Uganda - Second Agricultural Research and Training Project (ARTP II)

Document of The World Bank ReportNo: 19144-UG PROJECT APPRAISAL DOCUMENT ON A PROPOSED CREDIT IN THE AMOUNT OF SDR 19.1 million (US$26.0 MILLION EQUIVALENT) TO THE GOVERNMENT OF UGANDA FOR A SECOND AGRICULTURAL RESEARCH AND TRAINING PROJECT (ARTP II) April 9, 1999 Rural Development Operations Eastern and Southern Africa Africa Region  CURRENCY EQUIVALENTS (Exchange Rate Effective at Negotiations) Currency Unit = US$ = UShl,350 WEIGHTS AND MEASURES Metric System FISCAL YEAR July 1 - June 30 ABBREVIATIONS AND ACRONYMS ADC Agricultural Development Center ARDC Agricultural Research and Development Center ARDF Agricultural Research and Development Fund ARIS Agricultural Research Information System CAS Country Assistance Strategy CAEC Continuing Agricultural Education Center (MU) DANIDA Danish International Development Agency DAR Directorate of Animal Resources (MAAIF) DCR Directorate of Crop Resources (MAAIF) DFI District Farm Institutes DFID Department for International Development (formerly ODA) EU European Union FORI Forestry Research Institute (NARO) GOU Government of Uganda GON Govemment of the Netherlands JICA Japanese International Cooperation Agency IDA International Development Association MAAIF Ministry of Agriculture, Animal Industry and Fisheries MFPED Ministry of Finance, Planning and Economic Development MGLSD Ministry of Gender, Labor and Social Development MU Makerere University NARO National Agricultural Research Organization PIP Project Implementation Plan PPF Project Preparation Facility PPRC Program Planning and Review Committee (NARO) UNFA Uganda National Farmers' Association USAID United States Agency for International Development Vice President: Callisto Madavo Country Director: James W. Adams Sector Manager: Sushma Ganguly Team Leader: Edgardo Quisumbing  Uganda Agricultural Research and Training Phase II CONTENTS A: PROJECT DEVELOPMENT OBJECTIVE .................... ................................................... 2 1. PROJECT DEVELOPMENT OBJECTIVE AND KEY PERFORMANCE INDICATORS (SEE ANNEX 1): ........................... 2 B: PROJECT DESCRIPTION SUMMARY ....................................................................... 4 1. PROJECT COMPONENTS ....................................................................... 4 (SEE ANNEX 2 FOR A DETAILED DESCRIPTION AND ANNEX 3 FOR A DETAILED COST BREAKDOWN): .. 4 2. KEY POLICY AND INSTITUTIONAL REFORMS SUPPORTED BY THE PROJECT: ......................... ............................. 5 3. BENEFITS AND TARGET POPULATION: ....................................................................... 6 4. INSTITUTIONAL AND IMPLEMENTATION ARRANGEMENTS: ....................................................................... 6 C: STRATEGIC CONTEXT ....................................................................... 9 1. SECTOR-RELATED COUNTRY ASSISTANCE STRATEGY (CAS) ....................................................................... 9 2. MAIN SECTOR ISSUES AND GOVERNMENT STRATEGY: ....................................................................... 9 3. SECTOR ISSUES TO BE ADDRESSED BY THE PROJECT AND STRATEGIC CHOICES: ............................................. 10 D: PROJECT RATIONALE ....................................................................... 11 1. PROJECT ALTERNATIVES CONSIDERED AND REASONS FOR REJECTION: .......................................................... 11 2. MAJOR RELATED PROJECTS FINANCED BY THE BANK AND/OR OTHER DEVELOPMENT AGENCIES: .................. 11 3. LESSONS LEARNED AND REFLECTED IN PROPOSED PROJECT DESIGN: .............................................................. 12 4. INDICATIONS OF BORROWER COMMITMENT AND OWNERSHIP: ....................................................................... 13 5. VALUE-ADDED OF BANK SUPPORT IN TSHS PROJECT: ......................................... ............................... 13 E: SUMMARY PROJECT ANALYSIS (SEE ANNEX 8) ....................................................................... 14 1. ECONOMIC ....................................................................... 14 (SUPPORTED BY ANNEX 4): ........................................................................ 14 2. FINANCIAL ....................................................................... 14 3. TECHNICAL: ....................................................................... 15 4. INSTITUTIONAL: ....................................................................... 16 5. SOCIAL: ....................................................................... 16 6. ENVIRONMENTAL ASSESSMENT: ........................................................................ 