURRENCY EQUIVALENT (as of December 1997) US$1 = 2720 Riels ACRONYMS AND ABBREVIATIONS ADB Asian Development Bank ADC Agricultural Development Center ACR Australian Catholic Relief ADOR Agricultural Development Options Review (FAO/ADB) APIP Agricultural Productivity Improvement Project ASM Agriculture Sector Memorandum AUSAID Australian Aid CAAEP Cambodia-Australia Agricultural Extension Project CARD Council for Agriculture and Rural Development CAS Country Assistance Strategy CARERE2 Cambodian Area Rehabilitation and Regeneration Programme (UNDP) CDAI Chamcar Daung Agricultural Institute (now RUA) CDC Cambodian Development Council CEA community extension agents CFD Caisse francaise de developpement CG Consultative Group CIAP Cambodia-IRRI-Australia Project CIRAD Centre de cooperation internationale en recherche agronomique pour le developpement CMAC Cambodian Mine Action Center CWS Church World Service DANIDA Danish International Development Assistance DAPH Department of Animal Production and Health DAETE Department of Agricultural Extension Technology & Economics DGPH Direction Generale des Plantations d'Heveas DOA Department of Agronomy DOF Department of Forestry DPSIC Department of Planning, Statistics & International Cooperation Vice President (ag.): Javad Khalilzadeh-Shirazi Director: Javad Khalilzadeh-Shirazi Division Chief/Manager: Jeffrey Gutman Staff Member: Christopher Redfern  - 2 - FAO Food and Agriculture Organization GDIHM General Directorate of Irrigation and Hydro-Meteorology GDP Gross Domestic Product GRET Groupe de recherche et d'echanges technologiques HS haemorrhagic septicaemia IDA International Development Association (World Bank) IDRC International Development and Research Center (Canada) IFAD International Fund for Agricultural Development INM integrated nutrient management IPM integrated pest management IRCC Institut de recherche sur le caoutchouc au cambodge ITF Interim Trust Fund (IDA) MAFF Ministry of Agriculture, Forestry and Fisheries MEF Ministry of Economy and Finance MRC Mekong River Commission MRD Ministry of Rural Development NAHPIC National Animal Health & Production Investigation Center NGO non-government organization NPRDC National Program to Rehabilitate and Develop Cambodia NVDL National Veterinary Diagnostic Laboratory O&M operation and maintenance PLAC Prek Leap Agricultural College PRDC Provincial Rural Development Committee RGC Royal Government of Cambodia RUA Royal University of Agriculture TCP Technical Cooperation Program (FAO) UNDP United Nations Development Program USAID United States Agency for International Development VDC Village Development Committee VV village vet VPL Vaccine Production Laboratory WB World Bank WFP World Food Program GOVERNMENT FISCAL YEAR January 1 to December 31   CAMBODIA AGRICULTURE PRODUCTIVITY IMPROVEMENT PROJECT STAFF APPRAISAL REPORT Contents Credit and Project Summary .......................... i 1. PROJECT RATIONALE ........................ I A. Country Background ..............................1 B. Sectoral Background ...............1 C. Rationale for IDA Involvement ..............................4 D. Lessons from Previous Involvement ..............................4 2. PROJECT DESCRIPTION ........................ 6 A. Proj et Prep ara n6tion .............................6 B. Project Objectives ...............6 C. Proj et Descriptio8ion ............................. Agronomy, Seeds and Plant Protection .............................................................................................................8..........8 Anim al He alth and Production.9 .......................................................................................................... 9 A g ric ultural H ydraulics.9 ...................................................................................................................... 9 M A F S re g h n g Com p nents . ..... .......... ... ...... .. .... .. ........ .... ........ .................................. .................... 90 Smallholder Rubber Research ............ ....... ........ 10 MAFF Strengthening Components..............................................1.....................................0.......... 10 D. Expected Outputs.11 This report is based on the findings of IDA pre-appraisal and appraisal missions that visited Cambodia in February and June 1996, respectively. The missions comprised Christopher Redfem (task manager), Philippe Boyer (agronomist), Mostafa El-Erian (lawyer), Charles Maguire (agricultural training specialist), Susan Tamondong- Helin (sociologist) and David Sislen (project analyst). Youqiong Wang (project controller), Louise Bevan (agricultural economist) and Harry Franks (agricultural institutions specialist) participated for IFAD. The contributions of the following consultants funded under French, Japanese and Swedish grants for project preparation are acknowledged: Jacques Arrivets (agronomist), Ian Hancock (agronomist), Jeffrey Himel (water resources engineer), Mogens Lemonius (seeds specialist), Ken MacKay (fisheries) and Murray Maclean (veterinarian). The component for planning and statistics strengthening was prepared with the assistance of David Marshall and Jack Corwell (FAO) and Baden Cameron (AusAid consultant). Document clearance was provided by Jeffrey Gutman (Division Chief, EAIAE), Walter Schwermer (Project Adviser, EAI) and Javad Khalilzadeh-Shirazi (Director, EA 1). Assistance in preparing the documents was provided by Saraswathi Sundaram.  - 2 - 3. PROJECT COST AND FINANCING .......................................... 14 A. Project Costs ................................................. 14 B. Project Financing ................................................. 17 C. Disbursement ................................................. 19 D. Procurement ................................................. 21 4. PROJECT IMPLEMENTATION .......................................... 24 A. Project Organization ................................................. 24 B. Project Management ................................................. 24 C. Performance Indicators ................................................. 27 D. Monitoring, Supervision, Evaluation and Reporting ................................................. 29 E. Accounts and Auditing ................................................. 30 5. PROJECT BENEFITS, JUSTIFICATION AND RISKS .......................................... 31 A. Project Benefits ................................................. 31 B. Economic Analysis and Justification ................................................. 32 C. Sustainability ................................................. 33 D. Risk Assessment and Management ................................................. 34 6. ASSURANCES AND RECOMMENDATION .......................................... 36 A. Agreements Reached ................................................. 36 B. Recommendation ................................................. 37 ANNEXES 1. Detailed Cost Tables 2. Performance and Impact Indicators 3. Economic and Risk Analysis 4. Institutional Analysis of the MAFF 5. Project Management Unit: Structure and Terms of Reference 6. Recommendations for Strengthening Gender Awareness 7. Procurement and Disbursement Schedule CHARTS AND MAPS Figure 1: Organization of the Ministry of Agriculture, Forestry and Fisheries Map: IBRD No. 27954  CAMBODIA AGRICULTURE PRODUCTIVITY IMPROVEMENT PROJECT Credit and Project Summary Borrower : Kingdom of Cambodia Implementing Agency: Ministry of Agriculture, Forestry and Fisheries Beneficiary N/A Poverty : Program of Targeted Interventions. Amount SDR 18.8 million (about US$27.0 million equivalent) Terms Standard IDA (ITF) terms with 40 years' maturity Commitment Fee : 0.50% on undisbursed credit balances, beginning 60 days after signing. Onlending Terms N/A Financing Plan See Schedule A ERR : ERR of 38% (improved seed production), 36% (animal health and production), 26% (IPM) and 11% (agricultural hydraulics) Staff Appraisal Report: Report No. 15984-KH Map : IBRD No. 27954 Project Identification: 4033   1. PROJECT RATIONALE A. COUNTRY BACKGROUND 1.1 With a 1995 population of about 10.25 million and an estimated GNP per capita of US$260, Cambodia is one of the world's poorest nations. In stark contrast to some of its South East Asian neighbors with dynamic and fast growing economies, the country is still recovering from 25 years of war and isolation, during which much of its physical, social and economic infrastructure was destroyed. Following a period of almost exclusive assistance from the former Communist Bloc (1979-1988), the Paris Peace Accords of October 1991 opened up the country to wider rehabilitation assistance by bilateral and multilateral donors as well as international NGOs. The Paris Accords also paved the way for national elections held under the aegis of the United Nations Transitional Authority of Cambodia (UNTAC), culminating in the formation of a coalition Royal Government of Cambodia (RGC) at the end of October 1993. 1.2 The new Government has embarked, with the support of the international community, on a comprehensive medium-term program of macroeconomic stabilization that would help Cambodia successfully complete its recent re-orientation towards a free market economy. Major policy interventions have been directed at bringing down the budget deficit and rate of inflation, at raising tax revenues and improving tax administration, and reforming the monetary sector. The tighter financial policies have started to yield results, notably with the rate of inflation falling to an estimated 3.5 percent in 1995 as compared to triple-digit figures in 1992-93. 1.3 In fact, successful long-term development of agriculture will be crucial in helping Cambodia to meet the numerous challenges that it faces. Amongst these are the need to feed a population that, at its present growth rate of about 3% p.a., will double in 25 years, and to contain unsupportable urban migration by creating opportunities of productive employment in the rural economy for a young and growing population (about half are under 15 years of age). A critical challenge is therefore to rebuild the Government's capacity to plan, formulate and execute agriculture and rural development programs. B. SECTORAL BACKGROUND 1.4 Most Cambodian households depend on agriculture and its related subsectors of livestock rearing, fisheries and forest exploitation for their living. There are estimated to be about 1 million farming households of which a substantial minority, perhaps as high as 35 percent, is headed by women without access to adult male labor. Agriculture constitutes half of Cambodia's GDP and involves about 80% of the labor force. Crops, grown both for food and for other products such as rubber, account for roughly 30% of GDP, livestock raising for another 15%, fishing for an estimated 4 to 5%, and forestry for I to 2%. Rice is the most important crop, accounting for one- third of the total estimated value of agricultural production; rice, vegetables, fish and some meat  - 2 - are the staples of the Cambodian diet. Rubber and timber are the country's most important export commodities, recently comprising 75% of total domestic exports; but small quantities of other agricultural products, including live cattle, rice, fruits and fish, are also traded to neighboring countries, which represent important markets for future development of the sector. 1.5 Agriculture research, planning and development, including that of the livestock, forestry and fishery subsectors, as well as management of water resources for all agricultural uses, is under the responsibility of the Ministry of Agriculture, Forestry & Fisheries (MAFF) which is organized on the basis of seven technical departments which control their own staff in the provinces, with a total of about 12,000 employees. Although many of these staff have useful training and work experience from earlier years, the Ministry does not presently have the budget or responsibility for implementing major projects, apart from irrigation rehabilitation works funded by the Asian Development Bank (ADB) under its Special Rehabilitation Assistance Loan. All agricultural research is presently being done under externally funded projects, for rice notably by IRRI under a project funded by Australia. France plans to support the re- establishment of a research institute for rubber (IRCC). Responsibility for coordinating rural development activities lies with the Ministry of Rural Development, which now has about 1,200 employees and is involved in organizing rural water supply, rural roads, rural credit, village health and community development programs, often in collaboration with projects started by NGOs and international organizations. Important decisions by the Government affecting the relative roles and responsibilities of these and other agencies operating in the rural sector are increasingly being taken by a Coordinating Committee for Agriculture & Rural Development (CCARD) on which all agencies concerned are represented under the chairmanship of the Second Prime Minister. The CCARD is likely to be the Government's overall coordinating body for this and future Bank-supported projects for agriculture and rural development. Coordination of activities at provincial level is increasingly provided through Provincial Rural Development Committees (PRDC), chaired by the Provincial Governors. 1.6 Although agricultural production recovered quite strongly over the last decade, productivity levels are still low compared with those in other countries in the region, indicating that opportunities for raising them through improved technology and other means should be substantial. However, there are important constraints on how quickly this can be achieved, relating to technical, economic and socio-political factors. Yield of main crops, especially rice, is quite varied between different agro-ecological zones and very unpredictable from one season to the next, dependent on climatic events. In both 1994 and 1996, extensive flooding resulted in considerable crop damage, amounting to about 15% of the normal expected crop. Above-average rice production in 1995/96, which permitted limited rice exports to be resumed, was attributable to favorable rainfall, an increase in the use of inorganic fertilizers and a restoration of natural soil fertility as a result of flooding of the central plains the previous year. Consequently, year-to-year fluctuations in rice supply are likely to recur. 1.7 This yield uncertainty is the result of many factors, including a low proportion of cropped area under irrigation, difficulties in achieving satisfactory water control on often poorly engineered irrigation schemes, unusually variable soil conditions, and restricted availability of modem technology inputs that could potentially reduce crop losses from drought, pest and  1. PROJECT RATIONALE A. COUNTRY BACKGROUND 1.1 With a 1995 population of about 10.25 million and an estimated GNP per capita of US$260, Cambodia is one of the world's poorest nations. In stark contrast to some of its South East Asian neighbors with dynamic and fast growing economies, the country is still recovering from 25 years of war and isolation, during which much of its physical, social and economic infrastructure was destroyed. Following a period of almost exclusive assistance from the former Communist Bloc (1979-1988), the Paris Peace Accords of October 1991 opened up the country to wider rehabilitation assistance by bilateral and multilateral donors as well as international NGOs. The Paris Accords also paved the way for national elections held under the aegis of the United Nations Transitional Authority of Cambodia (UNTAC), culminating in the formation of a coalition Royal Government of Cambodia (RGC) at the end of October 1993. 