document of the world bank report no.: icr00003672 ......i document of the world bank report no.:...

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Document of The World Bank

Report No.: ICR00003672

IMPLEMENTATION COMPLETION AND RESULTS REPORT

(IDA-H1900; IDA-48060 MW, IDA-51410 MW AND IDA-H7930)

ON A

GRANT

IN THE AMOUNT OF SDR 27.6 MILLION (US$40 MILLION EQUIVALENT);

A FIRST ADDITIONAL FINANCING CREDIT IN THE AMOUNT OF SDR 8.6 MILLION (US$12.7 MILLION EQUIVALENT); AND A

SECOND ADDITIONAL FINANCING CREDIT IN THE AMOUNT OF SDR 16.6 MILLION (US$25 MILLION EQUIVALENT)

AND

SECOND ADDITIONAL FINANCING GRANT IN THE AMOUNT OF SDR 16.6 MILLION (US$25 MILLION EQUIVALENT)

TO THE

REPUBLIC OF MALAWI

FOR THE IRRIGATION, RURAL LIVELIHOODS AND AGRICULTURAL DEVELOPMENT PROJECT

December 31, 2015

Agriculture Global Practice AFCE1 Sub-Saharan Africa Region

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CURRENCY EQUIVALENTS (Exchange Rate Effective December 31, 2014)

Currency Unit = Kwacha

MWK 468.9488= US$ 1

US$ 1.44881 = SDR 1

FISCAL YEAR

July 1 – June 30

ABBREVIATIONS AND ACRONYMS

ABB Activity Based Budgeting ADD Agricultural Development Division AF Additional Financing AMIC Agricultural Market Information Centres ASP Area Stakeholder Panels ASWAp Agriculture Sector Wide Approach ASWAp-SP Agriculture Sector Wide Approach – Support Project BCA Bunda College of Agriculture BIA Beneficiary Impact Assessment CAS Country Assistance Strategy CAETS Controller of Agricultural Extension and Technical Services CCA Credit Ceiling Authority CFP Country Financing Parameters CSM Community Sensitisation and Mobilisation DA District Assemblies DADO District Agriculture Development Officers DAECC District Agricultural Extension Coordination Committee DAES Department of Agricultural Extension Services DAESS District Agricultural Extension Services System DAPS Department of Agricultural Planning Services DANIDA Danish International Development Agency DEC District Executive Committee DESC District Environmental Sub Committee DIASU District Irrigation Advisory Service Unit DLRC Department of Land Resource Conservation DoDMA Department of Disaster Management Affairs DOI Department of Irrigation DSP District Stakeholder Panel EPA Extension Planning Area ESIA Environmental and Social Impacts Assessment ESMF Environmental and Social Management Framework ESMP Environmental and Social Management Plans F/CBO Farmer/Community Based Organization

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FARAH Financial Accounting Reporting and Auditing Handbook FBO Farmer Based Organizations FDI Foreign Direct Investment FEIA Full Environmental Impact Assessment FISP Farm Input Subsidy Program FMR Financial Monitoring Reports FSLF Farmer Services and Livelihood Fund GAP Good Agriculture Practice GDP Gross Domestic Product GoM Government of Malawi HIV/AIDS Human Immunodeficiency Virus/Acquired Immunodeficiency Syndrome ICR Implementation Completion Report IDA International Development Agency IEC Information, Education and Communication IFA Inputs for Assets Program IFAD International Fund for Agricultural Development IMPF Irrigation Master Plan and Investment Framework IMT Irrigation Management Transfer INTOSAI International Organization of Supreme Audit Institutions IPC Internal Procurement Committee IRLAD Irrigation, Rural Livelihoods and Agricultural Development ISM Implementation Support Mission IWMU Irrigation Water Management Unit LDF Local Development Fund LEIA Limited Environmental Impact Assessment MASAF Malawi Social Action Fund MASIP Malawi Agricultural Investment Program MBC Malawi Broadcasting Cooperation MEGS Malawi Economic Growth Strategy MoAIWD Ministry of Agriculture, Irrigation and Water Development MPRS Malawi Poverty Reduction Strategy (MPRS) NGO Non-governmental Organization NIBO National Irrigation Board NIPDS National Irrigation Policy and Development Strategy ODPP Office of the Director of Public Procurement OO Outreach Office OPC Office of President and Cabinet PCU Project Coordination Unit PDO Project Development Objective PEC Project Executive Committee PMC Project Management Committee PRA Participatory Rural Appraisal PSC Project Steering Committee RA Roads Authority RAP Resettlement Action Plan RWH Rain Water Harvesting SDR Special Drawing Rights SIG Sector Investment Grant SFPDP Smallholder Flood Plains Development Project SLEMSA Soil Loss Equation for Southern Africa SRBMP Shire River Basin Management Program

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SRI System of Rice Intensification SOE Statement of Expenditure TA Traditional Authority ToR Terms of Reference VAC Village Agriculture Committee VDC Village Development Committee WUA Water Users Association WUASU Water Users Association Service Unit WUG Water Users Group

Vice President: Makhtar Diop

Country Director: Bella Bird

Sr. Global Practice Director: Juergen Voegele

Practice Manager: Mark Cackler

Project Team Leader: Pieter Waalewijn

ICR Team Leader: Hanane Ahmed

ICR Main Author: Hanane Ahmed

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MALAWI

Irrigation, Rural Livelihoods and Agricultural Development Project

Contents

1. Project Context, Development Objectives and Design …………………………………..1

2. Key Factors Affecting Implementation and Outcomes …………………………………..8

3. Assessment of Outcomes ………………………………………………………………..17

4. Assessment of Risk to Development Outcome ………………………………………….23

5. Assessment of Bank and Borrower Performance ………………………………………..24

6. Lessons Learned …………………………………………………………………………26

7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners …………...27

Annex 1: Project Cost and Financing ………………………………………………………..28

Annex 2: Outputs by Component ……………………………………………………............30

Annex 3: Economic and Financial Analysis …………………………………………………44

Annex 4: Bank Lending and Implementation Support/Supervision Process ………...............54

Annex 5: Beneficiary Survey Results ………………………………………………………..59

Annex 6: Stakeholder Workshop Report and Results ………………………………………..60

Annex 7: Summary of Borrower’s ICR and/or Comments on Draft ICR …………………....61

Annex 8: Comments of Co-financiers and other Partners/Stakeholders ……………………..70

Annex 9: List of Supporting Documents ……………………………………………………..71

MAP

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A. Basic Information

Country: Malawi Project Name:

Irrigation, Rural Livelihoods and Agricultural Development Project

Project ID: P084148 L/C/TF Number(s): COFN-04560,IDA-48060,IDA-51410,IDA-H1900,IDA-H7930

ICR Date: 11/18/2015 ICR Type: Core ICR

Lending Instrument: SIL Borrower:

Original Total Commitment:

XDR 27.60M Disbursed Amount: XDR 69.38M

Revised Amount: XDR 69.40M

Environmental Category: B

Implementing Agencies: Ministry of Agriculture, Irrigation and Water Development, Government of Malawi

Cofinanciers and Other External Partners: International Fund for Agriculture Development (IFAD)

B. Key Dates

Process Date Process Original Date Revised / Actual

Date(s)

Concept Review: 06/09/2004 Effectiveness: 05/24/2006 05/24/2006

Appraisal: 01/14/2005 Restructuring(s):

12/23/2010 03/18/2011 06/06/2012 08/22/2012 12/08/2014 01/19/2015 06/24/2015

Approval: 11/29/2005 Mid-term Review: 10/05/2009 10/23/2009

Closing: 06/30/2012 06/30/2015

C. Ratings Summary C.1 Performance Rating by ICR

Outcomes: Satisfactory

Risk to Development Outcome: Moderate

Bank Performance: Moderately Satisfactory

Borrower Performance: Satisfactory

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C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings

Quality at Entry: Moderately Satisfactory Government: Not Applicable

Quality of Supervision: Satisfactory Implementing Agency/Agencies:

Not Applicable

Overall Bank Performance:

Moderately Satisfactory Overall Borrower Performance:

Satisfactory

C.3 Quality at Entry and Implementation Performance Indicators Implementation

Performance Indicators

QAG Assessments (if any)

Rating

Potential Problem Project at any time (Yes/No):

Yes Quality at Entry (QEA): MS

None

Problem Project at any time (Yes/No):

No Quality of Supervision (QSA): S

None

DO rating before Closing/Inactive status:

Satisfactory

D. Sector and Theme Codes Original Actual

Sector Code (as % of total Bank financing)

Agricultural extension and research 20 20

Central government administration 5 5

General agriculture, fishing and forestry sector 35 35

Irrigation and drainage 30 30

Sub-national government administration 10 10

E. Bank Staff Positions At ICR At Approval

Vice President: Makhtar Diop Gobind T. Nankani

Country Director: Bella Deborah Mary Bird Hartwig Schafer

Practice Manager/Manager: Mark E. Cackler Richard G. Scobey

Project Team Leader: Pieter Waalewijn Tijan M. Sallah

ICR Team Leader: Hanane Ahmed

ICR Primary Author: Hanane Ahmed

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F. Results Framework Analysis

Project Development Objectives (from Project Appraisal Document)

(i) To raise agricultural productivity and net incomes of approximately 196,550 (net) poor rural

households in 11 target districts of Malawi in a sustainable manner by providing an integrated package

of support covering irrigation, agricultural/ irrigation advisory services, marketing and post-harvest

assets and services, and (ii) strengthen recipient institutional capacity for long-term irrigation

development.

Revised Project Development Objectives (as approved by original approving authority)

(i) To increase agricultural productivity of poor rural households in all districts; and (ii) strengthen

institutional capacity for long-term irrigation development.

(a) PDO Indicator(s)

Indicator Baseline Value

Original Target Values (from

approval documents)

Formally Revised

Target Values

Actual Value Achieved at

Completion or Target Years

Indicator 1 : Crop yield for irrigated maize - % increase and tons/ha (core indicator) Value quantitative or Qualitative)

1.6 2.5 3.2 3.4

Date achieved 05/24/2006 06/30/2012 08/22/2012 06/30/2015 Comments (incl. % achievement)

These yields represent a 100% increase over baseline, and the target had 112.5% achievement. These yields refer to irrigated crops on beneficiary land.

Indicator 2 : Crop yield for irrigated rice - % increase and tons/ha (core indicator) Value quantitative or Qualitative)

1 1.5 2.0 4.6


These yields represent a 360% increase over baseline, and the target had 230% achievement. These yields refer to irrigated crops on beneficiary land. High yields due to improved infrastructure and adoption of improved agronomy practices (SRI)

Indicator 3 : Increase in farm sales in targeted rural households for irrigated maize and rice - % increase in local currency unit (core indicator)

Value quantitative or Qualitative)

0 N/A 40 227.8

Date achieved 05/24/2006 06/30/2012 08/22/2012 06/30/2015 Comments (incl. %

Figures in nominal terms.

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achievement)

Indicator 4 : Adoption of harmonized investment framework for irrigation sector by DoI, linked to ASWAp

Value quantitative or Qualitative)

N/A Y Y

Date achieved 08/22/2012 12/31/2014 06/30/2015 Comments (incl. % achievement)

100% Achieved. PDO indicator introduced at AFII to measure second part of PDO. The National Irrigation Masterplan and Investment Framework was finalized in 2014 and adopted in 2015.

Indicator 5 : Direct project beneficiaries (number) of which female (%) (core indicator) Value quantitative or Qualitative)

0 196,550 500,000 841,235


Rural households benefiting directly from the project activities recalibrated at AF II to take account of additional support. Target was at least 40% female. Achieved was 46%. Target number achieved 168%

(b) Intermediate Outcome Indicator(s)

Indicator Baseline Value

Original Target Values (from

approval documents)

Formally Revised Target

Values

Actual Value Achieved at

Completion or Target Years

Indicator 1 : Area provided with irrigation and drainage services– new (core indicator) Value (quantitative or Qualitative)

0 2,200 3,000 11,811


Revised at AFII as target was already surpassed. 390% achievement mainly due to high demand for irrigation schemes under IFA program, not originally envisaged.

Indicator 2 : Area provided with irrigation and drainage services –rehabilitated (core indicator) Value (quantitative or Qualitative)

0 1,797 1,820 2,590


142% achieved. target revised at AFII to take account of inclusion of new schemes for rehabilitation

Indicator 3 : Water users provided with new/improved irrigation and drainage services (number)– disaggregated by % female (core indicator)

Value (quantitative or Qualitative)

0 10,200 17,000 45,266

Date achieved 05/24/2006 06/30/2012 08/22/2012 06/30/2015

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Comments (incl. % achievement)

266% achievement. Target for %female was 40%, achieved was 46%. Achievement due to high number of IFA schemes developed.

Indicator 4 : Area under prioritized hotspots conserved under catchment protection technologies Value (quantitative or Qualitative)

0 3,000 3,429


Indicator replaced original indicator on adoption of technologies which was too broad and not fully attributable to the project's interventions. Indicator refocused to core technologies and in priority hotspots. Target achieved 114%.

Indicator 5 : Technologies demonstrated by the project in the project areas (core indicator) Value (quantitative or Qualitative)

0 16 21


Not in the original project. Focus on catchment conservation, rainwater harvesting and agronomy technologies promoted under the project. Aligned with core indicators at AF II.

Indicator 6 : Number of FBOs supported under the project, and % still functional and generating benefits to members


0 N/A 125 and 80% functionality rate

128 and 85% functionality rate


Target achieved 102%. Targets set at AFII with additional financing for further FBO support when at that point 75 FBOs had been supported.

Indicator 7 : Number of farmers directly benefiting from the Inputs for Assets Voucher Program (# disaggregated by % female)


0 191,000 442,000 655,227


Target for % female was 40%. Achieved was 43%. This component was dramatically scaled up at AF II hence the revised targets, and input packages were modified to reach more beneficiaries.

Indicator 8 : Rural roads constructed/rehabilitated (core indicator) Value (quantitative or Qualitative)

0 3,200 5,000 16,900


IFA program focused only on mini irrigation and roads, hence the high increase. No other types of assets were supported in the 2012-2015 period. This mainly consisted of rehab/reshaping of minor feeder roads (unclassified).

Indicator 9 : Operational water user associations created and/or strengthened (core indicator) Value (quantitative

0 90 75 94

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or Qualitative) Date achieved 05/24/2006 06/30/2012 08/22/2012 06/30/2015 Comments (incl. % achievement)

Revised downwards as WUAs refer to legal bodies, whereas most smaller schemes had more informal Water User Groups. Both received support. Due to up scaling and further formalization, final figure achieved original target.

Indicator 10 : Number of people trained, of which % female in extension services, operations and maintenance of schemes, technical staff training, marketing and agribusiness.


0 n/a.

Extension 25,500 (40%), O&M 17,000 (40%), staff 1,500 (40%), marketing and agribusiness 30,000 (40%)

Extension 57,337 (44%), O&M 36,828 (43%), staff 1,704 (31%), marketing and agribusiness 30,113 (45%)


This is a composite indicator brought under one indicator and revised values. Generally achieved, except % female for technical staff training, which is reflective of staff gender balance.

Indicator 11 : Irrigation Master Plan and Investment Framework Developed for use by Department of Irrigation (Y/N)


N/A Y Y


Indicator 12 : Timely and acceptable reports generated by the M&E system Value (quantitative or Qualitative)

0 22 22


Indicator made quantifiable; End of project target to be recalibrated to take account of additional support.

Indicator 13 : Procurement and Financial Management Functions of the Project rated at least Satisfactory


n/a Y Y


Introduced at AFII to monitor performance of critical fiduciary functions of project management. Rating Y although FM was rated moderately satisfactory at final mission due to delayed reporting.

Indicator 14 : Timely and acceptable project impact evaluation report Value 0 4 4

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(quantitative or Qualitative) Date achieved 08/22/2012 12/31/2014 06/30/2015 Comments (incl. % achievement)

Target achieved

Indicator 15 : Funds available for emergency response within 6 weeks of declaration of emergency Value (quantitative or Qualitative)

n/a y y


Indicator was only to be measured if the component was triggered, which happened on 19 January 2015, after which funds were available within 3 days. Substantially achieved.

G. Ratings of Project Performance in ISRs

No. Date ISR Archived

DO IP Actual Disbursements

(USD millions) 1 12/31/2005 Satisfactory Satisfactory 0.00 2 06/13/2006 Satisfactory Satisfactory 0.00 3 09/29/2006 Satisfactory Satisfactory 2.20 4 12/08/2006 Satisfactory Satisfactory 3.31 5 05/06/2007 Satisfactory Satisfactory 5.28 6 11/01/2007 Satisfactory Satisfactory 7.70 7 05/31/2008 Satisfactory Satisfactory 13.28 8 11/20/2008 Satisfactory Satisfactory 15.29 9 05/29/2009 Satisfactory Satisfactory 18.86

10 12/09/2009 Moderately Satisfactory Moderately Satisfactory 22.19 11 06/28/2010 Satisfactory Moderately Satisfactory 25.17 12 03/16/2011 Satisfactory Satisfactory 31.34 13 11/20/2011 Satisfactory Moderately Satisfactory 40.51 14 06/06/2012 Moderately Satisfactory Moderately Satisfactory 45.55 15 06/20/2012 Satisfactory Satisfactory 45.55 16 01/14/2013 Satisfactory Satisfactory 57.67 17 07/28/2013 Satisfactory Moderately Satisfactory 68.95 18 01/12/2014 Satisfactory Satisfactory 75.53 19 06/24/2014 Satisfactory Satisfactory 88.07 20 01/02/2015 Satisfactory Satisfactory 105.54 21 06/12/2015 Satisfactory Satisfactory 106.54

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H. Restructuring

Restructuring Date(s)

Board Approved PDO

Change

ISR Ratings at Restructuring

Amount Disbursed at

Restructuring in USD millions

Reason for Restructuring & Key Changes Made

DO IP

12/23/2010 S MS 29.56 Reallocation to address cost overrun on irrigation scheme rehabilitation and development

03/18/2011 N S S 31.43

First Additional Financing to address cost overruns and additional support for small and mini irrigation

06/06/2012 N MS MS 45.55 Closing Date Extension and revision of disbursement table post June 2012

08/22/2012 Y S S 46.38

Second Additional Financing - rapid response program upscaling. small change to PDO and project extended to December 31, 2014

12/08/2014 S S 105.54 Reallocation and project extension by six months to June 30, 2015

01/19/2015 S S 105.54 Reallocation triggering component 5

06/24/2015 S S 106.54 Reallocation, administrative

If PDO and/or Key Outcome Targets were formally revised (approved by the original approving body) enter ratings below:

Outcome Ratings Against Original PDO/Targets Satisfactory Against Formally Revised PDO/Targets Satisfactory Overall (weighted) rating Satisfactory

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I. Disbursement Profile

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1. Project Context, Development Objectives and Design

1.1 Context at Appraisal

1. At appraisal, 89% of Malawi’s poor were rural, and agriculture was their key source of income. Of these poor, the overwhelming majority (i.e., 49%) were in the Southern region; 40% in the Central region, and 11% in the Northern region. At the time, Malawi faced huge challenges in achieving the Millennium Development Goals (MDGs) of “eradicating extreme poverty and hunger” by the year 2015. Raising agricultural productivity and diversifying its agricultural base to improve value-added was key to reducing the widespread food insecurity faced by Malawi’s population and to increasing rural incomes. 2. At appraisal, agriculture was the single most important sector of the Malawi economy, contributing about 36% of value-added to GDP, employing 85% of the workforce, and contributing 90% of foreign exchange earnings in 2003. Total cultivated area in the past five years of appraisal have averaged about 2.7 million hectares, of which from 1-1.1 million hectares were held in some 30,000 estates with average farm size ranging between 10-500 hectares. The remainder (1.7 million ha) was under smallholder cultivation of average farm sizes of about 1 ha. The National Sample Survey of Agriculture for 1998/99 indicated that nationally, 78 percent of farmers had less than 1 hectare of land. This suggested that agricultural intensification was the key strategy for increasing agricultural production. 3. The overarching development issue facing Malawi agriculture was the low productivity and profitability of smallholder agriculture, which has been characterized by low and stagnant yields. Low and stagnant yields have been influenced by dependence on rain-fed farming and low level of irrigation development, poor variety selection, declining soil fertility, and overall poor agricultural practices. Low profitability of smallholder agriculture has been influenced by weak links to markets. The challenge for agriculture was to pursue targeted investments to improve yields and strengthen market linkages to contribute to economic growth, poverty reduction and food security. 4. Four issues underlined the low productivity and profitability of Malawi’s agriculture. First, low irrigation development and poor water management. The country experienced unreliable rainfall combined with extended periods of dry spells which adversely affect the productivity of its agriculture. This called for full and supplementary irrigation. Major droughts occurred in1991/1992 and 1993/94 and floods in 1997/98 and 2000/01, which call for improved water management. The GOM had adopted a National Irrigation Policy and Development Strategy (NIPDS) in June 2000. The NIPDS, supported by an Irrigation Act passed in 2001, states that GOM will assume the role of facilitator of sustainable irrigation development in areas having potential, using a participatory approach, and will embark on developments only if the smallholder farmers in the area request such development and meet the criteria for sustainable development. The project aimed to address many of these elements of the NIPDS.

5. The second issue facing Malawi agriculture was that of weak extension services which undermined the productivity of Malawi agriculture. In the 1980s and 1990s, Malawi was supported by the Bank and donors to establish a “Training and Visit” (T&V) extension system, which was based on using lead or contact farmers to spread technical know-how. The T&V system failed for various reasons, partly because it was too output-driven and did not respond to farmer’s demands and knowledge and was an inefficient use of resources. In the early 2000’s the government called for more pluralism (multiple providers) in extension and service delivery and recognized the importance of the market and demand led

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impetus for the supply of goods and services. The project sought to support demand-driven extension and farmer capacity building within the limitations of what was considered institutionally feasible in the project’s target districts. 6. The third issue facing agriculture was the HIV/AIDS Pandemic. The HIV/AIDS epidemic had an overwhelming adverse impact on agricultural labor and the delivery of agricultural services and has through these channels undermined agricultural productivity, and requires creative approaches of organizing labor and rural resources for production to reduce rural poverty. According to the National AIDS Commission, about 1 million adults and children were infected with HIV in Malawi in 2001. The fact that HIV/AIDs is the leading cause of death in the most productive age group (20-49 years) points to its potential adverse effects on rural labor and rural labor productivity. This is an issue being addressed in health related projects in Malawi, and the proposed project will coordinate with these efforts to see how extension messages can also embody HIV/AIDS awareness and prevention information. 7. The fourth issue that faced Malawi agriculture was that of inadequate markets and post-harvest assets. Weak linkage of smallholders to input and output markets resulted in the low profitability of agriculture and low incomes. Smallholders faced critical information and infrastructure constraints which resulted in high input costs and low output prices. Isolation of their produce from profitable markets also locked them into cropping patterns of non-diversified production. Input costs—particularly fertilizer prices, were also high because of high transport and other costs. This called for smallholders organizing themselves better to do bulk purchases to reduce transactions costs and lower the unit cost of fertilizers, expanding fertilizer retail networks, and/or building capacities on alternative soil conserving technologies. This project proposed to address marketing constraints faced by smallholders under the project, provide demand-driven post-harvest assets for value addition, and address aspects of input supply faced by resource poor farmers, including the scaling up of good practices on soil conservation and fertility improving technologies.