16 7. PARTICIPATORY APPROACH: ....................................................................... 17 F: SUSTAINABILITY AND RISKS ....................................................................... 18 1. SUSTAINABILITY ....................................................................... 18 2. CRITICAL RISKS ....................................................................... 18 3. POSSIBLE CONTROVERSIAL ASPECTS: ....................................................................... 19 G: MAIN LOAN CONDITIONS ....................................................................... 19 1. EFFECTIVENESS CONDITIONS: ....................................................................... 19 H. READINESS FOR IMPLEMENTATION ....................................................................... 19 I. COMPLIANCE WITH BANK POLICIES ................... .................................................... 20  Annexes Annex 1. Project Design Summary Annex 2. Detailed Project Description Annex 3. Estimated Project Costs Annex 4. Cost-Benefit Analysis Summary Annex 5. Financial Summary Annex 6. Procurement and Disbursement Arrangements Table A. Project Costs by Procurement Arrangements Table Al. Consultant Selection Arrangements Table B. Thresholds for Procurement Methods and Prior Review Table C. Allocation of Loan Proceeds Annex 7. Project Processing Budget and Schedule Annex 8. Documents in Project File Annex 9 Concept Note on Relevant Research and Extension Annex 10. Statement of Loans and Credits Annex 11. Country at a Glance Map No. IBRD 29987  Uganda Agricultural Research and Training Phase II Project Appraisal Document Africa Regional Office Date: Country Director: James W. Adams Task Team Leader: Edgardo Quisumbing Sector Manager: Sushma Ganguly Project ID: PE-59127 Program Objective Category: Environmentally Sustainable Sector: Agriculture Development Lending Instrument: Sector Investment and Maintenance Loan Program of Targeted Intervention: Yes [x ] No Project Financing Data [ Loan [x] Credit [I Guarantee [ ] Other] For Loans/Credits/Others: Amount (US$m/SDRm): US$ 26 million/SDR 19.1 million Proposed terms: [x] Multicurrency [ Single currency, specify Grace period (years): 10 [] Standard Variable [] Fixed [ LIBOR-based Years to maturity: 40 Commitment fee: 0.5 % Service charge: 0.75 % Financing plan (US$m): Source Local Foreign Total Government 20.0 20.0 Cofinanciers 16.5 9.5 26.0 IDA 21.4 4.6 26.0 Total 57.9 14.1 72.0 Borrower: Government of Uganda Responsible agencies: Ministry of Agriculture, Animal Industry and Fisheries, Ministry of Finance, Economic Planning and Development, National Agnicultural Research Organization (NARO) Estimated disbursements (Bank FY/US$M): 1999 2000 2001 2002 2003 2004 2005 Annual 4 5 5 4 3 3 2 Cumulative 4 9 14 18 21 24 26 Project implementation period: 6 years Expected effectiveness date: 07/01/1999 Expected closing date: 12/31/2005  2 A: Project Development Objective 1. Project development objective and key performance indicators (see Annex 1): The proposed Agricultural Research and Training Project - Phase II (ARTP II) would be the second phase in a long-term program of assistance to agricultural research in Uganda and would continue to support technology development and dissemination, consistent with the Government's Policy on Poverty Eradication and the Plan for the Modermization of Agriculture (PMA). The development objectives of the project would be to increase the efficiency and productivity of the dominant crop, livestock, fisheries and forestry farming systems of Uganda; increase farm household income and improve family welfare; and enhance the management of natural resources for the protection of the environment. ARTP II would give increased emphasis to demand-driven, client-oriented research and promote the active participation of stakeholders, especially farmers and the private agribusiness sector, in research planning, implementation, and (beneficiary) impact assessment. The project will give priority to addressing the real problems of the farmers so that research is focused on specific constraints of a particular production system. During the first 2-3 years, the project would concentrate on moving on-the-shelf technologies existing at research institutes into farmers' fields. In addition, indigenous knowledge would be identified and disseminated as necessary. Examples of improved technologies and cultural practices which are available include: (a) improved cultural management of Matoke to reduce the harmful effects of the Sigatoka disease, banana weevil and nematodes, (b) the rapid multiplication of planting materials of many crops, e.g., mosaic resistant cassava cultivars, high yielding clonal coffee, high yielding disease resistant