1.2 The new Government has embarked, with the support of the international community, on a comprehensive medium-term program of macroeconomic stabilization that would help Cambodia successfully complete its recent re-orientation towards a free market economy. Major policy interventions have been directed at bringing down the budget deficit and rate of inflation, at raising tax revenues and improving tax administration, and reforming the monetary sector. The tighter financial policies have started to yield results, notably with the rate of inflation falling to an estimated 3.5 percent in 1995 as compared to triple-digit figures in 1992-93. 1.3 In fact, successful long-term development of agriculture will be crucial in helping Cambodia to meet the numerous challenges that it faces. Amongst these are the need to feed a population that, at its present growth rate of about 3% p.a., will double in 25 years, and to contain unsupportable urban migration by creating opportunities of productive employment in the rural economy for a young and growing population (about half are under 15 years of age). A critical challenge is therefore to rebuild the Government's capacity to plan, formulate and execute agriculture and rural development programs. B. SECTORAL BACKGROUND 1.4 Most Cambodian households depend on agriculture and its related subsectors of livestock rearing, fisheries and forest exploitation for their living. There are estimated to be about 1 million farming households of which a substantial minority, perhaps as high as 35 percent, is headed by women without access to adult male labor. Agriculture constitutes half of Cambodia's GDP and involves about 80% of the labor force. Crops, grown both for food and for other products such as rubber, account for roughly 30% of GDP, livestock raising for another 15%, fishing for an estimated 4 to 5%, and forestry for 1 to 2%. Rice is the most important crop, accounting for one- third of the total estimated value of agricultural production; rice, vegetables, fish and some meat  - 2 - are the staples of the Cambodian diet. Rubber and timber are the country's most important export commodities, recently comprising 75% of total domestic exports; but small quantities of other agricultural products, including live cattle, rice, fruits and fish, are also traded to neighboring countries, which represent important markets for future development of the sector. 1.5 Agriculture research, planning and development, including that of the livestock, forestry and fishery subsectors, as well as management of water resources for all agricultural uses, is under the responsibility of the Ministry of Agriculture, Forestry & Fisheries (MAFF) which is organized on the basis of seven technical departments which control their own staff in the provinces, with a total of about 12,000 employees. Although many of these staff have useful training and work experience from earlier years, the Ministry does not presently have the budget or responsibility for implementing major projects, apart from irrigation rehabilitation works funded by the Asian Development Bank (ADB) under its Special Rehabilitation Assistance Loan. All agricultural research is presently being done under externally funded projects, for rice notably by IRRI under a project funded by Australia. France plans to support the re- establishment of a research institute for rubber (IRCC). Responsibility for coordinating rural development activities lies with the Ministry of Rural Development, which now has about 1,200 employees and is involved in organizing rural water supply, rural roads, rural credit, village health and community development programs, often in collaboration with projects started by NGOs and international organizations. Important decisions by the Government affecting the relative roles and responsibilities of these and other agencies operating in the rural sector are increasingly being taken by a Coordinating Committee for Agriculture & Rural Development (CCARD) on which all agencies concerned are represented under the chairmanship of the Second Prime Minister. The CCARD is likely to be the Government's overall coordinating body for this and future Bank-supported projects for agriculture and rural development. Coordination of activities at provincial level is increasingly provided through Provincial Rural Development Committees (PRDC), chaired by the Provincial Governors. 1.6 Although agricultural production recovered quite strongly over the last decade, productivity levels are still low compared with those in other countries in the region, indicating that opportunities for raising them through improved technology and other means should be substantial. However, there are important constraints on how quickly this can be achieved, relating to technical, economic and socio-political factors. Yield of main crops, especially rice, is quite varied between different agro-ecological zones and very unpredictable from one season to the next, dependent on climatic events. In both 1994 and 1996, extensive flooding resulted in considerable crop damage, amounting to about 15% of the normal expected crop. Above-average rice production in 1995/96, which permitted limited rice exports to be resumed, was attributable to favorable rainfall, an increase in the use of inorganic fertilizers and a restoration of natural soil fertility as a result of flooding of the central plains the previous year. Consequently, year-to-year fluctuations in rice supply are likely to recur. 1.7 This yield uncertainty is the result of many factors, including a low proportion of cropped area under irrigation, difficulties in achieving satisfactory water control on often poorly engineered irrigation schemes, unusually variable soil conditions, and restricted availability of modern technology inputs that could potentially reduce crop losses from drought, pest and  disease. The three decades of civil war have destroyed vital data and the technical knowledge needed to use these data, severely depleted the agricultural labor force, leaving many women with the responsibility of farm as well as household management, and displaced rural families from their original land holdings. Poor transport and communications and continuing insecurity in parts of the country only aggravate the problem by making it more costly for farmers and traders to move surplus product and other supplies from one area to another. 1.8 Constraints on agricultural productivity, including low resiliency of production systems to flooding, drought, pest and disease, result in regional and localized shortfalls in supplying the minimum nutritional needs of rural residents for rice and other basic foods. Reaching national self-sufficiency in rice production has remained elusive, necessitating an unsustainable reliance on external food aid. The high cost of transporting rice and other foods, along with the inability of poorer residents to pay, means that even if aggregate production is sufficient for national needs, pockets of the rural poor go hungry. With the system of collectivized agriculture officially dissolved in 1989 and land privatization given legal backing in 1991, public supports (including provision of agricultural inputs, basic commodity distribution, and price setting) have been progressively removed. The impact of these changes is uneven, likely contributing to an increase in agricultural production, but also placing disproportionate strain on vulnerable groups including recent returnees, internally displaced persons, landless and land-poor rural residents, and rural households, such as those headed by widows, lacking in family labor. In general, these are the groups put at greatest risk in times of local food shortage. 1.9 Rice, which supplies about 75% of the calories consumed by Cambodians, is grown on over 90% of the currently cropped area. In 1989-91 Cambodia was considered close to food self- sufficiency, producing an annual average of some 2.5 million tons of paddy. The droughts and flooding that have damaged rice crops in parts of the country each year since 1990, however, have partly frustrated the attempts to increase aggregate rice production, while mines and insecurity problems have kept farmers away from otherwise cultivable areas. Due to the refugee repatriation and an estimated population growth rate of 2.7% per annum, paddy production would need to reach approximately 3.0 million tons by 2000 to assure national self sufficiency (based on FAO minimum nutritional requirements). 1.10 Moreover, even if overall rice production is adequate at a national or regional level, constraints on the transport and marketing of rice and other basic foods still pose significant obstacles to achieving household food security. In the past, heavy government regulation could be blamed as the main impediment to output growth. In the mid 1980s, controls on rural mobility and restrictions on private trade were significant, but the market liberalizing reforms introduced since 1989 removed most such regulatory constraints. More recently, a ban on rice exports limited the potential of farmers to increase incomes through access to the export market. The Government agreed to lift the ban on rice exports in late 1994, but delayed the official lifting until late 1995 because of the poor 1994/95 rice harvest. The Government's commitment to an open export policy for rice is important in signaling to farmers that investments in increasing domestic food production are worthwhile. National food security is not put at risk with such a policy because of Cambodia's proximity to two major rice exporters.  -4 - 1.11 Beyond the need for clear policy signals, two factors stand out as pressing constraints on agricultural marketing. First is the poor state of transport infrastructure that makes distributing the stocks to rural areas experiencing a rice deficit very costly. Second is the widespread practice of illegal road "taxation," whereby various groups levy a toll on road users. WFP reports that, though rice remained available in Phnom Penh and province centers in 1995, villages outside a 15-20 kilometer radius generally did not have access to these supplies in times of local shortage. This is partly due to the high transaction costs in food transport. C. RATIONALE FOR IDA INVOLVEMENT 1.12 In its presentations to the CG meeting held in July 1996, the Cambodian Government has made clear the top priority given in its development strategy to achieving early and sustainable improvements in agricultural production and poverty reduction in the rural areas. Furthermore, in the context of its efforts to reinforce the political basis for national reconciliation, the two Prime Ministers have repeatedly stressed the urgency of formulating and implementing sound projects for agriculture and rural development, as the principal means to bring about peace and security in the countryside. The Bank's assistance program fully reflects this priority, and the design of the proposed project responds to the strategic objectives set out in the Country Assistance Strategy dated January 28, 1997 and scheduled for Board discussion on February 20, 1997. Specifically the project supports the strategic objectives of "enhancing rural development and natural resource management" and "improving the human resource base and reducing poverty" (draft CAS, paras. 39 and 42). Complementing the proposed project, identification has taken place of a possible IDA-financed Rural Development Project for FY98/99, with components for rural transport and water supply improvement, agricultural and other income-generating activities, and institutional strengthening at local levels in four northeastern provinces, which would build upon the agricultural field development programs to be started under APIP. Clarification of the policy and institutional framework for both of these projects has been assisted by discussion with Government and other agencies of an Agriculture Sector Memorandum. D. LESSONS FROM PREVIOUS INVOLVEMENT 1.13 The Emergency Rehabilitation Project (ERP), Credit 2550-KH, was approved in November 1993 and is now closed. The major part of the US$63 million equivalent Credit financed critical imports needed by the private sector, while the rest financed the foreign exchange costs of rehabilitation sub-projects in six sectors. Following a mid-term review in October 1994, the amount earmarked for agriculture (and some other sectors) was reduced, both because of a lack of well prepared rehabilitation projects, and because of a pressing need to reallocate funds to investments in the power sector and for general imports. The restructuring of the agriculture component resulted in the elimination of several sub-projects whose technical feasibility or implementation within the agreed time-frame looked uncertain. As a result of the  -5 - restructuring, successful implementation of ERP agriculture subcomponents has helped pave the way for some of the components of the proposed project.' 1.14 The main lessons learned from implementing the agriculture component of the ERP are: (i) in Cambodia's present transitional stage of development, the Government's absorptive capacity for planning and implementing projects is still very limited and needs to be supplemented for an interim period with technical assistance; (ii) at the same time, the risk of creating a long-term dependency on foreign technical assistance should be avoided by involving local staff in project design and implementation at an early stage, improving incentives for initiative and performance, and providing more relevant and better organized training; (iii) project design and management arrangements should be kept simple in terms of their demands on central government coordination and implementation capacity, with attention also paid to decentralizing responsibility for implementation to the provincial levels; and (iv) despite efforts being made in the Finance Ministry to overhaul the budgetary system, systems for making timely transfer of funds to the line departments and provinces remain weak and will require continued attention. The components concerned are those for agronomy, livestock, fisheries, agricultural hydraulics, and smaliholder rubber.  - 6 - 2. PROJECT DESCRIPTION A. PROJECT PREPARATION 2.1 Most of the cost of project preparation was covered by a grant from the Japan Policy and Human Resource Development Fund of Yen 42.4 million (US$0.4 million equivalent), of which approximately half was used to finance agronomy, irrigation, fisheries, sociology and agricultural economics specialists for the preparation of this project and for pre-implementation assistance to the MAFF; the balance is being used for preparation of a rural development project under the aegis of the MRD. At the request of the Government of Cambodia, trust funds for project preparation were administered by the Bank. The Swedish SIDA trust fund financed a veterinarian who helped to update and expand the livestock component prepared by IFAD in 1994. The French general consultant trust fund financed a research agronomist from CIRAD who contributed to the preparation of the agronomy component. CIRAD also prepared the smallholder rubber research component. FAO and IDRC (Canada) helped prepare the IPM and fisheries components. FAO prepared the agricultural statistics component; and the FAO Cooperative Programme provided a seeds industry specialist for preparation of the seeds production component. Bank missions and MAFF staff worked together closely throughout project preparation to incorporate the above contributions into the final project design. B. PROJECT OBJECTIVES 2.2 The project's overall objective, in line with the major goals of government policy in the sector, is the sustainable and broad-based improvement of smallholder agricultural productivity as a means to improved food security and increased rural incomes. In the longer term, the agricultural sector is also expected to earn needed foreign exchange through exported surpluses, save foreign exchange through import substitution, and contribute government revenue to cover investment and recurrent costs of providing public services to the sector. This goal recognises: (i) Cambodia's commitment to a market-based economic development strategy; (ii) that aggregate agricultural production is a function of decisions made by individual farmers, who already invest their own resources in agricultural production at high risk and for low returns (crop losses, crop failure, livestock disease/mortality, civil insecurity, unknown markets); and (iii) that reduced risks and increased returns could be assisted though improved farmer access to information, appropriate technology, inputs and markets. 2.3 The project's underlying premise is that MAFF has, and will continue to have, an important responsibility to the 80% of Cambodia's population who derive their livelihood from agriculture, which at present MAFF does not have the capacity to fulfil. As defined in MAFF's draft mission statement, its role is "to support the economic growth of Cambodia by provising high quality services which result in a secure food supply, increased agricultural output and add value on a sustainable and cost effective basis to the agricultural, fishing and forest based sectors". The project would help to build the necessary institutional capacity in MAFF, in part by  implementing pilot field programs as a means of (i) gaining experience in the planning, organization and management of agricultural development programs; (ii) adapting, testing and demonstrating improved agricultural technology under field conditions; and (iii) more generally developing MAFF's understanding of and responsiveness to the needs of its client base. 2.4 The project would promote sustainable agricultural development by creating a MAFF that is enabling, responsive, accountable and cost effective. MAFF's evolving role and responsibility within a market-based economy will be to: (a) create an environment wherein smallholder farmers, who are predominantly poor and largely excluded from the market economy, can gain access to basic agricultural services and the opportunity to use new technology; (b) adapt, test, and demonstrate new technology appropriate to the country's different agro-ecological zones, which responds to local priorities and is economically beneficial to farmers; (c) regulate farming practices so as to ensure sustainability of natural resources and to protect the health and welfare of the rural population; (d) provide public, and some private, goods and services used by the agricultural sector (e.g. annual stocks of rice foundation seed) on a cost recovery basis; (e) license and regulate the provision of private goods and services (such as crop inputs, veterinary services and water) so that consumer and farmer interests are appropriately safeguarded. 2.5 Recognizing the above, the proposed project would consist of a coordinated five-year program to improve the quantity and quality of the technical, human and physical resources of MAFF needed to promote sustainable agricultural development. This would be achieved through carrying out (i) programs in each of the main agricultural subsectors comprising essential knowledge acquisition, technology testing and adaptation, field development activities, priority rehabilitation investments, and (ii) a major effort in MAFF human resource development. The sum total of these activities should lead by project completion to the building of substantial capacity in MAFF to plan, coordinate and implement successful agricultural development programs for the benefit of and with the participation of the rural populations concerned, and to substantial benefits for farmers in the areas of the pilot field programs in terms of increased crop and livestock production (see para. 2.14 for expected project outputs). The project design is sufficiently flexible and comprehensive to provide a framework capable of absorbing technical assistance and other interventions for institutional strengthening of MAFF which may be provided by other donor agencies.  -8 - C. PROJECT DESCRIPTION 2.6 The project would comprise nine components addressing priority development needs of 2 the MAFF. Five components would be carried out by MAFF technical departments , and three would be implemented from the Ministry level -- for strengthening agricultural planning and statistics, for establishing a human resource management capability, and for strengthening of provincial agriculture services. The other component would be the establishment of a project management unit (PMU) within the Ministry to manage the project. Organization of the components by responsible department was adopted to facilitate preparation and management of the project; there would, however, be substantial collaboration fostered between the departments, both at headquarters and especially in the field, in implementing the project. The individual components are described below. Agronomy, Seeds and Plant Protection 2.7 This is the largest and most important of the Project's components, accounting for 29% of total costs. It aims at strengthening the capacity of the Department of Agronomy (DOA) to develop appropriate technologies and formulate technical recommendations to farmers for improving rice and other annual crop production, with a view to achieving greater food security and increased farmer incomes while ensuring sustainability of farming practices. The component does not seek to develop DOA's capacity to undertake research per se, but rather to fill the critical gap between research and extension. It aims to provide DOA with the capacity to: (i) coordinate agricultural research effectively, to ensure that research programs on crop technology are formulated in accordance with the country's priorities; (ii) collect and analyze regional and local data on the main factors of production, with a view to identifying constraints and improving the base of technical knowledge that supports agricultural policy making; (iii) test technologies developed by research with a view to formulating suitable recommendations to farmers; (iv) lay the basis for modem seed industry in Cambodia capable of supplying farmers with higher yielding and better quality seed for rice and other food crops; (v) promote appropriate farming practices to ensure the sustainability of natural resources and protect the natural environment and the health of farming families from the increasing use of dangerous pesticides by educating them in IPM and other safer methods of pest control; and (vi) provide technical support to agricultural extension workers and staff of the provincial agriculture services. 2.8 The DOA component would consist of: (a) a Technical Coordination and Capacity Building sub-component (US$1 .5m) and five technical sub-components: (b) Soil Fertility Management and Conservation (US$1.0 m); (c) Farming Systems and Crop Diversification (US$0.9 m); (d) Seed Production Program (US$3.5m); (e) Plant Protection Service Establishment (US$1.lm); and (f) Integrated Pest Management (US$1.5 m). Each sub- component would receive technical assistance support and the necessary funding for training national staff, supplying equipment, construction or rehabilitation of selected infrastructure and 2 In this report the term "departments" also includes the Ministry's two General Directorates (Directions Generales) for Irrigation and Hydro-Meteorology (GDIHM) and Rubber Production (DGPH).  -9- incremental operating expenditures. Long term TA (one expert each for up to five years) for subcomponents (c) and (f) would be provided respectively by CIRAD (France) and the FAO regional IPM unit based in Manila; their costs are not included in the project. Animal Health and Production. 2.9 All types of livestock in Cambodia suffer from very high morbidity and mortality rates, due to the inability of Government services or the private sector to deliver basic animal health services, for which there exists cost-effective technology and demand from farmers. This component of the project, to be implemented by the Department of Animal Health and Production (DAHP), would build on the experience of successful NGO livestock programs and a pilot scheme started under the Bank ERP. There would be three subcomponents: (a) Disease Control and Management ($2.5 m) which would improve the DAHP central support services for animal disease diagnosis and vaccine production; (b) a Basic Animal Health program in four provinces where livestock raising is particularly important for the local economy ($2.2 m); and (c) Promotion of Animal Production through an extension program for improved animal husbandry and nutrition ($0.2 m). Because subcomponent (b) depends on the successful introduction in four provinces of a system of privatized village vets to provide basic animal health services to farmers, with training and initial support from DAHP, it was agreed during negotiations that by December 31, 1997 the Government would adopt a national plan for training, registration and licensing of village vets satisfactory to IFAD and the Association. The base cost of the component as a whole, which would be financed in parallel by IFAD, is estimated at $4.9 million (15% of total costs). Agricultural Hydraulics 2.10 The agricultural hydraulics component of the project is intended to provide the General Department of Irrigation, Hydrology & Meteorology (GDIHM) with the basic skills, knowledge and equipment to function effectively not only as the MAFF department with the responsibility for managing water for all agricultural uses but also as the only government agency currently with the mandate to plan the use of water resources across sectoral and local boundaries. The component would consist of four subcomponents: (a) GDIHM Capacity Building ($0.7m); (b) Hydrology Information System Development ($1.0m); (c) Small Scale Agricultural Hydraulics ($2.7m); and (d) Medium Scale Agricultural Hydraulics ($0.9m). The four subcomponents are designed with two complementary objectives in mind: to help strengthen the technical, human and physical resources of the GDIHM; and to improve farmer incomes and food security in selected pilot provinces through provision of water for supplementary irrigation as well as fishing, livestock and domestic use. Fisheries 2.11 The overall objective of this component, to be implemented by the Department of Fisheries (DOF), is to help improve Cambodians' livelihood and nutrition by sustaining the yield of freshwater fisheries through better management of the capture fishery and increasing the production of fingerlings for fish rearing. The specific objectives are to: improve the  -10- conservation and management of the capture fisheries, with a focus on freshwater fisheries; improve the supply of seed for aquaculture, with a focus on indigenous fish species; and strengthen the Department of Fisheries to carry out its mandate. There would be three subcomponents: (a) fisheries conservation and management ($1.5 m), comprising demarcation of fish sanctuaries in the Tonle Sap, habitat improvement, equipping the DOF fisheries inspection units for more effective regulation enforcement, and related information and training activities; (b) rehabilitation of a freshwater fisheries research station at Chriang Chamres on the Tonle Sap River in order to improve the production and supply of fingerlings of indigenous species for local fish raising enterprises ($1.0 m); and (c) DOF capacity building, for which training and short term technical assistance would be supplied in policy, finance and administration, human resource development, fisheries law and statistics ($0.5 m). It is expected that long term technical assistance to the DOF to assist it in carrying out subcomponent (a) will be provided under an extension of an ongoing DANIDA/MRC project for management of the freshwater capture fisheries of Cambodia. Smallholder Rubber Research 2.12 The component, to be implemented by the Department of Rubber Production (DGPH), is designed to obtain the technical data needed to confirm the country's suitability for smallholder rubber development, through formulation and implementation of a smallholder rubber research program and training of national research scientists and technicians. The project would comprise technical assistance of a senior rubber research specialist for five years (to be provided and funded by CIRAD, France), vehicles, office and laboratory equipment, and related incremental operating expenses. Total costs are estimated at $1.7 million. MAFF Strengthening Components 2.13 Three components are situated organizationally at Ministry level: (a) Human Resource Management (HRM): technical assistance would be provided to establish and train a Human Resource Management Unit attached to the Department of Personnel which would establish a MAFF personnel data base, train HRD managers in the MAFF and departmental personnel departments, carry out organizational and job analyses, carry out training needs assessments, prepare training plans for each department and unit of the Ministry involved in the project, and manage the selection, evaluation and career development of staff selected into project positions. It was agreed during negotiations that the Government would prepare and send for IDA's comments the annual training programs to be carried out under the Project. This work would provide the information and in-house skills needed to support the ongoing reorganization of the Ministry as well as an expansion and more effective use of training. The cost is estimated at $1.7 million; (b) Support to Provincial Departments of Agriculture: the component would provide for rehabilitation of buildings, office equipment, training, workshops and  - 11 - incremental operating expenses for five MAFF provincial offices 3 to support the project's field activities. The cost is estimated at $0.4 million; and (c) Strengthening of Planning and Statistics. These two subcomponents, to be implemented by the Ministry's Department of Planning, Statistics & International Cooperation (DPSIC) would provide technical assistance (short and long term), staff training (local and overseas), vehicles, equipment and operating budgets needed to build the capacity of the planning and statistics offices of DPSIC to strengthen the Ministry's capacity to carry out project and program level publik investment planning and to better meet the country's needs for basic agricultural statistics. Total costs are estimated at $2.9 million. Project Management Unit 2.14 To assist in implementation of the project and training of local staff a Project Management Unit (PMU) would be established within MAFF, reporting to the Secretary of State for Agriculture, who would chair a Project Steering Committee (PSC). The PMU would be headed by a senior official, of the level of Under Secretary of State, and be staffed by a full-time Deputy Chief and other staff, supported by long and short term technical assistance, including a Project Management Advisor, who would be the chief technical advisor for the Project; a Procurement Specialist; a Finance & Administration Specialist; and short term consultants for establishment of monitoring and evaluation systems and supervision of buildings and civil works. The PMU would coordinate the budgets and implementation plans of all the components of the project, and ensure their appropriate auditing, monitoring, evaluation and progress reporting. The estimated cost of the PMU, including costs for a staff retraining program, is $3.0 million over five years, or about 9% of the base cost estimate. It was agreed that both PSC and PMU would have been established, according to terms of reference satisfactory to IDA, and their key personnel appointed, as conditions of effectiveness. D. EXPECTED OUTPUTS 2.15 The project would enable activities to be undertaken as part of coherent work programs in five key sub-sectors 5 to produce outputs needed to achieve the project's medium term capacity- building objective. Directly productive outputs in terms of increased agricultural production and rural income would also be achieved during the Project. 