D)ocument of

The World Bank

FOR OFFICIAL USE ONLY

Report No. 14995

IMPLEMENTATION COMPLETION REPORT

NEPAL

AGRICULTURAL EXTENSION II PROJECT(CREDIT 1570-NEP)

SEPTEMBER 21, 1995

Agriculture and Water Operations DivisionCountry Department IISouth Asia Region

This document has a restricted distribution and may be used by recipients onlv in the performnance oftheir official duties. Its contents may not otherwise be disclosed without World Bank authorization.

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CURRENCY EQUIVALENTSNepalese Rupee (NRs)

US$1 0 NRs 18.50 (1985 project appraisal)NRs 42.30 (1991 original project completion)NRs 49.26 (1994 actual project completion)

WEIGHTS AND MEASURES

I hectare (ha): 2.47 acres (ac)I kilometer (kmi): 0.62 miles (mi)

I metric tons (mt): 2.205 pounds (lb)I kilogram (krn); 2.2 pounds

FISCAL YEAR OF BORROWER

July 1 6 - July 15

ABBREVIATIONS AND ACRONYMS

AA Agricultural AssistantADBN Agncultural De-velopment Bank of NcpalAEP H Agricultural Extension 11 ProjectAERP Agricultural Extension and Rcsearch ProjectAIC Agricultural Inputs CorporationAO Agncultural OfficcrAPROSC Agncultural Projects Scrnice CentcrASC Agricultural Scrvice CcnterDADO District Agriculture Developmcnt OfficerDCA Development Credit AgreementDOAD Department of Agricultural De clopmentHFPP Hill Food Production ProjectHMGN His Majestv's Government of Ncpal[DA International Devclopment AssociationJT Junior TechnicianJTA Junior Tcchnical AssistantM&E Monitoring and EvaluationMOA Ministry of AgncultureNARC Nepal Agricultural Research CotmcilPC/PS Problcm Census/ Problcm Solxing TcchniqueRARS Regional Agncultural Research SLationSAR Staff Appraisal ReponSDR Special Drawing RightsSMS Subject Matter SpecialistRATC Regional Agncultural Training CcnterT&V Training and Visit System of ExtensionUSAID United States Agency for International DcvelopmentVDC Village Dcvelopmcnt Committee

FOR OFFICIAL USE ONLY

IMPLEMENTATION COMPLETION REPORT

NEPAL

AGRICULTURAL EXTENSION II PROJECT(Credit 1570-NEP)

TABLE OF CONTENTS

PREFACE ................................................. i

EVALUATION SUMMARY ............................................... ii

PART 1. PROJECT IMPLEMENTATION ASSESSMENT ............................1

A. Statement/Evaluation of Objectives .................................... 1B. Achievement of Objectives .. 2....................................... 2C. Major Factors Affecting the Project ................................................ 6D. Project Sustainabilitv .............................................. 8E. Bank Performance ................................................ 8F. Borrower Performance ................................................ 9G. Assessment of Outcome .............................................. 9H. Future Development .............................................. 9I. Lessons Learned ............................................... 10

PART II. STATISTICAL TABLES

Table 1: Summary of Assessment .......................................... 12Table 2: Related Bank Loans/Credits ........................................... 14Table 3: Project Timetables ........................................... 16Table 4: Credit Disbursements ........................................... 16Table 5: Key Indicators for Project Implementation .................................... 17Table 6: Key Indicators for Project Operations .......................................... 18Table 7: Studies Included in the Project .......................................... 1 8Table 8A: Project Costs ........................................... 19Table 8B: Project Financing .......................................... 19Table 9: Economic Costs and Benefits .......................................... 19Table 10: Status of Legal Covenants .......................................... 20Table 11: Compliance with Operational Manual Statements ....................... 21Table 12: Bank Resources: Staff Inputs ........................................... 22Table 13: Bank Resources: Missions .......................................... 23

This document has a restricted distribution and may be used by recipients only in the performance of theirofficial duties. Its contents may not otherwise be disclosed without World Bank authorization.

APPENDICES

Appendix 1. FAO/CP Mission Aide-Memoire ........................................... 24Appendix 2. Borrower's Evaluation ................................................... 39Appendix 3. Borrower's Comments on Implementation Completion

Report ................................................... 47

Map IBRD I 7960R

IMPLEMENTATION COMPLETION REPORT

NEPAL

AGRICULTURAL EXTENSION PROJECT II(Cr. 1570-NEP)

Preface

This is the Implementation Completion Report (ICR) for the Agricultural ExtensionProject II (AEP II) in Nepal for which Cr. 1570-NEP in the amount of SDR7.4 million (US$7.2million equivalent) was approved on March 7, 1985 and made effective on September 9, 1985. TheIDA Credit was closed on December 31, 1994, after three one-year extensions to the originalschedule. The Credit was not fully disbursed, with SDR870,650 (US$1.20 million) being canceledon May 13, 1994. Final disbursement took place on April 5, 1995, at which time a balance ofSDR582,789.00 (US$838,681.00) was canceled.

This ICR was prepared by a mission from the FAO/World Bank Cooperative Programwhich visited Nepal in March 1995. It was finalized by the Task Manager, Mr. Yung K. Choi,

Agriculture and Water Operations Division, and reviewed by Mr. Shawki Barghouti, Chief,Agriculture and Water Operations Division, and Ms. Kazuko Uchimura, Project Advisor. TheBorrower provided comments that are included as an appendix to the ICR.

Preparation of the ICR is based on a review of the Staff Appraisal Report and legaldocuments, supervision reports and project files. as well as field investigations and discussions withthe Bank staff and government officials associated with the project. The Borrower contributed tothe preparation of the ICR by commenting on the mission's aide-memoire, preparing its ownevaluation, and commenting on the draft ICR.

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IMPLEMENTATION COMPLETION REPORT

NEPAL

AGRICULTURAL EXTENSION II PROJECT(Credit 1570-NEP)

Evaluation Summary

Introduction

1. The project was a continuation of IDA support to complete the introduction of theTraining and Visit (T&V) system of agricultural extension in all twenty Terai districts in Nepal.Earlier support for extension development was provided in conjunction with several irrigationprojects under which the T&V system of agricultural extension was introduced in six districts ofthe Terai region over the period 1975-79. This was followed by the Agricultural Extension andResearch Project (AERP; Cr. 1 100-NEP, closed July 15, 1990) and the Hill Food ProductionProject (HFPP; Cr. 1101 -NEP, closed July 15, 1990), which introduced the T&V extensionsystem in eight Terai and four Hill districts, respectively.