Rationale for Bank engagement

8. The Government of Malawi accorded high priority and requested for this operation, which is in the May 14, 2003 Bank Country Assistance Strategy (CAS) and is consistent with the CAS’s pillars of establishing a platform for growth and improving service delivery. The CAS specifically mentioned that Malawi needs to invest in a “medium-term program for enhancing [smallholder] agricultural productivity and improve farmers’ access to markets. The project supported many of these elements of the CAS. In addition, the Government prepared the Malawi Growth and Development Strategy (MGDS). Under the MGDS, developing agriculture and raising smallholder productivity were recognized as major drivers for growth and improved food security. 9. Bank’s involvement added credibility to the sector’s investment program and acted as a catalyst for the mobilization of Donor support for the sector. In fact, the Bank’s involvement built on lessons learned in IFAD’s Smallholder Flood Plains Development Project (SFPDP), which also helped mobilize IFAD’s involvement as a co-financier of the IRLADP project.

10. Bank’s involvement brought with it accumulated global experience and several years of working on Malawi agriculture (through about seven projects) from which it has learned important lessons to factor into this new project design. In addition, irrigation in Africa was just emerging as a new investment line, and this project was among the first of a new generation of irrigation projects, taking a more integrated approach after years of absence from the sector in Sub-Saharan Africa.

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1.2 Original Project Development Objectives (PDO) and Key Indicators

11. The Project Development Objectives (PDO) in the original agreements were to (a) increase agricultural productivity and net incomes of approximately 196,550 poor rural households in the Participating Districts; and (b) strengthen the Recipient’s institutional capacity for long-term irrigation development. 12. The PAD states the key indicators as follows:

- About 2,600 hectares effectively served by improved efficiency and reliability of delivery of irrigation water in rehabilitated and new schemes, benefiting 10,200 farm households organized in WUAs;

- 400 water harvesting civil structures constructed and operational, comprising 100 livestock water storage structures, 100 group backyard structures, 100 soil storage and new measures, and 100 catchment/land conservation structures, resulting in soil conservation and fertility generation measures in micro-catchments, benefiting 9000 farm households organized in groups;

- About 191,000 households benefiting from employment, inputs and rural asset creation through input for assets;

- About 24,000 farm households benefiting from the Farmer Services and Livelihood Fund (FSLF) in the form of post-harvest assets, marketing and extension services;

- Built capacity of farmers, implementing staff, service providers and institutions (benefiting at least 7000 farm households); and

- Overall, improved cropping intensity by 30%, agricultural productivity by 50%, and farm incomes by 30% in addition to bringing above the poverty line at least a tenth of the assisted households in the irrigated areas by project closing.

1.3 Revised PDO and Key indicators, and reasons/justification

13. At the time of the first Additional Financing (AF-I) agreement effective November 30, 2010, the PDO was simplified and aligned with the original Grant Agreement without changing the objective in substance to become: (i) to increase agricultural productivity and incomes of approximately 196,550 poor rural households in the 11 participating districts and to (ii) strengthen the recipient’s institutional capacity for long-term irrigation development. 14. At the time of the second Additional Financing (AF-II), the PDO was revised to enable the scaling up of both the number of beneficiaries and the number of districts and to simplify the measurement of agricultural productivity as the key objective rather than rural income. The PDO was: (i) to increase agricultural productivity of poor rural households in all Districts; and (ii) strengthen institutional capacity for long-term irrigation development”.

15. The key performance indicators at the outcome level as indicated in the original grant, AF-I and AF-II are shown in Table 1:

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Table 1: Key Peformance Indicators

Original Grant AF-I AF-II

Improvement in household incomes and assets ownership index, disaggregated by gender, 10,200 poor rural households in irrigated areas with sustainable food and income security (i.e. significant sustainable yields above consumption requirements), Improvement in central Ministry (DOI) and field irrigation capacities in target project districts (Numbers of staff trained by technical specialty; Staff weeks or months of technical assistance provided; Numbers of irrigation development supported and complaints remedied through district irrigation staff/farmer field visits).

Number of direct project beneficiaries disaggregated by % female, Increase in crop yield (for maize and rice) - % increase and tons/ha, Increase in farm sales in targeted rural households (for major crops: horticulture, maize and rice) - % increase in Local Currency Unit (LCU), Area provided with irrigation and drainage services (ha) – new Area provided with irrigation and drainage services (ha) – rehabilitated, Number of Operational WUAs

Direct project beneficiaries (number), of which female (percentage), Crop yield for irrigated maize - % increase and tons/ha, Crop yield for irrigated rice, % increase and tons/ha Increase in farm sales in targeted rural households for irrigated maize and rice (% increase in LCU), Adoption of harmonized investment framework for irrigation sectior by DoI, linked to ASWAp.

16. The key performance indicators at the intermediate outcome level for each component of the project are detailed in Section F of the data sheet. AF-I revised the indicators to be better aligned with the PDO and make them more measurable. At AF-II, a number of PDO indicators were maintained as IO indicators, and a new PDO indicator was included to better reflect the institutional strengthening aspect of the PDO. 1.4 Main Beneficiaries

17. Original Grant: Originally, the PAD estimated that approximately 196,500 farm families--gross (or 827,000 individuals--net) (representing 16% of the population in the 11 districts) would directly benefit from the project. - The direct beneficiaries under Component I were irrigation water users and farmers in upper catchments. These farmers benefited from improved access to water during both the wet and dry seasons, opportunities to extend their growing season, and diversify the range of crops grown and improve their irrigation agronomic practices. Farmers with rain-fed land in the catchments around the irrigation schemes benefited from soil conservation and rainwater harvesting measures. - The direct beneficiaries under Component II were farmers who formed themselves into groups and developed a proposal for either creating productive assets or improving their knowledge and skills through extension support, training and marketing. Specific groups also benefited from agronomy advice and seed multiplication. These farmers benefited from capacity building in group formation and acquiring basic

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business skills. In the Input for Assets Program, the beneficiaries were households who were willing and able to work on public works activities in return for a farm input voucher for seed, fertilizer, or farm tools. - Under Component III, the identified beneficiaries who benefited from institutional development were the implementing and planning departments in the Ministry of Agriculture, Irrigation and Water Development (MoAIWD), at central and district level, as well as Bunda College of Agriculture and the Natural Resources College in Lilongwe. In farmer capacity building, the main beneficiaries were farmers organized in Water User Associations, or Water User Groups through training and Irrigation Management Transfer. 18. Additional Financing: The target for direct beneficiaries of the AF-II was revised to 500,000 farm families after observing over-achievement during the first phase of the project and the proposed major upscaling of project activities, particularly the Inputs for Assets Program. Overall, the direct beneficiaries of the AF-II were the able rural poor in all the 28 districts of Malawi. This is described in the emergency package: the 2012 economic reforms that were necessary after the economy came to a grinding halt in 2011 was going to affect the rural poor through higher commodity prices. This program was intended to cushion the effects of economic reform on this group through the massive scale up of IRLADP and MASAF. IRLADP targeted rural able poor through IFA, MASAF targeted rural and urban poor through its social safety nets. This upscaling was based on the assessment from Government of the successful outreach to the country’s poor under both programs. 1.5 Original Components

19. The project had four components intended to (i) support rehabilitation and gradual management transfer of originally Government owned schemes to farmers; (ii) support the provision of complementary services and goods for optimizing returns from irrigated farming; (iii) support irrigation transfer, management, and related activities as well as support the operation and maintenance of water harvesting structures and soil conservation; and (iv) build staff capacity in project management and monitoring. A detailed description of each component can be found in Annex 2. 20. Component I: Irrigation Rehabilitation and Development (US$31.06 or 26.96 percent of total Project cost with IDA contribution of US$27.52), sought to support the rehabilitation and gradual management transfer of four originally Government-owned schemes to farmers; development of new small-scale gravity and mini-scale schemes; rehabilitation of small reservoirs; and construction of 400 group civil works for water harvesting and catchment conservation on a demand-driven basis. Sub-components: (i) selective rehabilitation and development of small scale irrigation schemes; (ii) rehabilitation of existing small storage reservoirs; and (iii) small scale farmer driven rain-water harvesting and catchment conservation. 21. Component II: Farmer Services and Livelihoods Fund (FSLF) (US$58.77 M, or 51.02 percent of total Project cost with IDA contribution of US$ 52.96), aimed to support the beneficiary communities, particularly those covered under the irrigation schemes, to obtain complementary services and goods for optimizing their returns from irrigation farming, to add value through micro-processing, to improve the marketing of their produce, and to build their technical and business capacities. Sub-components: (i) support for extension; (ii) support for Inputs for Assets (IFA) Program; and (iii) support for marketing and post-harvest assets. 22. Component III: Institutional Development and Community Mobilization (US$18.94 M, or 16.44 percent of total Project cost with IDA contribution of US$ 16.37), aimed to restructure, strengthen and/or formation of smallholder farmer organizations/Water Users Associations for irrigation transfer, management and related activities and establishment of Water Users Associations, especially among rain-

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fed small holders around irrigations schemes for operation and maintenance of water harvesting structures and soil conservation. Sub-components: (i) support for Department of Irrigation and Field Institutions; (ii) capacity building for farmers and community mobilization and sensitization; (iii) support for the Market Development Unit and the Agricultural Marketing Information Service (AMIS) under the Market Development Unit of the Ministry of Agriculture, Irrigation and Water Development (MoAIWD); and (vi) support for Bunda College, Natural Resources College, and other MoAIWD training. 23. Component IV: Project Coordination, and Monitoring and Evaluation (US$6.43 M, or 5.58 percent of total Project cost with IDA contribution of US$ 5.85), aimed to strengthen the capacity of project implementation, and enable effective and efficient coordination by establishing a Project Coordination Unit (PCU) in MoAIWD since the Project was implemented through two line ministries i.e. MoAIWD and Malawi Social Action Fund (MASAF). 1.6 Revised Components 24. Additional Financing (AF): During the AF-II, there were changes made to the project components and sub-components, as well as including an additional component summarized below (details in Annex 2). Below is a summary of the changes made:

- Component I: Irrigation rehabilitation and development and catchment conservation (US$12.50 M): There were two major changes that were made under this subcomponent. The first change was on rehabilitation of existing small storage reservoirs that was dropped at Mid-Term Review (MTR) due to high costs. Furthermore, two new activities were added under this Component during AF II i.e. preparation for future investments, and support to water use efficiency in existing schemes.

- Component II: Farmer Services and Livelihoods Funds (US$30.90 M): The support for extension continued but at the time of the AF-II, this activity included community mobilization and sensitization which was initially under component 3. Similarly, the support for marketing and post-harvest assets continued but at the time of the AF-II, this activity included support to the Marketing Development Unit, also moved from component 3.

- Component III: Institutional Development and Community Mobilization (US$3.55 M): This component continued but its new title at the time of AF-II “Institutional Development and Capacity Enhancement” reflected that community mobilization is covered under component II. Under this component and during the AF-II, the following changes occurred: (a) irrigation water management continued with specific sub-activities on capacity enhancement to public irrigation service delivery, and Water User Associations and Irrigation Management Transfer; (b) capacity building for farmers and community mobilization and senisitization activity was merged with activities under Component II; (c) support to Ministry of Agriculture Marketing Development Unit was merged with activities under Component II; (D) support to Bunda College, Natural Resources College and other MOA training was merged with activities under irrigation water management within this component. - Component V: Contingency Financing for Disaster Risk Response (US$0 M): This was a new component added during the AF-II (see below for a summary and Annex 2 for further details) which aimed to support preparedness and rapid response to disasters as needed, and allow rapid re-allocation of proceeds from other components under streamlined procurement and disbursement procedures.

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1.7 Other significant changes 25. Project Restructuring: The IRLADP project was restructured several times. Below are the list of restructurings:

(a) Reallocation: December 2010: This was a reallocation to address cost overrun on irrigation schemes rehabilitation and development.

(b) AF-I: March 2011: This was the First Additional Financing to address cost overruns and additional support for small and mini-irrigation.

(c) Closing Date Extension: June 2012: The project closing date was extended by 12 months to June

30, 2013 to provide for the time to process the AF II operation. Since the IFAD grant had closed in June 30, 2012, this restructuring also included a further increase in disbursement % from 87% to 100% from July 1, 2012.

(d) AF-II: August 2012: This was part of the Rapid Response Program covering three operations in Malawi. It added US$50 million in the form of US$25 million IDA grant and a US$25 million in IDA Credit. Project Components were somewhat modified and a new Emergency Response component was added (as shown in Revised Components), the PDO was somewhat altered (as shown under Revised PDO), and the closing date was exended to December 31, 2014.

(e) Closing Date Extension: December 2014: The closing date was extended by six months to June 30, 2015 to complete some on-going activities, and provide time for the completion of the Shire Valley Irrigation studies. There were also a reallocation to take care of cost overrun in some components.

(f) Restructuring to trigger use of the Emergency Component: Janaury 2015: This involved invoking the Component 5 of the project and reallocating US$600,000 to this component to immediately finance rehabilitation of roads destroyed by floods.

(g) Reallocation: June 2015: To reallocate funds across two categories which was an inadvertent oversight during an earlier restructuring. Administrative in nature only.

26. There were also two other changes at the time AF-II was appraised:

(a) Implementation arrangements: The project was designed to be implemented by MoAIWD and MASAF. A change in the implementing arrangement which did not have an adverse impact on the project was the exclusion of MASAF as part of the implementing arrangement during the AF II. The financing arrangements for community sub-projects were to no longer be undertaken by the MASAF/Local Development Fund (LDF), as the reorganization of LDF had reduced the added value of this arrangement for the project. At project design MASAF was proposed to manage demand driven activities under the project, given its strong experience in community driven activities and following its implementation modalities – in collaboration with the district councils. Since then, MASAF reformed and had no district based staff to support the project, or a mechanism to oversee community level activities, disbursements or verification for IRLADP. These roles had been taken over by the PCU, the district councils and the National Local Government Finance Committee. The PCU carried out all procurement, community disbursements and monitored funds flow to Districts, following manuals that were set-up between MASAF and IRLADP at the start of the project. For effective delivery of services, procurement below the Distirct level used procedures under the Malawi Public Procurement Act, August 2003, together with its regulations

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and desk instructions with certain exceptions. Procurement Management Committees (PMC) which comprised of local people at community level with guidance and support from district level or a designated service delivery such a Non- Governmental Organization carried out actual implementation of projects. The Committees sourced materials and hired contractors to undertake the works themselves. Procurement Manuals and friendly useable Handbooks which were adopted from MASAF were used .

(b) Co-financing: The original IRLADP was funded collaboratively through an IDA Grant, an IFAD loan and Government’s and beneficiary counterpart funding. IDA and IFAD funds were co-mingled to finance all the project activities. With the IDA AF-I, the percentages of co-financing were revised to reflect the higher share of IDA financing. The IFAD loan fully disbursed by the original project closing date of June 30, 2012, and no future co-financing was available.

2. Key Factors Affecting Implementation and Outcomes 2.1 Project Preparation, Design and Quality at Entry 27. Soundness of background analysis: The project drew lessons learned from the IFAD-financed Smallholder Floodplains Development Project (SFDP) specifically focusing on helping Water User’s Associations (WUAs) compliance with new regulatory and legislative framework, and strengthening WUAs capacity building. In addition, support was heavily drawn from lessons learned in IDA’s support strictly for the sector through the Agricultural Services Project (ASP). Most notably, the project looked at the way ASP involved relevant stakeholders in the conceptualization and design of project, inclusion of complementary investments to enhance farmer incomes, building implementation capacity, achieving effective flow of project resources to the field, reliance on the private sector in the implementation of irrigation schemes, and promoting participatory approaches for enhancing provision of agricultural extension services. In addition, the project carried out pre-feasibility assessments of irrigation schemes to be targeted in the country, as no prioritization framework or studies were available off the shelf. 28. Assessment of project design: The project addressed the three main constraints to agricultural development in Malawi (irrigation, inputs, and market access) through the component activities. It was a very ambitious project though – new advisory services arrangement, Irrigation Act with pending regulations for irrigation management transfer, upfront agreement on O&M and transfer with WUAs, grants for extension services using a limited array of service providers, grants for market access and post-harvest sub-projects, institutional changes in irrigation and agriculture marketing departments, dealing with issues relating to land security and water rights assignment, contribution by beneficiaries and cost recovery for irrigation schemes, among other aspects. It was highly innovative in the Malawi context and thereby somewhat risky. The results Framework was open-ended and relied on the first baseline to populate the targets (see PAD Results Framework) but economic analysis was very basic and relied on just three farm models for ERR/FRR computations. The project was limited to 11 districts and in that sense tried to contain the risks emanating from an innovative design, and worked through two nodal and expert implementing agencies with two designated accounts for easy flow of funds. 29. Implementing arrangements: The nature of the project required a variety of departments and districts to actively implement project activities. Originally, the project was designed to be implemented by two institutions: MoAIWD and MASAF and this remained unchanged until AF-II (see paragraph 26(a) for details). The capacity of the line ministries needed strengthening, and coordination across departments and ministries needed to be enhanced. Therefore, the Project was designed to be implemented by a PCU established in the MoAIWD to oversee project implementation and monitor project progress, coordinate and account for the utilization of project funds, while implementation rested with the various technical

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departments in the Ministry, and District Councils. The PCU was headed by a competitively recruited Project Coordinator, and included the following experienced staff acceptable to the Bank and IFAD: a Procurement Specialist, a Financial Management Specialist/Accountant, a Monitoring and Evaluation Specialist, and a Social Development Specialist. Within the Department of Irrigation, an Irrigation Water Management Unit was established to manage the irrigation sub-projects in the project and a Water User Associations Support Unit to oversee and support WUAs in the country. District level capacity was enhanced through the creation of District Irrigation Advisory Services Units and the recruitment of new staff, which were subsequently incorporated in the staff of the Department. 30. Project response to GoM requests: Government requests arose in three instances during implementation and the project design shifted to respond to both. In 2010, the government requested additional financing credit to address project cost overruns, complete planned rehabilitation of the irrigation schemes while providing the technical and managerial capacity required for sustainable small-scale irrigation development in Malawi, and to strengthen support to farmers’ access to organized supply chain. The project responded by increasing the Bank’s financial contribution to the existing project activities through a US$12.7 million Credit. In 2012 the Government urgently requested support to the ongoing macroeconomic stabilization proram and associated measures to mitigate the impacts of these reforms, particularly on vulnerable households in the wake of near economic collapse. As part of a Rapid Response Program, the Project received additional US$ 50 million in financing to scale up its social safety net function and support productive rural livelihoods in irrigation (mainly through IFA) and support for further investments that strengthen resilience in agriculture. In the third instance, Component 5 was triggered on January 14, 2015 in response to a major flooding disaster which destroyed agricultural land and property, displaced thousands of people and killed some in more than 15 districts. The extent of the damage and impact of the flooding compelled the Head of State to declare a national disaster and this immediately triggered the process towards emergency response. The project immediately requested a reallocation of US$600,000 to component 5 with justification and this was approved by the IDA. This process was effected and completed in a record three days in keeping with a disaster response. Immediately consultation with the Government recommended that the resources be used for repair and maintenance of access roads to facilitate movement of relief items to affected communities. 31. Government commitment: The government maintained sustained commitment to the sector issues related to enhancing agricultural productivity. Agriculture, and irrigation in particular, are highlighted as key priorities for subsequent government administrations in the Malawi Growth and Development Strategies that Malawi has had since the project started. This was apparent in the Government’s continued commitment to provide its own budget to the project, maintain the required implementation mechanism and expand this over time, hire additional irrigation staff (from the DIASU), pursue the training program which significantly enhanced implementation performance. The Government further demonstrated its commitment to the sector and its needs through the requests for the additional financing which responded effectively to ensure that the Project objectives and overall sector challenges were addressed and scaled up.

