Tanzania - Participatory Agricultural Development and Empowerment Project

PID THE WORLD BANK GROUP AWorld Froc of Povorty 414oShop 7hr 9WoxtJ 1A3nl; Report No AB38 Updated Project Information Document (PID) Project Name TANZANIA-Participatory Agricultural Development and Empowerment Project Region Africa Regional Office Sector General agriculture; fishing and forestry sector (70%); Sub-national government administration (30%) Project ID P067103 Supplemental Project Borrower(s) GOVERNMENT OF TANZANIA Implementing Agency MINISTRY OF AGRICULTURE AND FOOD SECURITY Address Address Kilimo l1l, P 0 Box 13798, Dar es Salaam, Tanzania Contact Person Simon Muro, Project Coordinator Tel (255-22) 286-2595 Fax. (255-22) 286-1936 Email simonmuro@raha.com Rural communities, farmers' groups, participating districts, commercial banks Address Contact Person Tel: Fax Email Environment Category B Date PID Prepared April 16, 2003 Auth Appr/Negs Date April II, 2003 Bank Approval Date May 27, 2003 1. Country and Sector Background Agriculture contributes about 50% of Tanzania's GDP, 75% of export earnings, and employs approximately 80% of the country's labor force. Approximately 3.5 million farm families cultivate about 4.5 million hectares of land. Most of these people are extremely poor and use low input/low output agricultural systems that lead over time to depletion of soil nutrients. Yields of the country's principal food crops are only 20% to 40% of the potential, and are currently stagnant or declining. Low productivity leads to a vicious circle of poverty, resource degradation, and food insecurity. Five key issues are relevant to the project's objectives and design: (i) Reforms over the last decade have created a good foundation for agricultural growth, but several factors have delayed a significant positive supply response and have increased risks. Removal of subsidies for agricultural inputs increased the costs and risks of higher yielding technologies in many parts of the country. As demand for inputs fell, retailers and traders exited from local input  2 PID markets and competition declined. Low volumes of trade and limited competition raised trading margins and reduced the profitability of purchased inputs to smallholder producers. The recent real appreciation of the Tanzanian Shilling has made export crops less competitive, and has highlighted the need to increase productivity. In order to avoid deepening poverty, smallholder farmers must adopt improved technologies that yield higher returns to all factors of production while at the same time preserving the quality of their main non-labor asset, land. The volume of activity and performance of rural markets must also improve, so that incremental output can be placed at profitable margins, and inputs purchased at competitive prices. (ii) Governmental officials are increasingly aware of the importance of farmers' participation in decisions regarding allocations of scarce funds for public investments. The growing number of successful experiences in Participatory approaches in Tanzania complement to the ongoing process of decentralization to the District level. Agricultural Sector Development Program (ASDP) aims at channelling approximately 75% of all public investments in agriculture through district councils. This would facilitate the work of district extension staff and the delivery of other support services to develop small, medium and large scale production and related enterprises. (iii) Degradation of natural resources, particularly land, is increasing in most regions of the country. Continuous cropping, non-replenishment of nutrients extracted from the soil, erosion by wind and water, and poor land husbandry practices contribute to depletion of the native fertility of soils and depress yields. The long term sustainability of agriculture on these lands is at serious risk. Farmers throughout the country complain of "soil exhaustion" as one of the most important problems they face. Deforestation in catchment areas has led to loss of ground cover, causing soil moisture losses and persistent drought. The need for better management of soil and water resources is therefore paramount. (iv) Smallholders seeking to improve their productivity and incomes need access to good advisory services The recent decentralization of the delivery of rural services, including agricultural extension, to district councils has launched a promising process of reform in dissemination of technology. Pluralism in provision of extension services, including the use of private service providers and NGOs, is slowly emerging. In the interim, however, neither research nor extension is capable without additional measures to provide the needed level of support to farmers. (v) The withdrawal of the state and parastatal entities from the provision of inputs, marketing of output, and supply of credit opens opportunities for a much expanded role for the private sector. Yet private agents in input supply and rural finance have found the terrain risky and have been very cautious in entry, in part because markets are thin, clients have little collateral, and costs of information are high. As a consequence, most smallholders have poor access to marketing and financial services needed for adoption of higher yielding technology. Government strategy: Government seeks to address these problems through an integrated and participatory approach that brings together all stakeholders in identifying the key problems, prioritizing the needs, and developing the strategies and technical solutions to address the challenges. The Participatory Agricultural Development and Empowerment Project (PADEP) is an integral part of the Agricultural Sector Development Program (ASDP) and the broader Rural Development Strategy (RDS). Government has completed the ASDP Framework and process Document which focuses on (i) empowering of rural communities and farmer groups, (ii) increasing agricultural productivity and access to markets, and (iii)  3 PID decentralizing public investments and involving the private sector in service delivery. PADEP will facilitate implementation of the ASDP along the agreed core principles. The overall objective of the Rural Development Strategy is to reduce poverty through multi-sectoral interventions in agriculture, roads, water, education, health and local government reforms. The Strategy will harmonize and coordinate key sector policies and strategies. The Rural Development Strategy will be implemented within the framework of decentralization and will rely on operational mechanisms that empower rural communities in planning and implementing development projects. The PADEP project will build on the "Vision for Extension for 2010," the articulation of the Government's approach to extension and the "Medium Term Plan" for the National Agricultural Research System (NARS), which highlights the need for generation and adoption of technology within the ASDP framework. To achieve the ASDS objective of 5 percent annual agricultural growth, the Government intends to maintain macro-economic stability and ensure that macro-economic policies (both fiscal and monetary) promote efficiency and competitiveness of the agricultural sector; create an enabling environment for improving profitability of the sector; increase smallholder productivity (through promotion of adoption of improved technologies); facilitate increased availability of key inputs (especially improved seeds and fertilizers); assist smallholders to improve their access to credit (through strengthening rural financial institutions); maintain competitiveness in agricultural exports (by removing external trade barriers); enhance the efficiency and sustainability of land utilization (through promotion of better land husbandry practices); and improve incentives for the private sector (through fiscal policy and better business environment). The Government's role will be limited to policy formulation, establishment of a regulatory framework to reduce transaction costs, provision of strategic public goods, and maintenance of safety nets for the most vulnerable in the society. Further, the Government intends to ensure that it does not undertake delivery of goods and services that the private sector is able to provide efficiently and effectively. 