Project Objectives

2. The overall objective of the project was to reorganize and strengthen the agriculturalextension services in eleven administrative districts in the Terai with the objective of achievingearly and sustainable improvement in agricultural productivity. This was to be accomplishedthrough: (i) strengthening and improving project management and supervision at central andregional levels; (ii) introducing monitoring and evaluation of project activities; and (iii) provisionof additional staff, offices, housing, vehicles, equipment and staff training.

3. The project was restructured in 1990/91, reflecting the need to adapt the original T&Vapproach to the realities of the post-panchayat era which included the abolition of AgriculturalAssistant (AA, the grassroot level extension worker) position and the reorganization of theMinistry of Agriculture (MOA). To further strengthen extension and research activities, therestructured project included eight Terai districts covered under AERP and four Hill districtscovered under HFPP. While the project was based on a sound foundation that would ensure anuniform approach and complete the coverage by improved extension of all Terai districts, theoriginal objective of introducing the T&V system was abandoned in 1991 for a number ofreasons (para 5).

Implementation Experience and Results

4. The project experienced considerable difficulties during implementation. Construction ofstaff quarters-cum-training halls were delayed, and a number of staff housings remain unfinished.The procurement of training facilities and vehicles was also delayed. Insufficient budgetallocations and their delayed release were the main causes of the procurement inefficiencies,while poor tendering and contracting procedures severely affected building construction. Theproject substantially met the quantitative targets in incremental staff recruitment.

5. The project achieved its principal development objective of reorganizing andstrengthening extension services aimed at increasing agricultural productivity. It was lesssuccessful in realizing its secondary objectives of strengthening adaptive research and stafftraining. Although an institutional framework of extension services was established, thequalitative improvement lagged. This was due mainly to lack of managerial capabilities, anddeficiencies in the policy environment of His Majesty's Government of Nepal (HMGN) withregards to staff appointments, job responsibilities and accountability, supervision, and otherincentive structures. MOA's physical target-oriented approach to extension also hamperedqualitative improvement of the extension services. During 1990/91, HMGN abandoned the T&Vextension system. The following factors contributed to the demise of the T&V system: (i)abolition of the position of AA; (ii) a switch from contact farmer approach in T&V system tofarmer group extension; (iii) integration within a single Department of Agricultural Development(DOAD) the hitherto separate agriculture, livestock and veterinary, and horticulture departmentseach with their own parallel structure down to the field extension worker; and (iv) initiation of apilot program for a farmer-centered problem census and problem solving (PC/PS) approach toextension program formulation and budgeting. Under this extension system, Junior Technician(JT)/Junior Technical Assistant (JTA) became the front-line extension workers.

6. Few studies conducted' in the project areas compared to non-project areas have reportedencouraging outcomes with regards to technological information dissemination among variousgroups of farmers (marginal, medium and large) within the project area. The extent of adoptionof new technology and consequent increases in productivity were difficult to quantify becauseseveral factors have to be taken into account including sufficiency of supply and access to inputs,credit, market and prices. However, the Bank's analysis2 of crop yields for paddy and othercereal crops in the Terai over the ten-year period (1979/80 - 1989/90) showed that yieldsincreased significantly in districts covered by the project, and were in excess of those yieldswhich were estimated at appraisal.

Sustainability of Training and Visit System of Agricultural Extension in Nepal, APROSC, May 1988.2 Project Performance Audit Report (Report No. 10661) on AERP (Cr. I 100-NEP), HFPP (Cr. I 101-NEP) and CashCrop Development Project (Cr. 1339-NEP), May 1992.

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7. Project sustainability. The important change made during project implementation wasthe introduction of the farmer-centered participatory approach in extension. Judged by thisrevised project approach, the project has been particularly successful in recent years indemonstrating the validity of the PC/PS approach, seeing it formally adopted by the MOA as akey element of its national extension strategy, and building a basis for a new national extensionsystem. The PC/PS is built on the concept of self-help, self-reliance and mutual cooperationamong farmers in the group. By judging the performance of some successful activities of thematured farmer groups in the village, this group approach is sustainable, if properly facilitated byMOA.

8. Actual cost, financing and implementation timetable. The exchange rate movementsof the Nepalese Rupee versus U. S. dollar, and the U. S dollar versus Special Drawing Rights(SDR) during the period permitted significantly increased actual expenditures. The final cost ofthe project was NRs 571.55 million (US$15.23 million at current annual exchange rate),compared to the appraisal estimate of NRs 157.90 million (US$ 8.5 million) which was 262%above the original estimated project cost in Rupee terms and 79% above in U. S. dollar terms(Part II, Tables 8a and 8b). Of the total IDA Credit of SDR 7.40 million, SDR 1.4 million(US$2.1 million equivalent) was canceled.

9. Key factors relating to achievement of project objectives. The significant deficiencieswhich hampered project implementation were: (i) weakness in extension management skills; (ii)frequent changes of project coordinator; (iii) a high staff turnover partly due to the temporarynature of the posts; (iv) insufficient budget allocation; (v) lack of staff mobility and extensionmaterials; and (vi) poor coordination linkage between research and extension. With regards toextension management, it was entirely a top-down process based on the achievement of physicaltargets and results. Key management problems associated with poor staff performance were poorsupervision, low motivation of staff, little accountability and lack of any performance-relatedreward system.

10. Performance of the Bank and the Borrower. The performance of the Bank duringsupervision was mixed as it was less successful in instituting the effective M&E system, andunable to resolve the chronic problems associated with the misuse of project vehicles by non-project related agencies. The Bank was flexible in readjusting appraisal targets and extensionapproaches when it became apparent that the appraisal proposal could not be achieved. Thesupervision reports were perceptive and helpful in relation to problems which occurred andsuggestions for improvements in implementation.

11. The borrower and implementing agency have also encountered implementationdifficulties. Implementation was slow in the earlier years in part as a result of the Trade andTransit impasse with India in 1989/90, the political instability in 1990/91, and frequentreorganizations of MOA during the 1989-92 period.

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12. Project outcome assessment. The project achieved most of its major objectives. Theproject's main impact lies in improved extension management accomplished through thereorganization of the extension service towards a farmer group approach. It promoted a moredemand-driven service to farmers. The integration of three departments, namely. agriculture,livestock and veterinary, and horticulture into one department to consolidate extension servicesunder one umbrella system was the most important achievement of HMGN, providing aframework to build on a reoriented and strengthened national extension service in Nepal.