32. Donor coordination under IRLADP: The project was co-financed by IFAD relying on Bank procedures for implementation. The PCU was overseeing the project implementation, progress and achievements, and coordinated and accounted for utilization of project funds. The PCU was responsible for submitting to both IDA and IFAD semi-annual progress reports on the project. Implementation support missions were jointly undertaken by World Bank and IFAD from the inception of the Project to June 2012, when IFAD financing closed as planned. Coordination has been effective and supported learning from previous programs and helped informing and preparation of future programs by various donors. Some of the sector arrangements (WUA training, safeguard training, WUA regulations) have set the stage for all future investments. The inclusion of financing for the irrigation investment framework was based on a

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request from Government to all development partners and based on a ToR that was shared and discussed in the sector’s Technical Working Group, and therefore has broad ownership in the sector. 33. Risk Assessment1: The most relevant risks and associated mitigated measures are summarized below:

a) Risks related to the irrigation component: The PAD highlighted the social risk associated with scheme transfer, dealing with competing claims in government scheme transfers over the irrigation land and infrastructure between previous indigenous owners of the land and the current irrigation users. The team mitigated this risk by focusing in the schemes transfer on gradual transfer to beneficiaries of the management of the infrastructure and launched social studies on how best to handle the land and infrastructure transfer. The second risk noted in the PAD is the risk in the government schemes of the potential shortage of capacity in the MoAIWD to undertake engineering design and construction works for scheme rehabilitation. This risk was mitigated by awarding a significant portion of scheme rehabilitation design and supervision to private engineering firms and construction works to contractors. Thirdly was the risk of farmers’ inability to operate and maintain the schemes properly once rehabilitated. The project mitigated this by training of farmers built into the project on scheme O&M as well as establishment, capacity enhancement and performance agreements with Water User Associations; coupled with the support that would come from the proposed Irrigation Advisory Service. The fact that the project was extended by 2.5 years (for other reasons) had the additional benefit of longer follow through on the change process.

b) Delays in the implementation of the decentralization plan: The PAD highlighted the delays would affect district level capacities and operating resources and related provision of front line services (e.g., extension) to farmers. This risk was recognized as “high”, but was seen a matter of being resolved between MOA, Ministry of Local Government and Ministry of Finance. This risk was mitigated by concentrating on project activities least affected by decentralization when, during implementation, there were signs of inadequate progress on decentralization. Also, this was mitigated by reprogramming funds for district extension to producer groups during implementation that they can use to procure technical services from alternative providers; e.g., NGOs, etc. this remained a problem during the whole project although capacity improved in the latter years, especially in terms of irrigation technical staffing and fiduciary management. To strengthen the extension outreach, the project implemented farmer field schools and farmer business schools, and third party service providers were used for business management support.

c) Risks related to the mechanism for administering the “Inputs for Assets” program: This was

operated using independent agencies outside the control of government ministries, and MoAIWD had no experience, and there was a need to identify possible partners to work with the Department of Extension Services. This risk was mitigated by involving MASAF in the administration of the funding and accounting for this program, since it had a proven track record of successfully managing such a program. Later, this function was ably taken over by Districts with the guidance of the PCU and MoAIWD management. When the project scaled up additional capacity in the PCU and its outreach offices provided additional quality control.

d) Risk related to the availability of adequate government counterpart funds during project

implementation: The project design minimized government cash contributions as much as feasible. The project continued to receive financial as well as in-kind contributions from the government throughout the project.

1 Overall project risk was not rated in the PAD since the Bank at that time did not have such rating.

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e) Risk related to the negative impact of HIV/AIDS on the agricultural workforce and on agricultural worker productivity: This was mitigated through social extension, in which prevention messages for the uninfected and advice on alternative livelihood strategies for the HIV infected were provided. The focus shifted slightly more towards nutrition in the latter years. Continued support was included under the ASWAP-SP specifically through the Farmer Based Organizations (FBOs).

2.2 Implementation 34. There was a QAG assessment for IRLADP in 2010 which complimented the Bank team on the high quality of implementation support. This assessment rated the Quality at Entry (QAE) as Moderately Satisfactory and the supervison was rated as Satisfactory. Specifically, implementation progress was Satisfactory from March 2008 to April 2009, became Moderately Satisfactory from October 2009 to March 2010, upgraded to Satisfactory from October 2010 to April 2012, Moderately Satisfactory from October 2012, and improved to Satisfactory from April 2013 to April 2015 as indicated in the final ISR. Despite concerns about institutional capacity and recurring external shocks (economic and weather), the effective coordination and supervision led to the achievement of the PDO and intermediate results by both the original grant and the AFs, which contributed to improved agricultural productivity in rural Malawi. Several factors positively impacted implementation:

- Review meetings: Periodical review meetings where the departments and the PCU could come in and discuss implementation issues positively affected project implementations as challenges were successfully ironed out timely.

- Joint field trip reviews: Joint field trip reviews between implementing departments and the PCU also helped in facilitating timely implementation of Project activities.

- Special meetings with contractors and consultants: The PCU and implementing departments at times held special meetings with contractors and consultants. This process enabled the contractors/consultants to outline the progress and challenges they are facing and thus ensured that most consultants/ contracts were finalized on time.

- Establishment of regional project outreach offices: Given the scale of the project, it was too difficult and costly for the PCU in Lilongwe to supervise all district activities. IRLADP established outreach offices in each region for direct supervision of the district activities. The main role of the outreach offices was to distribute funds, especially to keep them in line with actual activities in the districts, and the monitoring of progress on objectives and deliverables. The OO would only send new funds to the districts after earlier disbursements have been settled. This implementation arrangement of disbursing funds through outreach offices made coordination of activities very easy, because there was no need to report directly to the PCU as was previously the case. It made the management of the project closer to the beneficiaries and Communication was also faster. The set-up also facilitated smooth disbursements of funds.

- Continued government support of the sector: Agricultural development has remained a priority for Government’s medium development strategies and all subsequent Country Assistance Strategies (CASs) throughout the project implementation phase.

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- Donor coordination: The project benefited from a very good collaboration with IFAD as evidenced through joint overall project supervision activities and good interaction on project administration and disbursements in general. Also, lessons from the IFAD financed SFDP were brought in and strengthened project design. Likewise, IRLADP lessons are finding their way into various programs, including the proposed IFAD financed irrigation project. Furthermore, in regards to irrigation, the project had very good dialogue with other key donors in the sub-sector such as the African Development Bank (AFDB), European Union (EU), and the Japan International Cooperation Agency (JICA).

- Capacity building and strengthening of institutions: There was substantial enhancement at district level not only in terms of numbers but also in terms of training. Institutional set up changed during the project. Irrigation Department moved in and out of the ministry but that did not affect the project because there was willingness to collaborate across institutional boundaries.

- Restructurings: The project went through several restructurings on a proactive basis to expedite disbursements, meet cost-overruns, project scale-up, and provide for a potential disaster to facilitate a quick response as occurred during the January 2015 floods.

- Focus on documentation, lessons learning and setting the scene: As the first project to implement many of the activities at scale in the country, the project was seen as a vehicle to set the scene for future investments in the sector and as such focused many efforts on documenting lessons learnt, standards set, providing the framework for future investments in the sector and work on the regulatory framework and regulations.

- Midterm Review (MTR) Mission: An MTR mission took place in 2009 by the joint World Bank/IFAD and Government of Malawi team which assessed the project progress as well as made recommendations to ensure positive implementation. At MTR, the performance of the project was largely on course towards meeting the PDO. The overall physical implementation status at MTR was estimated at around 60 percent. In general, the MTR found that the original design of the project remained highly relevant for the sector, and was in-line with the evolving Government priorities in the sector. As such, the mission did not propose significant changes to the project design. However, the MTR mission proposed to strengthen the synergies among project components, andensure that relevant lessons were drawn from the Irrigation Rehabilitation and the Inputs for Assets components that will inform the GoM’s new priorities in the sector. One key example was that the MTR recognized the empirical impact the IFA program had on mini irrigation development and supported its further development, which was later massively scaled up during AFII in 2012.

Despite overall positive results, several factors adversely impacted project implementation: 35. Delayed start-up of the irrigation rehabilitation component due to technical design development issues, cost escalations due to increase in international prices (fertilizers) which rendered the cost allocated to Inputs for Assets component activities, local cost escalation (cement) which affected the cost of irrigation schemes’ rehabilitation all contributed to implementation problems. At the time of the first AF, issues relating to WUAs and scheme transfer were still unresolved.

36. Political situation: In the course of implementing the project, Malawi experienced three different political regimes (2006-2012; 2012- 2014; and 2014-2015. Worth noting is that all these political regimes prioritized agriculture and the project was complementary to their political objectives. In 2012, the country also lost a sitting Head of State amid economic turmoil. However, a smooth transition of power followed the constitutional order with the Vice President taking over as Head of State and Government and the

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Project was instrumental in responding to the economic crisis that had hit the country. Towards the end of the project, the country conducted tripartite polls where amongst others, Councilors were elected bringing hope for improved local level governance and service delivery. 37. Economic challenges: Macroeconomic imbalances started to build up in 2009 in the context of the global economic crisis. Between 2010 and 2012 there were deteriorating relations with donors and many donors pulled out aid earmarked for budgetary support and developmental programs. This was exacerbated with the global economic crisis which led to fiscal and external imbalances that required adjustment by containing domestic demand. By the end of 2011, Malawi was struggling with severe fuel and foreign exchange shortages and this greatly reduced economic activity in the country. Real GDP growth for 2011 and 2012 was estimated to have slowed to about 3.5 percent and 2.1 percent, respectively. However, a new political regime in 2012 saw the coming back of many donors with both budgetary and developmental support. This coupled with economic reforms in key sectors resulted in real GDP growth of 6.1 percent in 2013 and 6.3 percent in 2014. Furthermore, during the course of implementation, Malawi experienced very high levels of inflation. Between 2009 and 2011, Malawi had an average of 8 percent inflation. However in 2012 and 2013 inflation on average was 21.3 percent and 27.3 percent, respectively reaching a record high of 37.9 percent in March 2013. In addtion, exchange rate regulations took place. The GoM addressed the overvaluation of the exchange rate with a one-step 49 percent exchange rate liberalization, removal of restrictions on the setting of exchange rates by banks and foreign exchange bureaus for transactions with their customers and removal of the requirement to surrender tobacco export proceeds to the Reserve Bank. Construction progress which had slowed down in 2011 due to unavailability of forex and fuel to many of the contractors, re-bounced. 38. Capacity constraints at different levels: The IRLAD project was implemented at the Central (national), district and community levels. On the basis of the capacity assessments by the MoAIWD and MASAF, the project was found to operate in a high risk environment. Lack of adequate human resources in districts, and the absence of comprehensive accounting systems in the Ministry, districts, and communities and also lack of technical capacity were some of the capacity problems identified. There were a number of mechanisms that were developed at the start of the project and during the course of project implementation to ensure that these capacity constraints were addressed. These included: (i) recruitment of justification assistants (in Nsanje, Phalombe, Lilongwe, Salima, Nkhata Bay and Chitipa) to facilitate timely implementation of IRLADP activities and timely planning. IRLADP also invested in training district staff in financial management and procurement. The technical and financial reporting at district level greatly improved and there were few problems with the reporting and this also facilitated timely flow of funds to the district; (ii) establishment of regional project outreach offices in each region for direct supervision of the district activities; and (iii) introduction of District Irrigation Advisory Services Unit (DIASU) and recruitment of DIASU staff to provide support to Irrigation Water Management Unit (IWMU) and was responsible for strengthening irrigation advisory services at district level. 2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization 39. M&E design: Associated modifications were made to the Results Framework during the AF-1 to ensure realism of the targets, consistency, and alignment of the intermediate PDO outcomes and their indicators. Relevant core indicators have been included to re-align the results framework with current best practices, with some further revisions adopted with AF-II. After these modifications, the project adequately measured progress towards the overall PDO, and the framework succeeded in measuring the direct outcomes of the project. The original project’s M&E plan included the following actions:

- Overall monitoring of the project’s implementation as well as assessing the development impact of the project was assigned to be the responsibility of the M&E specialist in the PCU. The M&E

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was designed to be carried out using a rapid results and participatory approach. Furthermore, a multi-discipinary team was formed to conduct rapid result assessments across the range of project supported activities, focusing on the overall result.

- Staffing of the PCU included hiring an experienced monitoring and evaluation specialist based in the PCU headquarters, and three monitoring experts based in three regional outreach stations. These specialists would prepare consolidated monthly, semi-annual and yearly progress reports, conduct yearly impact surveys, and identify rapid results teams for the yearly assessment.

- Establishing benchmark indicators for the project through conducting a baseline survey by MOA, in addition to taking steps to formulate a consolidated action plan for one focal area prior to serve as a demonstration area for the remaining districts. The M&E was designed in a manner that would create an ongoing process of learning through PCU management balancing rapid results initiatives with longer term project goals, help spread M&E implementation insights from team to team, and fine tune overall implementation strategy.

- The PCU had the responsibility of submitting to both IDA and IFAD semi-annual progress reports on the project.

- A mid-term review was to be conducted jointly by MOA, IDA and IFAD during the third year of project implementation to take stock of project implementation progres, consraints, and recommendations for improvement, and assess logframe indicators in light of actual achievements on the ground and propose improvments.

Implementation and use: 40. M&E Implementation: Several activities were undertaken to ensure effective implementation in

terms of M&E design and implementation arrangements. These were:

- Development of baseline data and setting of project targets: the project conducted a baseline survey to collect information that was used as a benchmark for measuring the success of the project. The baseline survey report also reviewed the M&E framework and included some key indicators that were missing from the original framework. This was followed by the formulation of targets to be achieved by the project following the guidelines presented in the project appraisal report.

- Training of field staff in agricultural data collection: About 3,300 members of staff at ADD, District and EPA level were, therefore, trained in agricultural data collection. The training improved the quality of data being collected.

- Preparations of the Annual Work Plans and Budgets: Throughout the life of the project, the project has been preparing annual work plans and budgets to guide implementation of annual activities. Eight work plans have been prepared and implemented.

- Impact assessments: The project has conducted 3 Beneficiary Impact Assessments (BIA) on the activities implemented by the project. The third BIA was done at the end of project. The first BIA was done in 2009 with the objective of obtaining the beneficiary perception and opinion on progress and impact of project. A follow up BIA was done in 2012, the results of which helped in the formulation of the program under AFII. In 2009, Mid-term evaluation on the program, was done. Through this evaluation, the design of the Project was greatly modified. For example, under

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Component One, the construction of Rain Water Harvesting Tanks was dropped after establishing that the cost of construction was too high in relation to the benefits being realized.

41. M&E Use: The M&E information generated led to inform the project in the following ways:

- The system generated sufficient evidence of Project impacts on beneficiary livelihood improvements which gave Government confidence to make critical policy decisions towards seeking further support for scaling up the Project activities in July 2012 as part of the strategy for cushioning poor and vulnerable households from the effects of economic hardships the country was going through.

- The information on achievements and lessons learnt generated through monitoring system and technical studies also provided critical inputs in streamlining the design of AF II program from July 2012 to December, 2014.

- The project has made substantial impacts in enhancing the skills of beneficiaries and district staff in tracking and reporting of implementation progress which will go a long way in influencing continued culture of results management.

- Participatory M&E was implemented in the irrigation schemes with organized groups. FBOs and cooperatives only kept records on a limited number of indicators. An M&E framework was used by the WUAs to document, amongst others, the number of farmers, the number of hectares cultivated, the percentage of cultivated area in the dry and wet seasons, yields, membership fees, income per household etc. The M&E committee presented this information at each general assembly of the WUA. This was done in all large irrigation schemes, but for the smaller schemes in the Southern region only. - The project has also prepared a comprehensive report on the lessons learnt for all the project components to inform future programmes what works and what did not work to help them avoid re-inventing the wheel.

2.4 Safeguard and Fiduciary Compliance 42. Safeguards compliance: The Project was classified as Category B, and triggered the following policies: Environmental Assessment (OP/BP 4.01), Pest Management (OP/BP 4.09), Involuntary Resettlement (OP/BP 4.12), and Projects on International Waterways (OP/BP 7.50).Some of the specific dynamics on irrigated agriculture in Malawi in customary settings were not realized early on. In Malawi, where most of the land is customary and land is mostly acquired through inheritance or given by a chief, land tenure security is critical for the sustainability of irrigation schemes. In the case of small scale irrigation and mini irrigation schemes, customary rights are handed over during the irrigation season. It was decided during implementation to support this process and land and water use agreements were signed between land owners and WUAs and endorsed by chiefs and district, so as to document the practice and provide for future reference. This approach was innovative and seemed to work well in most schemes, although it is sub-optimal for soil fertility management. However, in a few cases, there were reports of potential land tenure conflicts and these were ably handled by village heads. 43. Environmental Safeguards: The final ISR rating on safeguards was “Satisfactory”, an improvement from the “Moderately Unsatisfactory” rating assessed during the October 2009 Mid-Term Review (MTR) mission. The MTR concluded the presence of inadequate grasp of environmental and social safeguard issues, especially at the District level. Although the design reports for the irrigation schemes had

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included the environmental and social safeguards and their mitigation plans, the project as a whole was not up-to-date on these issues. The MTR suggested that follow-up activities were necessary and should include an action plan to sensitize staff on environmental and social safeguards for the project. Project staff participated in regional safeguards clinics. The project supported and strengthened professional knowledge of district environmental sub-committees in all 28 district councils. These committees are now capable of managing environmental and social screening of any kind of projects within each district council. The project has trained 501 members of district environmental sub-committees on environmental and social safeguards. Training covered screening of sub-projects, preparation of environmental and social management plans. The project has trained 877 extension workers on environmental and social safeguards. The extension staff play a critical role in preparation of safeguards documents and implementation with farmers and communities. These trainings were harmonized across different projects/implementing agencies and delivered as a set of training at national level. The project trained over 60,000 farmers and members of local committees on environmental and social safeguards. The project has supported the production of hand books and leaflets on environmental and social safeguards. The handbooks on environmental and social safeguards are now used by district staff and extension workers on environmental and social screening beyond the project. Therefore, the action plan developed during the MTR and the March 2010 mission with regards to the environmental safeguards was being implemented effectively. 44. Pest Management: The final ISR rating was “Satisfactory” A simple and practical pesticide management plan was prepared to guide measures in mitigation of negative risks and impacts within the project for a number of new and rehabilitated irrigation schemes. The pesticide management plans have been adopted in procurement of pesticides from licensed retailers, storage, and application on the schemes by farmers. 45. Projects on International Waterways: Overall, compliance throughout the project was rated “Satisfactory” and the project had obtained an exception to notification under OP/BP 7.50 because of its primary rehabilitation and small scale nature. This exception was reaffirmed at AF II stage in 2012. 46. Involuntary Resettlement: Overall, Involuntary Resettlement Safeguards compliance throughout the project rated “Satisfactory”. The project has not caused any involuntary resettlement because the rehabilitation was largely in already existing schemes and otherwise based on farmer’s request on available land, and participatory land and water agreements were drawn up, confirming land tenure situation. 47. Procurement: The final ISR rating was “Satisfactory”. The project risk rating in contract processing and management has continued to be low. The final April 8-17, 2015 AM noted that all procurement procedures were adequate and concluded successfully. Overall, the project did not face problems in contract packing and scheduling, procedures for procurement of goods and services were generally followed by the project (the Internal Procurement Committee (IPC) at the Ministry of Agriculture , Irrigation and Water Development met regularly to support the project in the award of contracts), delays in processing of procurements were kept to a minimum, the project was supported by a full time dedicated procurement specialist, and the delays in processing procurements were kept to a minimum. In addition, in its entire years of implementation, there was no case of fraud, corruption or bribery recorded under the project in the award of contracts. 48. Financial Management (FM): The final ISR rated FM as “Moderately Satisfactory”. This was primarily due to delayed reporting and also weaknesses in the FM system, while overall FM arrangements, as confirmed by the final mission were found to be generally adequate for the purposes of recording, controlling, and reporting on project activities, and the project adequately disbursed and reported on all expenditures, including during the massive upscaling. The project migrated from SOE based reporting to Financial Monitoring Reporting (FMRs) as the basis of disbursements as capacity at districts improved.

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2.5 Post-completion Operation and Next Phase 49. Post-completion Operation: Project interventions have been designed with longer-term institutional and financial sustainability in mind. This is the key design choice for the strong focus on institutional strengthening at the farmer and WUA level for post-project operation and management, and maintenance of (irrigation) assets. WUAs have the legal basis, the water rights, the land tenure rights, formal IMT agreements, and internal constitutions as well as capacities to manage both water and financial resources, resolve conflicts and improve performance. The Government is better placed to follow up at district and national level through its staff complement, the monitoring tools available and legal agreements with WUAs on performance. The IFA program is not intended to be continuous with the same beneficiaries and has been designed to provide both a short term input (the fertilizer) and a community asset that both should provide longer term benefits at the community and household level. Asset maintenance is managed through WUAs (for irrigation ) and Road Maintenance Groups (for roads), and annual maintenance will be required to maintain the assets. Support to FBOs at the end of the project reached a stage where close government support was no longer required. A process of business advisory support through third party service providers was extended by a year through the ASWAP-SP after which it is expected that these are sufficiently independent and capable of making successful business decisions. The institutional arrangements in the Irrigation Department have been established in the Ministry’s organogram, where the Irrigation Advisory Services Units and the Water User Association Support Unit have been mainstreamed. The Irrigation Water Management Unit as such remained a project office and will – in different form – continue to support irrigation projects and the aim is that it will eventually be transformed into/replaced by a technical office supporting the National Irrigation Fund, once this provision in the Act is operationalized, maintaining the core principle of a “projects office” and the capacities therein. 50. Follow-on operation: The AF-II was to support preparation for future investments. Prominent was a strategic study on the future of irrigation development and management in Malawi. The strategic study was to help to inform a comprehensive investment framework and master plan for irrigation development. Additionally, AF II included support for a comprehensive set of feasibility and other studies (environmental, financial, institutional, land tenure) for the proposed Shire Valley Irrigation Project (SVIP). Furthermore, a set of (pre)feasibility studies for different types of irrigation were to be carried out. ·The strategic new assignment, developing the irrigation master plan and investment framework (IMPIF) was accomplished as planned. A total of 407,000 ha were identified as potential for irrigation in Malawi. The IMPIF was prepared for a period of 2015 to 2035 and aims at achieving utilization of 210,000 ha. 3. Assessment of Outcomes 3.1 Relevance of Objectives, Design and Implementation 51. The revised Project Development Objective was and remains highly relevant and continues to be aligned with the Government of Malawi’s high priority on sustainable agricultural land and water management, including irrigation development, which reduces dependence on favorable weather conditions, while enhancing productivity. The project was also consistent with the principles of the Agricultural Sector Wide Approach (ASWAp) in which one of its main aims is to increase the area under sustainable irrigation from 72,000 ha through the Green Belt initiative. The Project was also in line with the National Irrigation Policy and Development Strategy (NIPDS) which stipulates that support to a thriving irrigated agriculture sector be demand-driven and service oriented with the full participation of farmers and commercial interests Furthermore, the NIPDS encourages private sector participation in irrigation development. These were involved in the design and construction of irrigation schemes thus achieving the PDO of ensuring strengthened institutional capacity for long-term irrigation development.