Irish potato and sweet potato varieties, through tissue culture and other techniques, (c) improved varieties of beans, sorghum, cassava, groundnuts, sunflower, cotton, (d) village level on-farm storage structures for maize and other food grains, (e) small farm implements designed for the smaller cattle of Uganda, e.g., the improved Ugandan plow; hand shellers, hand threshers, and mechanical weeders, and (f) improved agroforestry technologies and practices for harvesting, processing and utilizing products of conifer plantations. The National Agricultural Research Organization (NARO) would continue on-going high priority, adaptive research which address specific production constraints and have a high potential of producing significant benefits and impact, in a relatively short time. Diagnostic surveys of production constraints carried out with extension staff and farmers would determine the adaptive research program to be carried out in the districts. A campaign to widely disseminate and introduce improved technologies and cultural practices will be carried out under the outreach, extension and technology dissemination program involving the district extension service, farmers, NGOs, MAAIF and NARO. Some examples of technologies which are close to maturity and could be moved to on-farm trials for verification include: (a) superior varieties/cultivars of high yielding maize, sorghum, cassava, Irish potato, groundnuts, sweet potato, millet, Sigatoka resistant banana, (b) improved aquaculture practices, (c) pheromones baits for the biological control of banana weevils, (d) integrated pest management in cotton, and (e) biological control of water hyacinth. Other research areas to be supported by the project will be identified during a series of district and national level consultations between NARO and all the stakeholders of agricultural research. The specific objectives of the project would be to: (a) transfer relevant technologies and indigenous knowledge, and improved cultural practices to farmers' fields, and promote their adoption, (b) ensure that technologies being developed are addressing actual problems of farmers, (c) establish and operate the Agricultural Research and Development Centers (ARDCs), (d) reinforce NARO's technical and in-service training support for the district-level extension services; and (e) strengthen NARO's effectiveness and efficiency in technology transfer, including smallholder seed production and distribution systems, integrated pest management, and soil fertility and management. The project would also: (f) provide  3 bridging finance for the design the proposed Agricultural Extension Project (AEP II), including pilot activities to test modalities to improve technical support for the decentralized extension services. The number of technologies developed and transferred to farmers will be given a higher weight in evaluating performance of researchers. Key performance indicators have been identified to measure project inputs, outputs, performance, and impact, such as increased adoption rates, yield increases and incomes of farmers (see Annex 1). These key performance indicators will be reviewed during a series of national consultations and may be revised as necessary.  4 B: Project Description Summary 1. Project components (see Annex 2 for a detailed description and Annex 3 for a detailed cost breakdown): Cost + % of Bank- % of Bank Project Components Category Cont. Total financin financing (US$M) g (US$M) (a) Technology Development and Adaptation. Physical, 24.3 34 6.6 27 The project will support: (i) on-going, adaptive Institution research which address specific problems of building dominant production systems, (ii) adaptive (INS) and research to respond to serious emerging project problems, and (iii) establishment of an ARDF to manage- support a competitive research grants scheme. ment (PM) ARTP II would finance recurrent expenditures, short-term training, procurement of goods and services, civil works for repair and maintenance of research institutes and construction of one research institute. (b) Outreach, Extension and Technology PM and 15.9 22 6.1 38 Dissemination. ARTP II would give priority to physical dissemination and adoption of existing on-the- shelf technologies through a partnership with extension and other stakeholders. The project would demonstrate these technologies in farmers' fields and promote their adoption. The project would finance procurement of goods, services and civil works, short-term training and incremental recurrent costs. (c) Institutional Development. The project will INS, PM 31.8 44 13.3 42 support the: (i) transformation of NARO into a and research and development institution to highlight physical its