Summary of Findings, Future Operations and Key Lessons Learned

13. Important findings. Three important findings are: (i) the successful introduction of thefarmer group approach to extension in pilot districts has demonstrated that this provides a moredirect interaction of extension workers and farmers, than the T&V system; (ii) projectimplementation and performance of extension staff has been constrained by lack of managerialcapability and commitment; and (iii) inadequate and inappropriate training for JT/JTAs andSMSs has limited their effectiveness in providing the necessary support to farmers.

14. Plans for future project operations. HMGN has provided a future operation plan basedon the experience and outcome of the project. Future developments would be in line with thenational agricultural extension strategy and the success of the group approach to extension. Itwould aim to expand the use of PC/PS techniques in farmer groups, further encourage women'sparticipation in groups, expand a bottom-up approach to planning and budgeting at district levels,and bring increased numbers of Water User groups under the PC/PS approach. The plan wouldalso provide more training for extension staff in the group approach, strengthen DistrictAgricultural Implementation Committees, and complete the unfinished civil works program.

15. Lessons learned. The main lessons learned from the project are as follows:

(i) While encouraging results have been obtained from the group approach toextension, the full advantages will only be realized if JT/JTAs are better trained inthe principles and techniques of the group approach.

(ii) Farmer training needs to be greatly expanded with course curriculum designed toprovide both increased knowledge in new technologies and more fundamentalprinciples of agricultural production processes so that they are empowered tobecome better and more independent decision makers.

(iii) SMSs are generally under-qualified. Their potential value to provide technicalback-stopping to JT/JTAs and to farmers and to provide an essential link betweenresearch and extension is limited, and therefore must be improved.

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(iv) Management training and policy initiatives are required to overcome the inherentweaknesses associated with lack of: detailed operational plans, individual jobdescriptions and associated duties, and lack of staff and unit operationalaccountability.

(v) Special attention is required to introduce mechanisms to strengthen and formalizeresearch-extension linkages to ensure that technologies recommended areappropriate to local farming situations and farmer needs.

(vi) Increased emphasis has to be given to the utilization of modem media productiontechnologies to provide adequate extension materials for field staff.

(vii) A major reason for procurement inefficiencies was a lack of procurement plan forthe whole project. The bidding documents and land availability for the physicalwork should have been ready before negotiations. It should pay sufficientattention to the implementing agency's capacity to supervise the quality ofconstruction works.

IMPLEMENTATION COMPLETION REPORT

NEPAL

AGRICULTURAL EXTENSION II PROJECT (Credit 1 570-NEP)

PART 1: PROJECT IMPLEMENTATION ASSESSMENT

A. STATEMENT/EVALUATION OF OBJECTIVES

1. Project Objectives and Scope. The objective of the Agricultural Extension II Project(AEP II) was to reorganize and strengthen the agricultural extension services in eleven districts inthe Terai with the objective of achieving early and sustainable improvement in agriculturalproductivity. The project aimed to bring about these increases by advocating adoption of lowcost and labor intensive agricultural practices and sound irrigation water management, thusfacilitating better cropping patterns, greater crop diversification and more efficient fertilizer usage.The project was designed to: (i) reorganize agricultural extension in six new districts andstrengthen the existing extension organization in another five irrigation project districts, (ii)provide training for all extension staff and farmers; (iii) enlarge two extension training centers atJhumka and Parwanipur; (iv) improve staffing in four regional agricultural development offices;(v) provide production officers in selected areas at subcenter levels to coordinate input, credit andirrigation water supply; (vi) construct office accommodation and housing for staff, (vii) furnishand equip field extension and training facilities; (viii) provide vehicles and travel allowances toensure greater staff mobility; (ix) provide incremental operating costs; and (x) undertake baselinestudies in the six new districts, and project monitoring and evaluation (M&E) in all projectdistricts.

2. AEP II was the second phase of an IDA-supported introduction of the Training and Visit(T&V) extension system in Nepal. Earlier support for extension development was provided inconjunction with several irrigation projects (Credits 373, 654, 812, 856 and 1055-NEP) in sixdistricts of the Terai, commencing in 1975. This was followed by the Agricultural Extension andResearch Project (AERP; Cr. 1100-NEP) and the Hill Food Production Project (HFPP; Cr. 1101-NEP), which introduced the T&V extension system in eight Terai and four Hill districts,respectively, both commencing in 1981.

3. Proiect Changes after Appraisal. AEP II was originally designed to cover the eleven'districts of the Terai not covered by AERP. However, the district of Dang Deukhuri did notparticipate in the project because of the presence of a continuing USAID funded project. Withthe completion of the AERP and HFPP in 1990, it was decided to restructure AEP II to include

Bara, Parsa and Rautahat (previously under Birganj and Narayani Irrigation I Project; Crs. 373 and 856-NEP), Sunsari and Morang (previously under Sunsari-Morang Irrigation Project l; Cr. 812-NEP), and six newdistricts, Kanchanpur (previously under Mahakali Irrigation Project; Cr. 1055-NEP), Kailali, Dang Deukhuri,Bardiva, Siraha and Saptari.

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the eight Terai districts2 covered in the AERP, four Hill districts (Tanahu, Gorkha, Syangja andLamjung) covered in the HFPP and the irrigation district of Rupandehi in the Terai which was notoriginally included3 . Under the amended Development Credit Agreement (DCA), agreed onDecember 6, 1990, provision was made to provide financing to support extension, adaptiveresearch and training activities in the thirteen additional districts, as well as to complete on-goingcivil works not completed in the previous projects. Furthermore, provision was made to improvefacilities of two Regional Agricultural Training Centers (RATCs) at Khajura (Banke district) andBhairawa (Rupandehi district) under the restructured project.

4. Evaluation of Project Objectives. The project was based on a sound foundation thatwould ensure an uniform approach and complete the coverage by improved extension services ofall Terai districts. It also responded well to the borrower's circumstances and the developmentpriority for the agricultural sector oriented towards increasing agricultural production withemphasis on the agriculture of the Terai. The timing of the project, its scope and the relative sizeof project components were appropriate. The risks to successful project implementation wereidentified as minimal.

B. ACHIEVEMENT OF OBJECTIVES

5. Overall Achievement. The project achieved its principal development objective ofreorganizing and strengthening extension services aimed at increasing agricultural productivity. Itwas less successful in realizing its secondary objectives of strengthening staff training.