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52. The project design and implementation strategy remains relevant, aligned with the Malawi Country Assistance Strategy (CAS) 2013-2017, and is considered in new sector projects. Agriculture continues to be the key economic sector for Malawi’s growth and development as is the main source of income, employment and (include how much agriculture contributes to exports). Nevertheless, vulnerability from economic and climate shocks, and low agricultural productivity remain a threat to food security and poses a challenge for agriculture in Malawi. - Design: IRLADP design was successful in ensuring that small farmers were optimizing their returns from irrigated farming through obtaining complementary goods and services in the form of demand driven support in three windows: support for extension, support for input for asset, and support for marketing and post-harvest assets. Another key successful design with positive spillovers on future projects was IRLADP’s focus on building and strengthening the capacity of public institutions in the sector. - Implementation: The development of Irrigation Master Plan and Investment Framework (IMPIF) has provided linkage for the irrigation sector to ASWAp and Water SWAp. The IMPIF has strengthened the institutional capacity for long term irrigation development. It has defined the development plan and financing framework to guide expansion of irrigation sub sector over the coming 20 years (2015-2035), highlighting priorities for investments and arrangements for coordination and managing implementation. Government has already started planning and implementing irrigation development program based on the IMPIF. Furthermore, the IMPIF has defined the development cost per hectare for irrigation schemes which will inform the preparation of future investments. Program for Irrigation Development (PRIDE) which is under preparation to be financed by IFAD has been planned based on the IMPIF. Also the preparation of feasibility studies for the new irrigation developments has already informed preparation of new irrigation projects (Smallholder Irrigation and Value Addition Project; PRIDE). - Due to their success, both the SRI technology and WUAs have become part of the mainstream policy for enhancing agricultural productivity and management of irrigation schemes. Both defined how small scale irrigation should be undertaken in Malawi. 3.2 Achievement of Program Development Objective 53. The PDO has been substantially achieved. The PDO had two broad sub-objectives and outcomes: (a) improving agriculture productivity of poor rural households; and (b) institutional capacity strengthening for long-term irrigation development. The project implemented a number of studies to generate evidence of Project impact in beneficiary livelihoods and more generally on project outcomes and these included: Beneficiary Assessment of the IRLADP; Two Impact Assessment Studies; Impact Evaluation of the project on beneficiary FBOs and MICs.

54. On the first sub-objective on agriculture productivity improvement, the key achievements have been:

- Assured supply of water: This happened through irrigation schemes (large, small and mini irrigation schemes), and irrigation support provided under Inputs for Assets (IFA) program – total of about 14,400 hectares (10,354 ha under IFA+2,590 ha under government schemes rehabilitation+1,457 under new small and mini-irrigation schemes); this is further supported by catchment area development and soil and water conservation measures which are aimed at reducing overland flow and run-off, improving water retention and soil fertility, and ground water recharge adding to the base flow of the rivers feeding the schemes. This was achieved through protection of 60,653 ha in priority catchments under IFA and component 1 activities (IOI 1, 2 and 4).

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- Supply of inputs and equipment: This included provision of inputs package of fertilizers and seeds under the IFA program: 38,875 tons of fertilizers; and a mixed supply of seeds consisting of 6,178 tons of hybrid maize seeds, 2,005 improved cotton packages, 186 tons of improved rice seed (including 115 tons of certified rice seed), 950 tons of bean seeds, and 1.2 tons of vegetable seeds, to about 655,000 beneficiaries (compared with the target of 442,000 beneficiaries) (IOI7). The project through the FSLF component provided farm machinery – power tillers. Rotary weeders, and conoweeders – which supported agriculture operations in irrigated areas under the project.

- Improved agricultural practices and farmers’ organizations: The project demonstrated new ways of soil and water conservation, rice agronomy, improved rice seed selection, post-harvest storage (IOI 5) and supported farmers through the FSLF to form farmer based organizations in a range of agriculture value chains and value addition activities (IOI 6)

- Facilitating market access: The IFA program also supported creating/improving infrastructure to support market access: 29 improved market structures (including markets, warehouses and processing structures), established 8 Market and Agribusiness Info Centers, and some 16, 900 Kms of feeder roads facilitating connectivity to markets (IOI 8).

- Provision of extension services: The project reached out to 346,940 farmers with extension services, either directly or through lead farmers based extension arrangement.) (IOI 10)

All of the above supported the transformation of agriculture in the project areas through increased cropping intensity, crop diversification, improved productivity, and increased farm sales:

- Increased cropping intensity: In the three broad groupings of irrigation areas (large, small and mini schemes), cropping intensity increased from 86% to 163%, from 80% to 175% and from 80% to 195% for the three groups respectively;

- Crop diversification occurred although differently for the three groups of irrigated areas: a shift from predominantly cassava production to a mix of maize, rice, sweet potatoes, green maize, and tomatoes for areas under large irrigation schemes; mostly green maize and tomatoes (and little rice due largely to the land tenure arrangement restrictions) in areas under small schemes; and rice, green maize, sweet potatoes and tomatoes in areas under mini schemes;

- Improved productivity of irrigated maize and rice: While the project is contributing much to increase in general maize yields through IFA, the attribution to the project is difficult to measure given the prominence of FISP and ASWAP-SP supporting maize farmers in addition to those covered under the project supported IFA program. While maize is not the only crop on the small schemes it is still a good proxy for yield increase in a diversified irrigated agriculture system. The second crop productivity measured was rice. Both yield data are obtained for irrigated conditions. There is a huge improvement in irrigated maize yield from 1.6 tons/ha at appraisal to 3.4 tons/ha, exceeding the project target of 3.2 tons/ha. For irrigated rice, the yield was 4.6 tons/ha compared with the baseline of 1 ton/ha. The target was a doubling of the yield to 2 tons/ha. The dramatic increase in rice yield could be attributed to use of certified seeds and SRI approach to rice production (PDO Indictor 1 and 2); and

- Increased farm sales for irrigated maize and rice: Although diversification was expected, the focus of the indicator was on the two core crops of the targeted farming system as horticulture would have been too broad to be properly measured. While the project supported and indeed achieved diversification, rice and maize sales increase was considered to serve as proxy for a wider crop mix. From a baseline of MWK 16,586 for an average rural HH, the farm sales was expected

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to increase by 40% by EOP. The actual sale was MWK 54,364 per HH, an increase of over 225% at end-of-project (PDO Indicator 3).

55. On the second sub-objective on long-term institutional capacity enhancement for irrigation, the key achievements have been:

- Better and improved water management: Formation of 94 WUAs against the target of 75 covering about 45,000 farmers) are operational and sustainable in terms of levy of water use fee and collection efficiency and farmers have been trained on scheme Operation and Management (IOI 3, 9 and 12). All these have secured land and water rights, internal constitutions, where relevant underwent irrigation management transfer and have ongoing performance agreements with the Government.

- Improved capacity at district and central level for irrigation development. The hiring of staff and formation of district advisory services units and water user association support units under the project, and their institutional embedding Staff received hands on training, and built first-hand experience in small scale irrigation development and management. WUA monitoring is embedded in Ministry workflow. The program has also enhanced capacity at contractor level, including local artisans for repair and minor works. National guidelines on rainwater harvesting were also developed, as have standard bidding documents for irrigation investments.

- Improved long term planning support – The project developed the country’s first irrigation masterplan and investment framework, including diagnostic, prioritization matrix and financing plan. This was complemented with feasibility studies for the next generation of investments to ensure both quality at entry for future projects and more strategic project preparation through a rolling investment plan and (IOI 11). - Legal framework clarifications: Water regulations under the act have been developed, including mechanisms for Irrigation Management Transfer, registration of WUAs, land leases, water abstraction rights that are now general practice in Malawi’s irrigation sector.

- Training for longer term capacity: The project strengthened curricula and training facilities at Bunda College of Agriculture and Natural Resources College, developed manuals for WUA training, developed and widely disseminated a lessons learnt document on all implementation lessons from the project and has directly supported follow on operations, such as the new IFAD funded PRIDE operation and the Flood Emergency Recovery Project.

56. These activities and outcomes led to a substantial increase in the institutional capacity of the farmers, the private sector and government to develop and manage irrigation schemes. In particular, the planning framework supports the government’s ambitious irrigation agenda and it was adopted as the national framework within the Agriculture Sector Wide Approach (PDO Indicator 4). 57. Good project management (IOI 12, 13, 14) and the ability of the project to scale up in times of crisis, firstly during the economic crisis of 2012 through a large upscaling in terms of districts and beneficiaries as reflected in the PDO, and secondly in the aftermath of the major flood event in January 2015 when the project was able to reallocate funds to disaster response within days (IOI 15) further underpinned the achievements in agricultural productivity and increased resilience of poor rural households. 58. Overachievement of targets: The project substantially achieved the PDO, significantly exceeded all of its Outcome Indicators, and met or exceeded all of the Results Indicators. This can be attributed to several factors described above and also to the successful upscaling and extension of the project closing

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date providing an opportunity for the realization of results as well as institutional strengthening and capacity building which enhanced the implementation capacity of implementing institutions in the later years of the project, and saw results being achieved increasingly efficiently. 3.3 Efficiency 59. An economic and financial analysis was performed to evaluate the economic efficiency of the Project through a cost-benefit analysis, using actual project outputs and costs. The economic and financial analysis of the IRLAD involved updating the initial economic and financial analysis for the project by validating and making necessary assumptions on the following: (i) characteristics of farm models; (ii) incremental crop yields attributed to project interventions; (iii) incremental labor demand and the wage rate for family and hired labor under the different farm models; (iv) estimates of financial rate of return; (v) estimates of economic prices based on appropriate import parity prices; (vi) and estimates of economic rate of return the project. Consequently, economic and financial analysis was conducted taking into account only the benefit and cost streams associated to irrigation investments. Summary results of the economic and financial analysis: 60. The analysis uses representative farm models to characterize the smallholder farming systems for farmers supported under the project. The Project Appraisal Document (PAD) and the updated project economic and financial analysis (Mangani, 2009), considered three alternative models for the irrigation schemes:

1. The rehabilitation of existing irrigation schemes; 2. The rehabilitation of storage reservoirs; and 3. The construction of small and mini-irrigation schemes.

61. However, rehabilitation of the small storage reservoirs was discontinued, after agreement between the World Bank and GoM during mid-term review, due to limitations in budgetary allocations to the sub component2. The resources were reallocated towards other components of the project. Therefore, the third model was disaggregated into two and removed the reservoir model. Consequently, three farm models were considered for this study:

Model 1:Selective rehabilitation of existing large-scale irrigation schemes (LSIs); Model 2:Rehabilitation and development of small-scale irrigation schemes (SSIs); and Model 3:Rehabilitation and development of mini-scale irrigation schemes (MSIs).

62. The following key assumptions were made when estimating the financial rate of return:

25-year project life span was used for purposes of comparison since the same life-span was used at appraisal and at mid-term evaluation. FAO (2002), however, estimates life span of irrigation schemes at 20 years;

20% discount rate was used to reduce future net incremental income to its present value considering that bank interest rates hovered between 13% and 25% during the entire project implementation period;

2 IRLADP Implementation Completion Report (2015), p.35.

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Beneficiaries started realizing benefits from irrigation activities from third year project implementation, reflecting the delays in construction works at the beginning of the project.

Benefits from Farm Model 1 (LSIs) would be obtained in full from Year 5 of project

implementation since farmers in these schemes have long experience with irrigated agriculture. However, full benefits from Farm Model 2 (SSIs) and Farm Model 3 (MSIs) would be obtained from Year 7 of project implementation, increasing gradually in four years (25% per annum) from Year 3 when the project starts realizing the benefits;

Operation and maintenance (O & M) costs were estimated at roughly 5% of total direct investment

costs to farm models (i.e., excluding PCU costs) made at the end of investment period. 63. The Financial Rate of Return (FRR) for irrigation activities of the project was 47.69% which is higher than the baseline rate (17.34%) and projected rate at mid-term evaluation (34.41%). The FRR is the interest rate at which the irrigation activities would breakeven or the net present value (NPV) of the activities would equal to zero. Overall financial returns to the project showed an increasing trend between project-start and project-end, showing that returns to the project were increasing with project implementation. The increasing trend is attributed to increment in the number of beneficiaries, total hectarage under irrigation and crop productivity as a result of the rehabilitation and development of the schemes coupled with related activities such as catchment conservation, soil and water conservation methods, introduction of improved production methods (seeds, fertilizer and SRI) and capacity building at all levels. These findings indicate that IRLADP was a worthwhile project. Estimated financial and economic rates of return

Scenarios Financial Rate of Return (%) Economic Rate of Return PAD

(2005) Projected

(2009) Current (2014)

PAD (2005)

Projected (2009)

Current(2014)

Overall project 17.34 34.41 47.69 15 29.94 38.88

If benefits decrease by 10% 31.41 40.11 14 27.29 33.37

If invest. cost increase by 10% 31.77 40.93 14 27.61 33.98 If benefits lag by two years 23.47 23.34 12 21.01 21.51

Sources: World Bank (2005), Mangani (2009) and Independent Endline Survey & Impact Evaluation (2015) 64. The analysis showed that the overall project realized a positive Net Present Value (NPV) of US$ 6,491,780. The present values of the project’s incremental benefits and costs were estimated at US$ 16,144,320 and US$ 9,652,540 respectively, giving a Benefit-Cost Ratio (BCR) of 1.67 which is greater 1.0. These findings again confirm that irrigation activities of IRLADP were worthwhile or viable at the discount factor of 20%. 3.4 Justification of Overall Outcome Rating Rating: Satisfactory 65. The overall outcome rating of Satisfactory is based on the achievement of the following: - PDO achievement: Substantial. The project achieved the PDO based on data from ISRs, Government reporting, and the 2015 Independent Impact Evaluation.

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- Relevance of objectives, design, and implementation: High relevance. The Project’s objectives, design and methodology were highly relevant for subsequent irrigation projects, continued to be relevant for the sector as reflected in both the Government’s development strategy on sustainable agricultural land and water management, and the Bank’s 2013-2017 CAS. - Efficiency: Satisfactory. Good indication of economic and fiscal efficiency contributing to sustainability of the project impact. 3.5 Overarching Themes, Other Outcomes and Impacts 66. Gender: The Project supported introduction of the household approach in four districts where it proved to be the most effective approach for mainstreaming gender and HIV/AIDS issues.In addition, the project achieved all of its targets on minimum participation of females as beneficiaries, and emphasized female representation at WUAs, FBOs, and IFA committees. 67. Institutional Strengthening: The Project strengthened the implementation capacity of the Ministry of Agriculture, Irrigation and Water Development; strengthened the irrigation planning, design and supervision capacity in the Department of Irrigation; assisted the marketing unit in the Department of planning, as well as supported district councils, Bunda College, Natural Resources College and other MoAIWD training institutions; and capacity building of field staff, farmer beneficiaries, and other stakeholders participating in project implementation. Furthermore, the development of the Irrigation Master Plan and Investment Framework (IMPIF) has strengthened the institutional capacity for long term irrigation development. It has defined the development plan and financing framework to guide expansion of irrigation sub sector over the coming 20 years (2015 – 2035), highlighting priorities for investments and arrangements for coordination and managing implementation. The Government has already started planning and implementing irrigation development programmes based on the IMPIF. 4. Assessment of Risk to Development Outcome Rating: Moderate 68. Sustainability of outcomes: The Project has taken a participatory and demand-driven approach in the irrigation, farmer support and IFA components, and has invested considerable time and resources into strengthening institutions at farmer, water user association, cooperative as well as government level. It has also provided formal agreements on land tenure, water rights, and irrigation management transfer. The Government continues to prioritize and support the sector. The availability of improved seeds and fertilizers is ensured through parallel programs and improved income situation of the beneficiaries. There is still the risk of limited financing to maintain the infrastructure or government institutions or weakening over time of the arrangements and capacities, hence the moderate risk rating.

69. Remaining risks: Despite the mitigation measures put in place for continued sustainability of Project outcomes, some risks continue to exist, specifically, (i) weak land tenure security for the sustainability of irrigation schemes; (ii) natural disasters which continue to have devastating impacts on agricultural production; and (iii) lack of appropriate maintenance of project supported community assets may lead to abandonment of some of the infrastructure.

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5. Assessment of Bank and Borrower Performance 5.1 Bank Performance (a) Bank Performance in Ensuring Quality at Entry

Rating: Moderately Satisfactory 70. The PDO was well aligned with the GoM’s requests for the proposed operation to address sector issues and constraints related to enhancing smallholder agricultural productivity, and remained unchanged for the AF. The complexity of the project led to building effective implementation approaches during the implementation phase in terms of coordination and capacity building of the implementing institutions. Nevertheless, during the preparatory phase, the project lacked a capacity needs assessment to identify capacity gaps, a thorough elaboration of scheme designs, and proper identification of project sites, and tendering and procurement activities. The Project design recognised the weak financial management capacities for the implementing institutions including the district councils. The situation remained the same until the third year of project implementation, and this has affected disbursement of funds to districts. 71. Both the AF-I and AF-II were well designed, and responded effectively. The design of the AF-I enabled the project to cover the cost overruns and provide complementary services to help the smallholder farmers become more resilient and reduce their vulnerability to drought as well as trade related shocks. In regards to the AF-II, the design of the project which included revising the PDO enabled the scaling up of both the number of beneficiaries and the number of districts and also simplified the measurement of agricultural productivity as the key objective rather than rural income. Furthermore, the success of the Project to trigger Component 5 with reasonable processes and steps allowed for quick response to the major flooding disaster which occurred in January 2015. The response process was completed in a record three days in keeping with a disaster response. 72. Notwithstanding the recognition of this project as innovativeas a result of the delay in disbursement due to lack of appropriate measures at the preparatory phase to ensure strong coordination, implementation capacity, and financial management, ensuring Quality at Entry is rated “Moderately Satisfactory”, in line with the QAG assessment. (b) Quality of Supervision Rating: Satisfactory

73. World Bank missions were undertaken every six months and key specialists participated in these missions and provided essential advice and observations, as evidenced by the AMs. The World Bank team followed up on the issues raised during the missions and through frequent implementation support meetings with the resident bank task team. The procurement, disbursement and FM teams were represented and were actively involved during project implementation. Safeguard specialists participated and actively supervised the safeguards throughout Project implementation. Furthermore, joint missions were undertaken in the agriculture sector in showing the harmonization of the sector wide approach (IRLAD ASWAP-SP)

(c) Justification of Rating for Overall Bank Performance

Rating: Moderately Satisfactory

74. Overall, the Project was aligned with the Government priorities and designed to meet critical needs in the sector. While this was a complex project which required ensuring quality at entry, the World Bank

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team and the counterparts worked together to ensure that the challenges were effectively tackled during implementation. The supervision activities were effective in addressing issues in several areas impacting implementation. The World Bank’s performance was rated Moderately Satisfactory for ensuring Quality at Entry and Satisfactory for the Quality of Supervision. Since the overall rating is the lower of the two ratings, the overall Bank Peformance is rate as Moderately Satisfactory.

5.2 Borrower Performance

(a) Government Performance

Rating: Satisfactory

75. The Government’s performance is rated Satisfactory based on its sustained commitment to the sector issues related to enhancing agricultural productivity. While there were delays in disbursements due to initial institutional capacity constraints, the Governments’ overall commitment significantly enhanced implementation performance. The Government further demonstrated its commitment to the sector and its needs through the requests for the additional financing which responded effectively to ensure that the Project objectives and overall sector challenges are addressed.

(b) Implementing Agencies Performance


76. Ministry of Agriculture, Irrigation and Water Development: Satisfactory. Over the course of project implementation, the Ministry of Agriculture, Irrigation and Water Development worked hand in hand with the PCU to ensure success of the Project. In addition to coordinating implementation of most project activities, the Ministry was also responsible for conducting independent monitoring and evaluation reviews. The Ministry also participated in ISM and Secretary for Agriculture, Irrigation and Water Development chaired the meetings to adopt ISM reports. 77. Performance of the PCU: Satisfactory. The PCU has performed very well and met all the management requirements regarding the covenants agreed to between the Government and the Bank. The PCU has been able to coordinate the programming of project activities from districts and disburse funding within reasonable timescale. The PCU has had tremendous impact on strengthening the capabilities of district implementers in meeting social and environmental safeguards as well as conducting tracking surveys under the M&E function. The PCU has also exhibited high levels of competence and performance standards as demonstrated by the ability to prepare additional funding requests as need arose within very short periods of time.

(c) Justification of Rating for Overall Borrower Performance


78. The Government’s performance is rated Satisfactory, and the overall performance of the implementing institutions is rated Satisfactory. Given the overall performance of the Project and the Satisfactory rating for PDO achievement, the Borrower performance is rated “Satisfactory”

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6. Lessons Learned 79. IRLADP was the first project of its kind that the Bank supported in Malawi and one of the first of a new generation of irrigation projects in the sub-region that took an integrated approach to irrigation based farming system support. As such, it has generated a lot of lessons to both the Government and the Bank and development partners. These lessons have been systematically discussed and are captured in a lessons learnt document by the implementing agency with the view that they inform future operations in the sub-sector. These lessons are actively integrated in current and proposed projects by the Ministry. The ICR provides just a summary of the key lessons: 80. Lessons for the strategic context of irrigation in Malawi: Small-scale irrigation is very beneficial and within the management capacity of smallholders, especially if gravity-fed. The integrated approach, combining hardware and software has higher start-up costs and is prone to delays, but eventually has the highest return on investment. The project supported different ‘business lines’ of agricultural water management and diverse solutions are promulgated in the investment strategy of the government for future schemes, recognizing various objectives and stakeholders that are involved. One harmonized approach and a strong implementation capacity that empowers farmers through improved water supply and farmer management in combination with agricultural support has been the key to success. In Malawi’s context food security and irrigation development can go hand in hand through simple “IFA schemes”, that are catalytic for organic growth in the irrigated area at very low cost and with immediate benefits to farmers. These should be considered alongside more formal and larger scale irrigation schemes aiming at commercialization. 81. Lessons for project design: Quality at entry was moderately satisfactory and delays occurred, but this was somewhat inevitable given the pioneering nature of the project. It is advisable that governments have a coherent investment pipeline with actual studies on the shelves for implementation. The project supported this for follow-up projects. Importantly, a strong coordination function on the different elements of irrigation development has been key to the success. The project was complex, but largely responding to a complex reality and coordination worked and implementation lessons were incorporated in design changes. The project extension and scaling up worked well because the scale up was focused, capacity was increased and it was built on a successful working model. The project extension had the side effect that the original schemes could still be monitored and supported with agronomy advice for another 6 growing seasons, which tremendously supported the yield increase. Often in irrigation projects there is insufficient time for the transition period after project completion. Here, SRI introduction became one of the top unanticipated successes of the project. Lastly, the project has generated a set of operational guidelines/procedures on WUA support, irrigation contract management, M&E, that are useful for follow up projects. 82. Lessons on sustainability of the investments – Irrigation performance has not usually been sustainable in Malawi, hence the need for repeated rehabilitation, hence the approach to build ownership (real and perceived) and capacity has been paramount in the project, through trainings, recorded participatory agreements on irrigation development, land and water rights, and formal IMT. For the IFA schemes that are by and large farmer-designed and implemented the technical sustainability of the actual infrastructure may not be high as they are simple earth works, the importance placed on them by farmers is keeping them under production and they are gradually upgraded with government support. Sustainability of institutional strengthening is more difficult to measure, but is demonstrated through higher staff numbers in established positions, improved planning and design capacities, embedding and further development of the principles developed under the project under follow up projects, and the implementing agencies’ explicit interest in harvesting lessons learnt and adoption of the strategy in the sector wide approach.