2. Objectives The project seeks to raise the production of food, incomes, and assets of participating households and groups in about 840 villages in a sustainable manner through the implementation of small agricultural development sub-projects planned and managed by community members and farmers groups. This objective will be achieved by: (i) empowering self-selected rural communities and farmers' groups to make decisions regarding choice of sustainable and remunerative productive technology; (ii) sharing of costs by the public sector and participants, and hence sharing the risk of adoption of improved technologies, again for self-selected participants; (iii) enhancing demand for products and services provided by the private sector in rural areas by increasing the purchasing power of participating groups and encouraging the growth of savings; (iv) promoting improved land and crop husbandry practices by participants; (v) supporting the ongoing decentralization process at the district level; and (vi) partially financing maintenance and/or construction of roads, bridges, and other small sub-projects to improve access to markets.  4 PID 3. Rationale for Bank's Involvement The Bank has contributed to the re-orientation of the project, from one focused on the supply of technology and over-reliance on Governmental structures for service delivery to one focused on the demand side, strengthening rural communities and farmer groups, and developing capacity at the district level. Project design has benefitted greatly from best-practice experiences in community-driven approaches to rural development from other countries and regions. The Bank brings international lessons and experiences from implementing CDD projects in East, Central and West Africa, and Latin America. In Africa, the Bank has accumulated experience in launching, implementing and supervising subprojects, including social funds-type projects (TASAF and MASAF) and has the community-based procurement experience. The experience gained in management and channeling of funds through block grants, against development plans prepared by communities and local authorities, will be critical to the success of PADEP. The Bank has contributed to the PRSP process and is currently preparing PRSC to support the Government in its initiatives to reduce poverty. IDA's support to PADEP will sustain the present good collaboration with other major development partners and make a significant contribution to the goals of the PRSP, particularly in the development of community driven initiatives and the decentralization of decision making and service delivery. In addition, IDA can provide continuity of support to scale up PADEP operations upon successful implementation of the first phase. The Bank has on-going projects in the agricultural sector (TARP 11, NAEP II and RBMSIIP) and in other sectors of the Tanzanian economy that can contribute technical solutions and facilitate institutional linkages with line ministries. For example, PADEP can benefit from efforts under TARP 11 to generate improved technology, from NAEP 1I in decentralized delivery of extension services, and from RBMSIIP in improved efficiency of use of water for irrigation. TASAF provides opportunities for communities to invest in sub-projects that improve delivery of services, thus allowing PADEP to focus on sub-projects intended to improve incomes directly. 4. Description The project has two components: (i) Community Agricultural Development Sub-projects; and (ii) Capacity Building and Institutional Strengthening. The total project cost is estimated to be US$ 69.99 million equivalent, of which IDA will finance US$ 56.58 million, beneficiaries will contribute US$ 1 ].82 million, and Government (national and district councils) will provide US$ 1.59 million. The project comprises of the Agricultural Development Subprojects, benefiting either the community at large, of a village (Community Subprojects) or a group of farmers in a village (Farmer Group Subprojects) and complimentary Institutional Strengthening and Capacity Building Program at the district and community and national level. The subprojects will cover all aspects of community development initiatives such as identification, design, implementation, monitoring and evaluation using participatory approaches. The Capacity Building Program at the local level will cover identification, preparation and implementation of a capacity building program to support the community initiatives. The Capacity Building Program at the national level will cover aspects of Policy Planning and Regulatory Mechanism, Technology Linkages and Capacity for Project Implementation. Component 1: Community Agricultural Development Sub-projects This project component will consist of (a) Community Investment Sub-projects (CIS); and (b) Farmer Group Investment Sub-projects (FGIS). The aim of this component is to empower rural communities and farner groups to make decisions to improve their economic well-being and to act on them. Communities and organized farmers' groups will have the primary responsibility for using  5 PID participatory approaches in implementing small-scale investment activities supported by the project, including identification and planning of subprojects, implementation of technical recommendations, local procurement of inputs, contracting of service providers and monitoring and evaluation. The project will build capacity of local authorities, communities and farmers' groups by conducting tailor-made basic training in participatory methodologies (PRA), sub-project cycle, basic financial and procurement skills, participatory monitoring and evaluation (PM&E), environmental and social assessments, and HIV/AIDS awareness and prevention. A community is defined as a single village, or a significant portion thereof, with a common investment interest. Thus a community sub-project will be any investment, that draws public interest and brings common benefits. A "Farmer Group" is defined as a small group (10 - 40 households) of the same village in which members have voluntarily agreed, with endorsement of their Village Council, to engage in an investment sub-project that introduces technological innovation. Possible sub-projects include: soil fertility and better land management (watershed management for soil and water conservation, restoration