(a) Physical Objectives

6. The project target was to provide 209 units of office buildings, housing and improvedfacilities at RATCs. However, during project implementation, this target was sharply reduced to123 units because of the rapidly changing policy environment of HMGN. Even so, at completion,only 81% of the revised target was completed. Of these, 17 offices and houses were not officiallyhanded over to HMGN due to litigation by contractors for additional payments to accommodatesharp rises in material costs. The project provided 19 four-wheel drive jeeps, 60 motorcycles and165 bicycles.

(b) Institutional Development Objectives

7. Establishment of Effective T&V System of Extension. The T&V system of extension wassatisfactorily institutionalized and became operational in all project districts. The T&V systemwas based on AAs, being responsible for visiting 10 selected "contact farmers" in each of ninewards of one Village Development Committee (VDC), previously a Panchayat area, during each

2/ Jhapa, Sarlahi, Mahottari, Dhanusha, Kapilbastu, Chitawan, Nawalparasi and Banke.3/ The district was earlier covered by Bhairawa-Lumbini Groundwater Project Stage I (Cr. 654-NEP) and Stage

lI (Cr. 1316-NEP).

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fortnight period. The AAs within 3-5 VDCs were to receive technical support from three JTAs,one of whom provided overall guidance and supervision, with one JT guiding and supervising thework of three JTAs. To strengthen technical back-up, the project provided two SMSs in eachdistrict, one each in agronomy and plant protection. The AAs, JTAs and JTs received training inrecommended crop production practices and "packages" from SMSs on one day each fortnight.The documented evaluation of the T&V system4 indicated that compared to other extensionsystems in Nepal, it had relatively higher numbers of visits to farmers, more provision forsupervision of field extension workers, better research-extension linkages, was more oriented tosmaller farmers and had the lowest cost per household, but had a higher client to agent ratio (I to621). Following abolishment of AA positions, this ratio widened and is now between 1,300-1,600farm families.

8. Introduction of Group Extension Approach. During 1990/91, a number of factorscontributed to the demise of the T&V system, including (i) the abolishment of AA positions ( acritical element of the T&V system as they were the front-line extension workers); (ii) thereorganization of the MOA, where the Departments of Agriculture, Livestock and VeterinaryServices, and Horticulture were joined together in a newly established DOAD; and (iii) thecompletion of the AERP and HFPP. As an alternative to the T&V system, in December 1991, theMOA introduced a farmer group based extension system to incorporate problem census/problemsolving (PC/PS) techniques in order to make extension responsive to farmers needs. In June1992, the PC/PS technique was introduced in two VDCs in three pilot districts, with technicalassistance provided by the project. These pilot activities were subsequently extended to six otherdistricts. Farmer groups have now been formed in all project districts.

9. Field visits were made to assess group activities in some 27 farmer groups comprising 14districts during the preparation period of this report. The groups can be classified into three maintypes in terms of stage of group development: (i) initiating/mobilizing; (ii) consolidating; and (iii)maturing, indicating a gradual move towards sustainable, self-initiating and self-helping entities.These groups included mixed gender groups as well as separate men and women farmer groups.The women farmer groups were primarily involved with livestock raising, goats and dairying, andwere very active in and had benefited from extension advice and assistance. Most farmers aresatisfied with the group approach but at present, it seems to produce more benefits for those withspecific opportunities to exploit, particularly those systems producing higher value products, suchas vegetable growing, seed production, dairying and goat production, but less benefits for otherfarmers. In order to enhance all group activities, considerable emphasis has to be given toproviding training to JT/JTAs in group formation, the motivation, facilitation and the PC/PStechnique, as well as farmer awareness programs on the advantages of group formation.

10. Block Production Program. The project was also designed to further intensify the pilotproduction programs implemented successfully in previous irrigation projects. Forty-threeProduction Officers (POs) were appointed to coordinate production inputs and prepare actionplans for individual farmers in selected intensive crop production areas. Each PO was responsible

4 / Sustainability of Training and Visit System of Agriculture Extension in Nepal, APROSC, May 1988.

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for 1,000 ha covering 2-6 blocks. Comparative assessment of extension approaches indicated thatfarmers in these areas were visited more frequently, had greater knowledge and higher adoptionof improved varieties and cultural practices, and productivity than under the T&V system, butrequired higher extension costs and manpower strength. This program, however, was found to bepoorly integrated with extension and worked directly with input suppliers, such as AgriculturalDevelopment Bank of Nepal (ADB/N) for credit and Agricultural Inputs Corporation (AIC) forfertilizers. The program was discontinued.

11. Strengthening of Regional Agricultural Training Centers (RATCs). The project expandedthe facilities at Jhumka and Parwanipur RATCs by providing incremental staff and supplementingequipment and furniture. However, vehicles and important items of audio-visual equipment werenot supplied. At Jhumka RATC, farm facilities on the center campus were handed over to AICfor seed production during implementation of the project, leaving the center with no land orfacilities to carry out practical training. The Parwanipur RATC was closed down during thecourse of the project and regional training transferred to another site. Assistance was to beextended to Khajura and Bhairawa RATCs under the restructured project, but assistance wasminimal. Each RATC, on average, provided regular training courses on crop technologies forselected farmers (between 500-750 per year). Frequent transfer of staff to and from RATCs hasreduced the quality of training since staff are mainly SMSs who have received some trainertraining, rather than specialist trainers with long teaching experience. Two minibuses needed forfield trips were canceled. Some audio-visual aids were purchased, but not as envisaged in theSAR in terms of individual items.

12. Staffing and Training. Most incremental staff positions such as AAs, Junior TechnicalAssistants (JTAs), Junior Technicians (JTs), and Subject Matter Specialists (SMSs) were filled.Positions for three Senior Agricultural Extension Officers (SAEOs) at regional offices were notfilled which weakened monitoring and supervision of district's activities from the RegionalAgriculture Directors. Under the T&V system, field level extension staff received regular trainingbut the quality of this training was below that intended and required for AAs, JTAs and JTs toundertake their duties satisfactorily. Specialization in a particular discipline was not regarded as aprerequisite for appointment as a SMS. Frequent staff changes considerably reduced theeffectiveness of SMSs in training of field staff and providing the necessary technical expertise andinformation to assist farmers. Some special training programs were conducted and a number ofseminars/workshops were held in relation to various aspects of the group extension system andPC/PS techniques. A total of 58 staff undertook study tours to become acquainted with researchand extension activities, agricultural problems and technologies used in northern India.