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83. Good practices under the project – in addition to the above, the Inputs for Assets program – IFA proved to be a way of economically empowering farmers through provision of farm inputs for working on their community asset such as irrigation schemes or roads. It has shown generally good outcomes and provided an alternative model for the farm input subsidy program, which is still the dominant program in the country and as such still part of the policy dialogue. The combination of social protection elements, disaster financing elements with a more production oriented agricultural development project has proven to be a successful model that supports both broad and deep development. 84. On Project implementation - The IRLADP Project was embedded in national structures, and had reasonable autonomy on fiduciary processes and decision-making on day-to-day planning. The PCU was able to adaptively manage in the volatile environment it operated, which was demonstrated by high disbursements that supported overachievements of most project targets in a context where many projects struggle to disburse. The support it provided to districts to gradually take on more responsibilities as decentralization matured (through its outreach offices and through technical assistants in the districts) enabled the eventual scaling up. Both Government and Bank were proactive in restructuring and through frequent (at minimum fortnightly) coordination meetings to support quick problem solving and processing where required, and this enabled smooth restructuring, scaling up as required. 7. Comments on Issues Raised by Borrower/Implementing Agencies 85. The borrower, together with the primary implementing institution (MoAIWD) confirmed its agreement with the ICR conclusions and ratings (formal response in Annex 7). The Ministry appreciated the World Bank’s support towards agricultural development, especially in the area of irrigation which continues to be a priority. The Ministry regarded the project as one of the most successfully implemented due to its achievement of all the development objectives.

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Annex 1. Project Costs and Financing

(a) IRLADP Project Cost by Component (in USD Million equivalent)

Components Appraisal Estimate (USD millions)

Actual/Latest Estimate (USD

millions)

Percentage of Appraisal

A. Irrigation Rehabilitation and Development

10.32

10.19

98.73

B. Farmer Services and Livelihoods Funds (FSLF)

19.26

19.33

100.37

C. Institutional Development and Community Mobilization

8.52

10.48

122.97

D. Project Coordination Unit, and Monitoring and Evaluation

1.90

2.83

149.00

Total

40.00

42.83

107.07

(b) AF-I Project Cost by Component (in USD Million equivalent)


Actual/Latest Estimate (USD millions)


A. Irrigation Rehabilitation and Development

4.70

4.76

101.29

B. Farmer Services and Livelihoods Funds (FSLF)

2.80

2.98

106.37

C. Institutional Development and Community Mobilization

4.30

4.54

105.57

D. Project Coordination Unit, and Monitoring and Evaluation

0.90

0.93

103.06

Total

12.70

13.21

103.98

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(c) AF-II Project Cost by Component (in USD Million equivalent)


Actual/Latest Estimate (USD millions)


A. Irrigation Rehabilitation and Development and Catchment Conservation

12.50

12.49

99.93

B. Farmer Services and Livelihood Fund 30.90

30.97

100.21

C. Institutional Development and Capacity Enhancement

3.55

3.56

100.15

D. Project Coordination, Monitoring and Evaluation

3.05

3.05

99.98

E. Contingency for Disaster Risk Response

--

0.52

Total

50.00

50.58

101.17

(d) Financing

Source of Funds Type of Co-

financing Appraisal Estimate

(USD millions)

Actual/Latest Estimate

(USD millions)

Percentage of

Appraisal

International Development Association (IDA) - Grant H1900

Grant

40.00

42.83

107.07

IDA Grant - H 7930 Grant

25.00

25.29

101.16

IDA Credit - 48060 Credit

12.70

13.32

104.89

IDA Credit - 51410 Credit

25.00

25.29

101.16

International Fund for Agricultural Development (IFAD) - 679

Loan

8.00

8.47

105.82

Total

110.70

115.20

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Annex 2. Outputs by Component Original grant 2.1 Component I: Irrigation Rehabilitation and Development: The main objective of this component was to improve the performance of existing performing schemes that were not functioning well through rehabilitation and upgrading works, and promote small and mini scale irrigation schemes in areas where articulated demand and viable options were available. The implementation of Component 1 covered four sub-components: (i) selective rehabilitation, (ii) development of small scale irrigation schemes, and (iii) rehabilitation of existing small storage reservoirs (earth dams) and (iv) rainwater Harvesting and catchment conservation. 2.2 Selective Rehabilitation of Government Irrigation Schemes: This involved selective rehabilitation of four schemes namely Limphasa, Likangala Complex, Mkhate and Muona with a total area of 1,797 ha (gross) with net irrigable area of 1,579 ha. A total of 2,590 ha (142% of target) have been rehabilitated (1797 ha of original four GoM schemes, 634 of Ex-SFPDP and 158 ha of Ex-SHIP). Rehabilitation of all the four original GoM schemes had been completed, and the cultivated area during the dry season increased from 1,074 ha to 1,813 ha. As regards to Ex-SFPDP, rehabilitation works were completed at Khwisa, Domasi, Kaombe, Chonanga and Miyombo schemes. 2.3 Development of New Small Scale and Mini scale Irrigation (SSI) Schemes: This sub-component targeted the development of 560 hectares (net 500 hectares) of new gravity fed small scale irrigation schemes (SSIs) and 340 hectares (net 300 hectares) of mini-scale irrigation schemes. The development of these schemes were demand driven and where beneficiaries were willing to be organised in either Water Users Associations (WUAs) or Water Users Group (WUGs) for small and mini scale schemes respectively. A total of 1, 457 ha of land representing 132% was provided with new irrigation and drainage facilities (including 547 ha of original SSIs, 610 ha of mini schemes including upgrading, 299 ha of new SSIs as presented in Annexes 5 and 6). 2.4 Rehabilitation of Existing Small Storage Reservoirs (Small Earth Dams): At appraisal, support was provided for rehabilitation of 8 existing small storage reservoirs in the target districts covering a gross area of 175 ha (160 ha net). However, at MTR, rehabilitation of small storage reservoirs was dropped due to overall financial allocation constraints to the irrigation consultancies.

2.5 Small Scale Farmer Demand Driven Rainwater Harvesting and Catchment Conservation: This sub-component focused on sustainable management of soil through improved conservation techniques to reduce overland flow and run-off and improve water retention and soil fertility; and introduction of structural storage techniques to store some of the overland runoff for productive use. The subcomponent had four outputs through which the project would be implemented and these were: 2.6 Rainwater harvesting for communal livestock watering: This activity involved harvesting water for livestock watering as one of the productive uses through introduction of structural storage techniques to store some of the overland runoff. At appraisal, 100 groups of farmers were expected to benefit from livestock water ponds but this was revised at midterm review to 83 ponds based on the expressed demand from communities. A total of 32 livestock ponds were constructed representing 40% achievement (the low achievement was because the responsible department did not have expertise to design and supervise the works. However, during the later years of the project, coordination with the department of irrigation resulted in the achievements recorded) .

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2.7 Rainwater harvesting for group backyard gardening: In order to promote group backyard gardening, the project piloted the construction of both above and underground tanks; as structural storage techniques to store some of the overland runoff for productive use. A total of 90 tanks (86 underground, 4 above ground) out of the 100 targeted were constructed under the project in the first 11 targeted districts for demonstration purposes. The volumes of the tanks range from 5m³ - 100m³. An assessment of the ones which were constructed, 84 are still operational. A total of 812 staff and 14, 510 farmers have been trained in various rainwater harvesting technologies. Furthermore, a total of 25 artisans have been trained in construction of rainwater harvesting structures. 2.8 Soil storage and catchment conservation: The implementation of this activity targeted at reducing the silt load in the rivers feeding the irrigation schemes through sustainable management of soil using conservation techniques to reduce overland flow and runoff and improve water retention and soil fertility. The main activities implemented under this output included the normal soil and water conservation activities in the catchments especially the prioritized hotspots.

2.9 Overall, by end of project implementation, a total of 60,635 hectares were protected with vetiver hedgerows. This includes all land in the catchment (hotspots) under soil and water conservation as well as the vetiver hedgerows protecting scheme degraded areas and canals. The overall target for the hotspots was 3,000 hectares. A total of 203 hotspots across all districts were identified and activities were implemented in them involving 71,700 farmers (40,000 male farmers and 31,000 female farmers) surpassing the target of 58 hotspots that were identified. A total of 510 km of stream banks have been protected. New soil storage and catchment conservation: output aimed at increasing the options for farmers for sustainable management of soil through improved conservation techniques to reduce overland flow and run-off and improve water retention for ground water recharge thereby increasing the base flow of the rivers supporting the schemes. A total of 427 km of swalles, 167,279 infiltration pits, and 98,955 infiltration ponds have since been achieved. 2.10 Component 2: The Farmer Services and Livelihoods Fund (FSLF): This component supported the beneficiary communities; particularly those covered under the irrigation schemes, to obtain complementary services and goods for optimizing their returns from irrigated farming, micro-processing and/or marketing their produce, and for capacity building. The component had four sub-components: (i) support for extension; (ii) input for assets; (iii) support for marketing and post-harvest assets; (iv) farmer capacity building and community sensitization and mobilization. 2.11 Support for Extension: The project supported the operationalization of a new Agricultural Extension Policy, “Pluralism Demand Driven Services” through the District Agriculture Extension Services System (DAESS). A total of 9 DAECC, 7 District Stakeholder Panel (DSP), 89 Area Stakeholder Panel (ASP) and 2,813 Village Agriculture Commitees (VACs) were established or revamped using the project resources.3 The Project reached out to 346,940 farmers (43% women) with extension advice and were practicing crop, livestock, and irrigation technologies geared towards increasing the level of productivity and household income Other interventions were implemented under the ‘support for extension sub component and they are: (i)Lead farmer approach; (ii) Farmer Business Schools; (iii) Household approach for mainstreaming Gender and HIV and AIDS; and (iv) Food and nutrition. The Project supported the training of 5,279 (3,062 males and 2,217 females) lead farmers in different agricultural technologies who later trained 346,940 (190,817 and 156,123 females) fellow farmers in different crop, livestock, and

3 The project stopped supporting this activity because another project in the Ministry funded by the EU, (Institutional Development Across the Agri-Food Sector (IDAF)) was supporting the Ministry to do the same activities, hence, the discontinuation.

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irrigation technologies. A total of 113 farmer business schools were established while 6,789 farmers (4,074 males and 2,715 females) attended the schools. 2.12 The Project supported introduction of the household approach in four districts where it proved to be the most effective approach for mainstreaming gender and HIV/AIDS issues. Guidelines and modules on household approach were prepared and a total of 77 staff (12 women and 65 men) were trained. A total of 46,833 (19,431 male and 27,402female) farmers were reached with messages on Gender and HIV and AIDS in the project districts. The manuals have been adopted by IFAD programs where implementation is underway. 2.13 The following are the extension activities supported by the project: 2.14 Food and Nutrition: The project developed IEC materials in areas of Dietary diversification, Food Processing, Preservation and Utilization and Integrated Homestead Farming. Trainings were done to 48 staff (34 male and14 female) 826 farmers 543 males and 283 females) in all 8 large irrigation schemes. The farmers are now growing high value nutritive indigenous vegetables in their 89 backyard gardens. The farmers are now able to grow vegetables for consumption and marketing and the nutrition status of most farmers has improved. 2.15 System of Rice Intensification: The Project supported introduction of “System of Rice Intensification” (SRI) in rehabilitated schemes of Muona, Nkhate, Likangala Complex, Lifuwu and Limphasa in 2011/2012 growing season. The introduction of SRI was extended to all schemes which were under Smallholder Flood Plain Development Project in 2013/2014 season. SRI was introduced to address constraints/problems in rice cropping techniques as well as improving productivity while reducing water consumption. In terms of achievements on capacity building for farmers and staff, 29 Ex SFDP staff (14 male and 15 females) and 425 lead farmers (251 males and 174 females) were trained and these later trained 1,614 farmers (749 males and 865 females). International tour on SRI was conducted to India whereby 5 staff and 5 lead farmers participated. Demonstrations and field days were mounted and conducted to increase awareness of the system to many farmers around the schemes. About 272 on farm demonstrations were mounted and 68 field days were conducted which was attended by 4,689 farmers (2,590 male and 2,099 females). A total of 1,949 farmers are practicing SRI across the country. The farmers have doubled and others tripled their rice yields ranging from 4-7 mt/ha depending on the variety. The project also supported the Department of Agricultural Research Services to release SRI technology by Agricultural Technology Clearing Committee in September 2014.

2.16 Rice Variety Trials: The Project supported Rice Variety Testing of 12 improved varieties with farmers starting in the 2012/2013 crop season, using the breeding concept of Participatory Variety Selection (PVS). The adoption of PVS led to fast track release of three superior and farmer-preferred rice varieties. 2.17 Farm Machinery: Over the period, the Project introduced farm machinery/equipment and power tillers for soil preparation and transportation and small equipment to reduce drudgery of farm operations in irrigation schemes. The project supported farmers in all IRLADP rehabilitated irrigation schemes and ex Smallholder Flood Plain Development Project (Ex-SFPDP) Schemes with 7 power tillers with their allied implements, 10 rotary weeders and 160 conoweeders for demonstrations. About 10,021 smallholder farmers have been exposed and are practicing farm machinery technologies (conoweeders) that reduce drudgery of farm operations. Artisans have been also trained to fabricate the conoweeders to serve farmers in the schemes as SRI was expanding.

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2.18 Certified Rice Seed Multiplication: The Project introduced and organized scheme based rice seed production program after noting that one of the challenges that led to low rice productivity and production in the schemes was the use of unimproved or over recycled seed which had lost its productive potential. Certified Rice Seed Multiplication Programme was introduced in several schemes, the project trained 37 staff (23 males and 14 females) and 18 lead farmers (12 male and 6 females) in rice seed multiplication, and 679 farmers, (224 male and 455 females) have been trained in rice seed multiplication. This initiative has led to doubling of yields and production of table rice ranging from 2,000kgs/ha to over 4000kgs/ha. 2.19 Support for Livestock: The project supported livestock production was under Input For Asset (IFA) and Farmer Based Organizations (FBOs). Under IFA, the project rehabilitated 57 dip tanks across the country for the control of ticks. This has increased the number of animals being served and has controlled the outbreaks of tick borne diseases. Under Farmer Based Organisation Fund, the project also supported the production of 7 livestock handbooks and one general livestock production manual of 2,000 copies each to be used by FBOs and staff involved in livestock production. These provided information on important livestock husbandry, disease prevention and control issues to field staff, farmers and other stakeholders in order to improve livestock productivity in the country. In addition, the fund also supported farmers with grants where they started various enterprises such as piggery, poultry, dairy, etc. 2.20 Support for Inputs for Assets Program: The IFA Program was aligned to the country’s policy objective of ensuring food security at the household level through improved access to agricultural inputs by the communities (most important for the economically vulnerable individuals). In addition to the productivity enhancement ability of the Program, productive assets were also developed by the communities for their own social and economic benefits. The IFA program was also meant to create employment, and support the development of remote fertilizer markets by creating effective demand. Besides roads and mini irrigation schemes, the eligible works included reforestation on community lands, construction of water harvesting structures, and soil conservation works, benefiting several farm lands. The assets created were to be demand driven by the communities. 2.21 The Program was implemented on a cycle basis namely rain-fed (summer) and winter (irrigated) periods of the year. The Program has been under implementation since 2006; with the initial coverage having been 11 initial Project districts. However, since 2012 its coverage has been increased to all 28 districts of the country under the project’s AFII. The total estimated cost for the Program was US$15.3million in the first phase of the program (May 2006 – June 2012) targeting 196,900 beneficiaries while in extended program (July 2012 – December 2014) under the project’s Additional Financing II, US$ 25.65 million was allocated to the program resulting in the target being revised to 442,000 beneficiaries. The resources for the AFII came from the World Bank and the Program was designed and agreed upon between the Government and the Bank as part of the economic recovery from the economic shocks the country was facing4. In order to accommodate this massive scale up of the IFA component under AFII, as well as to incorporate lessons learnt from the implementation of IFA from the original project, a number of changes were proposed to this sub component. 2.22 The IFA performed well compared to similar programs (such as Farm Input Subsidy Program (FISP) and Public Works Program championed by Local Development Fund (LDF)) in that it did not have cash involvement. For FISP, farmers were expected to contribute cash for them to access the inputs, while in IFA, they had to contribute their labour. For the Public Works Program, the communities were paid in cash for the labour that they provided while under IFA, the payment was in form of farm inputs. The arrangement under IFA ensured that farmers directly accessed inputs. The IFA approach stimulated employment and supported development of fertilizer markets by creating effective demand for inputs in the rural areas.

4 Refer to section 2.1.2 of this report

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2.23 Under the IFA program, a total of 2,123 community assets were created in the 11 project districts from 2006 to winter of 2012 of the Project and 4,165 assets under the AFII period of July 2012 to December, 2014 in all the 28 districts in Malawi. A total of 655,227 beneficiaries accessed inputs through the program with 10,353.9ha of irrigation land developed/rehabilitated and 16,914.9km of roads constructed/rehabilitated. In the original 11 districts, the types of assets created ranged from soil and water conservation, feeder roads, irrigation schemes, afforestation and dip tank rehabilitation as shown in the figure below. To ensure that mini irrigation schemes developed under this sub-component are sustainable, guidelines for the development of mini scale irrigation schemes were prepared and shared with district assemblies. Types of IFA Assets Created

2.24 Under the AFII, 922 mini scale irrigation schemes and 3,243 roads were achieved. A total of 655,227 beneficiaries have benefitted from employment, inputs and rural assets and of these 46% were women5. 2.25 The introduction of IFA program in the district has improved maize productivity from 1.6 tons per hectare to about 3.9 tons per hectare. The total amount of fertilizer and hybrid maize seed that was distributed to the farmers in the first phase of the program in the 11 districts was 16,408.65 tons and 2,257.59 tons respectively. There were also 2,005 cotton packages that were procured and distributed to farmers mainly from the Lower Shire Valley as a way of promoting crop diversification. After the AFII, about 22,466.75 tons of fertilizer and 3,920.2 tons of maize seed were distributed to the program beneficiaries. Again, in an effort to enhance diversification, 186.19 tons of rice seed, 950 tons of bean seed and 1.14tons of vegetable seed were distributed to the beneficiaries.

5 Of the 655, 227 beneficiaries, 192,000 benefited from the first 11 districts in the first phase of the program while 463,227 benefited

during the AFII phase of the program.

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A summary of the achievements under IFA is presented in the following tables: Community Assets Created via IFA (from 2006 to Winter 2012)

Summary of Achievements under IFA from Summer 2012 to Summer 2014

Chitipa Rumphi Nkhatabay Salima Lilongwe Dedza Zomba Phalombe Blantyre Chikwawa NsanjeTotal Projects

RWH Structures 7 5 0 3 5 2 3 6 8 6 1 46Pond 17 1 2 20 30 0 18 2 65 5 0 160Catchment Conservation 17 33 14 65 48 64 32 26 167 47 28 541Ha 204 396 168 780 576 768 384 312 2004 564 336 6492Feeder Roads 26 27 37 93 167 32 36 27 48 16 40 549KM 169 175.5 240.5 604.5 1085.5 208 234 175.5 312 104 260 3568.5Number of Irrigation schemes 6 19 15 25 41 27 8 10 74 79 20 324Ha 45 142.5 112.5 187.5 307.5 202.5 60 75 555 592.5 150 2430Afforestation 7 10 6 36 47 19 13 9 53 11 5 216Ha 42 60 36 216 282 114 78 54 318 66 30 1296Community Orchard 8 3 2 14 12 19 6 1 4 7 76Ha 3.2 1.2 0.8 5.6 4.8 7.6 2.4 0.4 0 1.6 2.8 30.4Dip Tank Rehab 5 3 1 4 7 8 4 7 8 8 2 57Slaughter Slab 0 0 0 0 0 0 0 0 0 1 0 1Cattle crush 1 1 2 4Village Grain Banks 6 17 8 7 0 8 0 0 0 1 0 47Dyke 0 0 0 0 0 0 7 1 0 0 0 8Shallow wells 0 0 0 13 0 0 0 0 42 2 6 63

Market Structure Rehabilitation 0 0 0 5 1 0 0 3 0 4 15 28Livestock Watering Point 2 1 3

District

Irrigation Projects Feeder Road

Number of Irrigation Hactarage Irrigation Beneficiaries

Number of Roads (KM) Roads Beneficiaries

Male Female Total Male Female Total 1 Chitipa 25 173.5 830 888 1,718 115 574.5 5,340 3,332 8,6722 Karonga 33 1,749.00 4,243 4,382 8,625 205 594 7,608 4,007 11,6153 Rumphi 33 320 1,684 1,129 2,813 175 1,191.00 7,588 6,055 13,6434 Nkhata Bay 39 955 2,516 2,307 4,823 93 828 5,370 4,982 10,3525 Likoma 0 0 0 0 0 28 133.5 1,220 422 1,642

6 Mzimba North 12 80 462 397 859 103 640.1 3,375 3,261 6,6367 Mzimba South 65 449 3,184 2,231 5,415 68 360.8 3,070 2,315 5,3858 Nkhotakota 18 185 3549 2845 6394 120 673.4 5,590 3056 8,6469 Kasungu 14 68 815 1,055 1,870 52 266.7 6,359 5,695 12,054

10 Ntchisi 25 218.7 559 1,900 2,459 45 183.6 2,035 1,832 3,86711 Dowa 53 314.5 3,102 2,569 5,671 43 239.7 4,823 3,038 7,86112 Salima 42 140.2 1,816 1,561 3,377 73 294.7 4,970 4,018 8,98813 Lilongwe 54 328.2 4,145 3,163 7,308 212 845.8 11,641 11,136 22,77714 Mchinji 23 126.2 2,277 1,396 3,673 41 298.5 5,168 3,854 9,02215 Dedza 21 224.6 1,418 2,068 3,486 75 279.1 7,414 9,571 16,98516 Ntcheu 14 191.5 1,191 1,311 2,502 159 701.3 9,556 7,547 17,10317 Mangochi 56 87.3 3333 3617 6950 121 500 7,513 8097 15,61018 Machinga 13 667 1,437 1,622 3,059 136 577 6,901 9,843 16,74419 Balaka 23 57.8 2631 1749 4380 64 263.2 5,914 4446 10,36020 Zomba 8 127 707 439 1146 229 752.9 13934 10150 2408421 Phalombe 10 121.9 288 352 640 95 537 7,546 4,912 12,45822 Chiradzulu 7 26 241 539 780 106 339.2 12,835 6,796 19,63123 Blantyre 12 71.7 863 900 1763 116 342 8,382 8660 17500