2.16 Human Resources. By project completion, a key output in all sub-sectors would be developed human resources. In MAFF, about 1,000 trained personnel at central and provincial levels would have achieved pre-determined levels of technical and managerial competency. Kompong Thom, Kompong Cham, Kratie, Prey Veng and Svay Rieng provinces; see map IBRD 27954. 4 including crop production estimates at district, provincial and national level, and monitoring and analysis of producer price developments 5 Agronomy, livestock, fisheries, agricultural hydraulics, and smallholder rubber. 6 (of a total MAFF workforce of about 12,500)  - 12 - Many more would have acquired better communication and analytical skills and gained on-the- job experience of successful workplan implementation and inter-departmental collaboration. Training courses would have been conducted for staff of the agronomy, livestock and hydrology departments in gender awareness. In four selected provinces about 800 village vets would be trained and licensed; and about 20,000 farmers trained / exposed to new technology: 16,000 rice farmers would have been trained in IPM; a minimum of 500 farmers trained in seed production, and about 2,000 farmers would have participated in supervised on-farm field trials (200 trials per year for 4 years in Soil Fertility Management and Farming Systems/Crop Diversification). 2.17 Physical Outputs. Expected physical outputs contributing to the institutional capacity objective include newly constructed or rehabilitated and equipped departmental and provincial offices, laboratories, research station and seed processing buildings; it is expected that these would be functioning efficiently. 2.18 The Seeds Multiplication Program would start to produce physical outputs within the investment period of the project, including 700 tons/year of improved rice foundation seed produced for multiplication and 15,000 tons/year of rice extension seed processed, labelled and marketed. Other directly productive outputs are 2 million/year doses of cattle vaccine, 2 million/year fish fry/fingerlings, and about 136 small-scale water retention/drainage structures. In all components, physical targets have been set that take account of MAFF's weak initial implementation and absorptive capacity, and the over-riding objective to build up that capacity through various means. 2.19 Information for Future Development of the Sector. By project completion the project would have begun to generate important information outputs. These include information systems which would produce valuable data on Cambodian farming and inland fishing systems, a national agricultural statistics system (DPSIC), an agronomic technology testing and demonstration system (DOA), a hydrology information system (GDIMH), a crop pest database (DOA), a sectoral public investment program database (DPSIC), and a personnel and job description database (HRD). Some information outputs would be the result of one-off studies and surveys such as smallholder rubber research results, evaluations of small-scale agricultural hydraulics schemes, the vaccine production privatisation study, training needs assessments, statistical surveys, farming systems studies and field trial results, a feasibility study of a medium- scale agricultural hydraulics scheme7, and component monitoring and evaluation reports. These outputs, together with the technical and analytical skills acquired by MAFF personnel, would contribute to improved prioritisation and decision-making capacity within MAFF and an improved allocation of resources in the agricultural sector. In some cases, information outputs would feed into other project outputs such as field-tested technical recommendations. A critical systems output is expected to be an established information flow involving two-way communications among the different stakeholders in the agricultural sector that will ensure that MAFF promotes technology that responds effectively to real needs. The scheme proposed is the Prek Tatam canal rehabilitation, in Prey Veng province, one of the priority schemes identified in the 1994 UNDP Irrigation Study.  - 13 - 2.20 Policy Development. In three components of the project, policy outputs would be produced: (i) a National Seeds Strategy would be prepared to guide implementation of the seed production, multiplication and distribution subcomponent and establish appropriate policies for future management of the function, including cost recovery and financial mechanisms necessary to permit the development of a commercial seed multiplication industry; (ii) a National Strategy for Animal Health and Production, that would clearly define the respective roles of the public and private sectors in the light of experience gained under the Project and elsewhere, and provide recommendations on the future of the Vaccine Production Laboratory (VPL), presently operated by the DAHP. The regulation of basic animal health provision would have been formalised through the registration and licensing of village vets; and (iii) in conjunction with expected assistance to Government by the UNDP (DDSMS) and ADB, a National Water Resource Strategy would be prepared that would clarify present institutional responsibilities for water, including the present separation of functions for rural water supply and irrigation planning, and make recommendations for participation and cost recovery policies likely to promote sustainable development of water resources for agricultural purposes. It is expected that this work would also result in a preliminary version of a revised legal framework to address irrigation water usage/ water rights issues. It was agreed that each of the above three national strategies would be prepared by the Government and sent to IDA for comments by December 31, 1998.  - 14 - 3. PROJECT COST AND FINANCING A. PROJECT COSTS 3.1 Project cost estimates are based on June 1996 prices. Investment costs have been assigned to the following expenditure categories: civil works, vehicles, equipment, materials (for laboratory experimentation, field trials and demonstrations), international specialist services (technical assistance), studies, overseas and domestic training. Recurrent costs are assigned to the categories: staff training and field allowances, and incremental operating expenses (including operation and maintenance). Physical contingencies of 10% have been added for civil works, materials, field trials and incremental operating expenses. Price contingencies, local and foreign, have been included as follows: 5% per annum for local costs and 2.3% per annum for foreign costs. Physical contingencies add US$ 0.9 million (3%) and price contingencies US$ 1.9 million (6%) to the aggregate base cost estimates. 3.2 Cost summaries by component and by expenditure account are given in Tables 3.1-2. The total base cost8 is US$ 32.2 million equivalent and the total project cost including contingencies is US$ 35.1 million, of which 72% is foreign exchange. Excluding estimated taxes and duties of US$ 0.5 million, the estimated project cost is US$34.6 million. Investment costs of US$ 24.9 million are 77% of base costs, the largest category being international specialist services (22%). Incremental operating costs of US$ 7.3 million including staff training and field allowances and other incremental operating expenses are 23%. Detailed cost tables by project component are given in Annex 2. 8~~~~~~~~~~~~~~~~~~~~~~ The investment cost estimates exclude taxes and duties; it was confirmed at negotiations that all goods required for the project would be imported free of duty and tax. Operating costs include a tax/duty component.  - 15 - Agriculture Productivity Improvement Project Table 3.1 Summary of Project Costs by Component % % Total (US S '000) Foreign Base Local Foreign Total xchang Costs A. Agronomy, Seeds and Plant Protection 1. Department of Agronomy Capacity Building 339 1,123 1,462 77 5 2. Soil Fertility Management 227 734 961 76 3 3. Farming Systems / Crop Diversification 239 645 884 73 3 4. Seed Multiplication Program 778 2,686 3,463 78 11 5. Plant Protection Service Establishment 215 911 1,126 81 3 6. Integrated Pest Management (IPM) 906 551 1,456 38 5 Subtotal Agronomy, Seeds and Plant Protection 2,703 6,650 9,353 71 29 B. Animal Health & Production 1. Disease Control & Management 570 1,908 2,478 77 8 2. Basic Animal Health 862 1,347 2,209 61 7 3. Animal Production Promotion 101 97 199 49 1 Subtotal Animal Health & Production 1,534 3,352 4,886 69 15 C. Agricultural Hydraulics 1. Department of Hydraulics Capacity Building 81 631 713 89 2 2. Management Information System 289 760 1,049 72 3 3. Small Scale Agricultural Hydraulics 812 1,875 2,688 70 8 4. Medium Scale Agricultural Hydraulics 232 618 850 73 3 Subtotal Agricultural Hydraulics 1,414 3,884 5,299 73 16 D. Fisheries 1. Fisheries Conservation & Management 353 1,122 1,476 76 5 2. Freshwater Fisheries Research 264 687 951 72 3 3. Department of Fisheries Capacity Building 126 411 537 77 2 Subtotal Fisheries 743 2,221 2,964 75 9 E. Smallholder Rubber Research 480 1,231 1,711 72 5 F. Planning & Statistics 1. Agricultural Statistics System Establishment 757 1,184 1,941 61 6 2. Agricultural Policy & Planning Capacity Building 141 781 922 85 3 Subtotal Planning & Statistics 898 1,965 2,863 69 9 G. MAFF 1. Human Resource Development & Management 476 1,271 1,747 73 5 2. Support to Provincial Agriculture Services 113 268 381 70 1 3. Project Management Unit 263 2,748 3,011 91 9 Subtotal MAFF 852 4,287 5,139 83 16 Total BASELINE COSTS 8,624 23,591 32,215 73 100 Physical Contingencies 230 720 949 76 3 Price Contingencies 973 968 1,941 50 6 Total PROJECT COSTS 9,827 25,278 35,106 72 109  - 16 - Agriculture Productivity Improvement Project Table 3.2 Summary of Project Costs by Expenditure Category */% % Total (US S '000) Foreign Base Local Foreign Total Exchange Costs I. Investment Costs A. Civil Works /a 1,059 3,178 4,237 75 13 B. Vehicles /b 442 2,507 2,949 85 9 C. Equipment /c 939 3,755 4,694 80 15 D. Materials /d 298 1,192 1,490 80 5 E. Intemational Specialist Services - 7,028 7,028 100 22 F. Studies - 1,325 1,325 100 4 G. Overseas Training - 851 851 100 3 H. Domestic Training 1,395 930 2,324 40 7 Total Investment Costs 4,133 20,765 24,898 83 77 II. Recurrent Costs A. Training and Field Allowances 3,549 - 3,549 - 11 B. Incremental Operating Expenses 942 2,826 3,768 75 12 Total Recurrent Costs 4,491 2,826 7,317 39 23 Total BASELINE COSTS 8,624 23,591 32,215 73 100 Physical Contingencies 230 720 949 76 3 Price Contingencies 973 968 1,941 50 6 Total PROJECT COSTS 9,827 25,278 35,106 72 109 a ind. construction & rehabilitation \b including boats \c incl. office, communication, audio-visual, laboratory, agricultural & processing equipt. \d for laboratory experimentation, field trials and demonstrations  - 17- B. PROJECT FINANCING 3.3 The project financing plan is shown by project component in Table 3.3. The financing plan broken down by expenditure category is included in Annex 2. 3.4 The estimated project cost of US$35.1 million equivalent would be financed by: (a) a local contribution of $3.35 million equivalent from the Government of Cambodia, financing about 10% of total project cost (or about 8%, excluding estimated taxes and duties); (b) the proposed Credit of SDR 18.8 million (US$27.0 million equivalent), financing about 77% of total project cost; and (c) an IFAD Loan of SDR 3.3 million (US$ 4.75 million equivalent), financing the animal health and production component of the project and covering about 14% of total project cost. The proposed IDA Credit would be funded under the Interim Trust Fund (ITF) administered by IDA and subject to its special eligibility provisions regarding procurement. These provisions would not affect the IFAD Loan, which is intended entirely for the parallel financing of the livestock component of the Project. It was agreed that the cross-effectiveness date of the IDA (ITF) Credit and the IFAD Loan would be March 31, 1997, or such later date as might be agreed.  Agriculture Productivity Improvement Project Table 3.3 Financing Plan by Project Component (US $ '000) Local Government IDA (ITF) IFAD Total For. (Excl. Duties & Amount % Amount % Amount % Amount % Exch. Taxes) Taxes A. Agronomy, Seeds and Plant Protection 1. Department of Agronomy Capacity Building 186 11.7 1,403 88.3 - 1,590 4.5 1,206 373 11 2. Soil Fertility Management 117 11.1 936 88.9 - - 1,053 3.0 794 250 9 3. Farming Systems / Crop Diversification 177 17.9 812 82.1 - - 989 2.8 714 261 14 4. Seed Production Program 327 8.8 3,374 91.2 - - 3,701 10.5 2,837 837 27 5. Plant Protection Service Establishment 94 7.8 1,109 92.2 - - 1,203 3.4 961 224 18 6. Integrated Pest Management 106 6.4 1,543 93.6 - - 1,649 4.7 601 1,013 34 Subtotal Agronomy, Seeds and Plant Protection 1,007 9.9 9,178 90.1 - - 10,184 29.0 7,113 2,958 113 B. Animal Health & Production 1. Disease Control & Management 261 9.7 - - 2,423 90.3 2,684 7.6 2,036 594 54 2. Basic Animal Health 347 14.0 - 2,131 86.0 2,478 7.1 1,486 945 47 3. Animal Production Promotion 35 15.4 - - 193 84.6 228 0.7 112 112 5 Subtotal Animal Health & Production 643 11.9 - - 4,747 88.1 5,390 15.4 3,634 1,651 105 C. Agricultural Hydraulics co 1. Department of Hydraulics Capacity Building 2 0.2 746 99.8 - - 748 2.1 655 92 1 2. Hydrology Information System 75 6.6 1,057 93.4 - - 1,132 3.2 804 315 12 3. Small Scale Irrigation 382 12.8 2,610 87.2 - - 2,992 8.5 2,052 859 81 4. Medium Scale Irrigation 167 17.1 810 82.9 - - 978 2.8 703 271 3 Subtotal Agricultural Hydraulics 626 10.7 5,223 89.3 - - 5,849 16.7 4,215 1,537 97 D. Fisheries 1. Fisheries Conservation & Management 143 9.3 1,397 90.7 - - 1,540 4.4 1,160 341 40 2. Freshwater Fisheries Research 147 14.1 891 85.9 - 1,037 3.0 742 289 6 3. Department of Fisheries Capacity Building 43 7.4 532 92.6 - - 575 1.6 433 137 5 Subtotal Fisheries 332 10.5 2,820 89.5 - 3,152 9.0 2,334 766 51 E. Smaliholder Rubber Research 352 18.3 1,574 81.7 - 1,925 5.5 1,369 507 49 F. Planning & Statistics 1. Agricultural Statistics System Establishment 72 3.4 2,043 96.6 - 2,114 6.0 1,252 846 17 2. Agricultural Policy & Planning Capacity Building 72 7.3 921 92.7 - - 993 2.8 833 148 12 Subtotal Planning & Statistics 144 4.6 2,964 95.4 - - 3,108 8.9 2,085 994 29 G. MAFF 1. Human Resource Development & Management 90 4.8 1,792 95.2 - - 1,882 5.4 1,344 526 12 2. Support to Provincial Agriculture Services 121 27.4 321 72.6 - - 442 1.3 307 99 35 3. Project Management Unit 42 1.3 3,131 98.7 - - 3,173 9.0 2,876 280 17 Subtotal MAFF 253 4.6 5,244 95.4 - - 5,497 15.7 4,527 906 64 Total Disbursement 3,356 9.6 27,002 76.9 4,747 13.5 35,106 100.0 25,278 9,318 509  - 19 - C. DISBURSEMENT 3.5 The proposed IDA (ITF) Credit of US$27.0 million equivalent and IFAD Loan of US$4.75 million equivalent would be disbursed over a period of five and a half years with disbursements completed by the closing date of June 30, 2002. The disbursement schedule is considered feasible, because of the proposed input of technical assistance for project implementation and the range of activities included, which reduces the risk that a delay in one particular activity would hold up the entire project. A timely start to project implementation and disbursement following effectiveness is expected, with mobilization of international TA and first deliveries of equipment planned for September 1997. 