(c) Objectives of Sector Policies

13. The objectives of sector policies relevant to the project were concerned with the HMGN'sSeventh Plan (1985/90) and the Eighth Plan (1992/97). The Seventh Plan set specific objectivesof increasing agricultural production, increasing rural employment, fulfilling basic food needs, andincreasing production and self-reliance in production of agro-based raw materials. The Eighth

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Plan (1992/97) had the principal objectives of achieving sustainable economic growth, povertyalleviation and reduction of regional imbalances. Emphasis has been given to diversification andcommercialization of this sector to raise income and employment opportunities of farmers. Thus,specific objectives for agricultural development were to contribute to the national economythrough increased agricultural production and productivity through: (i) meeting the growingdomestic food demand, (ii) expanding agro-based industries, (iii) increasing employmentopportunities to the majority of small farmers, and (iv) maintaining a balance between agriculturaldevelopment and environmental protection. The project contributed to both eventualities ofincreasing agricultural production and productivity.

(d) Project Benefits

14. The outcomes of the investments in this type of project are difficult to measure, since it isnot possible to determine what proportion of increased agricultural production is due to extensionservices alone and what is due to additional purchased inputs and other factors. In practice, it is acombination of a number of factors, with extension playing the role of a catalyst that spurs thedesired achievement. During Bank supervisions, significant diversification of cropping andmovement to higher valued crops was observed particularly in the irrigated areas. However,agricultural data is out of date and unreliable, making it difficult to demonstrate these visualobservations of progress in this ICR. However, the comparative yields study of five selecteddistricts to represent the T&V system under AERP in the early 1980s (1982 and 1983) and fourdistricts to represent those recently introduced to the AEP II system in the late 1980s waspresented in the Bank's Project Performance Audit Report (PPAR, Report No. 10661, May1992) on AERP and HFPP. The PPAR revealed that in the case of paddy from 1982/83 to1989/90, the yield trend in the AERP districts is significantly greater than the other districts.PPAR also indicated that an increasing trend in wheat yields is apparent from the latter half of the1970s irrespective of extension treatment, and there is no significant yield difference between theextension treatments. These results suggest that factors other than the intensive T&V serviceswere largely instrumental in the changes in wheat productivity occurring in the Terai, but that theT&V services could have contributed to yield increases in rice.

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C. MAJOR FACTORS AFFECTING THE PROJECT

(a) Factors not Generally Subject to Government Control

15. Implementation of the project was slow in part as a result of the Trade and Transitimpasse with India in 1989/90, the political instability in 1990/91, and frequent reorganizations ofMOA during the 1989 - 92 period.

(b) Factors Generally Subject to Government and Implementing Agency Control

16. The political instability mentioned above exacerbated the effects of recurringimplementation problems, including delayed procurement processing, inadequate and delayedrelease of counterpart funds, and frequent reassignment of Project Coordinators and field staff.The significant deficiencies which hampered project implementation included: delays in theappointment of key staff, weak professional capacity of field extension workers, a high staffturnover, and inadequate annual budget allocation. Many of these deficiencies identified earlier,however, were substantially improved from 1991 onward.

17. Implementation Delays. The project was to be completed over six years from September1985, with a closing date of December 3 1, 1991. After three one-year extensions, it was closedon December 31, 1994.

18. Project implementation experienced continuous problems, having been rated "2" sinceinception in September 1985 - February 1991, when its rating dropped to "4" for about a yearbefore improving to "3" and subsequently to "2" rating until Credit closure. Several factorshave contributed to this modest performance and the delays in project implementation (see paras15 and 16).

19. The T&V system of extension successfully introduced a single extension system in theTerai to replace several extension systems used previously. Many managers had received little orno training in management techniques and were frequently technical specialists acting in amanagement role. Management was entirely a top-down process based on the achievement ofphysical targets and results. Key management problems associated with staff performance werelow motivation, little accountability, and lack of any performance related reward system. Weaksupervision also meant that many JTs and JTAs reportedly attended training but rarely visited thefield. The introduction of the PC/PS technique to farmer groups has the potential to promoteparticipatory program planning for extension at village level and participatory implementation ofplans by mobilizing farmer's own local resources. In addition, under this farmer-centered groupapproach, JTs and JTAs were required to interact directly with farmers as a facilitator to improvefarmer access to inputs, credit and markets, making them better motivated for early adoption ofnew technologies.

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20. Although planning, monitoring and evaluation division was established in the MOA, it waspoorly equipped and understaffed to carry out effective monitoring functions. Although belated,recent acquisition of several computers, copying machines, facsimile facilities as well as vehicleswill enhance M&E activities.

21. The T&V system and subsequently the group approach to extension produced goodresults for those farmers who could access sufficient resources to implement the technologiespromoted. Livestock rearers reported significant improvements in production due to improvedhealth services, introduction of improved breeds and in some instances, improved forageproduction and feeding. The introduction of the PC/PS technique in pilot areas has certainlyfocused extension needs on solving problems identified in participatory discussions with farmergroups, which should ultimately make extension activities more relevant and demand-driven.

22. Extension Materials and Field Demonstrations. The project made no specific use of more

advanced media such as radio, film and video. Field staff were consequently largely dependent onthe leaflets and posters produced centrally by DOAD. Most field staff lacked adequate leaflets fortheir own use, far less to distribute to farmers. Also, leaflets describing recommended cropvarieties and cultural practices for individual crops were not available to farmers. Demonstrationswere carried out across the whole project area. It was noted that demonstrations often exhibitedpoor field plot techniques, were poorly located with little use of sign boards.

23. Research - Extension Linkages. Research-extension linkages were established as plannedbut their effectiveness was less than anticipated. No clear definition existed of the relative andinteracting roles of research and extension. Under the T&V system of extension, bimonthlymeetings were held between SMSs and staff at regional research stations. These meetings wereconsidered beneficial as they consisted of group discussions reviewing extensionrecommendations and discussing future research topics and field trials. However, bimonthlymeetings were discontinued following the establishment of Nepal Agricultural Research Council(NARC) in 1991. During the latter part of the project there was little interaction between SMSsand research staff, except on the basis of informal personal initiatives.