of soil fertility using rock phosphate, conservation and no tillage techniques, and fuel efficiency technologies - biogas); agricultural investments and technologies (integrated plant nutrition strategy (IPNS), integrated pest management (IPM), rainwater harvesting, improvement of traditional schemes, production of non-traditional crops and improved livestock); and input-output marketing (production of organic fertilizers, primary processing of crop and livestock products, contract farming etc.). Criteria for approval of sub-projects will include gender balance, sustainability and empowerment of rural communities. In order to share risks involved in adopting new imiproved technologies, efforts of communities and farmers' groups will be complemented with direct transfers of financial resources to them (through local governments) on a matching-grant basis. This will allow them to shop and compare prices among several suppliers of goods and services needed to implement their sub-projects. Mechanisms for community-driven development will be introduced in a phased manner, to allow for improvements in the course of project implementation. Before implementing the sub-projects, each Village Council or farmer group will undergo a participatory planning process to identify opportunities key challenges and practical ways to overcome them. The sub-projects thus derived will then be costed and the implied share of the cost to the beneficiaries made clear. If the beneficiaries wish to undertake the project, it will be submitted for approval to the District Management Team (DMT) of the District Authority. With each participating community or farmers group, the cycle of sub-projects will unfold over three years. The initial year will be devoted mainly to capacity buildilg PRA, identification and preparation of the subprojects. The initial year will be devoted a village mainly to capacity building, PRA, and identification and preparation of the sub-projects. The second and third years will be devoted to implementation. For CIS, beneficiaries will contribute (labor, materials or in cash) at least 17% of total sub-project costs, excluding technical assistance and training and the project will contribute the difference up to a maximum of US$ 30,000 equivalent per village. Additionally the project will contribute 100% of the cost of technical assistance and training up to a maximum of US$ 5,000 equivalent. For FGIS, the project will contribute in cash 50% of the cost of consumable inputs (seeds, fertilizers, and plant protection chemicals) up to US$ 25 equivalent per household per year for a maximum of 2 years; a 80% of costs of technological innovations other than agricultural input and up to US$ 8,000 per village. In addition, the project will contribute 100% of the cost of technical assistance and training up to a maximum of US$ 3,000 equivalent. The total project contribution for CIS and FGIS subprojects per village will bc US$ 46,000 equivalent. Farmers participating in the group investment sub-projects will be required to have a savings account and deposit at least 50% of the cost of  6 PID consumable inputs to be purchased prior to receiving the matching contribution grant. At the end of the season they will be required again to deposit at least 50% of the value of inputs needed for the following season in order to qualify for another matching grant from the project. In this way farmers are expected to build savings habits required to purchase inputs for the following seasons and will be encouraged to build up relationship with financial institutions and input dealers. Component 2: Capacity Buildin2 and Institutional Strengthening This component enhances the institutional and human capacity to ensure that the sub-projects chosen are adequately considered in key dimensions, including environmental, economic, social, and project preparation, management and supervision and implemented with acceptable quality. In all participating districts the project will support training to upgrade capacities in participatory planning methodologies, project implementation, monitoring and evaluation, financial and procurement management skills, environmental and social assessments, and public-private partnership in service delivery. Staff of the district councils will also undergo training to enable them guide communities and farmers' groups as needed. Technical assistance will be provided in the preparation of District Agricultural Development Plans (DADPs), which are integral part of the overall District Development Plans (DDPs). Under this component conditional block grants to the districts will be in cash in the amount of US$ 175,000 equivalent for three years. The District Councils will contribute 10% of the grant (US$ 17,500 equivalent). Planning for the use of these funds will be the responsibility of the District Councils through the DMTs. Support of the project at national level will include funding for capacity building in key entities and for project preparation, management and implementation and additional analytical work to underpin ongoing reforms. The capacities of national institutions responsible for policy analysis, regulatory functions, and project preparation, management and implementation such as planning, monitoring and evaluation, and financial management will be strengthened through training, technical assistance and provision of required equipment. The project will also finance various policy studies aiming at reviewing, harmonizing and rationalizing agricultural taxes, levies and fees on crop and livestock sub-sectors. Other studies to be supported will cover surveys of sectoral performance and beneficiary assessments. The project will support further development and updating of the agricultural sector monitoring and evaluation system, and improvement of its management information system (MIS). In addition, the project will support the implementation of the Seed Act (1973) and the Plant Breeders Right Act (2002), which provide the regulatory framework for seed industry, including the establishment of Seed Executive Agency. The project will carry out the rehabilitation of four strategically located soil testing laboratories, provide the required laboratory chemicals and equipment, including soil-testing kits for on-site soil diagnosis. Finally, the project will finance the national coordination and facilitation unit operating costs. Zanzibar Component Whilst the decision to include Zanzibar came late, the Government of Zanzibar (GOZ) has submitted all the relevant project documents. The Zanzibar component design and implementation arrangements mirror those of the mainland. A preliminary review of project documents and discussing with the Zanzibar component preparation team on matter related to the implementation arrangements were done at appraisal. The Bank will complete appraisal of the Zanzibar component (US$ 3.5 million out of total project cost of US$ 69.99 million) by March, 2004. So far, broad agreement has been reached with GOT and GOZ on the institutional and implementation arrangements, and these will be  7 PID reflected in the Development Credit Agreement (DCA). The IDA disbursements for mainland and Zanzibar components will follow the NAEP 11 model with two separate Special Accounts. The Zanzibar islands (Unguja and Pemba) will