3.6 The expected IFAD Loan of US$4.75 million equivalent would provide parallel financing for a distinct component of the Project. It would be administered by IDA and disbursed erntirely against expenditures under the component for Animal Health and Production. There is no joint financing with the IDA (ITF) Credit. However, IFAD Loan disbursement categories and percentages were coordinated with those of IDA (ITF) during negotiations to simplify disbursement and accounting. 3.7 IDA (ITF) disbursements would be made against: (a) 80% of total expenditures for civil works; (b) 90% of total expenditures for goods and equipment (excluding vehicles); (c) 100% of total expenditures for vehicles, which would be imported free of duty; (d) 70% of expenditures for agricultural and laboratory materials; (e) 100% of expenditures for consultant services and studies; (f) 100% of expenditures for overseas training; (g) 100% of domestic training expenditures, including local training allowances; and (h) a declining percentage of project operating costs (100% for expenditures incurred during 1997-98, 80% for expenditures incurred during 1999, 50% for expenditures incurred in 2000, and 40% for expenditures incurred in 2001 or later). 3.8 Disbursements would be made against statements of expenditure (SOE) for: civil works contracts less than $150,000; goods contracts less than $150,000; consulting contracts less than $100,000 (firms) and $50,000 (individuals); overseas and domestic training costs; and incremental operating expenditures. All documents supporting SOEs would be retained by the PMU and made available for random sample review by IDA supervision missions and independent auditors. For all contracts above these limits, full documentation would be required. 3.9 Special Accounts (one for IDA, one for IFAD eligible expenditures) with an aggregate authorized allocation of US$2.0 million equivalent, based on four months' average expected expenditures, would be established in a bank acceptable to IDA. The PMU at MAFF would control and operate the Account, subject to procedures established by the Ministry of Finance and to be agreed at negotiations. All documentation for operation of the Accounts would be retained at the PMU. Applications for replenishment of the S/A supported by appropriate documentation would be submitted regularly -- preferably monthly but not less than quarterly -- or when the amounts withdrawn equal 20 percent of the initial deposit. 3.10 MAFF's internal planning and budgeting system is weak and its procedures unclear, particularly with respect to reporting and flow of funds arrangements between MAFF  - 20 - headquarters and its provincial offices. It needs to be strengthened to avoid internal budget management problems affecting implementation of the Project. Some aspects are already being addressed under the Ministry's ongoing reorganization, while other measures are being taken by the MEF to strengthen financial procedures across all ministries (para 1.16). To help ensure that the financial planning and budget systems established for the purpose of the Project are adequate and consistent with the systems being put in place more generally, a study would be carried out during the first year of the Project, once the PMU is in place. During negotiations it was agreed that by September 30. 1997, Government would conduct and send to the Association for comments the conclusions and recommendations of a suitable study prepared on the basis of terms of reference satisfactory to IDA. and would implement the study's recommendations during the Project taking account of the Association's comments.  -21 - D. PROCUREMENT 3.11 The agreed procurement arrangements for the project are summarized in Table 3.4. Table 3.4 Summary of Proposed Procurement Arrangements (US$ '000) International National Competitive Competitive Bidding Bidding Other NBF Total Buildings & Civil 700 1,367 2,260 511 4,838 Works (560) (1,093) (1,808) (0) (3,461) Vehicles 2,761 257 3,018 (2,761) (0) (2,761) Equipment 2,305 1,200 950 397 4,852 (2,075) (1,080) (855) (0) (4,010) Agricultural & Lab. 1,065 684 1,749 Materials (746) (0) (746) Consulting Services & 7,656 1,034 8,690 Studies (7,656) (0) (7,656) Overseas Training 764 135 899 (764) (0) (764) Local Training 5,334 1,279 6,613 (5,334) (0) (5,334) Project Operating 3,352 1,095 4,447 Expenses (2,269) (0) (2,269) TOTAL 5,766 2,567 21,381 5,392 35,106 IDA (ITF) financing: (5,396) (2,173) (19,432) (0) (27,001) Totals may not add exactly due to rounding. "Other" includes international and national shopping, simplified procurement for small works, force account, consulting services and training. "NBF" not Bank financed. Figures in parentheses show IDA (ITF) financing.  - 22 - 3.12 Procurement for works, goods and services to be financed by the IDA (ITF) Credit and IFAD Loan would be carried out in conformity with the Bank's Guidelines for Procurement Under JBRD Loans and IDA Credits, dated January 1995 and revised in January and August 1996, subject to special eligibility provisions under the ITF financing (para. 3.4). Since the procurement capability of the implementing agency is limited, technical assistance for procurement activities and supervision of building works would be provided through the PMU (para. 4.3). Procurement details would be as follows: (a) Civil Works. A contract for the construction of a new office/lab building for the DOA estimated to cost US$0.7 million would be let through ICB using the Bank's Standard Bidding Documents for Procurement of Works, January 1995. The capacity of private domestic contractors to handle works of this size and type is increasing. A preference margin of 7.5% would be given to domestic contractors bidding under ICB procedures. Most other building works carried out under the project would be small and simple, generally consisting of repair or renovation of existing MAFF office buildings and field stations, located at provincial/district centers in rural areas. Owing to the dispersed nature and small size of these works (less than US$150,000 per contract), National Competitive Bidding (NCB) procedures, acceptable to the Bank, would be appropriate since international contractors are not likely to be interested in bidding but they would attract capable local bidders. The total estimated cost of these works, including contingencies, is US$1.9 million. Where feasible, the PMU would group them in suitable packages of $100,000 or more each so as to reduce the number of contracts with a view to economy and efficiency. For this purpose, the PMU and the responsible departments concerned would use the Bank's Standard Bidding Documents for Procurement of Works (Smaller Contracts), January 1995. Works mainly for building renovation, amounting to an estimated US$0.5 million and typically costing less than $50,000 per contract, would not justify NCB procedures and would be procured through simplified procurement procedures based on evaluation and comparison of at least three quotations from local contractors. As the scope of work cannot be defined in advance, sites are remote and there is a need to minimize the disruption of ongoing activities, works for rehabilitation of small-scale hydraulic structures in two pilot provinces, and for the construction of permanent markers for fish sanctuaries, for an estimated cost of US$1.3 million would, with IDA's prior agreement, be carried out under force account by the MAFF departments concerned. (b) Goods (Equipment. Vehicles, Boats, Vaccines and Office and Laboratory Supplies). Vehicles, patrol boats and equipment costing US$5.7 million would be procured by ICB procedures (with a preference margin of 15% of the CIF price, or the actual customs duty, whichever is lower, granted to domestic manufacturers); and goods costing US$1.2 million, with an estimated cost of US$50,000 or less per contract, would be procured by NCB procedures acceptable to the Bank. This would include items such as office equipment and furniture manufactured locally. For the latter, PMU would prepare bidding documents based on the Bank's  - 23 - Standard Bidding Documents for Procurement of Goods, January 1995, to be cleared by the Bank prior to use. To the extent practicable, contracts for goods will be grouped in bid packages estimated to cost the equivalent of $100,000 or more each. Imported cattle vaccines and agricultural and laboratory materials costing US$1.4 million, with an estimated cost of US$50,000 or less per contract, would be purchased by international shopping with at least 3 price quotations from at least two countries, under paragraphs 3.5 and 3.6 of the Procurement Guidelines. (c) Training. Contracts for domestic training (US$2.2 million) would be negotiated with local training institutions.9 Overseas training agreements, for a total cost of US$0.9 million, would be negotiated by PMU and the implementing department concerned with the foreign providing institutions. Such agreements would be negotiated on a case by case basis, with terms of reference for the proposed training and selection criteria for providing institutions and participants to be discussed and agreed with the Association. (d) Consulting Services. Contracts for consulting services and studies required under the project are estimated to cost a total of US$ 8.7 million, mostly procured from the international market. Since the quality of such services is crucial to the success of the project, this factor would be given most weight in their selection. The services required would be contracted in suitable packages from shortlists of appropriately qualified international firms on the basis of technical proposals, in accordance with the Guidelines for Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency and employing as far as practicable the Bank's Standard Form of Contract for Consultants' Services, June 1995. Letters of invitation, evaluation reports and proposed awards of contract would be submitted to the Bank for prior review. 3.13 Procurement Review. Civil works contracts costing over $150,000, goods contracts costing over $150,000, and consulting service contracts over $100,000 for firms and $50,000 for individual consultants, would all be subject to prior review by the Bank. This would allow for prior review of contracts covering approximately 80% each of the works, goods and services to be procured under the project. However, all terms of reference and any single-source selections of consulting firms/consultants, regardless of contract value, would be subject to prior review. Contracts awarded below the agreed prior review thresholds, and all documentation supporting claims for disbursement on the basis of SOEs, would be subject to ex-post review by IDA. Until greater experience is gained by the Borrower, it is expected that at least 20 percent of such contracts would be subjected to random ex-post review. 9 such as Prek Leap Agricultural College, the Institute of Technology of Cambodia, and Cambodia Development Resource Institute, a non-profit training and research foundation.  -24 - 4. PROJECT IMPLEMENTATION A. PROJECT ORGANIZATION 4.1 Project Organization. The project consists of a number of components focused on different organizational units within MAFF. These units vary in status from substantial institutions to relatively minor divisions. The components can be classified as follows: (a) Subsectoral Programs: (i) Agronomy, Seeds & Plant Protection (DOA) (ii) Agricultural Hydraulics (GDIHM) (iii) Animal Health & Production (DAHP) (iv) Fisheries (DOF) (v) Smallholder Rubber Research (DGPH) (b) Institutional Strengthening Components: (i) Planning & Statistics Strengthening (ii) Human Resource Development & Management (iii) Strengthening Provincial Agricultural Services (c) Project Management Unit 4.2 The current structure of MAFF is shown in Figure 1 and an institutional analysis is presented in Annex 4. An internally-led process of reorganization is under way and further changes are expected. Components have largely been designed as self-contained activities within the responsible MAFF department and do not depend to any critical extent on other departments for implementation. Thus the design is relatively robust with respect to further organizational changes in MAFF. B. PROJECT MANAGEMENT 4.3 Management of the project is at three levels -- ministry, department and provincial office -- as described below: (a) Ministr level: MAFF will take overall responsibility for the execution of the project, through a Project Steering Commitee (PSC) and a Project Management Unit (PMU). It was agreed that the PSC and PMU shall be maintained throughout the period of project implementation. The Secretary of State is expected to be the chairman of the Project Steering Committee, the proposed membership of which is shown in Annex 5, and will include the Undersecretary of State (Planning), the  - 25 - Directors/DGs of the participating departments, the Director General of the Ministry, and the PMU Project Management Advisor. The full-time project coordinator (deputy chief of PMU) will be the secretary to the PSC. The PSC will meet at least twice a year and have the following responsibilities: (i) To approve the annual work plans and budgets for the project; (ii) To receive reports on progress of all components, and report to the Minister; (iii) To advise the Secretary of State on the resolution of problems; (iv) To ensure that APIP is coordinated with other projects and programs in the agricultural sector. Coordinating day-to-day execution of the project will be the responsibility of the Project Management Unit (PMU). The PMU will include representatives of the departments concerned. The Under-Secretary of State (Planning) will be Chief of PMU, supported by a deputy chief who will be full-time project coordinator. The responsibilities of the PMU will be as follows: (i) Secretariat to the PSC; (ii) Coordination and compilation of the annual work plans and budgets for the project; (iii) Liaison with Ministry of Finance on budget allocation and release, and disbursement from the IFAD and IDA Special Accounts; (iv) National and international procurement including buildings/civil works; (v) Project accounting (monthly and annual); (vi) Coordination of HRD programme and general training courses such as management, language and computer training; (vii) Disbursement of funds to participating departments; (viii) Management of project-wide monitoring and evaluation; (ix) Preparation of semi-annual progress reports to IDA on project implementation. The PMU would employ ten professional level staff and five clerical/secretarial staff. Three technical assistance personnel and one short term specialist would be attached to the PMU, as follows: (i) Senior project management and policy advisor; (ii) Procurement specialist; (iii) Finance and administration advisor; (iv) Monitoring and evaluation specialist (short term); and  - 26 - (v) the PMU will be responsible for the appointment of (short term) consultants to supervise buildings and civil works. Responsibility for executing the subsector components will rest with the Director or DG of the MAFF technical department concerned. The Director General of MAFF would have responsibility for the Provincial Agricultural Services Strengthening component. (b) Departmental level: (i) Subsector programs will be the direct responsibility of the Directors General/Directors of the department concerned who report to the Secretary of State and are members of the Project Steering Committee. They will be supported by a departmental coordinating committee and by management/administration staff within their departments. Responsibilities include: a. Preparation of the annual work plan and budget; b. Preparing procurement specifications of equipment/civil works for submission to the PMU; c. Design and tendering of minor civil works (less than $50,000); d. Local purchasing; e. Staffing of component-designated posts; f. Supervision of work plan; g. Administration of staff training and travel allowances; h. Component monitoring; i. Component accounting and quarterly progress reporting to the PMU; and j. Project related technical training, workshops, study tours. (ii) The organization to undertake these tasks within each department is described within the respective component annexes. Each department will be assisted in component management by a senior technical advisor. (c) Provincial level: (i) Four components (agronomy, livestock, irrigation and strengthening of provincial agricultural services) have activities executed through the provincial directors of agriculture (PDA). The first three will be executed under the responsibility of the respective line department directors, the third under the responsibility of the Director General of MAFF.  - 27 - (ii) The Governors and PDAs would be fully informed and the provincial offices concerned would be required to present annual work plans to the Provincial Rural Development Committees (PRDC) for coordination purposes. The PRDC would not have direct responsibility for approval, this being firstly the responsibility of the department and then of the PMU/PSC. (iii) Responsibilities of the provincial offices will be: a. Preparation of annual work plans/budgets and submission to department in Phnom Penh subsequent to presentation to the PRDC; b. Execution of work plan; c. Routine accounting and reporting to the department; d. Coordination with the PDA and the Governor's office; e. Provincial staff training. f. For the livestock and small-scale irrigation subsector programs, the provincial chief (OAHP or POH) will have responsibility for the work and the PAS component will be the responsibility of the PDAs. Technical assistance personnel will be based at provincial level for both the irrigation and livestock components and will assist the provincial staff in their management responsibilities. C. PERFORMANCE INDICATORS 4.4 Performance Indicators have been set for the project as a whole and also by component so as to measure progress during implementation (achievement of outputs and results) and progress towards objectives (achievement of effects and impact). They would also serve as milestones, which will confirm that components are proceeding according to plan, or signal that there are actual or potential problems requiring remedial action. PIs have been chosen for their value in measuring the extent to which the project is likely to achieve its long-term development objective.10 4.5 The main impact indicator for the project as a whole is a measurable increase in capacity within MAFF to fulfill its role and responsibilities. The following progress indicators would permit both qualitative and quantitative assessment: (a) an HRDM system established and operating effectively within MAFF; 1 In setting Pls for the proposed project, recent Bank guidelines on Performance Indicators for Technical Assistance Operations (document WB/OPRDR 23.1996) have been followed.  - 28 - (b) sufficient competent senior staff assigned as full-time counterparts in the PMU and in each of the project components, with staff trained by the project in positions which use their acquired skills and experience; (c) measurable increases in language, analytical, technical and management skills of MAFF staff; (d) progress reports from PMU and senior TA assigned in each technical department on quality and performance of counterpart staff in project work-planning, budgeting, implementation, reporting and trouble-shooting; (e) progress reports from PMU and departmental heads indicating quality and performance of TA; (f) clearly prioritised development plans/ programs for the different sub-sectors that respond to farmers needs and reflect real constraints and potentials; (g) MAFF actively seeking resources/budget for program implementation from both government and donors. 4.6 Specific impact and progress indicators for each project component and subcomponent are given in Annex 2. Table 4.1 below shows the selected development impact indicators discussed and agreed during negotiations.  - 29 - Table 4.1 Development Impact Indicators Objective Indicator Unit Base Mid- ICR Ful I tern Impact Recommended Quantity of foundation seed tons 0 400 700 700 seed availability produced Quantity of extension seed tons 0 7500 15000 15000 multiplied IPM Trained farmers no. 0 8000 16000 30000 IPM adoption rates % 80 80 80 Animal health mortality rates % - adult buffalo 0.1 0.07 0.05 - adult cattle 0.08 0.06 0.04 - adult pigs 0.3 0.2 0.1 - breeding poultry 0.3 0.2 0.1 - chickens 0.6 0.4 0.2 Irrigation strategy Small-scale scheme completion No. 0 25 50 75 Adequacy of O&M % Freshwater fish Production of fry 000s 2000 5000 10000 "seed" Production of fingerlings 000s 850 2000 3000 availability I I.I_I_I D. MONITORING, SUPERVISION, EVALUATION AND REPORTING 4.7 Monitoring. Monitoring of project activities will be done at two levels. The PMU will be responsible for establishing the framework for project wide monitoring. It would cover three groups of performance indicators: (a) Physical monitoring of project progress such as procurement, construction of buildings, expenditure, holding of PSC and other committee meetings, routine reporting etc. (b) Monitoring of human resource development including implementation of training needs analyses, completion of personnel registration, execution of training programs; and follow-up studies to determine the impact of HRD programs on MAFF staff. (c) Monitoring of project impact on intended beneficiaries. This applies mainly to the irrigation, livestock and PAS components and will require conducting baseline studies and comparison of farmers within project schemes and outside them.  - 30 - 4.8 This overall framework would be set up with the help of a specialist consultant assigned to the PMU, initially for a six month period and then for short follow up visits to supervise execution. 4.9 Each executing department will be responsible for its internal monitoring. Staff from the department planning section will be given initial training in monitoring techniques and will then be assigned to monitor specific indicators within the overall framework and to prepare routine reports. The senior technical advisor for the component will be responsible for ensuring that a proper program is set up and followed. 4.10 Supervision. Because of the rapidly changing environment in Cambodia, at least semi- annual supervision missions will need to be fielded, with the authority to approve or recommend adjustment of the project if the need arises. These missions will be coordinated and carried out by the Bank but IFAD inputs will be included as and when issues on the livestock component arise and by mutual agreement between IFAD and the Bank. 4.11 Mid-Term Review, Evaluation. During the third year of the project it is agreed to carry out a -joint mid-term review to assess progzress achieved in implemnenting the pro-ject. and the Govenment would thereafter take any necessary measures for its future implementation such as to achieve the agreed objectives. On completion of the project, a full evaluation of performance will be undertaken for the ICR. 4.12 Reporting. Monthly reports and accounts will be produced at provincial, department and PMU level. Semi-annual progress reports will be prepared for submission to the Bank and IFAD by June 30 and December 31 each year until the Project is completed. E. ACCOUNTS AND AUDITING 4.13 The project account would be maintained by the PMU in MAFF, and separate sub- accounts for project components/subcomponents would be maintained by each project implementing department, in accordance with sound accounting practices. The project accounts would reflect all financial transactions during the project implementation period both for the IDA and IFAD Credits and for the government counterpart funding, in two books: one by project component, and one by standard expenditure categories. The project accounts would be maintained separately from any routine budget account or other externally-funded project account. Assurances to the above effect were agreed at negotiations . 4.14 Project accounts would be audited in accordance with Guidelinesfor Financial Reporting and Auditing of projects Financed by the World Bank (World Bank, March 1982). Assurances were obtained that audits of project-related records and accounts. including the Special Accounts. would be undertaken in accordance with accounting principles consistently applied. by independent auditors acceptable to IDA, and that audited accounts and financial statements, in a format agreed with IDA. and including separate audits of Statements of Expenditures. would be furnished to IDA for approval within six months of the end of each Government financial year. until completion of the project.  - 31 - 5. PROJECT BENEFITS, JUSTIFICATION AND RISKS A. PROJECT BENEFITS 5.1 The project would build capacity within MAFF and the main development impact would thus be institutional. MAFF staff would benefit from intensive training, and experience of the implementation of well-resourced, well-designed work-programs which contribute to a coherent integrated sectoral program. The ultimate beneficiaries are rural communities who depend on agriculture and fishing for their livelihoods, for assisting whom MAFF is responsible. 5.2 Rural communities in Cambodia would benefit economically and financially in the medium to long term through the adoption of appropriate, sustainable and financially profitable agronomic technology and low cost measures for protecting animal health. Additional benefits would be obtained from improved surface water storage and drainage for increased production of rice and other crops, and from higher and sustained levels of production from freshwater fish capture and aquaculture, and ultimately from profitable investment in smallholder rubber plantations. 5.3 The project would also contribute positive nutritional and human health benefits. Greater food security, particularly in respect of the main wet season rice crop as a result of improved seed availability and water for supplementary irrigation, the increased availability of fish and animal protein from the fisheries and livestock components, and crop diversification as a result of the farming systems component, would all result in greater adequacy and variety of diet in rural areas. A healthier and better fed rural labor force would enjoy higher productivity and a better quality of life. 5.4 Environmental benefits are expected to be achieved in the medium to long term through the improved sustainability of rice based farming systems. These would ensue as farmers adopt recommended practices with respect to soil fertility management, integrated pest management, water management and conservation, and crop diversification. Strengthened fisheries conservation, management and research would help ensure that important freshwater capture fisheries are not over-exploited and that better knowledge is acquired in order to minimise possible negative environmental impacts of future aquaculture development. Rubber research would ensure that smalholder rubber plantations are established only in suitable areas. 5.5 The RGC would benefit fiscally as cost recovery mechanisms would be introduced under the project for improved rice seeds, animal vaccines and irrigation water, and as appreciation is developed of the areas which are/are not government's budgetary responsibility under a market economy. In the long-term, sound and sustainable agricultural development would contribute to Cambodia's foreign exchange earnings and provide a stronger and broader base for domestic resource mobilization.  - 32 - B. ECONOMIC ANALYSIS AND JUSTIFICATION 5.6 The economic analysis undertaken during appraisal involved a detailed evaluation of the costs and benefits of each planned output, and of the risks and assumptions inherent in the means-ends hierarchy. This iterative process which inter alia involved close examination of alternative means of achieving objectives and outputs, aimed to produce project components whose outputs would contribute most reliably and cost-effectively to sub-sectoral immediate objectives and the project's development goal. 5.7 To achieve the objective of capacity building in MAFF, the project includes a heavy investment in training (US$ 5.1 million) and a Human Resources Development and Management (HRDM) component, to ensure that all training has an impact on job performance and effective accomplishment of project workplans. Additionally, and more importantly for sustainable development of the sector, it would establish and institutionalize the process of managing training and human resources effectively within the Ministry. Recognising that an institution building objective may conflict with the achievement of physical targets, the project has been designed with deliberately limited and realistically achievable targets. However, cost effectiveness analyses indicate that in some areas (HRDM in particular) the investment per beneficiary is relatively high for benefits which are difficult to quantify; the high cost is largely due to the substantial technical assistance requirement. The expected outputs from investment in HRDM are nevertheless considered to be crucial for the success of the project and economically justifiable given the project's capacity building core objective and the importance for the country's long term development of creating technical, planning and management capacity in the agriculture sector. 5.8 For project components expected to have a direct impact on production levels (livestock, small-scale agricultural hydraulics, seed multiplication, and integrated pest management), an indicative economic analysis was carried out on the stream of incremental costs and benefits directly associated with the investment, projected over 15 years. Comparisons were made with the results of ADOR I 11 for which detailed domestic resource cost (DRC) calculations were made for the major agricultural commodities produced in Cambodia. For outputs and most inputs, market prices were used as a proxy for economic prices, since minimal distortions to market prices were identified. For unskilled rural labor a shadow wage rate of US$0.50 per day was used, representing a conversion factor of approximately 0.50. 