role to promote transfer and adoption of improved technologies, (ii) updating of the National Agricultural Research Strategy and Plan of 1991; and (iii) strengthening of NARO's capacity for economic and impact analysis of research results. ARTP II will finance short-tenn training, recurrent expenditures, including staff emoluments, procurement of goods and services, and civil works for the rehabilitation of the NARO Secretariat headquarters. Total 72.0 100 26.0 36  5 2. Key policy and institutional reforms supported by the project The project would provide some support for institutional development and reforms of the national agricultural research system to transform NARO into a research and development institution, giving greater attention to the transfer and adoption of superior technologies. During the first year, the main activity of the project would be to update the National Agricultural Research Strategy and Plan of 1991, strengthening NARO's capacity to monitor, evaluate and determine economic impact of improved technologies, develop and implement a process for evaluating performance of NARO and its staff, and refine the implementation strategy for the outreach, extension and technology dissemination program. National and district level consultations will take stock of the priority constraints of the dominant production systems of Uganda, and whether technologies to address these constraints already exist, are under development, and what important problems loom in the future. These consultations will be followed by the launching of a campaign to transfer improved technologies that already exist (on-the- shelf) and indigenous technologies which show superior performance over farmers' practices, into farmers' fields to increase production and incomes. The project would assist the Government in decentralizing research to the country's nine agro-ecological zones over the next 5-10 years, thus bringing researchers closer to the intended beneficiaries and stakeholders. Eight ARDCs will be established involving the rehabilitation of (i) six existing District Farm Institutes, and (ii) an existing DFI at Serere. The ARDCs will, in time, have a zonal/agroecological mandate to improve production and incomes of dominant farming systems of the agroecological zones. As a result of this and other initiatives intended to secure stakeholder participation in research planning, implementation and program reviews, the project would promote a client-oriented and demand-driven adaptive research agenda. The Concept Note on relevant research and extension (Annex 9) lays out a structure for technology development and transfer to the districts/sub-counties. This structure will be regularly evaluated and improved as necessary during the implementation of the project. Conditional grants from the Government would be provided to the districts, upon the advice of NARO, to access or contract for technical assistance, training and other services from any institution which can best provide the services, as well as to contribute to the operating costs for technology development and transfer to the districts. NARO's outreach program for effective technology transfer would be intensified through the appointment of a Deputy Director General (DDG) who will be in charge of Outreach and Technology Dissemination. The DDG will be supported by a fully staffed Outreach, Extension and Technology Dissemination Unit (OU) in the NARO Secretariat. The DDG for Outreach and Technology Dissemination will have overall responsibility for the outreach programs of the 8 ARDCs and of all the research institutes and national coordination of technical support and training for the extension programs of the districts and the sub-counties. The Project will support the active involvement of Makerere University in research through the Agricultural Research and Development Fund (ARDF), and through in- service and continuing education training courses to update skills of agricultural professionals, e.g., agribusiness technicians, NGOs, subject matter specialists and other extension staff, researchers, and commodity groups.  6 3. Benefits and target population The direct benefits of the project would include: * a strengthened research and development program establishing durable linkages between researchers, extension workers and farmers focusing on a more client-oriented and demand- driven research agenda, * new, improved/superior technologies introduced and adopted by farmers, * more cost-effective agricultural research institutions capable of effectively addressing the priority problems and opportunities of farmers in major ecological zones of the country, * a better trained cadre of scientific and support personnel, and