during the first year of the project undertake the Capacity Building Program, and begin the detailed preparation of its Agricultural Development Plans for implementation in the second year of the project. It will be a condition of disbursement that the Agricultural Development Plans and the Capacity Building Programs are prepared and cleared by the Bank. The overall institutional and implementation arrangements have been prepared and appraised. Grant allocation for the districts in Zanzibar for the Agricultural Development Subprojects have been estimated at an equivalent of US$ 2.8 million and for the Capacity Building Program at US$ 0.7 million. The grant ceiling for each subproject will not exceed the ceiling for the mainland districts. The funds allocated for capacity building will cover requirements at the level of the districts and at MANREC. A detailed Project Operational Manual (POM), including Guidelines for the Preparation and Implementation of the Subprojects, a Project Implementation Plan (PIP) and the Annual Work Program and Budget (AWP&B) for the first year of the project (FY 2004) have been prepared by the Government of Zanzibar. These documents have been reviewed and steps to finalize them have been agreed at appraisal. The adoption of the POM and the PIP and the AWP&B for FY 2004 by the Zanzibar Project Steering Committee will be a condition of disbursement against the Zanzibar component. 5. Financing Total (US$m) BORROWER $1.59 IBRD IDA $56.58 LOCAL COMMUNITIES $11.83 Total Project Cost $69 99 6. Implementation Implementation period The Agricultural Sector Development Program (ASDP) provides the overall framework for project implementation. The project is primarily a mechanism for mobilizing finance for implementing ASDP "Sub-program A" (Agricultural Sector Support and limplementation at District and Field Level), in particular Component A. 1 (Investment and Implementation), which will also be supported by initiatives of other donors, including DANIDA, JICA, EU, IRISH AID, FAO, NORAD, AfDB and IFAD. The project will be implemented over the period of five (5) years. Executing agencies Implementing agencies are envisaged at the national, district and village level. At the village level, the community/farmer groups, through their elected Community/Farmer Group Subproject Committees, will be responsible for preparing and implementing the Agricultural Development Subprojects. The elected subproject committee shall have the representation of at least 40 percent women. Specific roles and responsibilities of the SC will include: (i) planning and implementing subprojects; (ii) mobilizing contributions from community/farmer group members; (iii) providing information to the community/farmer group on implementation progress; (vi) handling management of subproject funds and procurement; (v) seeking technical support from public agencies and private service providers; (vi) preparing and submitting monthly, quarterly and annual physical and financial reports to the Village Council (VC) for submission to the District Management Team (DMT); and (vii) seeking guidance on business decisions of the subproject during the process of project preparation.  8 PID At the district level, the District Executive Director (DED), assisted by the District Agriculture and Livestock Development Officer (DALDO), will be responsible for the project implementation. The DED will: (i) allocate resources to PADEP activities according to the approved annual work plan and budget; (ii) provide an accountant for PADEP operations in the district; (iii) set up agreed financial management procedures; (vi) open separate bank accounts for PADEP operations as required by the Project's financial management system and will be accountable for the funds received and released; (v) ensure the availability of the District's matching contribution towards its capacity building program; and (vi) procure project supplies according to the agreed procedures. The DED will appoint PADEP District Officer (PDO) to assist the DALDO on day-to-day activities in the field. At the national level, the Ministry of Agriculture and Food Security (MAFS), through its Directorates of Policy Planning (DPP), Crop Development (DCD), Research and Development (DRD), and the Project Coordination Unit (PCU) will be responsible for the coordination of the Institutional and Capacity Building Programs covering respectively: (i) Policy Planning and Regulatory Framework and Private Sector Performance (ii) Strengthening Technological Linkages and (iii) National Capacity Building for supporting project implementation. These MAFS directorates will be responsible for linking with other directorates/departments in other agricultural sector lead ministries. Project coordination A National Project Steering Committee (NPSC) has been established by the Government of the United Republic of Tanzania to coordinate the four agricultural sector ministries and Zanzibar. The agricultural sector lead ministries include the Ministry of Agriculture and Food Security (MAFS), the Ministry of Water and Livestock Development (MWLD), the Ministry of Cooperatives and Marketing (MCM) and the President's Office - Regional Administration and Local Government (PO-RALG). The NPSC has an oversight for ensuring that project activities are implemented in a manner consistent with the development objectives. Amongst the key functions of NPSC are to: (i) approve the DADP and the Project's Annual Work Program and Budget (AWP&B) for funding; (ii) approve subsequent amendments to the Project Operational Manual (POM) and Project Implementation Plan (PIP); (iii) provide smooth coordination and linkages between various sector ministries and PADEP; (iv) ensure consistence with sector policies and adherence to established norms and standards; (v) review quarterly and annual physical implementation and financial reports, and audit reports; (vi) oversee the process of recruiting key PCU staff through open competition; (vii) commission an independent team to undertake concurrent evaluation of the project; and (viii) articulate policies and ensure compliance during implementation. The NPSC is chaired by the Permanent Secretary, MAFS and has representation from other line ministries, farmer associations, private sector and the NGO community. A Project Coordinator, who is the Secretary to the NPSC, has also been appointed by the Government. The Coordinator of the Agricultural Sector Development Program (ASDP) secretariat and the Principal Secretary, MANREC in Zanzibar will be co-opted into the NPSC prior to Credit Negotiations. The Zanzibar Project Steering Committee (ZPSC) to be chaired by the Principal Secretary, MANREC will be appointed by the Government of Zanzibar. The ZPSC will be responsible for ensuring that Zanzibar component is implemented according to the project development objectives. A Project Technical Committee (PTC) has been established in the mainland, with responsibility for coordinating the provision of advisory services and technical backstopping to the Project. It is chaired by the Director Crop Development, MAFS, and comprises of heads of various technical departments of agricultural sector ministries and representatives from academic research institutions and independent authorities in the field of agricultural research, extension and policy. A parallel Project Technical Committee (PTC) will be established by the Government of Zanzibar.  