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2.26 Support for Marketing and Post-harvest assets: The support for marketing activity focused on addressing the marketing needs of the target group of farmers supported under the project and also making a start on a longer-term development of marketing by supporting the MOA’s marketing unit with an MIS. Constraints of marketing information or infrastructure, and also value-addition through low-cost processing were addressed on a demand-driven basis. Thus, the project established a fund that farmer groups prepared proposals for appraisal by District Assemblies/DECs and funding by the project through MASAF, on a demand-driven basis and after fulfillment of eligibility criteria. 2.27 A total of 220 groups submitted proposals and 198 were appraised and 130 with a total membership of 25,713 (15,402 males and 10,311 females) were approved and supported with grants.. 2.28 Twenty nine (29) community marketing, warehouses and processing structures were constructed based on the demands from the communities and proposals submitted and approved by the district councils. Grants were also given to crop production, livestock production, poultry production, beekeeping and farmer capacity building. The ware houses (13) built under the Project have a holding capacity ranging from 30 to 100 metric tons. 2.29 In order to safeguard protection of farm management and life of member farmers and thereby contributing to the improvement of local community based on the spirit of mutual help, the project supported registration, development and management of agricultural cooperatives. A total of 46 active Agricultural Cooperatives were supported by the project with a membership of 2,722 of which 1,419 and 1,303 were female and male farmers respectively. These cooperatives were mainly very instrumental in marketing and processing of members’ produce to promote value addition initiatives. 2.30 As for the support for crop storage technology evaluation, the objective was to help farmers reduce post-harvest losses of their farm produce especially rice. The Project supported demonstration and up scaling of three post-harvest handling technologies and these technologies were: metallic silos, hermetic bags and poly-propyrene bags. A total of 24 metallic silos, 12 hermetic bags and 110 poly-propyrene bags were installed for demonstration from target of 29, 12 and 110 respectively in all the large irrigation schemes supported by the project. The technologies are still being evaluated by the Department of Crop Development (DCD) for one more year and thereafter, they will be disseminated for farmers adoption. 2.31 Farmer Capacity Building and Community Sensitization and Mobilization: The original project appraisal targeted 7,000 FBO farmers capacity building and this was surpassed as a total of 30,113 farmers (15,950 males and 14,163 females) were trained in group formation, development and management, basic business skills, appropriate post-harvest handling and value addition techniques, financial literacy, savings and investment. 2.32 After noting some weaknesses in business management, a total of 100 FBOs were trained in advanced business management skills by hired consultants. These FBOs are now able to keep records, prepare business plans and undertake market research and get linked to markets to get maximum benefits from their agricultural ventures. As part of sustainability and exit strategy, government staff were involved as counterparts to the consultants. It is therefore expected that the government staff will take over the task of coaching and mentoring the FBOs. 2.33 Trainings also involved 2,458 field days, 876 tours (one tour took 10 staff and farmers to India, 6 staff members to Zambia). A tour to Zambia was on Household Methodology gender and HIV and AIDS and a tour to India was on System of Rice Intensification.

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2.34 Community sensitization and mobilization was successfully accomplished and achieved its purpose of enabling the communities to demand project activities and participate fully. The methodology for community mobilization and sensitization was developed by government departments instead of the Consultant as designed in the original appraisal. The methodology allowed all communities who demanded project activities to participate in implementing the project activities under Component 1, Component 2 and Component 3. 2.35 The original project design was to work in 11 districts and in 11 project focal areas and expand gradually. However, instead of concentrating in the 11 project focal areas, the project expanded to all parts of each of the 11 districts with all components. The project formed 11 district Community Sensitization and Mobilisation teams and developed a strategy that was followed during the whole period of the project. The strategy involved project beneficiary targeting where all project beneficiaries were identified under each component following the laid down criteria , development of 146,500 print materials (25,000 posters, 60,000 leaflets, 35,000 brochures, 12,000 booklets, 5,000 guidelines, 6,000 Guide to Agriculture Books, 3,500 marketing manuals) and electronic media materials (832 radio programs and 416 television programs) and 4 newspaper pull-outs and IRLADP magazine, 5,674 community awareness meetings, 3,456 beneficiary consultative and participatory meetings. 2.36 With the Additional Finance in 2012, the Project expanded to all 28 districts, mainly with Input for Asset (IFA) activities and in total 4,165Project Management Committees (PMCs) and Asset Management Committees (AMCs) were formed, trained in their roles and supported during the implementation of the subprojects. 2.37 Component 3: Institutional Development and Community Mobilization: This component involved restructuring, strengthening and/or formation of smallholder farmer organizations/Water Users Associations for Irrigation transfer, management and related activities and establishment of Water Users Associations especially among rain fed smallholders around irrigation schemes for operation and maintenance of water harvesting structures and soil conservation. This component also supported limited policy and institutional capacity building in the Ministry of Agriculture, Irrigation and Water Development; strengthening irrigation planning, design and supervision capacity in the Department of Irrigation; assisting the marketing unit in the Department of planning, as well as supporting district councils, Bunda College, Natural Resources College and other MoAIWD training institutions; and capacity building of field staff, farmer beneficiaries, and other stakeholders participating in project implementation. 2.38 There were four sub-components under this component namely: (i) Support to the Department of Irrigation and Field Irrigation Institutions; (ii) Capacity Building for Farmers and Community Mobilization and sensitization; (iii) Support to the Trade and Marketing Unit of the Ministry of Agriculture, Irrigation and Water Development (MoAIWD); and (iv) Support for Bunda College of Agriculture (BCA), Natural Resources College (NRC) and other MoAIWD training institutions. 2.39 Support to the Department of Irrigation and Field Irrigation Institutions: This sub-component supported limited policy and institutional capacity building measures in the MOAIWD. Specifically, it supported the strengthening of irrigation planning, design and supervision capacity in the Department of Irrigation and district councils. It also supported capacity building of field staff and farmer beneficiaries. The main objectives of the irrigation support under this component were for sustainability reasons, to incorporate the transfer of GoM managed schemes to the beneficiary farmers; and to encourage improved water management on all schemes through comprehensive training and introduction of best practices. Within this sub-component, there were a number of key focus areas: 2.40 Water User Associations (WUAs): A total number of 33 new WUAs have been formed covering all 8 Large Scale, originally government owned irrigation schemes and 25 new SSIs schemes out of the

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planned number of 35 at appraisal. In addition, 17 WUGs have been formed for all mini scale irrigation schemes. All the WUAs and WUGs formed are operational and functional. The functionality status of WUAs is being monitored through the WUA Monitoring and Evaluation framework which was also developed under the project. Furthermore, a total number of 10 WUAs in EX-SFPDP and 3 in EX-SHIP schemes were re-vamped through various trainings and later incorporated. 31 Water User Groups in IFA Upgraded irrigation schemes were also established and identified as potential sites for further irrigation development. These schemes were clustered and provided with basic operation and maintenance trainings besides farmer organizations sensitization. In total, 119WUAs/WUGs have been formed and revamped throughout the project life.

2.41 Irrigation Management Transfer (IMT): Government has facilitated the Irrigation Management Transfer for all the 8 large Government schemes which include 5 schemes under Likangala Complex rehabilitated under the project. In the IMT; there is a joint management period of each specific facility, consistent with the technical complexity and financial dimension of their O&M. The WUASU established in DoI was monitoring the implementation of the IMTs and GoM will continue supporting the schemes during the joint management phase (2 years) with practical hands-on training on scheme management, budgeting and accounting, infrastructure maintenance and catchment/water resources conservation. Commissioning of all the 25 SSIs constructed under the Project was done. All beneficiaries, including those of mini schemes, have also been empowered to own and manage the irrigation and drainage facilities. In order to scale up the processes of WUAs and Irrigation Management Transfer this was extended to ex-Smallholder Flood Plains Development Project (SFPDP) schemes. 2.42 Land and Water Management: All 8 large scale schemes have had their lease and offered and some are paying for land lease such as Limphasa scheme. Farmers from all the 8 large scale schemes of Likangala complex, Muona, Nkhate and Limphasa have since paid for the leases and deeds were provided to the WUAs. These WUAs have been paying for their land leases since 2012. The WUASU in DoI has included in its overall WUA monitoring set-up a process to ensure that leases for the schemes are renewed once expired. For the other schemes, particularly in the small scale irrigation schemes, agreements on land use were entered into between land owners and beneficiaries of the scheme in the presence of Government staff through the understanding of the hierarchy between Government, Clan, Land owners, Sons & daughters and Tenants/beneficiaries on land use in small scale irrigation set-ups. Water abstraction rights were also processed for all 8 large scale, 25 small scale, 10 ex-SFPDP and 17 mini scale irrigation schemes. Farmers are paying for these water rights since they were offered. 2.43 WUA Regulations and Revisions of the Irrigation Act: With the support from the project, WUA regulations have been prepared and these were vetted by the Ministry of Justice. However, further processing of the regulations requires approval of the National Irrigation Board (NIBO), which is still not in place. The process of establishing the NIBO is being facilitated under the EU funded project. Thus, Government would pursue legitimizing the WUA regulations after establishment of the NIBO. 2.44 Irrigation Advisory Services: Under this category, the project was expected to provide a rapid response and complaint redress system at district level to resolve irrigation problems faced by farmers/WUAs and to provide technical services to farmers in various districts in good irrigation and rain water harvesting (RWH) practices as well as in institutional issues. The Irrigation Water Management Unit (IWMU) in the Department of Irrigation was established with 4 outreach offices in Mzuzu, Lilongwe, Zomba and Chikwawa. The IWMU operated with almost a full complement of staff. In addition, the District Irrigation Advisory Services Units (DIASU) were established in all the 11 initial project districts. 2.45 With project support, a total of 42 staff representing 100% (comprising of 25 Irrigation Engineers, 15 Irrigation Agronomists and 2 Water Users Association Coordinators) were recruited to form District Advisory Services Units (DIASU) and Water Users Association Services Unit (WUASU) at headquarters.

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These were initially recruited on non-established positions but Government has since embedded them in the normal civil service and they have been deployed across the country. All these staffs underwent capacity building initiatives through training in formation of WUA and Irrigation Management transfer processes. The WUA training also involved WUA specialists from the outreach offices, district desk officers and Assistant Irrigation Officers. Furthermore, all the staff were also given hands-on training on modern and improved technologies for conducting surveys and producing scheme designs. 2.46 Support for Irrigation Component Implementation: Under this category, the project was expected to achieve two main objectives, thus: 1) build local capacity to address immediate and long-term irrigation development and water management issues in Malawi; and 2) establish an Irrigation Water Management Unit (IWMU) at DoI to improve sustainability of irrigation investments. The Project was further expected to establish and organize farmers around Water Users Associations; provide support in strengthening Irrigation Advisory Services at district level; and provide implementation support to DoI for the irrigation component.

2.47 At appraisal, IWMU was envisaged to become technical support entity for the implementation of irrigation programs under DoI. However, this did not materialize and it was later planned to have the IWMU (secretariat) operationalize the Irrigation Fund (IF). There have been delays in operationalization of the IF which is being worked out under the EU funded Rural Infrastructure Development Program with support from the Technical Assistance. Thus, once the IF is operationalized and National Irrigation Board established, a secretariat would be formed and would have most of the functions of IWMU. 2.48 Support to the Department of Irrigation: Three staff managed to get long term training on integrated irrigation management and scheme design (Masters Course) representing 100% achievement. In addition, a total of 110 staff were trained in various irrigation related areas. 2.49 The design and supervision roles of the Irrigation Services Divisions and the District Irrigation Offices were supported with survey equipment and plotters, complementing equipment already supported by the Medium Scale Irrigation Development Program and Rural Infrastructure Development Program. Capacity Building for Staff in the Department of Irrigation

Training Area Achieved % Number of technical staff trained in WUA formation and management 110 115

Number of staff participated in long term training (MSc) 3 100

No of staff trained in contract management 69 100

No of staff trained in O&M of schemes 286 100

Number of staff participated in Irrigation hands on course 60 200

No of staff trained in Tendering 24 100

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Area of Support to the Department of Irrigation 2.50 Capacity Building for Farmers and Community Mobilization and Sensitization: A total number of 39, 748 farmers in the Water Users Associations out of a target of 39,000 were trained in all project areas, including in Ex-SFPDP schemes. The training focused on, leadership skills, finance management skills, operation and maintenance, roles and responsibilities, irrigation water management, WUA legal framework including constitution drafting and revisions and development of bye-laws, application and renewal of water rights and land leases, Participatory Monitoring of WUA performance, contract management, business planning and processes, water sources and abstraction methods and communication skills. Generally, all the 32 WUA Modules were covered.

2.51 Support to the Trade and Marketing Unit of the Ministry of Agriculture, Irrigation and Water Development (MoAIWD): Support to MoAIWD aimed at transforming the Agricultural Trade and Market Development Unit (ATMDU) into a Market Development Unit (MDU) to enhance the development of smallholder markets. The project was expected to achieve this objective by deploying the services of international and national market experts to promote product research, agricultural market analysis, strengthen agricultural market information services, to provide agricultural market information to farmers and also provide training services and appropriate office equipment to the MDU staff. 2.52 So far, the ATMDU has been reorganized into a fully-fledged MDU with Economists that were assigned as desk officers to each of the four core functional areas that the MDU is required to pursue, thus product research, market research, policy analysis and micro-finance development. 2.53 As a way of strategizing the implementation of the sub-component, a Comprehensive Agricultural Market Systems Development Strategy (CAMSDS) was developed to facilitate implementation of product research, market research, and policy analysis. As an input into the market development activities, the project facilitated the development of a contract farming strategy expected to guide players in the agriculture sector in undertaking contract farming arrangements. Further, under the Agricultural Market Information Service (AMIS), 8 agricultural market information centres (AMICs) were established in six districts of Rumphi (Bolero EPA), Salima (Chipoka and Tembwe EPAs), Dedza (Bembeke EPA), Zomba, Blantyre (Mtonda EPA) and Chikwawa (Mitole EPA) to provide agricultural market information to smallholder farmers and facilitate their trade. This was followed by sensitization of stakeholders on the AMICs in all the six districts being piloted. The MDU also developed a manual for use by the AMICs which was followed by training of staff and leaders of AMICs. AMIC committees were formed to guide the operations of AMICs. In order to facilitate linkages with buyers of agricultural commodities, the AMICs were provided with communication gadgets.

Area of Support Achieved %

Number of DIASU & WUASU staff recruited 42 100 Number of Survey equipment for districts & ISDs procured as follows: Dumpy levels 10 100 Total Station 6 100 Theodolite 5 100

GPS 1 100 Plotters 5 100

Flow meters 8 100 Design Software (Model Maker, Civil Cad&AutoCad) 3 100

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2.54 In an effort to strengthen the MDU, 4 Economists from the MDU and 1 Agribusiness Development Officer from the Department of Agricultural Extension were trained in Agricultural Trade Policy Analysis and Principles of Agribusiness, respectively. 2.55 Support for Bunda College of Agriculture6, Natural Resources College, and other MOAIWD Training Institutions: the project design included provision of support to agricultural related institutions to ensure that students are being trained and equipped in line with the prevailing private sector demands. Among others, the project intended to support curricula and capacity reviews at these institutions and provide equipment, information technology and training materials. 2.56 Under this sub component, the following achievements were registered: The two institutions of Bunda College of Agriculture (BCA) and Natural Resources College (NRC) reviewed their curricula and the revised curricula were developed and submitted to the appropriate governing councils for authorisation; Seven lecturers from Natural Resources College (NRC) and four lecturers from BCA underwent capacity building at the Bangladesh Academy for Agricultural Development (BARD) to enable them provide greater expertise to their students based on the revised curricula; In addition, a total number of 25 students from NRC and BCA were provided with hands-on experience related to project activities. These were attached to contractors and consultants working on various assignments on irrigation engineering and management during internships. 2.57 Support to institutions has been consistent with the major activities concerning curricula review and capacity development of lecturers being accomplished. Support was also provided for the short term course for fresh graduates from Bunda College (now LUANAR) and Malawi Polytechnic on practical principles of irrigation design, contract management and water management, addressing deficiencies in practical skills to complement the theoretical knowledge from the colleges. Initially, one course was envisaged but 2 courses have been implemented with a total of 60 participants (with 27 from the private sector). 2.58 Component 4: Project Coordination and Management: In terms of project management, the grant conditions and covenants for the effectiveness of the project required that a project coordination unit (PCU) with staff (including a Project Coordinator/Irrigation Engineer, a Social/Community Development Specialist, a Procurement Specialist, two Internal Auditors and a Monitoring and Evaluation Specialist) with proper qualifications and demonstrable experience be established. Inadequate capacities in the line ministry (MOA IWD), and complexity of the Project, necessitated the establishment of the PCU. 2.59 The conditions further required government to establish a satisfactory Project Steering Committee (PSC); prepare and adopt a satisfactory project implementation manual; and enter into a satisfactory memorandum of understanding with MASAF. 2.60 The PCU was established in April 2006 with the recruitment of all key staff. The Project had a staff of 57 members occupying different positions and most of these were recruited in the second year of project implementation. 2.61 The World Bank and the Government agreed that the Project should have at least two Joint Implementation Support Missions per year (every 6 months) to monitor and supervise the activities of the Project. The main aims for the supervision were to evaluate project implementation progress and to resolve any implementation difficulties that are being faced by the Project. During the life of the Project, the Bank

6 Bunda College of Agriculture and the Natural Resources College is now known as the Lilongwe University of Science and Technology

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fielded a total of sixteen (16) Implementation Support Missions jointly undertaken by World Bank and IFAD from the inception of the Project to June 2012. 2.62 These supervision missions were very helpful as they gave a chance to the World Bank and IFAD staff to appreciate progress that has been made on the Project, interact with the various implementers and also appreciate the challenges that were being faced. The missions also had a chance to meet various stakeholders such as the Ministry of Agriculture, Irrigation and Water Development, some selected concerned donor organizations and Project Coordination staff to discuss various issues related to the Project. 2.63 With regards to the institutional implementation arrangements, under the PSC (chaired by Principal Secretary for Agriculture) there was a Project Executive Committee (PEC), comprising only of the implementing agencies (PCU, MASAF, DOI, DAES, CAETS, LRD, a representative from the district assemblies of the target project districts, and the 4 Project outreach offices located in the ADDs being Chikwawa and Zomba in the South, Lilongwe in the Center and Mzuzu in the North. The PEC had technical oversight of project implementation, reviews and recommended project work plans and budget to the PSC, and it also carries out monitoring and evaluation of project activities. The PCU functions as the secretariat for both the PSC and the PEC. 2.64 With respect to the PSC and PEC, these were established after the grant and loan signing as a condition for project effectiveness. The PSC and PEC meetings were very instrumental in giving policy directions on how the Project should be implemented given the dynamic environment in which it was operating. The committees continued to guide the PCU on the implementation of the Project. 2.65 For the project financial management, originally, IFAD and IDA had agreed to do a joint co-financing of the Project. The co-financing was arranged to help the Project tap on the considerable experience IFAD had in the use of private consultants and contractors, and its close involvement with the beneficiaries as well as in the gradual management transfer of government schemes to their users. 2.66 All along before the Project started, IFAD had been funding an ongoing irrigation operation, i.e., the Smallholder Flood Plains Development Project (SFPDP) and this Project was to build on lessons learned from SFPDP. The Project funding arrangements were originally composed of US$ 40.0 million from IDA, US$8.0 million from IFAD, US$ 2.8 million from Malawi Government and US$ 1.7 million was beneficiary contribution. 2.67 The flow of funds for this project had been agreed as follows: the project was to have two sets of resources –IDA and IFAD through joint financing. The financing with IFAD was such that IFAD held its own funds and made payments into the project’s special accounts on the basis of the Banks SWIFT message. The Banks standard disbursement rules and procedures applied even to IFAD funds. 2.68 A request for additional financing in the form of a Credit in the amount of SDR 8.6 million (US$12.7 million equivalent) (Credit No. 48060) was approved by the Board of Executive Directors on September 20, 2010 and became effective on June 17, 2011. With the first IDA Additional Financing the percentages of co-financing were revised to reflect the higher share of IDA financing. The IFAD loan will be fully depleted by the original Project Closure Date of June 30, 2012; and no future co-financing is foreseen. The additional IDA financing was accessed through the Crisis Response Window (CRW). The AF was sought to cover cost overruns and to ensure completion of planned rehabilitation of irrigation infrastructure and provision of a package of technical and advisory services designed to build capacity for sustainable small-scale irrigation development.

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2.69 The Malawi Government obtained a second additional financing (AF II) for the Project of US$50.0 million from IDA. The proposed additional financing formed part of an emergency response package to the Government of Malawi (GoM), which had embarked on difficult economic reforms. The AF II for IRLADP responded to GoM’s request dated April 26, 2012, to: (i) scale-up a number of its activities from 11 to 28 districts; (ii) consolidate project achievements and successes; (iii) prepare a future irrigation investment framework; and (iv) extend project duration beyond its original closing date of June 30, 2012 to 31st December, 2014. 2.70 The Project was required to use financial management, disbursement and reporting arrangements that are consistent with the guidance provided in the World Bank Disbursement Handbook for the entire life of the project and in conjunction with the Financial Accounting Reporting and Auditing Handbook (FARAH) issued in 1985, for the first year of the project. Both the Ministry of Agriculture and MASAF management unit have agreed on producing a set of financial reports which shows sources and expenditure of resources, balance sheet, procurement and other output reports from the start of the project which will be used as a basis for disbursements. 2.71 By 31st December, 2014, all preparations for closing the Project were done including closing out of all Outreach Offices. However, the IRLAD Project was also providing resources to the preparation of future investment for irrigation including providing preparatory financing for the Shire Valley Irrigation Project which was still waiting for its Project Preparation Advance (PPA). The Malawi government, therefore, requested for a six months extension to allow smooth transfer and utilization of these resources. The request was approved by IDA and the Project was set to close on 30th June, 2015. 2.72 The FM system of the Project was generally rated Satisfactory even though the risk was rated Substantial. The Project was current on all financial reporting requirements. Audited financial statements for the years were submitted on time and had a clean audit opinion. Disbursement as at 30th April, 2015 stood at $114,699,402 million representing 99.63% of the Project portfolio.