24. Civil Works Program. The serious delays in the civil works program which adverselyaffected project implementation were due to lengthy procedural processes for design approval,tendering, and dispute resolution arising from civil works contracts. Furthermore, problemsassociated with poor design and quality of construction came from poor supervision. There wasconsiderable delay in the appointment of personnel to positions designated as architects tosupervise the civil works program, and those engineers appointed had little relevant experience orqualifications.

25. Actual Project Cost. Table 8A of Part II gives a comparative statement of appraisalestimates and final costs. The exchange rate movements of the Nepalese Rupee versus U. S.dollar, and also the U. S. dollar versus SDR during the project period, permitted significantlyincreased actual expenditures. The final cost of the project was NRs 571.55 million (US$ 15.23million at current annual average exchange rate), compared to the appraisal estimate of NRs

8

157.90 million (US$ 8.5 million) which was 262% above the original estimated project cost inRupee terms and 79% above in U. S. dollar terms. The Credit was not fully disbursed. Of thetotal IDA Credit of SDR 7.4 million, SDR 870,650 (US$ 1.2 million) was canceled on May 13,1994. Final disbursement took place on April 5, 1995, at which time a balance of SDR582,789.00 (US$ 838,681.00) was canceled.

D. PROJECT SUSTAINABILITY

26. The recent introduction of the farmer group approach to extension has created anopportunity for greater collective farmer participation and involvement in defining needs forextension support. Experience to date indicates that the self-initiated farmer groups, especially inthe pilot VDCs, are moving strongly towards self-reliance and self-help which would be a greatasset for the sustainability of the approach. However, without considerable additional donorproject support, the capacity of the extension system to respond effectively to farmer needs willremain at an undesirably low level. The current level of budgetary support is inadequate inrelation to expanding extension facilities in all Terai and limited Hill districts, and to upgradingstaff skills and knowledge in group facilitation and technical information.

E. BANK PERFORMANCE

27. Project Preparation and Appraisal. The conceptual framework for the project was basedon earlier experience with the T&V system introduced under various irrigation projects in theTerai. The project was well in line with HMGN's development priority and with the Bank'sstrategy for the country. The project was prepared by HMGN with some technical advice fromthe Bank. The SAR identified the key project components required to overcome deficiencies inthe existing systems. The SAR also outlined a balanced agricultural extension program forovercoming constraints that could otherwise impede improvement of agricultural performance.The implementing capacity was appraised and found to be satisfactory as DOAD had previousexperiences of implementing other similar projects supported by other donors. However, duringthe appraisal, the Bank did not pay sufficient attention to procurement planning, designs and costestimates (para 24). A switch from the T&V extension system to the farmer-centered groupapproach in extension, which was not envisaged during appraisal, could be the key ingredient forsustained operation of the project.

28. Supervision. The Bank undertook eighteen supervision missions during the course ofproject implementation, at an average of one every six months. Generally, their reports wereperceptive and helpful in relation to problems which occurred and suggestions for improvementsin implementation. The Bank staff showed flexibility in suggesting or approving neededmodifications. The relationship between the Bank and the implementing agency was cordial.Although the project was supervised by a number of Task Managers during implementation, staffof the Bank resident mission in Nepal provided the necessary continuity and support for theproject. Some chronic issues raised during supervisions were: (i) the slow progress of theconstruction of JT and JTA quarters; (ii) the need to strengthen planning, M&E activities; and (iii)

9

the misuse of project vehicles by non-project related agencies. On these issues, HMGN did littleto direct the project towards rectifying the deficiencies.

F. BORROWER PERFORMANCE

29. Preparation. The Project Coordinator's office of the AERP formulated a draft outline ofthe project. No external technical assistance was provided in preparing the project. Theborrower and the implementing agency had done a satisfactory job in preparing the project.

30. Implementation Shortfalls. The performance of the implementing agency was deficient inthe actual implementation of the civil works. It lacked criteria for selecting the construction sitesfor ASCs, JT and JTA quarters, and also in selecting the qualified civil works contractors. Theengineer's cost estimate for the construction works was not always based on actual surveys in agiven locality, but on merely applying HMGN's standard unit cost. In addition, there wereproblems with the lengthy approval of procedures for procurement, and poor supervision ofconstruction work (para 24). All these factors impeded implementation progress and resulted indelay and poor quality of civil works.

31. Studies. Reporting. and Covenant Compliance. All the studies proposed under the projectwere completed. Bi-annual project progress reports were regularly submitted, and annualaccounts and audits reports were submitted. Compliance with important covenants wassatisfactory. The covenants dealing with the appointment of the Senior Agricultural ExtensionOfficer in the three regions was not complied with because of personnel adjustment difficulties ofMOA.

G. ASSESSMENT OF OUTCOME

32. The project achieved most of its major objectives. Although project implementationprogress was only partially satisfactory for the reasons described in paras 15 and 16, overall, theproject outcome is rated satisfactory. The reason for this rating is that the ultimate goal of theproject was not so much whether all project components were completed on time, but whetherthe institutional framework and extension policy guidelines were properly established, respondingto the need of beneficiaries to enhance farm productivity and incomes. To support this rating,several commendable achievements made by HMGN since early 1992 can be listed. These are: (i)the introduction of farmer participatory approach in extension through the PC/PS practice topromote a more demand-driven service to farmers (paras 8, 9 and 26), (ii) the amalgamation ofthree separate extension departments under one umbrella system (para 8); (iii) the formulation ofnational agricultural extension strategy and its implementation plan; (iv) the preparation of thefollow-on project by their own initiatives and efforts; and (v) the strong commitment to implementthe future operational plan (para 33).

10

H. FUTURE DEVELOPMENT

33. HMGN has prepared a future operational plan based on the experience and outcome ofthe project. Future developments would be in line with the national agricultural extensionstrategy and success obtained using the group approach to extension. It would aim to expand theuse of PC/PS techniques in farmer groups, further encourage women's participation in groups,expand a bottom-up approach to planning and budgeting at district levels, and bring increasednumbers of water user groups under the PC/PS approach. The plan would also provide moretraining for extension staff in the group approach, fill vacant SMS positions, strengthen DistrictAgricultural Implementation Committees, and complete the unfinished civil works program.HMGN has requested financial assistance from the Bank for a follow-up project which would aimto further strengthen extension services. HMGN has prepared a project preparation report whichis under review by IDA.