9 PID The MAFS will have an overall responsibility for project coordination, including the overall management of the financial resources, monitoring and evaluation. For this purpose the MAFS has established a Project Coordination Unit (PCU) in the ministry. It is fully staffed with agreed terms of reference for core staff and an organogram. The staffing of the PCU is currently by MAFS staff, except for two positions for which there is no expertise in the ministry. These positions have been filled by consultants. A Project Coordinator (PC) heads the PCU, and is assisted by an Operations Officer, who is also the Deputy Project Coordinator. Other PCU staff include the Financial Manager, Community Agricultural Development Officer, Monitoring and Evaluation Officer, Project Analyst, Procurement Specialist and Private Sector Officer. The Project will draw upon expertise available within the MAFS and National Resource Team (NRT) for other technical expertise. Assurance will be obtained at Credit Negotiations that the PCU will be maintained, adequately staffed through at least the first three years of the project, pending arrangements, determined at mid-term review, for mainstreaming the functions of the PCU within the MAFS or ASDP coordination. The PCU have the following responsibilities: (i) ensuring that PADEP operates according to the POM; (ii) initiating and supporting Project activities in participating districts; (iii) assisting PDOs and DFTs in enhancing capability in subproject identification, appraisal, implementation, monitoring and evaluation; (iv) reviewing the DADPs and submit to the NPSC for approval; (v) preparing and submitting to the NPSC a consolidated work program and budget; (vi) managing the project management information system; (vii) monitoring the compliance to budgetary ceilings and financial operations of the Districts; (viii) providing technical input for updating technical manuals and guidelines; (ix) reviewing fund withdrawals from Project account to Districts, and to the communities and farmer groups in order to ensure that they are within the allocation; (x) preparing and forwarding withdrawal applications to the Bank; (xi) preparing and submitting to the NPSC quarterly, semiannual, and annual reports on the physical and financial performance of Project; (xii) providing capacity building support to the districts; (xiii) approving the capacity building program and the subprojects for funding; (xiv) facilitating project audit at all levels; and (xv) interacting with the Bank and other donors on project matters. The Project Coordinator shall be responsible for day-to-day management of PADEP and ensure that Project activities are in line with the requirements of the Development Credit Agreement (DCA). The coordination of the project at the district level will be the responsibility of the District Council, through its existing District Management Team (DMT). The DMT, which consists of Heads of Departments and is chaired by the DED, will aggregate approved subprojects into the District Agricultural Development Plan (DADP). The later forms an integral part of the overall District Development Plan (DDP), which is approved by the District Council. The DMT will also be responsible for implementing their Capacity Building and Institutional Strengthening Program. Specifically, the DMT will be responsible for: (i) reviewing and approving the Village Plans, DADP and budgets; (ii) verifying eligibility of project beneficiaries, cost-sharing arrangements, and other project requirements; (iii) approving the district capacity building program and subprojects proposals; and (vi) monitoring and supervising the implementation of subprojects. In the mainland, the District Council will be responsible for the management of the project resources (grants). In Zanzibar, as the districts do not have the required capacity, the MANREC will handle the management of project resources, while capacity at the districts is strengthened. The DED will establish a DFT of between 8 to 10 members comprising of District technical staff and representatives of the private sector and NGOs with skills in agriculture, financial management, and participatory rural appraisal processes. The membership could include: District Extension Officer, Crops Officer, Livestock Officer, Planning Officer, Treasurer, Community Development Officer, Cooperative Officer, Natural Resources Officer, PADEP District Officer and Representatives of private sector, NGOs, research stations. Other technical staff could be co-opted depending on nature of subproject proposed by  10 PID the beneficiaries. The DFT will act as a technical working group under the DED and will be responsible for: (i) facilitating the PRA, identification of priorities, supporting the development of subprojects, and strengthening of farmer groups and communities; (ii) conducting desk and field appraisal of subprojects; and (iii) providing technical support during implementation and monitoring of subprojects. Detailed description of implementation agencies and implementation arrangements is given in Project Operational Manuals (POMs) for the mainland and Zanzibar components. Financing. Accounting, financial reporting, and auditing arrangements The funding for the Agricultural Development Subprojects for communities/farmer groups and the Capacity Building Program for districts and communities/farmer groups will be through conditional matching block grants. Funds will be channeled through the local authorities (District Councils), against an approved District Agricultural Development Plan (DADP), incorporating Subprojects prepared by the communities/farmer groups. A project accounting and financial management manual describing the accounting system procedures, internal controls, chart of accounts and roles and responsibilities of the implementing agencies in financial management aspects was reviewed at appraisal and found to be satisfactory to the Bank. The flow of funds to national, district and community/farmer group levels will be triggered by the following internal control mechanisms:: * National level - Annual Work Plan and Budget (A WP&B) for all components, with confirmation of availability of counterpart funds from the Government of Tanzania and from participating Districts, will be the basis for disbursement. The AWP&B for the first year of the project have been reviewed at appraisal, and they, will be confirmed at Credit Negotiations, including the availability of counterpart funds. For the subsequent years it will be a dated financial covenant. * District level - Agricultural Development Subprojects and the District Capacity Building Program, will be conditions of Disbursement. District Project Plan from each participating district, including the Subprojects and the District Capacity Building Program and incorporated into the District Agricultural Development Plan and approved by the NPSC; and, the execution of a Project Implementation Agreement between MAFS and the District. * Community/farmer group-Subproject proposal, will be a condition of disbursement. Approved Subproject by the DMT (Project Steering Committee in the case of Zanzibar) and the execution of a Financing