5.9 For the livestock component, the base case ERR over 15 years is estimated at 36%. The analysis demonstrates the economic attractiveness of investment in animal health care and sensitivity tests confirm it. Recurrent costs would be minimal as farmers themselves would pay the full cost of maintaining privatized village veterinary services. 5.10 The small-scale agricultural hydraulics sub-component is designed to demonstrate the viability of small-scale irrigation in two pilot provinces and therefore has deliberately limited physical development targets. Costs per scheme include all sub-component management costs FAO Investment Centre: Cambodia Agriculture Development Options Review (Phase 1), 3 vols, April 1994.  - 33 - except technical assistance, plus unskilled rural labor for scheme construction and operation & maintenance shadow-priced at $0.50/md, and all other operation and maintenance costs; and benefits assume an incremental production of wet season rice and some high-value vegetables and/or fresh fish. The potential ERR per scheme is 25%; when conservative assumptions are made on both net incremental benefits and adoption rates, the indicative ERR decreases to only 11%. As is well appreciated, each potential site is unique and economic viability is a function of many variables beyond the control of the project. The analysis nevertheless indicates that small- scale irrigation rehabilitation should be economic provided that agreed site selection criteria are followed and provides sufficient justification for proceeding with a well-targeted demonstration phase. Project outputs in terms of experience and results will feed into policy decisions as to whether and how RGC should invest further in the sub-sector. 5.11 An indicative cost benefit analysis of the seed multiplication program gives an ERR of 17%, if only first round benefits from using recommended seed are included, and 38% if second round benefits are included. The analysis includes all subcomponent costs, assumes that foundation seed would be sold from seed farms at a price reflecting its direct cost of production, and demonstrates that recurrent costs would be more than covered by sales revenues as well as the overall economic benefits to farmers of this program. 5.12 A base case ERR of 26% was calculated for the IPM sub-component, with all sub- component management costs included except TA. If the uncontrolled use of pesticides continues unchecked , rice-fish farmers would expect substantially decreased catches. When incremental fishing benefits (prevention of losses) are included in the analysis, the estimated ERR rises to 42%. 5.13 The overall conclusion of economic analysis is confirmation that the project would strengthen MAFF capacity in areas which require an initial public sector investment but only a modest recurrent budget and which can generate valuable returns to the economy. C. SUSTAINABILITY 5.14 Project preparation has been participatory and APIP's components focus firmly on MAFF's priorities for the sector. The involvement and commitment of senior MAFF officials to the project from the very beginning has given a strong sense of ownership and responsibility for the successful implementation and sustainability of the project and its component activities. 5.15 Only through cost recovery can investments in support of development be made sustainable. With government agreement, design of the project has foreseen direct cost recovery mechanisms wherever possible. Thus, entities involved in seed multiplication would have to pay for foundation seed and farmers would pay for extension seeds; the retail provision of basic animal health services will be done through private, unsubsidized village vets; a site selection requirement for small-scale irrigation development is an unskilled labor contribution to scheme construction, operation and maintenance; fish producers must purchase fishery concessions, licenses, hatchery-produced fish fry and fingerlings and pay substantial fines for illegal fishing. In addition APIP would finance studies, training, strategy development, data collection, and economic viability assessments that would establish the feasibility of future privatization of  - 34 - services or cost recovery arrangements. These would include recommended practices for smallholder rubber development, evaluation of results in small-scale irrigation development, training in economics and data analysis for policy planners, and a privatization study for animal vaccine production. Thus APIP would build MAFF's capacity as a facilitator, regulator and demonstrator of new technology, not as provider of free goods and services. The expectation is that farmers will pay for goods and services necessary to increase their production, once they are convinced that it is profitable to use them and so long as the risks are not too great. Recurrent costs of maintaining sub-sector programs after the end of the project are estimated at about US$ 1.0 million per year or less. 5.16 The sustained execution of MAFF sub-programs will depend on whether capacity built under the project will continue in post (staff) and in operation (plant and equipment, vehicles, buildings, laboratories) to serve the needs of agricultural communities in the medium to long term. This will in part depend on factors outside the management control of the project, such as the expected reform (down-sizing) of the civil service and public sector pay scales, political commitment and stability, and funding constraints on operational budgets. The sustainability and development impact of agricultural development programs implemented through MAFF will depend inter alia upon the extent to which these wider objectives are met. D. RISK ASSESSMENT AND MANAGEMENT 5.17 Exogenous risks to the project referred to in the previous section include: (a) rural insecurity, which may continue to hamper field activities in some areas of the country; (b) fragility of the political situation -- the planned elections in 1998 may distract attention and divert budgetary resources from the project; (c) chronic funding constraints of the government and its possible inability to provide budgetary resources on an ongoing basis to ensure the sustainability of the programs started under the project; (d) difficulty in coordinating the work-programs of the different technical departments of MAFF and between headquarters and the provincial/district offices; and (e) an increasing turn-over of trained staff due to low motivation and poor remuneration in the public service. The project has been designed in the full awareness of these risks and measures have been taken to minimise their effects. 5.18 The risk of inadequate counterpart staff commitment and that trained staff will not be continuously assigned in jobs which use their skills and experience is addressed directly in the project. Sufficient resources would be provided to ensure adequate incentives (e.g. through staff training and travel allowances) to staff to perform their duties under the project, and to establish work programs that ensure individual job satisfaction and delivery of quality services in response  - 35 - to client needs. This should encourage a much higher level of inter-departmental cooperation in MAFF as well as individual job performance. 5.19 The shortage of well-qualified and experienced staff in the Ministry is both a reason for the project and a risk to its successful implementation. Formal training amounts to 11% of project base costs and HRDM is given particular importance. Long-term overseas training has been kept to a minimum so as to ensure that able staff mostly remain in Cambodia, working as counterparts alongside international specialists, and gain experience and intensive on-the-job training through the project. Funds for language training have been included where required so as to facilitate communication and understanding between local and international project staff. For the same reason, all long term international project staff would be expected to become conversant in the Khmer language within six months of arrival in post. 5.20 Implementation performance indicators would be monitored throughout the project. Problems would be identified, their causes analysed and possible solutions fed back to PMU and the relevant technical departments. This would ensure that workplans and targets get readjusted in line with developing implementation capacities. 5.21 It will take time to build analytical, managerial, and technical skills in MAFF and the project includes a large and necessary amount of technical assistance. There is a risk inherent in the potential conflict between meeting implementation targets and building national capacities. In some cases it may be necessary and desirable to trade-off short-term effects for long-term sustainable impact. Project targets have been deliberately set so that the potential for conflict between objectives is minimised. In evaluating bids for provision of TA, the MAFF needs to be aware of this risk and give a high weighting to both technical/analytical and management/human sets of skills. 5.22 The only risk that cannot be controlled through project design is that of continuing insecurity in rural areas. Over the past year, there have been major political developments as a result of which the zone of high insecurity has contracted, but some risks remain. Project design has taken these into account by excluding or reducing project activities in provinces still considered insecure. In addition, the pilot field components could be relocated to other provinces if necessary.  - 36 - 6. ASSURANCES AND RECOMMENDATION A. AGREEMENTS REACHED 6.1. The following agreements were reached during negotiations: (a) as conditions precedent to Credit effectiveness, the Government shall have established both the PSC and PMU, according to terms of reference satisfactory to the Association, and shall have appointed their key personnel (para 2.1 1); (b) a failure of the IFAD Credit Agreement to have become effective by March 31, 1997, or such later date as the Association may agree, shall be an event of default (para 3.4); (c) the Government shall maintain the PSC and PMU throughout the period of Project implementation (para 4.3); (d) the Government shall send to IDA semi-annual reports on Project implementation progress, under terms of reference satisfactory to the Association, by June 30 and December 31 each year until the Project is completed (para 4.12); (e) the Government shall maintain proper policies and procedures for monitoring and evaluating Project implementation on a regular basis (para 4.7-9) and shall keep adequate Project records and separate accounts, according to generally accepted accounting principles (para 4.13); (f) audits of project-related records and accounts including the Special Accounts, will be carried out by independent auditors acceptable to IDA, and audited accounts and financial statements, in a form acceptable to IDA, and including separate audits of Statements of Expenditure, will be sent to IDA within six months of the end of each Government financial year (para 4.14); (g) by September 30, 1997, the Government shall conduct and send to the Association for comments a study of the MAFF's internal planning and budgeting system and procedures, on the basis of terms of reference satisfactory to the Association and with particular focus on the reporting and flow of funds arrangements between MAFF headquarters and its provincial departments of agriculture (provincial agricultural services), and implement the recommendations of the study during the project taking into consideration the Association's comments (para 3.10); (h) by December 31, 1997, the Government will adopt a national plan for training, registering and licensing of village vets satisfactory to the Association (para 2.7);  - 37 - (i) by December 31, 1998, the Government shall furnish to the Association for comments (i) a national strategy for seeds improvement, (ii) a national strategy for animal health and production and (iii) a national water resource strategy, each of these strategies to propose specific measures for cost recovery from beneficiaries and for operational maintenance of public investments (para 2.20); Gj) by June 30, 1999, the Government in consultation with the Association will carry out a mid-term review, based on a report to be furnished by April 30, 1999, to assess the progress achieved in implementing the Project and agree on any adjustments needed to achieve its objectives (para 4.11); and (k) the Government shall send the Association by December 31 each year for its comments the training programs to be carried out under the Project during the following year (para 2.12). B. RECOMMENDATION 6.23 Subject to the conditions set out in para 6.1 above, the proposed project would constitute a suitable basis for an IDA (ITF) Credit of SDR 18.8 million (US$27.0 million equivalent) to the Kingdom of Cambodia with 40 years' maturity and 10 years of grace.   Royal Govemment of Cambodia Agrcultural Productivity Improvement Project Table 1 Department of Agronomy Capacity Building Detailed Costs (US $) Quantities Base Cost ('000) Unit 1997 1998 1999 2000 2001 Total Unit Cost 1997 1998 1999 2000 2001 Total I. Investment Costs A. Construction Office & Lab Complex /a m2 650 - - - - 650 B. Vehicles Double cabin pick-up unit 2 - - - 2 20,000 40 - - - - 40 Motorcycle unit 10 - 10 1,500 15 - - - - 15 Subtotal Vehicles 55 55 C. Equipment Office Equipment /b unit 61 5 - - - 66 Communication Equipment /c unit S - - - - 5 Subtotal Equipment 66 5 - - - 71 D. Training Local Training unit - 3 3 3 3 12 2,500 - 8 a 8 8 30 National WID consultants /d month 1 1 1 1 1 5 1,000 1 1 1 1 1 5 1 Subtotal Training 1 9 9 9 9 35 U E. Technical Assistance TechnicalAdvisor/e month 6 12 6 - - 24 15,000 90 180 90 - - 360 Financial & Administrative Specialist month 6 - - - - 6 15,000 90 - - - - go Subtotal Technical Assistance 180 180 90 - - 450 Total Investment Costs 952 194 99 9 9 1,261 II. Recurrent Costs A. Training Allowances /f LS 23 23 23 23 23 115 B. Travel Allowances unit 5 10 10 10 10 45 C. Office Operabng Expenses unit 2 2 2 2 2 10 D. 0 & M Vehicles & Equipment LS 4 7 7 7 7 32 Total Recurrent Costs 33 42 42 42 42 201 Total 985 235 140 50 50 1,462 \a DoA's central officesand laboratores for soils and plant analysis, plant protection and seed quality control. \b includes 2 computers. 