I. LESSONS LEARNED

34. The main lessons learned from the project are as follows:

(i) The group approach to extension has significant advantages over the T&V systemas follows: (i) it is demand-driven in the resolution of farmers' problems; (ii) itprovides for wider coverage of extension contact with farmers and is more costeffective; and (iii) it provides greater direct interaction of technicians and SMSswith farmers. These potential advantages will, however, only be fully realized if:(i) JT/JTAs are better trained in the principles and techniques of the groupapproach; (ii) an awareness campaign is mounted to inform farmers of theadvantages of forming groups; (iii) the activities of the field extension services arebetter organized and regularized; and (iv) the availability of technical services andinformation is increased.

(ii) Farmer training needs to be greatly expanded with course curriculum designed toprovide new technologies and more fundamental principles of agriculturalproduction processes and marketing information.

(iii) The potential value of SMSs to provide technical back-up to JT and JTAs tointroduce new technologies, to provide technical information to farmers and toprovide an essential link between research and extension is greatly under-exploited.SMSs are generally under-qualified for their tasks and responsibilities, and needspecialized in-service training to upgrade their specialist knowledge and skills.

(iv) Management of extension services at all levels is weak due to lack of: (i) detailedoperational plans; (ii) budget for travel and daily allowances; (iii) individual jobdescriptions and associated duties and responsibilities; and (iv) scope for effectivereward and punishment. It is essential that managers at all levels be given

ii

appropriate management training, clear job descriptions be detailed for all staff,and proper planning and M&E systems be introduced to ensure individual andcollective accountability in staff performance, achievement and output.

(v) ASCs were established in the districts without due consideration of localities andtarget groups. There is a need for future projects to rationalize the number ofASCs in each district such that ASCs are used more effectively as farmerinformation and training centers in the districts.

(vi) Monitoring and evaluation of the agricultural performance data deserves highpriority as a critical tool for rectifying deficiencies.

(vii) MOA requires a clearly defined staffing program linked to a coherent manpowerdevelopment policy and planning and career structure.

(viii) Research-extension linkages are weak. It is necessary to introduce mechanisms toensure formal linkages between extension and research. Such mechanisms shouldinclude: (i) re-introduction of bi-monthly meetings at the district level betweenDOAD and NARC research stations; (ii) joint diagnosis of farmer problems; (iii)cooperative involvement in production, implementation and evaluation of mini-kitsand other demonstrations; and (iv) joint operation of laboratories for soilsanalysis, plant protection, and seed testing.

(ix) Field extension staff are inadequately supplied with extension materials. Increasedemphasis has to be given to the utilization of modern media productiontechnologies to quickly produce leaflets tailor-made for local situations as well assupplying pamphlets and brochures on recommended cultural techniques.

(xi) There is a need to strengthen the activities of the Agricultural CommunicationDivision of DOAD to make better use of modern communication systems,especially radio, television and video for transferring the farming technologies andmarketing informations to farming communities.

(xii) The Civil Works program did not meet the anticipated standards. Sufficientattention should be paid to appraisal of implementing agency's procurementcapability. There is a need to review a procurement plan for the whole project,including detailed design and bidding documents prior to negotiations.

M:\CHO1\NEPICR\mtx2.doc

12

Table 1: Summary of Assessments

A. Achievement of objectives Substantial Partial Negligible Not Applicable

Macro policies E9 E E9

Sector policies D E

Financial objectives [7]

Institutional development

Physical objectives E7

Poverty reduction El7Gender issues n E [II

Other social objectives 77 El E

Environmental objectives |l l 7E

Public sector management El E E E

Private sector development E E E E

Other (Human ResourcesDevelopment) D DD

B. Project sustainability Likely Unlikelv Uncertain

C. Bank performance satisfactory Satisfactory Deficient

Identification 9 E 9Preparation assistance E E E

Appraisal E E E

Supervision E E E

13

HighlvD. Borrower performance satisfactory Satisfactorv Deficient

Preparation F9

Implementation 7 F]

Covenant compliance F 1

Operation (if applicable)

Highly HigbhYE. Assessment of outcome satisfactory Satisfactory Unsatisfactorv unsatisfactory

14

Table 2: Related Bank Loans/Credits

Loan/credit title Purpose Year of StatusApproval

Preceding operations

1. Birganj and Narayani To develop imgation resources on 12,700 ha and 1973 Closed onIrrigation Projects thereby raise agricultural production and farm June 30,(Crs. 373 and 856-NEP) incomes and increase food security in Bara, Parsa 1981

and Rautahat districts of the Central Region of theTerai.

2. Bhairawa-Lumbini To develop irrigation resources on 7,600 ha through 1976 Closed onGroundwater I Project construction of 64 deep tubewells and therebv December(Cr. 654-NEP) develop agricultural production in Rupandehi 31, 1982

district of the Western Region of the Terai.

3. Sunsari-Morang Irrigation I To develop irrigation resources in Sunsari and 1978 Closed onProject (Cr. 812-NEP) Morang districts of the Eastern Region of the Terai. June 30,

1987

4. Mahakali Irrigation Project To rehabilitate, upgrade and extend irrigation 1980 Closed on(Cr. 1055-NEP) resources on 6,000 ha in Kanchanpur district of the December

Far Western Region of the Terai. 31, 1988

5. Agriculture Extension and To reorganise extension services in eight districts in 1981 Closed onResearch Project the Terai and strengthen applied and adaptive July 15,(Cr. 1 100-NEP) research. 1990

6. Hill Food Production Project To increase food production in four Western Hill 1981 Closed on(Cr. 1101-NEP) districts of Gorkha, Lamjung, Syanja and Tanahu July 15,

through improvement ot extension services, credit 1990and fertilizer inputs, improved marketing anddevelopment of irrigation resources on 3,000 ha.

7. Bhairawa-Lumbini To further develop irrigation resources on 7,000 ha 1983 Closed onGroundwater II Project through construction of tubewells in Rupandehi October(Cr. 1316-NEP) district of the Western Region of the Terai. 31, 1990

8. Cash Crops Project To promote the commercial production of 1983 Closed on(Cr. 1339-NEP) sugarcane, tobacco and oilseeds in the Terai, initiate December

pilot development of sericulture (Hills) and 31, 1988groundnut, and strengthen ginger research (Hills).

15

Following operations

1. Narayani Irrigation III To complete the development of the irrigation and 1986 Closed onProject (Cr. 1715-NEP) drainage system of the 37,000 ha Nepal Eastern June 30,

Canal Command. 1995

ICR underpreparation

2. Sunsari-Morang Irrigation To extend irrigation to an additional 16,700 ha and 1987 Closed onII Project (Cr. 1814-NEP) provide initial desilting facilities for Stages I and II March 31,

in Sunsari and Morang districts of the Eastern 1995Region of the Terai.