2.73 For the project procurement management, the procurement process has proven to be one of the key elements in the implementation of IRLADP activities. Prudent management of duns and purchase of high quality materials in the procurement process resulted in successful completion of sub-projects. Thereby, this allowed all stakeholders to fully benefit. 2.74 Apart from some notably delayed procurements, the project adhered to the procurement plan in the procurement of goods, services and civil works contracts under the project and due to this the project maintained a Satisfactory rating as key contracts remained signed. A procurement plan was in place and the position of Procurement Specialist has been maintained. As the project closed, the procurement plan had been revised to reflect all procurement done up to the project closure. 2.75 The Bank undertook Procurement Post Reviews (PPRs) every half year from the beginning of the project and report of the findings of each PPR was shared and discussed with the Project. Generally reports showed compliance to procurement planning, bidding and evaluation reports were of good quality, record keeping was good with all documents on file, timely payments were made to contractors. The overall risk rating for the project was low and there was no indication of corruption in the contracts that were reviewed. The project never recorded a mis-procurement.

2.76 Component 5: Contingency Financing for Disaster Risk Response: This was a new component added during the AFII to support preparedness and rapid response to disasters as needed and it was to allow for rapid re-allocation of proceeds from other components under streamlined procurement and disbursement

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procedures. This component was not triggered up until 14th January 2015 as no national disaster requiring rapid assistance occurred before then. 2.77 There were numerous circumstances when government requested for assistance from this facility following local disaster occurrences that were not officially declared by the Head of State. For example localized food shortages due to dry spells, localized flooding, pest damage etc. This was not possible because the financing agreement specifically stated that unless the disaster is of such a magnitude to be declared by the Head of state it would not qualify for this facility. The disaster risk manual for implementation of the contingency financing component was prepared jointly with Department of Disaster Management (DODMA) and finalized during the Project. 2.78 While the component could not be triggered under the project, as most rapid onset disasters are climate related, government and World Bank were encouraged to strategize and clarify on how to improve the triggers for contingency disaster response financing, for possible inclusion in future operations. The government felt that the condition that a disaster has to be declared by the Head of State was too restrictive. As such, it was determined that factors rising from an objective assessment of severity and urgency of the request, need to be reviewed when considering inclusion into contingency financing. However, contingency financing was clearly not designed for localized disasters or slow-onset disasters like drought, where other mechanisms were more appropriate. 2.79 A team comprising IRLAD, DODMA and other relevant government departments were therefore, tasked to come up with reasonable processes and steps which could be considered to activate the component for different levels/types of disasters. After this discussion the manual was updated and shared with stakeholders and World Bank for use in subsequent operations. 2.80 A major flooding disaster, however, occurred and destroyed land and property, displaced thousands of people and killed some in more than 15 districts. The extent of the damage and impact of the flooding compelled the Head of State to declare a national disaster and this immediately triggered the process towards emergency response. The project immediately requested a reallocation of US$600,000 to component 5 with justification and this was approved by the IDA. This process was effected and completed in a record three days in keeping with a disaster response. Immediately consultation with the Government recommended that the resources be used for repair and maintenance of access roads to facilitate movement of relief items to affected communities. 2.81 Two roads were identified with assistance from Roads Authority (RA), DODMA, Malawi Defence Forces (MDF) and Ministry of Transport and Public Works (MoTPW). The roads include 12km of Migowi – Nambazo Road (S147) at Phaloni Bridge which was completely washed away due to flood waters but has now been fully repaired by Malawi Defense Forces. Also the Thabwa - Fatima road via Muona (S152) covering 79km has been repaired by contractors under the supervision of Roads Authority. 446ha of irrigated land covering 18 irrigation schemes have been restored to functionality after major wash a ways by the floods. Farmers have now grown a winter crop which will help them restore their livelihoods. Procurement processes were simplified and disbursement hastened under this contingency disaster response to allow works to be completed on time. Government recommended that this facility should be included in other similar projects in anticipation of future disasters.

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Annex 3. Economic and Financial Analysis The economic and financial analysis assessed the viability of IRLADP. This involves updating the initial economic and financial analysis for the project by validating and making necessary assumptions on the following: (i) farm models and their characteristics; (ii) incremental crop yields attributed to project interventions; (iii) incremental labour demand and the wage rate for family and hired labour under the different farm models; (iv) estimates of financial rate of return; (v) estimates of economic prices based on appropriate import parity prices; (vi) and estimates of economic rate of return the project. 3.1 Farm models and their characteristics The analysis uses representative farm models to characterize the smallholder farming systems for farmers supported under the project. The Project Appraisal Document (PAD) and the updated project economic and financial analysis (Mangani, 2009), considered three alternative models for the irrigation schemes:

4. The rehabilitation of existing irrigation schemes; 5. The rehabilitation of storage reservoirs; and 6. The construction of small and mini-irrigation schemes.

However, rehabilitation of the small storage reservoirs was discontinued, after agreement between the World Bank and GoM during mid-term review, due to limitations in budgetary allocations to the sub component7. The resources were reallocated towards other components of the project. We therefore disaggregated the third model into two and removed the reservoir model. Consequently, three farm models were considered for this study:

Model 1: Selective rehabilitation of existing large-scale irrigation schemes (LSIs); Model 2: Rehabilitation and development of small-scale irrigation schemes (SSIs); and Model 3: Rehabilitation and development of mini-scale irrigation schemes (MSIs).

3.2 Characterization of the Farm Models Farm models characterization expounds on the indicators for distinguishing the farm models including the cropping intensity, plot size, total number of direct beneficiaries, rehabilitated/developed area and irrigable area. The characterization gives a representative farm model; in this case representative LSI, SSI and MSI. The characterization is based on information derived from various sources including the project’s PAD and Results Framework (revised after AFII), expenditure and M&E data from the PCU, other relevant secondary sources of information, key informant interviews with personnel involved in implementing the project (e.g., members of scheme Executive Committees, AEDOs and DIOs) and results of this study. Table 3.1: Key indicators and key assumptions by farm model

Farm Model Key indicators Key assumptions

Farm Model 1 Crop intensity

Increase from 86% to 163% (85% during the summer and 78% during the winter)

Hectares & beneficiaries 1,853 ha benefiting 10,483 households Crops Maize, rice, sweet potatoes, green maize, tomatoes

Farm Model 2 Crop intensity Increase from 80% to 175% (100% in summer, 75% in winter)

7 IRLADP Implementation Completion Report (2015), p.35.

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Hectares & beneficiaries 504 ha benefiting 3,910 households Crops Green maize, tomatoes

Farm Model 3 Crop intensity

Increase from 80% to 195% (100% in summer, 95% in winter)

Hectares & beneficiaries 592 ha benefiting 5862 households Crops Rice, green maize, sweet potatoes, tomatoes

Sources: PAD; IRLADP Implementation Completion Report (2015); Baseline Survey report (2007); Independent Endline Survey & Impact Evaluation study (2015)

3.2.1 Farm Model 1 Farm Model 1 depicts the representative cropping intensity and cropping pattern of existing rehabilitated large-scale irrigation schemes (LSIs) comprising ex-GoM schemes,8 ex-SFPDP schemes9 and ex-ShIP schemes10. There was a decrease in irrigated area (area provided with irrigation and drainage services) in the LSIs by 93ha from 1,946 ha to 1,853 ha mainly because of uncompleted rehabilitation works at ex-ShIP schemes. The total number of direct beneficiaries for LSIs was 10,483 in 2014, 43% of whom were women. The Endline survey established that the 2014 cropping intensity for the large schemes was 163% and the average plot size on LSIs was 0.32 ha. Thus, the realization gap was positive for the cropping intensity, average plot size, irrigated area and number of beneficiary households, indicating that the project exceeded targets in the large schemes with respect to these indicators. Table 3.2: Baseline, projected and actual indicators for Farm Model 1 (LSIs)

Scenario changes Cropping intensity

(%)

Average plot size

(ha)

Rehabilitated area (ha)

Irrigated areaa (ha)

Number of direct

beneficiary households

Without project (baseline)

86 0.20 0 1,946 7,900

Projected with project 150 0.20 2589 1,820 10,200 Realized with project 163 0.32 2589 1,853 10,483 Realization gap +13 +0.12 0 +33 +283

a. Area provided with irrigation and drainage services. Sources: PAD; IRLADP Implementation Completion Report (2015); Baseline Survey report (2007); Independent Endline Survey & Impact Evaluation study (2015) 3.2.2 Farm Model 2 This farm model depicts the cropping intensity and cropping pattern for rehabilitated and newly constructed small-scale irrigation schemes (SSIs). Thus, the model comprises both old and new SSIs. At project end, 846.1 ha of SSIs was developed, while 504.0 ha (60%) was irrigated (Table 6.9) since construction works were continuing at some new SSIs (e.g., Luju and Lifuliza). The target of the project was to develop 560 ha (500 ha net) resulting in a wide positive realization gap for the developed area because of unanticipated

8 Ex-GoM irrigation schemes are Nkhate in Chikhwawa District; Muona in Nsanje District; Limphasa in Nkhata Bay District; and Likangala Complex in Zomba District, which comprises Likangala Main, Chiliko, Khanda, Njala and Segula irrigation schemes. These schemes are all over 250 ha with a total command area of 1,797 ha. 9 Ex-SFPDP irrigation schemes are Domasi in Machinga District; Khwisa in Balaka District; Kaombe in Nkhota Kota District; and Miyombo and Chonanga in Karonga District. 10 ShIP is an acronym for Smallholder Irrigation Project. Ex-SHIP irrigation schemes are Mchere in Nsanje District; and Mbenderana A and Mbenderana B in Chikhwawa District.

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development activities arising from AFII at the appraisal stage. The number of direct beneficiary households for SSIs at the end of the project was 3,910 (67% female). The Endline survey results indicated that average plot size in small-scale irrigation schemes was 0.27 ha, giving a slight positive realization gap for the plot size.

Table 3.3: Baseline, projected and actual indicators for Farm Model 2 (SSIs) Scenario changes Cropping

intensity (%)

Average plot size

(ha)

Developed

(ha)

Irrigated area (ha)

Direct beneficiary households

Without project (baseline) 80 na 0 na na Projected with projecta 170 0.20 560.0 500.0 2,500 Realized with project 175 0.27 846.1 504.0 3,910 Realization gap +5 +0.07 +286.1 +4.0 +1,410

a. Indicators at appraisal. Sources: PAD; IRLADP Implementation Completion Report (2015); Baseline Survey report (2007); Endline Survey & Impact Evaluation study (2015)

3.2.3 Farm Model 3 Farm model 3 depicts the cropping intensity and cropping pattern for rehabilitated and newly constructed mini-scale irrigation schemes (MSIs). This representative farm model was derived from a sample of newly constructed MSIs and irrigation schemes that were initially under IFA but were upgraded to mini schemes. At project end, a total of 2109.1 ha MSIs was developed (109.4 ha new, 1500 ha IFA development, 499.7 ha IFA upgrading). At appraisal it was not envisaged that more irrigation area would be developed through IFA, hence the extremely wide realization gap for the developed area (Table 6.10). Total number of MSI beneficiaries was 5,862 (47% female), giving extremely wide realization gap for direct beneficiaries because of the unanticipated developments in the IFA programme which also increased the number of beneficiaries. The average plot size in the schemes was 0.48 ha which was larger than expected (0.2 ha). Table 3.4: Baseline, projected and actual indicators for Farm Model 3 (MSIs)

Scenario changes Cropping intensity (%)

Average plot size

(ha)

Developed

(ha)

Irrigated area (ha)

Direct beneficiary households

Without project (baseline) 80 na 0.0 na na Projected with projecta 170 0.20 340.0 300.0 1,500 Realized with project 195 0.48 2109.1 591.5 5,862 Realization gap +25 +0.28 +1769.1 +90.0 +4,362

a. Indicators at appraisal Sources: PAD; IRLADP Implementation Completion Report (2015); Baseline Survey report (2007); Endline Survey & Impact Evaluation study (2015) 3.3 Cropping intensities and their trends

Table 3.5 gives 2014 cropping intensities for the three representative farm models described above based on cropping patterns practiced by beneficiaries within each model. 3.3.1 Farm Model 1 (LSIs). Farmers are mainly growing Faya on large-scale schemes during summer (wet season) since the crop has a high water requirement, hence it is better grown during the wet season rather than the dry season. Other relatively minor crops grown during the season are hybrid and local maize and sweet potatoes. Maize grain is produced during summer and local maize is mainly produced for household

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self-food sufficiency, while the other crops are mainly grown for sale. Farmers prefer local maize to hybrid maize for food production because of its sweetness and better storability. The same crops (Faya, maize, sweet potatoes) and tomatoes are also commonly grown during winter (dry season), with reduced intensity for Faya but increased intensity for the other crops. The winter crops are mainly grown for cash. Winter maize is commonly sold green on cobs for cash, again local green maize is preferred to hybrid green maize (though there are no price differences between the two) because of its sweetness. Cropping intensities for large-scale schemes in summer and winter are estimated at 84% and 78% respectively, giving an overall intensity of about 163%.

Cropping patterns have shifted since project implementation started. Cassava, which was commonly cultivated by beneficiaries at the beginning of the project is no longer prominent; beneficiaries have shifted from producing cassava to producing sweet potatoes on the large schemes. In addition, farmers have continued to grow local maize for food and for sale (green maize), thus hybrid maize has not fully substituted local maize on the scheme as expected at appraisal. This is also the case on other farm models, SSIs and MSIs.

Table 3.5: Cropping intensities by season and Farm Model, 2014

Season

Crop

Cropping intensity (%) Farm Model 1

(LSI) Farm Model 2

(SSI) Farm Model 3

(MSI)

Summer

Faya 73 2 19

Hybrid maize 6 47 14

Local maize 5 41 55

Sweet potato 1 2 8

Tomato 0 9 4

Subtotal 84 100 100

Winter

Faya 31 0 0

Green (hybrid) maize 15 6 8

Green (local) maize 18 65 77

Sweet potato 11 0 0

Tomato 3 5 10

Subtotal 78 75 95

TOTAL 163 175 195 Source: Independent Endline Survey & Impact Evaluation study (2015)

3.3.2 Farm Model 2 (SSIs). Farmers in the small-scale irrigation schemes are focusing on producing hybrid and local maize during summer and winter. The focus in these schemes, and indeed in mini schemes, is on maize production rather than on rice production because of the prevailing land arrangements for scheme activities. Small-scale and mini schemes use land belonging to individual smallholder farmers (under customary tenure system) who are members of the scheme. The schemes enter into an agreement with the land owners (facilitated by IRLADP) to use the land for scheme activities during winter (dry season) and revert the land to the owners during summer (wet season) so that the owners can use it for food production. Thus, scheme members have access to land for scheme activities in the dry season when there is inadequate water for rice production, and the land is mainly used for food production by the owners at the time more water is available for rice production. The farmers are also growing sweet potatoes and tomatoes during the rainy season, albeit at much smaller scale than maize.

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Apart from cultivating hybrid and local green maize in winter, beneficiaries on SSIs are also cultivating tomatoes during the season but on a relatively much smaller scale. The maize is mainly grown for commercial purposes, but heavily focusing on production of local green maize because of its sweetness. The overall cropping intensity increased from 80% at start of project implementation to 175% (100% summer, 75% winter) at project-end.

3.3.3 Farm Model 3 (MSIs). Faya, hybrid maize and local maize are commonly cultivated on mini schemes during summer with local maize predominating. During winter, farmers are commonly cultivating green maize for sale, again focusing on local green maize because of its sweetness. Summer and winter cropping intensities are estimated at 100% and 95% respectively, giving an overall intensity of about 195%.

The above findings suggest that smaller schemes (SSIs and MSIs) are relatively more intensively cultivated than large schemes (LSIs). However, beneficiaries on the smaller schemes are heavily focusing on maize production (particularly local maize), whereas their counterparts on large schemes are focusing on rice (Faya) production. As noted above, the prevailing land tenure arrangement limits rice production on smaller schemes.

Trends in cropping intensities. Cropping intensities for beneficiaries in LSIs, SSIs and MSIs have generally been increasing with project implementation (upward trend), increasing by 89%, 119% and 144% respectively between 2006 and 2014. This is an indication that the project has been contributing to improvement of cropping intensities in irrigation schemes considering that rehabilitation of existing schemes and development of new ones has improved farmers’ access to water resulting in intensifying their irrigation activities.

Figure 3.1: Trends in cropping intensities Farm Model, 2006 – 2014.

Sources: PAD; IRLADP Implementation Completion Report (2015); Independent Impact Assessment Survey report (2013); Baseline Survey report (2007); Independent Endline Survey & Impact Evaluation study (2015)

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3.4 Financial analysis

Financial analysis of project interventions was carried out to estimate (i) the incremental labour demand and wage rate (return to labour) under the different farm models; and (ii) the financial rate of return. 3.4.1 Incremental labour demand and return to labor

As an ex-post analysis, estimation of incremental labour demand and return to family labour entailed comparing the baseline situation against the current situation. In updating the financial analysis, comparison is made between results of the analysis at appraisal/baseline (contained in the revised PAD, World Bank, 2005); at mid-term evaluation (Mangani, 2009); and at project-end using 2014 data (current study results). Table 6.12 shows the incremental labour and return per day of family labour for irrigation activities under different farm models. The project has resulted in incremental labour demand by 80, 44 and 116 mandays for LSIs, SSIs and MSIs respectively. The relatively high increase in labour demand for beneficiaries under MSIs is due to their relatively large plot sizes compared to their counterparts and to certain extent by the differences in cropping patterns between the models. The differences in plot sizes and cropping patterns also caused the differences in the labour demand and return between periods; at baseline (2006), at mid-term (2009) and current situation (2014). The project has also increased return to labour for beneficiaries under all three farm models; the increase is highest on MSIs and lowest on LSIs indicating that labour use efficiency is higher on smaller schemes than and larger schemes. Similarly, the project has resulted in increasing household labour incomes of beneficiaries under all three farm models. The results indicate that beneficiaries on MSIs have benefited the most from irrigation scheme activities, while those on SSIs have benefited the least. The return to labour, incremental labour income and household labour income have been increasing with time.

3.4.2 Financial Rate of Return

The main benefits of IRLADP would comprise both direct and indirect quantifiable benefits in the form of incremental crop production, improved transportation efficiency from road improvements associated with the IFA programme, improved marketing and crop value-added through provision of post-harvest assets and storage facilities, empowered rural communities as a result of group formation at community level and capacity building that result in improved production and marketing decisions, and more sustainable utilization of natural resources coming from water harvesting and soil conservation measures. However, it is problematic to estimate all of the project’s direct and indirect benefits as the project supported physical investments as well as institutional building measures. Consequently, estimates of financial and economic rates of return take into account only the benefit and cost streams associated irrigation investments. Discounted Cash Flow (DCF) techniques were used to estimate financial (FRR) and economic rates (ERR) of return to assess feasibility/viability/worthiness of the project.

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Table 3.6: Incremental labour demand and return per day of family labour by farm model with and without project scenarios.

Variable Unit Farm Model 1 (LSIs) Farm Model 2 (SSIs) Farm Model 3 (MSIs) Baseline

(2006)Projected

(2009)Actual(2014)

Baseline (2006)

Projected(2009)

Actual(2014)

Baseline(2006)

Projected(2009)

Actual(2014)

Weighted average d f l b

manday 27 63 108 24 77 69 24 72 140

Incremental labour due to project

manday 35 80 53 44 48 116

Weighted average return to labour

MK/manday 181 607 1,124 85 627 1,643 85 629 1,989

Incremental labour income due to project

MK/manday 426 1,163 542 1,929 544 2,274

Household income per plot

MK 5,068 38,429 131,749 2,125 48,142 112,646 2,125 45,441 279,189

Incremental labour income per household

MK 33,361 130,092 46,017 119,520 43,316 286,063

Sources: World Bank (2005), Mangani (2009) and Independent Endline Survey & Impact Evaluation (2015)

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The following key assumptions were made when estimating the financial rate of return:

25-year project life span was used for purposes of comparison since the same life-span was used at appraisal and at mid-term evaluation. FAO (2002), however, estimates life span of irrigation schemes at 20 years;

20% discount rate was used to reduce future net incremental income to its present value considering

that bank interest rates hovered between 13% and 25% during the entire project implementation period;

Beneficiaries started realizing benefits from irrigation activities from third year project

implementation, reflecting the delays in construction works at the beginning of the project.