1 printer and 1 photocopier (cost revised 6/15) \c includes fax, mobile telephone, etc \d For gender sensitization training, training of trainers, and monitoring of women's participation / targetting ve Overall coordination of APIP s sub-components in DoA \f 4 counterparts ($2400/staff-yr) + 3 medium-level (US$1800/staff-yr) +3 junior staff ($1200/staff-yr) + 6 support staff (US$720/staff-yr) (D (D 0 N') XJ  Royal Govemment of Cambodia Agricultural Productivity Improvement Project Table 2. Soil Fertility Management Detailed Costs (US $) Quantities Base Cost ('000) Unit 1997 1998 1999 2000 2001 Total Unit Cost 1997 1998 1999 2000 2001 Total I. Investment Costs A. Civil Works Rehabilitation of Buildings /a m2 60 - - - - 60 B. Vehicles Double cabin pick-up unit 3 - - - - 3 20,000 60 - - - - 60 Motorcycles unit 6 - - - - 6 1,500 9 - - - - 9 Subtotal Vehicles 69 - - - 69 C. Equipment Office Equipment /b unit 20 - - - - 20 Agricultural Equipment /c unit 100 - 100 Laboratory Equipment /d unit - 75 - - - 75 Subtotal Equipment 120 75 - - - 195 D. Training Overseas Technical Courses /e unit - - 3 4 3 10 2,000 - - 6 8 6 20 b Local Training unit - 3 3 3 3 12 2,500 - 8 8 8 8 30 Subtotal Training - 8 14 16 14 50 E. Technical Assistance Soil Fertility Specialist month - 6 6 6 - 18 15,000 - 90 90 90 - 270 F. Field Trials / LS - 40 40 40 40 160 Total Investment Costs 249 213 144 146 54 804 II. Recurrent Costs A. Training Allowances /g LS 20 20 20 20 20 98 B. Travel Allowances unit 1 3 3 3 3 13 C. Office Operating Expenses unit 1 1 1 1 1 5 D. Laboratory Operating Expenses unit - - 2 4 4 10 E. 0 & M Vehicles & Equipment unit 4 7 7 7 7 32 Total Recurrent Costs 25 31 33 35 35 157 Total 274 243 176 180 88 961 \a for two research stations \b computer,printer, fax & communications equipment at each station ($10,000 X 2) \c for two research stations \d for the central Soils & Plant Analysis Laboratory 3 \e three to six month courses overseas 3 U for two research stations X \g 2 senior counterparts ($2400/staff-yr) + 5 medium-level/lab.staff ($1800/staff-yr) + 3 junior staff ($1200/staff-yr) + 3 support staff (US$720/staff-yr) K th  Royal Govemment of Cambodia Agricutural Productivity Improvement Project Table 3. Farming Systems I Crop Diversification Detailed Costs (US S) Quantities Base Cost ('000) Unit 1997 1998 1999 2000 2001 Total Unit Cost 1997 1998 1999 2000 2001 Total I. Investment Costs A. Civil Works Rehabilitation of Buildings /a LS 90 - - - - 90 B. Vehicles Double cabin pick-up und 3 - - - - 3 20,000 60 - - - - 60 Motorcycles unit 10 - - - - 10 1,500 15 - - - - 15 Subtotal Vehicles 75 75 C. Equipment Office Equipment /b unit 20 - - - - 20 Agricultural Equipment /c unit 160 - - - - 160 Spare parts /d LS 8 - - 8 - 16 Subtotal Equipment 188 - - 8 - 196 D. TraIning Overseas Technical Courses /e unit - - 3 4 3 10 2,000 - - 6 8 6 20 E. Technical Assistance FarmingSystemsSpecialist/f month - 12 12 12 - 36 - - - - Vokinteer/LocaiConsuHants LS - 12 12 12 - 36 1,000 - 12 12 12 - 36 Subtotal Technical Assistance - 12 12 12 - 36 F. Farming Systems Field Trials /g LS - 40 40 40 40 160 G. Otwer Fied Trials ,_ Fodder Crop Trials /h LS - 8 8 8 8 30 Water Management Trials ri LS 10 10 10 10 40 Crop DiversUifcation Trials fi LS - 5 5 5 5 20 Subtotal Other Field Trials - 23 23 23 23 90 Total Investment Costs 353 75 81 91 69 667 II. Recurrent Costs A. Training Allowances /k LS 16 16 16 16 16 82 B. Travel Alloiwances uni 1 4 4 4 4 17 C. Accomodation und - 24 24 24 - 72 D. Ofice Operating Expenses unit 2 2 2 2 2 10 E. 0 & M Vehicles & Equipment unit 4 8 8 8 8 36 Total Recurnent Costs 23 54 54 54 30 217 Total 376 129 136 145 99 884 la for two research stations \b computer,printer. fax & coffmunications equipment at each station ($10,000 X 2) vc hckides 2 ators and rted equipment vd for agriculural equipment b three to six month courses overseas W To be fianced by CIRAD 4g for two research stBaons and on-farm trials Vi in colaboration wfth Depltnwt of An"nal Health & Production Q > V hI collaboralion with Department of Hydraulics inhci. frultrees W Vx 2 senior counterparts ($2400/ste-yr) + 3 medium-ievet staff (S1800/st4-yr) + 4 Junior staff (S1200 staff-yr) + 2 support sta ($720vstalf-yr) i hi  Royal Govenment of Cambodia Agricultural Producbvtty Improvement Project Tabfe 4. Seed Producfion Program Detailed Cost (US S) Quantites Base Cost ('00) Unit 1997 1998 1999 2000 2001 Total Unit Cost 1997 1998 1999 2000 2001 Total 1. Investment Costa A. CMI Works Seed Processing and Storage /a m2 1,000 496 - - - 1,496 200 200 99 - - - 299 Office rehabiliation /b m2 - 120 - - - 120 200 - 24 - - 24 Rehabilitation of Inmgaton Systems /c LS - 240 - - - 240 1,000 - 240 - - - 240 Field levelling /d LS - 30 - - - 30 1,000 - 30 - - 30 Subtotal Chvi Works 200 393 - - 593 B. Vehicles Double cabin pick-ups unit 4 - - - - 4 20,000 80 - - - - 80 LargenWU& tui - 4 - - - 4 40,000 - 160 - - - 160 Motorcydes unit 10 9 - - - 19 1,500 15 14 - - - 29 Tractors with Equipment unit 6 7 - - - 13 60,000 360 420 - - - 780 Subtotal Vehicles 455 594 1,049 C. Equipment Office Equipment unit - 30 - - - 30 AirDryer unit 10 - - - - 10 1,000 10 - - - - 10 Imgaton equipment indcpumps unit 50 20 - - - 70 Seed processing and drying /e unit 50 850 152 - - 1,052 Laboratory equipment unit - - 42 - - 42 Subtotal Equipment 110 900 194 - - 1,204 D. TraIning Certificate in Seed Technology, overseas unit - 1 1 2 - 4 10,000 - 10 10 20 - 40 Local Training unit 6 - - - 7 13 2,000 12 - - - 14 26 Subtotal Training 12 10 10 20 14 66 E. Technical Assistance Seed Industry Specialist LS 1 - - - 1 15,00O 15 - - - - 15 Seed Production Technician LS 12 - 12 12,000 144 - - - - 144 Subtotal Technical Assistance 159 159 Total Investment Costs 936 1,897 204 20 14 3,071 11. Recurrent Costs A. Training Allowances Seniorcounterparts month 72 72 72 72 72 360 200 14 14 14 14 14 72 Seedlaboratorytechnicians month 24 24 24 24 24 120 125 3 3 3 3 3 15 Seed farm technicians LS 96 96 96 96 96 480 70 7 7 7 7 7 34 Seedfarmlabourers month 144 144 144 144 144 720 50 7 7 7 7 7 36 Subtotal Training Allowances 31 31 31 31 31 157 B. Iravel Alowances unit 6 6 6 6 6 30 C. Office Operating Expenses Central Office unit 2 2 2 2 2 10 Seed Laboratory unit 2 2 2 2 2 10 Seed Farms LS 2 5 5 5 5 20 Subtotal Offtce Operating Expenses 5 9 9 9 5 40 D. 0 & M Vehicles 6 Equipment Central Office LS - 2 2 2 2 6 Seed laboratory O&M LS 0 0 0 0 1 Seed Farm O&M LS - 7 14 14 14 49 Fuel for Seed Farms LS - 5 5 5 20 Subtotal 0 & M Vehicles & Equipment 14 21 21 21 76 E Other Seed Farm Operabng Expenses unit 45 45 - - - 90 Total Recurrent Costs 6s 105 67 67 67 393 ( (D Total 1,024 2,001 271 87 81 3,463 X 0 la 648 m2 each at Dey Eth and Kep Srau, 254 m2 Chamkar Leou l 40 m2 at Kap Srau, Toul Samrong and Chamkar Leou vc At Dey Eth ($10,000) Kap Srau ($90000) Toul Samrong ($ 100,000) and Chamkar Leou ($50,000) t. vd At Kap Srau ($10000) and Toul Samrong ($20,000) bs For two seed farms  Royal Govemment of Cambodia Agricultural Productivity Improvement Project Table 5. Plant Protection Service Establishment /a Detailed Costs (US $) Quantities Base Cost ('000) Unit 1997 1998 1999 2000 2001 Total Unit Cost 1997 1998 1999 2000 2001 Total I. Investment Costs A. Vehicles Double cabin pick-up unit 2 - - - - 2 20,000 40 - - - - 40 Motorcycles unit 10 - - - - 10 1,500 15 - - - - 15 Subtotal Vehicles 55 55 B. Equipment Office Equipment/b unit 32 - - - - 32 Communication Equipment /c unit 50 - - - - 50 Laboratory Equipment /d unit - 200 - - - 200 Agricultural Equipment LS 60 - - - - 60 Subtotal Equipment 142 200 - - - 342 C. Training Local Training unit - 3 3 3 3 12 2,000 - 6 6 6 6 24 D. Technical Assistance Plant Protection Specialist month - 12 12 - - 24 15,000 - 180 180 - - 360 w Pesticides Lab Technician month - 6 6 - - 12 10,000 60 60 - - 120 Subtotal Technical Assistance - 240 240 - - 480 Total Investment Costs 197 446 246 6 6 901 II. Recurrent Costs A. Training Allowances /e LS 13 19 19 19 19 90 B. Travel Allowances unit 3 13 13 13 13 53 C. Office Operating Expenses unit 2 2 2 2 2 10 D. Laboratory Operating Expenses unit - 2 5 5 5 17 E. 0 & M Vehicles & Equipment unit 4 7 15 15 15 56 Total Recurrent Costs 21 43 54 54 54 225 Total 218 489 300 60 60 1,126 \a exduding IPM \b induding computer, printer & photocopier \c includes faxes, radios, mobile telephones for central & provincial Plant Protection offices & staff \d for the central Plant Protection Laboratory \e 4 counterparts + 4 junior staff for 5 years, and 4 laboratory technicians ($1 500/staff-yr) for 4 years (D (D t4 : H 0 F-h  Royal Govemment of Cambodia Agrcultural Productivity Improvement Project Table 6. Integrated Pest Management Program Detailed Costs (US $) Quantities Base Cost ('000) Unit 1997 1998 1999 2000 2001 Total Unit Cost 1997 1998 1999 2000 2001 Total I. Investment Costs A. Vehicles Double cabin pick-up unit 2 - - - - 2 20,000 40 - - - 40 Motorcydes /a unit 20 20 20 - 60 1,500 30 30 30 - - 90 Subtotal Vehicles 70 30 30 - - 130 B. Equipment Office Equipment /b unit 14 - - - 14 Communication Equipment /c unit 5 - 5 Audio-Visual Equipment /d unit 20 - - - - 20 Subtotal Equipment 39 39 C. Training 1. Training of Trainers TOT activities unit 1 1 1 - - 3 40,000 40 40 40 - - 120 National IPM Workshops unit - 1 1 1 - 3 4,500 - 5 5 5 - 14 Study Toum for IPM Trainers /e LS - 1 1 1 - 3 5,000 - 5 5 5 - 15 Subtotal Training of Trainers 40 50 50 10 - 149 2. Farner Field Schools I FamnerFieldSchools unit 40 95 160 190 190 675 600 24 57 96 114 114 405 Innovation Fund for foilow-up activities if LS 1 2 3 4 3 13 P. Subtotal Fanmer Field Schools 25 59 99 118 117 418 Subtotal Training 65 109 149 128 117 567 D. Technical Assistance IPM Spedaiist /g month 12 12 12 12 12 60 - - - - - Total Investment Costs 174 139 179 128 117 736 II. Recurrent Costs A. Training Allowances National IPM Coordinators (1+2) month 36 36 36 36 36 180 200 7 7 7 7 7 36 Nafional IPM Program Trainers (4) month 48 48 48 48 48 240 150 7 7 7 7 7 36 Provincial IPM Coordinators(IO) month 60 60 96 120 120 456 100 6 6 10 12 12 46 ProvincialIPMTrainers/h month 180 540 720 1,080 1,080 3,600 100 18 54 72 108 108 360 Subtotal Training Allowances 38 74 96 134 134 478 B. TravelAllowancesfi unit 27 57 75 107 107 373 150 4 9 11 16 16 56 C. Office & Miscellaneous Expenses unit 13 14 17 17 17 77 D. 0 & M Vehicles & Equipment Vehides unit 2 2 2 2 2 10 3,500 7 7 7 7 7 35 Motorcydes unit 15 30 45 45 45 180 350 5 11 16 16 16 63 Equipment unit - 1 1 1 1 4 3,000 - 3 3 3 3 12 Subtotal 0 & M Vehicles & Equipment 12 21 26 26 26 110 Total Recurrent Costs 67 117 150 193 193 721 Total 241 255 329 321 310 1,456 va for provincial co-ordinators and famner trainers Q s vb indudes computer (2) & printer, photocopier, etc LD tD \c indudes fax, mobile telephone, etc \d indudes video camera, television set, projector & screen i' ve For tan people - in the region o Xf Funds to encourage innovative field studies by FFS graduates th \g To be financed by FAO \h Number of Trainers: 15,45,60,90,90 \i For IPM trainers & coordinators at all levels @ $150 per year per person  Royal Govemment of Cambodia Agricultural Productivity Improvement Project Table 7. Disease Control & Management Support Services - Animal Production Office & Support to DAHP /a Detailed Costs (US $) Quantities Base Cost (000) Unit 1997 1998 1999 2000 2001 Total Unit Cost 1997 1998 1999 2000 2001 Total I. Investment Costs A. Equipment Computer (1). printer (1) & software unit 1 - - - - 1 6,000 6 - - - - 6 Computer (2), printer (1) & software unit 1 - - - - 1 11,000 11 - - - - 11 Fax & communicaions equipment unit 1 - - - 1 5,000 5 - - - - 5 Photocopier /b unit I - - - - 1 3,000 3 - - - - 3 Office fumiture LS 1 - - - - 1 5,000 5 - - - - S Aircondibioner unit 3 3 750 2 - - - - 2 Subtotal Equipment 32 - - - - 32 B. Double cabin pick-up /c unit 3 3 3 20,000 60 - - - - 60 C. DAHP Oflice building repair /d m2 360 - - - - 360 25 9 - - - - 9 D. Feed resources and management study month 3 1 1 1 6 15,000 45 15 15 15 - 90 E. Overseas Training le StudyTours-STI person/week 2 2 2 2 2 10 2,140 4 4 4 4 4 21 Conferences-ST2 personA/eek 1 1 1 1 1 5 2,140 2 2 2 2 2 11 Training Courses - ST3 personANeek 1 1 1 1 1 5 2,140 2 2 2 2 2 11 Subtotal Overseas Training 9 9 9 9 9 T1 F. Local Training Project startup workshop LS 1 - - - - 1 12,000 12 - - - - 12 t Management training Ml LS 1 1 - - - 2 4,000 4 4 - - - 8 Technical workshop - TW1-5 unit 1 1 1 1 1 5 4,000 4 4 4 4 4 20 Subtotal Local Training 20 8 4 4 4 40 G. Technical Assistance Central Adviser month 6 12 - - - 18 15,000 90 180 - - - 270 Total Investment Costs 265 212 28 28 13 544 II. Recurrent Costs A. Training allowances APOflice Coordinator month 12 12 12 12 12 60 170 2 2 2 2 2 10 National Coordinator month 12 12 12 12 12 60 200 2 2 2 2 2 12 Assistant (AcctVFin/Adm) month 12 12 12 12 12 60 150 2 2 2 2 2 9 Assistant (Tech, M&E) month 12 12 12 12 12 60 150 2 2 2 2 2 9 Drivers month 36 36 36 36 36 180 60 2 2 2 2 2 11 Secretary month 12 12 12 12 12 60 60 1 1 1 1 1 4 Subtotal Training allowances 11 11 11 11 11 SS B. Incremental Operating Expenses Travel allowances /f LS 4 4 4 4 4 20 2,000 8 8 8 8 8 40 Office matenals /g LS 1 1 1 1 1 5 2,400 2 2 2 2 2 12 Vehicdeoperation&maintenance unit 3 3 3 3 3 15 3,500 11 11 11 11 11 53 Utilibies&buildingmaintenance LS 1 1 1 1 1 5 10,000 10 10 10 10 10 50 Office supplies LS 1 1 1 1 1 5 600 1 1 1 1 1 3 Subtotal Incremental Operating Expenses 32 32 32 32 32 158 Total Recurrent Costs 42 42 42 42 42 212 Total 307 254 70 70 55 756 X (D \a Support to DAHP includes senior management, the regional coordinator, HRD, library & publications; and the admin/planning/tinance/personnel sections inder the V-D Admin. _X \b In library / publications unit \c One vehicle is for the regional coordinator based at provincial centre 0 \d repairs & rehabilitabon for old building Xe Codes correspond to those in project document. Trainings not costed are essentially in-house'. N Xf Including accommodation for staff travelling outside Phnom Penh. \9 $50 / month for DAPH, Library/publications, HRD & regional coordination.  Royal Govemment of Cambodia Agricultural Productivity Improvement Project Table 8. Disease Controi & Management Support Services - National Animal Health & Production Centre Detailed Costs (US $) Quantities Base Cost ('000) Unit 1997 1998 1999 2000 2001 Total Unit Cost 1997 1998 1999 2000 2001 Total 1. Investment Costs A. Laboratory & Office bulding /a m2 750 - - - - 750 300 225 - - - - 225 B. Vehbhics Doublecabin pick-ups unit 2 - - 2 20.000 40 - - - 40 C. Equlpnmnt Laboratory equipment/b LS I - - - - 1 100,000 100 - - - - 100 Aircondiwoner unit 12 - - - 12 750 9 - - 9 Computer, printer & software unit 3 - - - - 3 6,000 18 - - - - 18 Photoopier unit 1 1 3,000 3 3 Office fumiture LS I - - 1 9,000 9 - - - - 9 Subtotal Equipnmnt 139 - - - 139 0. Overseas Training Laboratory proceduresfellowships LU-1 LS 4 4 - - - 8 4,000 16 16 - - - 32 Laboratory management fellowship LU-2 LS I - - 1 4,000 4 - - - - 4 Epidemiology scholarship FU-1 LS 0.5 1 - - - 1.5 30,000 15 30 - - - 45 Subital Oveme" Training 35 46 - - - 81 E. Technical Assistance LaboratoryAdviser/c month 6 9 - - - 15 15,000 90 135 - - - 225 F. Studies Epidemiology specialist unit 6 3 2 1 - 12 15,000 90 45 30 15 - 180 Total Invesment Costa 619 226 30 15 - 890 II. Recurrent Costa A. Training allowances Manager month 12 12 12 12 12 60 170 2 2 2 2 2 10 Engineers (10) month 120 120 120 120 120 600 150 18 18 18 18 18 90 Technicians(11) month 132 132 132 132 132 660 100 13 13 13 13 13 66 Drivers month 12 24 24 24 24 108 60 1 1 1 1 1 6 Subtotal Training allowances 34 35 35 35 35 173 B. Incrmental Operating Expenses Utidities & bulding maintenance LS 1 1 1 1 1 5 10,000 10 10 10 10 10 50 Vehicle O&M unit 2 2 2 2 2 10 3,500 7 7 7 7 7 35 Laboratory supplies /d LS 1.5 1 1 1 1 5.5 41,000 62 41 41 41 41 226 Office supplies LS 1 1 1 1 1 5 2,000 2 2 2 2 2 10 Travel aDowances le LS 1 1 1 1 1 5 4,320 4 4 4 4 4 22 Subtotal Incremntal Operating Expenses 85 64 64 64 64 342 Total Recurrent Costa 119 99 99 99 99 515 Total 738 325 129 114 99 1,405 b To house the NAHPC (lab, epidemiology,admin sections, and a lecture theatre). Q : \b See attached table for breakdown provided by DAHP ID M vc Should assist at the VPL (10%) and NAHPC (90%) 0o vd See attached table for breakdown provided by DAHP. S20K included in year 1 for retroactive financing for CWS. H \e 6 staff in epidemiology unit and 2 drivers, 15 days/month @