Agreement between the District (MANREC in the case of Zanzibar) and the Community/ Farmer group. The following will be the step-by-step procedures for releasing funds: * For Institutional Strengthening and Capacity Building Programs at the national level funds management will be done by the PCU and disbursements will be against the Annual Plan and Budget. * For the Subprojects and the Capacity Building Program at the district level in the mainland, each district will receive an advance from the PCU of a sum equivalent to their requirement, as indicated in their annual plan and budget, for a quarter. A small upfront transfer will also be made to communities/farmer groups to meet the cost of preparing their proposals. The advance against the Agricultural Development Subprojects will be deposited into a District Project Account opened by the district with a commercial bank, and that against the Capacity Building  1 1 PID Program will be deposited into a separate District Capacity Building Account. The transfer will constitute the conditional grant for the district's own capacity building program and grants meant for the communities. * For Subprojects and the Capacity building Programs in Zanzibar, the MANREC will maintain the Project Account as the districts in Zanzibar have no adequate capacity for funds management; the grants meant for the subprojects will be released direct to the Subproject Bank Accounts. * The funds from the District Project Account will be released by the district, in tranches agreed in the Financing Agreement, to the community/farmer groups subproject account opened in a bank of their choice after the communities/farmer groups depositing into their Bank Account their matching contribution (or upon certifying their contribution in kind). The Community Subproject Committee appointed by the beneficiaries will operate this bank account, with at least 2 of the 4 signatories being women. * The funds from Capacity Building Program account will be transferred to a capacity building Operating Account when the district has deposited its matching contribution into the Operating Account. * Accounting for the grant tranches/advances will be through Statement of Expenditures (SOEs) supported with full documentation after the beneficiaries utilizing at least 70% of the grant/advance released. * The communities will account to the district for the grant tranches on completing the activities proposed against each tranch. In the case of Zanzibar, the communities will account direct to the MANREC. * The district will in turn account to the PCU, on quarterly basis, supported with the SOEs from the communities and its own SOEs with supporting documents, for the funds withdrawn for the capacity building program. * The SOEs will be prepared against the respective budget lines from a set of books maintained by the districts and the beneficiaries. * The PCU will reimburse the district by releasing a further advance covering the expenditures budgeted for the following quarter. And, the district will in turn release further tranches against the grant allocation to the communities and withdraw further funds for its capacity building program. The Financial Management System (FMS) will cover budgeting, accounting and reporting. The FMS will be used for planning, costing and producing Financial Monitoring Reports (FMRs) and annual financial statements. The FMS will be maintained at the PCU based on Returns from the districts and communities/farmer groups. The Returns from the districts councils and communities will be prepared from independent set of books maintained by the districts and the communities/farmer groups. Simple formats of the Returns, which constitute the SOEs and the FMRs, were reviewed at appraisal and found to be satisfactory to the Bank. These Returns format will be field tested on the pilot subprojects and agreed at Credit Negotiations. For the community subprojects, the book-keeping and accounting will be simple hand-written  12 PID records of receipts and payments and will be maintained in the Kiswahili language. The SOEs and the FMRs will be generated from these records. The record keeping and accounting by the districts will be an integral part of their accounting system. These are maintained according to the Local Government Financial Management procedures. Within these records all cash and bank transactions will be recorded and ledger accounts maintained in respect of the project. The SOEs and the FMRs will be prepared from these records and supplemented by a brief physical implementation report to the PCU. A Consultant engaged under the PPF has completed the detailed design of the financial management system and submitted proposals for computerization. The proposals for computerization will be reviewed and agreed at Credit Negotiations. It will be a condition of credit effectiveness that financial management system is put in place, at least for manual operation and that the returns from the districts and the communities, as well as the FMRs are field tested on the pilot subprojects. Monitoring and evaluation arrangements The project will use participatory methodologies that involve the district councils, wards, villages and farmers' groups in collection, processing, and reporting of data in a simplified format. Implementing teams in the districts and wards will be trained in participatory monitoring and evaluation approaches. Baseline data collection will be undertaken as part of an extended PRA exercise in each targeted community. The baseline will include an assessment of the quality and availability of rural services provision, as well as current levels of production, asset ownership and income, possibly based on TASAF's Community Services Delivery Survey methodology. Beneficiary-led assessments will be carried out by village governments to assess the benefits arising from subproject as they reach completion. Each district will summarize these assessments on an annual basis, in order to gauge the emerging effects of subprojects on the communities and to learn lessons for investments in following years. These district summaries will then be reviewed at annual zonal workshops attended by relevant stakeholders (farmers' groups, NGOs, private sector traders etc.). Project monitoring will be based on monthly community-prepared subproject reports that feed into a Management Information System (MIS) in every participating district. The MIS will be organized around three modules: (i) a community and farmers' group subproject module, containing data on the community planning processes and investment subprojects, and the farm-level technology adoption and input use as well as output information and environmental monitoring; (ii) a financial management module, which will report on financial performance and the rate of subproject progress, in line with FMR requirements; and (iii) an institutional strengthening and capacity building module for district activities. Based on the pilot district experiences, a consultant will design the MIS and install it on district computers in a phased manner during project Year 1. With data from the baseline surveys and beneficiary-led assessments, reports from the MIS, and findings from field visits (including random audits) and supervision reports, the districts will monitor project