Benefits from Farm Model 1 (LSIs) would be obtained in full from Year 5 of project implementation since farmers in these schemes have long experience with irrigated agriculture. However, full benefits from Farm Model 2 (SSIs) and Farm Model 3 (MSIs) would be obtained from Year 7 of project implementation, increasing gradually in four years (25% per annum) from Year 3 when the project starts realizing the benefits;

Operation and maintenance (O & M) costs were estimated at roughly 5% of total direct investment

costs to farm models (i.e., excluding PCU costs) made at the end of investment period. The Financial Rate of Return (FRR) for irrigation activities of the project was 47.69% which is higher than the baseline rate (17.34%) and projected rate at mid-term evaluation (34.41%). The FRR is the interest rate at which the irrigation activities would breakeven or the net present value (NPV) of the activities would equal to zero. Overall financial returns to the project showed an increasing trend between project-start and project-end (Table 6.13), showing that returns to the project were increasing with project implementation. The increasing trend is attributed to increment in the number of beneficiaries, total hectarage under irrigation and crop productivity as a result of the rehabilitation and development of the schemes coupled with related activities such as catchment conservation, soil and water conservation methods, introduction of improved production methods (seeds, fertilizer and SRI) and capacity building at all levels. These findings indicate that IRLADP was a worthwhile project. Table 3.7: Estimated financial and economic rates of return

Scenarios Financial Rate of Return (%) Economic Rate of Return PAD

(2005) Projected

(2009) Current (2014)

PAD (2005)

Projected (2009)

Current(2014)

Overall project 17.34 34.41 47.69 15 29.94 38.88

If benefits decrease by 10% 31.41 40.11 14 27.29 33.37

If invest. cost increase by 10% 31.77 40.93 14 27.61 33.98 If benefits lag by two years 23.47 23.34 12 21.01 21.51

Sources: World Bank (2005), Mangani (2009) and Independent Endline Survey & Impact Evaluation (2015) The analysis showed that the overall project realized a positive Net Present Value (NPV) of US$ 6,491,780. The present values of the project’s incremental benefits and costs were estimated at US$ 16,144,320 and US$ 9,652,540 respectively, giving a Benefit-Cost Ratio (BCR) of 1.67 which is greater

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1.0. These findings again confirm that irrigation activities of IRLADP were worthwhile or viable at the discount factor of 20%. 3.5 Economic analysis The assumption made in this analysis was Malawi would normally be likely to import maize and rice rather than export the products. In addition the country normally imports its fertilizer requirements. Hence, import parity prices were used to estimate economic price of maize grain, rice and main fertilizers (23:21:0 and urea). International prices used in the analysis were collected from the Food Security Portal managed by the International Food Policy Research Institute (http://www.foodsecurityportal.org ). Appendix I gives detailed information on import parity prices of maize, rice and fertilizers. There were differences between the import parity prices and actual market prices because of distortions in the market mainly as a result of government policies. The import parity price for maize was greater than the maize market price indicating government control on maize price since farmers were receiving less than they should; maize being the country main staple food commodity. The conversion factor for maize was therefore more than 1.0. Conversely, import parity prices for rice, urea and 23:21:0 were less than their respective market prices with conversion factors of less than 1.0 (Table 3.8), indicating limited government control on market prices for these commodities. Thus, farmers were receiving higher prices than they should for their rice, and were paying more than they should have paid for the fertilizers. Import parity prices for other products and farm inputs were assumed to be the same as their local market prices (conversion factor =1). Table 3.8: Comparison of import parity prices and market prices, 2014

Commodity Item Unit Import parity price

Actual market price

Conversion factor

Crops

Maize grain Mk/kg 92 71 1.295 Rice Mk/kg 20 90 0.222

Fertilizers

Urea MK/50kg 6,854 16,150 0.424 23:21:0 MK/50kg 7,419 17,100 0.433

Independent Endline Survey & Impact Evaluation (2015) After applying the economic prices to the investment analysis, the project realized an Economic Rate of Return (ERR) of 38.88%, which was less than the financial rate of return (47.69%) due to distortions in the market prices. Sensitivity analyses were conducted to determine the robustness of the irrigation investments to adverse factors. It is apparent from the previous and current analyses that the financial and economic rates of return are relatively robust with respect to cost increases, benefit reductions and delays in benefits (Table 3.7).

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Annex 4. Bank Lending and Implementation Support/Supervision Process (a) Task Team Members

Name Title Unit/Organization

Lending

Mr. Tijan M. Sallah First Task Team Leader

Hardwick Tchale Second Task Team Leader (Senior

Agriculture Economist)

GFADR

Pieter Waalewijn Third Task Team Leader (Senior

Water Resources Management

Specialist)

GWADR

Cheikh Sagna Senior Social Development Specialist GSURR

George Ledec Lead Economist GENDR

Marian Bradley Country Portfolio Manager Africa II Division, IFAD

Mary Bitekerezo Senior Social Development

Specialist

GSURR

Ian Anderson Consultant, Irrigation Engineer IDA

Hocine Chalal Lead Environmental Specialist GENDR

Francis Nkoka Disaster Risk Management

Specialist

GSURR

Nejdet Al-Salihi Consultant, retired IDA Lead

Irrigation Engineer; Procurement

David Rohrbach

Cary Anne Cadman Senior Environmental Specialist GENDR

Harold Liversage IFAD

Parvis Hekmat Consultant, Irrigation Engineer IFAD

Tesfaye Asfaw Consultant, Marketing Specialist IDA

Mohamad Usman Consulant, Agricultural Economist IDA

Satish Kumar Consultant, retired IDA Senior

Agric. Services & Institutional

Specialist

55

Yvette Laure

Djachechi

Social Scientist IDA

Clare Bishop Consultant, Social Specialist IFAD

Francis M’buka Agronomist Malawi Country Office, IDA

Stanley Hiwa Agricultural Economist, Malawi Country Office, IDA

Donald Mphande Financial Management Specialist Malawi Country Office, IDA

Pascal Tegwa Procurement Specialist, Malawi Country Office, IDA

Tesfaalem G. Iyesus Senior Procurement Specialist IDA

Amadou Konare Consultant, Environment IDA

Hisham Abdo Kahin Lawyer IDA

Muthoni Kaniaru Lawyer IDA

Modupe Adebowale Senior Disbursement Officer IDA

Meseret Kebede Cluster Assistant IDA

Franco Russo Operations Assistant IDA

Francis Mkandawire

AFTFM

Simon Chirwa Senior Procurement Specialist AFTPC

Steve Mhone Procurement Specialist AFTPC

Marjorie Mpundu Counsel LEGAF

Suzanne Morris CTRFC

Yisgedullish Amde Senior Operations Officer AFCS3

Gibwa Kajubi Operations Officer

AFTCS

Appolenia Mbowe Senior Country Economist PREM

Chrissie Kamwendo Operations Officer AFMMW

Grace Chilambo Program Assistant AFMMW

Appolenia Mbowe

Sr. Economist AFTP1

Ida Manjolo Sr. Social Protection Specialist

AFTSP

Zeria Banda Communication Officer FRSC

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Grace Ingrid Chilambo Program Assistant AFMMW

England Maasamba Program Assistant AFCE1

Esther Lozo Executive Assistant AFMMW

Grace Soko Program Assistant AFCMZ

Praveen Kumar Lead Economist AFTP1

Temwa Gondwe

Economist AFTP1

Charles Boudry Legal Associate LEGAF

Luis M. Schwarz Sr. Finance Officer CTRLA

Trust Chimaliro Financial Management Specialist

AFTFM

Ivan Velev Country Program Coordinator AFCMZ

Maniza Naqvi

Sr. Social Protection Specialist AFTSP

Muderis A.

Mohammed

Sr. Social Protection Specialist

AFTSP

Olivier Durand (Senior Agricultural Specialist AFTAR

Richard James Consultant, Operations Officer AFTWR

Pauline McPherson Operations Officer AFTAR

Mary Bitekerezo Senior Social Development

Specialist

AFTCS

Lungiswa Thandiwe Gxaba

Senior Environmental Specialist FTEN

Hawanty Page Senior Program Assistant

AFTAR

Deliwe

Ziyendammanja

Team Assistant AFMMW

Pauline Kayuni

Team Assistant AFMMW

Frits Ohler Senior Agriculture Officer FAO/CP, Rome

Supervision

Kapil Kapoor Acting Country Director

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Karen Brooks Sector Manager

Sandra Bloemenkamp Country Manager AFMMW

Kundhavi Kadiresan Country Director AFCS3

Marcelo Giugale Sector Director AFTPM

Jamal Saghir Sector Director AFTSN

Ritva Reinikka Sector Director AFTHD

John Panzer Sector Manager AFTP1

Martien van

Nieuwkoop

Acting Sector Manager AFTAR

Iain Shuker Program Coordinator AFTAR

Lynne D. Sherburne-

Benz

Sector Manager AFTSP

ICR

Hanane Ahmed Economist GFADR

Olivier Durand Senior Agriculture Econommist GFADR

Samuel Taffessee Senior Economist GFADR

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(b) Staff Time and Cost

Stage of Project Cycle Staff Time and Cost (Bank Budget Only)

No. of Staff Weeks USD Thousands (including

travel and consultant costs)

Lending

FY04 65,816.28

FY05 275,268.71

FY06 94,557.06

Total 435,642.05

Supervision/ICR

FY06 100,796.18

FY07 240,824.47

FY08 163,374.58

FY09 191,273.27

FY10 140,643.92

FY11 94,721.32

FY12 125,709.83

FY13 122,218.69

FY14 105,918.01

FY15 180,232.91

Fy16 40,000.00

Total 1,505,713.18

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Annex 5: Beneficiary Survey Results (if any)

No survey conducted.

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Annex 6: Stakeholder Workshop Report and Results (if any)

No stakeholder workshop organized

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Annex 7: Summary of Borrower’s ICR and/or Comments on Draft ICR

There is sufficient evidence to confirm that IRLADP achieved its Development Objective to increase agricultural productivity of poor rural households in all districts through the various interventions implemented under the project. The project met its objectives considering the fact that most of the irrigation and drainage infrastructures (100% of the schemes) were completed. Utilization was high especially during the period of second additional financing and adequate involvement of MoAIWD. A total of 45,266 beneficiaries have been given access to water for irrigation purposes excluding those from IFA.Specifically, the studies show that the project made substantial contribution towards key performance indicators, namely in percentage for maize and rice crop yields productivity (tons/ha).

Achievement of Outcomes

Justification of Overall Outcome Ratings Rating: Satisfactory

The achievement of PDO and the overall performance of IRLAD Project is satisfactory. The relevance of IRLAD Project remained substantial throughout, as reflected in both the Government’s development strategy on sustainable agricultural land and water management, and the Bank’s Country Assistance Strategy (CAS). The Project was also also in line with the National Irrigation Policy and Development Strategy (NIPDS) which stipulates that support to a thriving irrigated agriculture sector be demand-driven and service oriented with the full participation of farmers and commercial interests. The IRLADP Project achieved its Development Objective of increasing agricultural productivity of poor rural households in all districts through promotion of irrigation farming and support to extension to ensure that the farmers are using Good Agricultural Practices (GAP). The Project implemented a number of studies to generate evidence of Project impact in beneficiary livelihoods and these included: Beneficiary Assessment of the IRLAD Project; Two Impact Assessment Studies; Impact Evaluation of the project on beneficiary FBOs and MICs and the Endline Impact Evaluation Study. Specifically, the studies show that the Project made substantial contribution towards key livelihood indicators, namely: household incomes and food security, capacity building at various levels and also in supporting GoM existing Programs. For example, the project helped to increase maize yield from 1.6 tons per ha at baseline to 3.4 tons surpassing the target by 114 percent. For rice, the project assisted to increase yields from 1 ton per ha at baseline to 4.6 tons per ha. The End Line Impact Evaluation of the IRALD finds the project to have met its targets at both impact-level and outcome-level indicators. Apart from Component 3, where only two indicators were below their targets, the rest of the outcome-level indicators for all the other components surpassed their targets. This demonstrates the fact that the project has been highly successful in meeting its targets. Overall project performance in achieving the PDO is satisfactory. Similarly, overall project performance was satisfactory on all five components of the project.

ASSESSMENT OF RISK TO DEVELOPMENT OUTCOME

Overall Rating: Low The risks to development outcome were cumulatively rated low at the close of the operation because adequate mitigation measures were put in place at operation’s design stage and interventions implemented during the life of the project. In total, five critical risks were identified at appraisal. These critical risks have

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been broadly categorized as; social; implementation of decentralization plan; administration of input for asset program; government counterpart funding; and HIV/AIDS. ASSESSMENT OF DEVELOPMENT PARTNER AND BORROWER PERFORMANCE Development Partner Performance Overall Rating: Satisfactory

Quality of World Bank Supervision Bank supervision is rated as ‘satisfactory ‘despite the change of Task Team Leaders three times. The Bank managed to share Implementation Support Mission (ISM) objectives in good time. Team composition was generally acceptable. Quality of IFAD Supervision IFAD supervision is also rated as successful as in all ISM it was effectively represented and provided the support GoM and implementers required. Team composition was generally acceptable. Representation from IFAD mostly comprised of a task team leader from the IFAD headquarters. Borrower Performance Overall Rating: Satisfactory

The Government of Malawi designated the Project Coordination Unit (PCU) to oversee implementation of the Project. The PCU was complimented with the Bank Team throughout the three phases of financing availed to the project to the tune of US$ 115.2 million.

Performance of the Ministry of Finance, Economic Planning and Development Over the course of project implementation, the Ministry Finance of was able to mobilize a total of US$ 2.8 million as GoM contribution as per the agreement during the project appraisal. The Ministry was also fully involved in ISM over the project implementation.

Performance of the Ministry of Agriculture, Irrigation and Water Development Over the course of project implementation, the Ministry of Agriculture, Irrigation and Water Development worked hand in hand with the PCU to ensure success of the Project. In addition to coordinating implementation of most project activities, the Ministry was also responsible for conducting independent monitoring and evaluation reviews. The Ministry also participated in ISM and Secretary for Agriculture, Irrigation and Water Development chaired the meetings to adopt ISM reports.

Performance of the PCU The PCU has performed very well and met all the management requirements regarding the covenants agreed to between the Government and the Bank. The PCU has been able to coordinate the programming of project activities from districts and disburse funding within reasonable timescale. The PCU has had tremendous

63

impact on strengthening the capabilities of district implementers in meeting social and environmental safeguards as well as conducting tracking surveys under the M&E function. The PCU has also exhibited high levels of competence and performance standards as demonstrated by the ability to prepare additional funding requests as need arose within very short periods of time. RATING SUMMARY BY BORROWER ICR

LESSONS LEARNT The Project adopted a continuous learning strategy as an integral part of project management. As a result, challenges experienced during implementation provided the learning points which enhanced the delivery of project outputs. The key lessons learnt throughout the implementation of the IRLAD Project include the need to build capacities at the district and community levels so that the stakeholders and beneficiaries were able to respond to demands of implementing various activities. The following is a summary of the main lessons learned from implementing the IRLAD Project: Policy Level

a) Fulfilment of Grant/Loan Agreements; overall, there has been a great improvement in the way government strived to meet all the set conditions. For the first time, it took about 6 months for government to fulfil the grant/loan conditions and the project to be declared effective. This implies the conditions were not imposed on government but there was a mutual agreement between all partners.

b) Use of Existing Structures: The Project showed that for a project of national scale it is crucial

to put in place an institutional set-up that builds on existing structures and includes effective links to national policies. Additionally, it is important to ensure that capacity is built at national and district level for implementation and ownership of project activities and after-project sustainability.

c) Pre-appraisal Detailed Project Design: Due diligence in preparation of pre-appraisal detailed

project design and cost estimates, and an in-depth design review process, are key to smooth implementation of irrigation projects. Flexibility should be exercised in the event that costs increase significantly to affect project outputs. Local data should be thoroughly analysed to provide a sound basis for costing especially for the civil works other than relying on cost estimates from other countries.

d) Payments In Public Works Programmes in Malawi: Development / rehabilitation of rural

earth roads is one of the key public assets that are worked on in Public works programmes. These programmes include the IFA and the LDF public works programmes. It has been observed that these many players follow different rules and procedures. For example, while in the IFA beneficiaries were paid inputs in the LDF public works programme they are paid money. This creates confusion and causes beneficiaries to scramble for public works programme they

Outcomes: Satisfactory Risk to Development Outcome Low Bank Performance Satisfactory Borrower Performance Satisfactory

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consider more profitable. The government needs to harmonize the implementation procedures of programs of similar nature.

e) The Household Approach to Agricultural Extension : This stimulates members of

households to take joint decisions on what crops to plant, what to harvest and what to do with the revenues. The household approach is inclusive and is successful in addressing gender issues and AIDS and makes sure that men and women both participate in all household activities.

f) Farmer Business Schools (FBS) Concept in Agricultural Extension

The Farmer Business Schools concept has been a successful new approach in changing farmers’ mind sets from subsistence thinking to commercial thinking and increasing farmers’ business and marketing skills. FBS graduates have learned how to set prices and calculate gross margins; some graduates use this knowledge to set up businesses outside of agriculture.

g) Systems of Rice Intensification (SRI) Method of Rice Cultivation: This has been introduced with huge success. The advantage with SRI is that it promotes efficient application of inputs which result in high outputs. As a result, it has boosted rice yields by 100 to 200% and farmers are embracing the technology.

h) Lead Framers Concept in Agricultural Extension: Lead farmers build capacity of their fellow farmers in specific technology they have been trained in. To sustain these

lead farmers, communities need to find means of motivating them so that they continue providing the services.

Design Level

a) Delayed implementation of civil works: the delayed implementation of the activities related to civil works reflects inherent problems during project design which did not recognise the role of project Engineers at an early stage of project implementation. The assumption that the Department of Irrigation (DoI) would prepare the terms of references for the consultants and advertise before the engineers were engaged did not hold as DOI had human capacity problems. The few engineers available in the department are also busy with other equally important assignments. For future projects, it will be proper that all the ground work including terms of references should be done in advance before PIUs are established to avoid delays in the implementation of civil works related activities.

b) Involvement of small agro-dealers in input distribution: the idea to involve small agro-

dealers in the distribution of inputs as a way of strengthening agro-dealer networks in the project districts was a good idea. However, a detailed mapping of the agro-dealers needs to be undertaken before recommending a wholesale participation of agro dealers to prevent farmers from travelling long distances to redeem their inputs.

c) Project Preparatory Phase: A project preparatory phase (of a minimum of two years) is

recommended for complex projects like IRLADP to facilitate start-up activities, such as a capacity needs assessment to identify capacity gaps, a thorough elaboration of scheme designs and prior identification of project sites, and tendering and procurement activities. In future preparatory activities such as community sensitization and mobilization will need to start a year in advance to allow the communities understand the project objectives and their roles and continue these activities throughout the Project period. Rather than conducting these activities at the same time of implementation

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d) Concept of Backyard Gardening in the Project: The concept of backyard gardening as designed for the project has shown not to be practical owing to the fact that settlements in farming communities do not match the design. Settlements in Malawi are varied and do not necessarily provide room for the construction of large volumes of water harvesting tanks.

Institutional Level

a) Inadequate Financial Management Capacity at District Assembly: the designing of the Project

recognised the weak financial management capacities for the implementing institutions including the district councils and assumed that the situation would improve once the Project takes off. However, this situation remained the same until the third year of project implementation and this has affected disbursement of funds to districts. The decision to recruit Justification Assistants in the critical districts improved the situation and future projects should consider this arrangement earlier than was the case with IRLADP.

Operational Level

a) Greater emphasis on community participation and ownership: the Project embraced community development and participatory methods which should be continued since this has proved to be the best way to plan and implement the Project. The community sensitisation and mobilisation approaches adopted by the Project assisted in increasing the enthusiasm of farmers to participate in project activities.

b) Training: This was a key factor to the successful development of irrigation agriculture. This

includes training of irrigation engineers, contractors, extension workers and farmers. The combination of promoting the ‘hardware’ together with the ‘software’ is crucial. In future, community mobilization and sensitization should start earlier and intensified during the period of project implementation.

c) Conditions for Sustainable Irrigation Schemes: To create sustainable irrigation schemes in

long term, the following factors have to be in place: committed farmer groups with strong leaders, a reliable permanent water source, access to markets and marketing skills to sell surplus.

d) Introduction of New Technologies: The new technologies of construction and utilization of

water harvesting tanks which was introduced during Project Implementation failed to be relevant and effectively address farmers’ needs. The financial and technical requirements of new technologies need to match the capacities of the potential beneficiaries.

e) Community Participation in Catchment Conservation Activities: It has been observed that

there is great variation in farmers’ motivation and level of ownership of catchment conservation activities between districts and communities. However, to enhance farmer participation, sensitization combined with promotion of technologies with short-term benefits is key. In addition, there is a need for civic education on the importance of environmental protection and integrated water management.

f) Management of the Input for Asset Programme (IFA): Through the IFA programme,

beneficiaries received inputs which enhanced food security at household level while the

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community assets developed provided wellbeing of the community in terms of accessibility and irrigation .However, the benefits were short term as more attention needed to be given to the use and maintenance of these assets. There was need to built capacity of the beneficiaries to maintain the assets as well as properly hand over roads to department of district councils responsible for road maintenance.

g) Grants for Farmer Based Organizations (FBOs): Grants were issued to FBOs to increase the profitability of their enterprises. The members of these FBOs were managing their enterprises in groups and this was observed to result into lack of ownership, responsibility and commitment among the FBO members. This was then changes and the management of the enterprises, especially livestock, was transferred to individual members and pass on program was encouraged .This has proved to be effective and sustainable for dairy and piggery enterprises.

h) Amounts of Grants Issued to FBOs : It has also been learnt that the FBO grant thresh hold was low and failed to stimulate high levels of production that could lead to introduction of agro processing programmes. Most of the products were sold as raw and locally. Farmers would have benefitted more if they were able to process their produce and access good markets. It is important that grants threshold should be of the level and be packaged to stimulate agro processing.

i) Water User Associations: WUAs have shown they can manage irrigation schemes if they are empowered through capacity building. Important factors are:

i. Group cohesion and good leadership capacity ii. High literacy levels iii. Construction of irrigation schemes is completed timely and of good quality iv. Minimum political interference

j) Hotspot Approach To Land Resources Conservation: To use limited resources more efficiently it was observed targeting hotspots of land degradation was better than entire catchments. Tackling areas with severe erosion and protecting river banks was an effective way of protecting water resources and reducing siltation in streams and irrigation canals.

k) Training of Fresh Graduate Students: Provision of opportunities to students to gain practical

experience through attachments is an effective tool in improving graduates skills. l) Dairy Animal Based FBOs : Such FBOs took so long to build up a successful enterprise due

to challenges of Artificial Insemination (AI). To address the challenge, bulls were procured and distributed to the groups. For future programmes, the bulls have to be part of the package of the grant right from the planning stage.

IRLADP has successfully shown the value of using an integrated approach to promote irrigation and support farmers’ livelihoods. Building the hardware (infrastructural assets) combined with the software (institutions and capacities) was essential to achieve impact. IRLADP has built its intervention strategies on existing government structures and farmer initiatives, putting a lot of effort into building capacities at all levels (farmers, extension workers, government staff and higher education) in the process. This is to be recommended to all any future projects.

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Response from Borrower on the ICR

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Annex 8: Comments of Co-financiers and other Partners/Stakeholders

The Bank requested comments from IFAD. However, no feedback was received.

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Annex 9. List of Supporting Documents

Project Appraisal Document (filed in WB-DOCs) Project Paper Additional Financing (Crisis Response Window) – Additional Financing I (filed in

WB-DOCs) Project Paper Rapid Respone Program – Additional Financing II (filed in WB-DOCs) IRLADP Documenting Lessons Learnt from the Irrigation, Rural Livelihoods, and Agricultural

Development Project (IRLADP) - (filed in WB-DOCs) IRLADP Independent Endline Survey and Impact Evaluation - (filed in WB-DOCs) Borrower ICR – (filed in WB-DOCs)