performance, identify implementation problems and achievements, and take appropriate actions to improve project implementation and environmental su,stainability. The PCU will be responsible for aggregating district-level reports on an quarterly and annual basis. These, combined with the progress information on national-level activities, will be consolidated and submitted to the NPSC and to IDA by the PCU. After two years of project implementation, the PCU will contract an independent Mid Term Review to assess overall progress and emerging impact, and recommend necessary changes to project design for the remaining project period. At the end of the project, a comprehensive terminal evaluation will assess the achievement of the stated development objective increases in household production,  13 PID incomes and assets as well the environmental impact - by comparing the baseline and beneficiary assessments with results from a final year field survey of subprojects. The final evaluation document will provide the basis for consideration by IDA to expand and extend support for the project beyond its initial five year horizon. 7. Sustainability Institutional sustainability - Institutional sustainability will derive from capacity building and local ownership of the sub-projects. PADEP implementation arrangements are built into the structures of local government (district councils) and are consistent with the on-going Local Government Reform Program (LGRP), which is also supported by IDA. Financial sustainabiluty - Financial sustainability will derive from the stream of earnings generated by the sub-projects, either in cash or in kind. The project design has built in incentives for savings by farmers' groups. This mandatory saving in a group's bank account of a certain portion of the revenue generated, to finance purchased inputs for the next farming season, will enable households to sustain adopted new technologies beyond the project life. Some of the sub-projects, such as dip facilities, may charge "user fees" and deposit these in the operations and maintenance (O&M) account. For smallholder irrigation sub-projects, the standard procedure is for each participating household to contribute, on annual basis a certain agreed amount of cash to cover the O&M costs. It is estimated that on average, 80% of district council's own generated revenue comes from the agricultural sector, particularly crop and livestock marketing cess and/or levy. Increased production brought about by PADEP supported sub-projects will modestly boost district councils' revenues. Environmental and social sustainability - The PADEP design has integrated environmental appraisal, monitoring and evaluation as part of the sub-project cycle management. This will enable participating districts, communities and farmers' groups to assess environmental risks and address them in a timely and practical manner. The EMP will be prepared for each sub-project as part of the appraisal process. PADEP will build the capacity of MAFS' environmental unit and district staff to carry out environmental assessment and monitoring and evaluation of sub-projects. Guidelines for environmental and social assessment will be translated into Kiswahili and distributed to all participating districts and rural communities/villages. Sustainability ofprovision of services - Success here depends on the level of decentralization and involvement of the private sector, NGO and civil society in delivery of services. Capacity building for district councils will improve service delivery on a sustainable basis. Regarding decentralization, the GoT is committed to fiscal and administrative devolution to district councils, which are closer to the communities. District councils are now responsible for providing public extension services, alongside private and NGO providers. Other technical services, such as veterinary drugs and care, importation and distribution of agricultural inputs, design of irrigation systems, and agro-mechanization are mainly provided by the private sector. Increased demand for services provided by the private sector will facilitate more sustainable supply.  14 PID 8. Lessons learned from past operations in the country/sector An Operations Evaluation Department (OED) review of "Tanzania, Agriculture, and the World Bank" (Report No. 1811 1, June 30, 1998) supports the view that 'in Tanzania at this stage in its development, the best way to eliminate poverty is to develop agriculture.' The report further notes that for most farmers the transition from traditional long fallow, land-extensive, low-input subsistence agriculture to market-oriented production using substantial purchased inputs still lies in the future. Tanzania is at an earlier stage than some African countries (Kenya, Zimbabwe) in building institutions (markets, legal and regulatory framework, social and material infrastructure) needed to develop agriculture in a liberalized and market-oriented economy. The report also notes that agricultural practices in much of Tanzania have led to some land degradation due to depletion of nutrients and organic matter. This project responds well to the issues and lessons presented by OED. OED evaluation reports for three Tanzanian agricultural and forestry projects (IDA Credit Nos. 1970, 1994 and 2335) highlight two important lessons: (a) involvement of farmers in design and operation of extension programs is a critical element in ensuring the continued technical relevance and usefulness of the service; and (b) establishment of effective research-extension linkages requires institutional reforms that create positive incentives for collaboration. Information should flow both ways, not only from researchers to farmers, but also vice versa. More generally, a review of the Bank's experience in agricultural technology generation and transfer in several regions, as documented by OED evaluations, indicates that the following elements are critical for success: (i) beneficiary ownership and participation for priority setting, planning and monitoring, as well as financing; (ii) a single model cannot be designed for generalized application; pluralism and competition among service providers (public, private, non-profit, and non-governmental sectors) improve the efficiency of the system; (iii) success and sustainability of development programs require commitment for building social capital through organizational and technical training of beneficiary groups and community-based organizations. The international experience of CDD-type projects, which is documented by various publications of the World Bank (e.g. thematic group on CDD) has revealed the following: (i) the potential for CDD is greatest for goods and services that are small in scale and not complex. These are activities within the management capacity of community organizations and that require local cooperation, such as common pool goods (e.g, surface water irrigation systems), public goods (e.g., rural road maintenance), and civil goods (e.g., public advocacy and social monitoring); (ii) the impact of CDD programs is directly related to the strength of the Community Based Organizations (CBOs) driving the process, the strength of the linkages with formal institutions, and the extent to which CBOs are socially inclusive; and (ii) the necessary elements for sustainability are: demand-based approach, articulating priorities defined by the people themselves and expressed through community contributions; social mobilization and the organizational capacity of local community groups; and financial viability, which entails significant community contributions (including in cash) towards initial capital cost and, whenever possible full recovery of operating and management costs. Further, the Bank has learnt that the effectiveness of CDD-type initiatives is enhanced by: (i) creating an enabling environment through relevant institutional and policy reform, including linking with decentralization process, developing sound sector policies and clear institutional arrangements, undertaking institutional reform and promoting private sector involvement in supply of goods and services; (ii) making investments responsive to informed demand to enable communities to make meaningful investment choices, which are affordable to them so that they can contribute to capital and recurrent costs; (iii) building participatory mechanisms for community control and stakeholder  15 PID involvement to ensure ownership of a subproject and sustain outcomes; (iv) ensuring social and gender inclusion through understanding the existing community decision making processes and the often complex local political and social context; (v) investing in capacity building of local organizations, including CBOs and promoting use of traditional knowledge and culture-based skills; (vi) facilitating community access to information, including project contents and rules, technical information, such as accounting and managerial skills for decision making and implementation of activities; (vii) developing simple rules and strong incentives, supported by participatory monitoring and evaluation for advancing CDD goals of accountability, transparency and partnerships; (viii) maintaining flexibility in design of projects, often through piloting, to allow systems to evolve and better adapt to local demand and capabilities; (ix) designing mechanism for scaling up of successful operations in order to have greater impact on macro indicators of poverty; and (x) investing in an exit strategy, such as building local capacity to absorb the operating and maintenance costs of the subprojects, by encouraging savings or cost sharing. These lessons have been incorporated in PADEP design. Finally, PADEP project design has benefitted from the experiences of pilots in two districts, Morogoro and Hai, which were financed by the National Agricultural Extension Project - Phase 11. These pilots showed that there is considerable enthusiasm among beneficiaries and district-level staff for the proposed approach. If sufficient resources are allocated for training and capacity building, the proposed approach is viable and promises to deliver the expected results. Training modules for PRA methodologies, sub-project preparation and appraisal, financial management and procurement, participatory M&E, environmental assessment and screening, and HIV/AIDS awareness will be developed, and district and ward staff will be trained. 9. Environment Aspects (including any public consultation) Issues : This project is classified as category B for environmental purposes, which calls for partial assessment. The project does not present major environmental or social issues, and is likely to have a positive environmental and social impact. Environmental and social management will be an important contributor to success of the community subprojects under Component 1. Therefore, PADEP will ensure that the World Bank environmental and social safeguard polices are adhered to. The safeguard policies that are triggered by the proposed PADEP project are: OP/BP 4 01 Environmental Assessment, OP 4.09 Pest Management, OP 4.12 Involuntary Resettlement, and OP 7 50 Projects on International Waterways. Since the subprojects to be supported by PADEP are small and because rural people will be the drivers of the subprojects, the process of environmental and social screening has been made simple and informative. The screening process will consist of the following steps: preparation of environmental profiles, assigning category to a subproject; scoping and public consultations; conducting environmental assessment; review and approval of environmental assessment reports; and disclosure and appeal procedures. The environmental assessment (including social and socio-economic aspects) itself will follow a number of steps, including impact assessment - based on screening and scoping exercise; analysis of alternatives - to enhance the design of a subproject, including do nothing alternative; predictions - to provide information on the potential implication of the proposed subproject; evaluation of significance - to determine the predicted or measured change in an environment and social attributes; identijy mitigation measures - to reduce adverse environmental and social impacts; and public consultations - with affected or interested groups and NGOs during screening, scoping and preparation of ToR and EA report. An Environmental and Social Framework (ESF) and a Resettlement Policy Framework (RPF) have been prepared and disclosed in the Country and the InfoShop. The ESF includes an environmental  16 PID and social checklist by subproject types to assist DFTs, communities and farmer groups in the screening process. The subsequent EA work will be carried out based on the screening results and related subproject's category. To the extent that subprojects trigger World Bank safeguard policies, subproject-specific safeguard documentation, such as subproject Pest Management Plan (PMP), subproject Dam Safety Measures (DSM) and subproject Resettlement Action Plan (RAP) will be prepared and disclosed in the Country, prior to subprojects' approval for funding. The project will not entail any involuntary resettlement, but a resettlement framework is required for all subprojects that may imply changes in land use or changes in access to land, associated with subproject activities. Due to the possible use of international waters by the irrigation subprojects, the relevant riparians (Kenya, Uganda, Malawi and Mozambique) have been notified. 10. List of factual technical documents: * Project Operatioal Manual (POM) * Project lmplementation Manual (PIP) * Accounting, Financial Management and Management Information System Manual * Project Procurement Manual (PPM) * Guidelines for Preparation and Implementation of Agricultural Subprojects * Environmental and Social Framework (ESF) * Resettlement Policy Framework (RPF) 11. Contact Point: Task Manager Ladisy Komba Chengula The World Bank 1818 H Street, NW Washington D.C. 20433 Telephone (255 22) 2114575-77, 2116198 Fax: (255 22) 2113039 12 For information on other project related documents contact. The InfoShop The World Bank 1818 H Street, NW Washington, D C 20433 Telephone (202) 458-5454 Fax (202) 522-1500 Web. http // www worldbank org/infoshop Note: This is information on an evolving project. Certain components may not be necessarily included in the final project. Tables, Charts, Graphs: Processed by the InfoShop week ending 04/16/2003  17 PID For a list of World Bank news releases on projects and reports, click here L5EsAiRCH IJ LFEEDSACK .I LSrTI PA P W | lJHOWCASE I3