ICR underpreparation

3. Mahakali Irrigation II To raise agricultural production and farm incomes 1988 ClosingProject (Cr. 1924-NEP) through expansion and management improvement date

of public irrigation system, through construction scheduledand rehabilitation of private schemes, and for Marchrestoration and river protection works in 31, 1997Kanchanapur district of the Far Western Region ofthe Terai.

4. Bhairawa-Lumbini To further develop irrigation resources on 8,000 ha 1990 ClosingGroundwater Irrigation III through expansion of deep tubewell irrigation dateProject (Cr. 2144-NEP) system and construction and rehabilitation of scheduled

private schemes to raise agricultural production, for Junefarm incomes in Rupandehi and Nawalparasi 30, 1999districts of the Western Region of the Terai.

16

Table 3: Project Timetable

Steps in project cycle Date planned Date actual/latest estimate

|Identification (Executive Project Sununary).__

FiPreparation SeptemberrOctober, 19b3

Appraisal March 17-23, 1984l

|Negotiations July 9, 1984 February 15-20, 1985l

Letter of developi ent policy (if applicable) n.a. n. l

Board presentation September 11, ]984 March 7, 1985

Signing June 10, 1985l

Effectiveness Septernber 9, 1985l

First tranche release (if applicable) n.a. n.a.

Midlenn review (if applicable) n.a. n.a. t

Second (and third) trache release (if applicable) n.a. n.a.

Project completion June 30, 1991 June 30, 1994 2

Credit closing December, 1991 December, 19943'

Although no mid-term review was scheduled, the Credit Agreement was amended on December 6, 1990 following IDA agreemnent with HMGN proposalto restructure the project to: (i) provide continued financing for incremental extension, adaptive research, and training activities in 12 additional districts;(ii) complete civil works in original II districts, (iii) strengthen adaptive research in projed areas; and (iv) increase the percentage disbursement forsalaries and allowances for project staff.

2 Project completion date was extended three years to June 30, 1994, following three I -year extensions to Credit closing.

3" Requests for one-year extensions of Credit closing date were agreed by IDA on December 18, 1991, December 29, 1992 and December 20, 1993,respectively.

Table 4: Loan/Credit Disbursements: Cumulative Estimated and Actual(US$ million)

FY88 FY87 FY88 FY89 FY90 FY91 FY92 FY93 FY94 FY95

(USSmillion)

Appraisal Estimate 0.3 1.0 2.8 4.8 8.7 7.2

Actual 0.05 0.45 147 1.77 2.34 2.92 4.08 4.96 6.68 8.30

Actual as % of Estimate 17 45 57 38 35 41 58 69 93 108

comment iDA agreed on May 13, 1984, to HMGN request to cancel US$1.2 million (SDR870,6Fi) ot Credit and to reallocate the remainig balance according to proposed categonesof expenditure. The Bank has allowed disbursements on expenditures incurred prior to closure of Credit, to be drawn until 30 Aprl, 1995. Appraisal estimate used anexchange rate of SOR1 .0 = USS0.97 while actual estimates are based on current exchange rates which changed throughout project period.

17

Table 5: Key Indicators for Project Implementation

I. Key implementation indicators Approval RevisedUnit Target Target Actual

1. Civil Worksoffices No. 46 15 911Rest House No. I 0 0Houses - Gazetted No. 120 61 58,'Houses - Non-gazetted No. 27 32 32Training Centre No. I I 13/Garages No. 13 3 3Compound walls No. 0 9 9

2. VehiclesJeeps No. 14 19 14Minibus No. 2 2 0Mlotorcycles No. 141 141 33Bicycles No. 165 165 165

3. Equipmnent l

Office Unit 19 65 184 Fumiture Unit 146Audio-visual and other Unit 1,265 1,529 1,501

4. Incremental Staff3'PLAA No. 810 0JTA No. 263 320JT No. 93 246Production Officer No. 43 0SMS No. 27 100ADO No. 10 0AADO No. 10 0SAEO No. 4 0Civil Engineers No. 5 5Training Staff No. 11 21Economists No. 6 10Support Staff No. 159

II. Modified indicators (to include AERP and HPFF districts)

l. Civil WorksOffices No. 0 1 06/ASC No. 0 4 27 Houses No. 0 4 Os/Suspension bridge No. 0 1 1Garages No. 0 2 2

2. VehiclesJeeps No. 0 5 5

L Motorcycles No. 0 27 27

" Six offices still under construction.2/ Five JT quarters not yet handed over and one IT quarter still under construction.3/ Improvements to Jhumka Training Centre included construction of motor garage, fencing and electrification.4/ Office equipment was revised to include computers with printers (5), photocopy machine (5) and facsimile machines (3).5' Target staff in SAR are for 10 districts included in project, while actual staff at end of project in those same districts included additional staff brought

under DOAD due to orgarisational restructuring.61 MOA headquarters building completed but not handed over.

An additional two ASCs completed but not handed over." Four JT quarters completed but not handed over.

18

Table 6: Key Indicators for Project Operation

(Not applicable to this project)

Table 7: Studies Included in Project

Purpose as definedStudy at appraisal/redefined Status Impact of study

1. Benchmark studies in To collect data concerning Completed in 3 districts Provided detailedsix new project districts cropping patterns, yield data, in June 1986 and 2 analysis of agricultural

availability of inputs, other districts in March production, socio-marketing facilities, present 1988 economic andstatus of extension support demographic features inand its impact, and farmers project districts.technological constaints.

2. Sustainability of To evaluate the approach of Completed May 1988 Work was of insufficientTraining and Visit system T&V system in a national analytical rigour,of agricultural extension perspective as to its although goodin Nepal. suitability, applicability and description of extension

contribution to agricultural modalities in Nepaldevelopment in context of were given.various existing extensionapproaches.

3. National Agricultural To provide financial Completed 1994 Provides soundExtension Strategy assistance to Task Force to guidelines for future

prepare the strategy development ofdocument. extension services in

Nepal.

4. Operations Manual for To provide detailed Completed December, Manual guidelines nowParticipatory Census and operational plan for 1994 being simplified andSolving Techniques implementing the translated into Nepali

Participatory Census and language.Solving technique in farmergroups.

5. Preparation of To provide financing for Completed December, Six working papers andAgricultural Extension preliminary preparation of 1994 main project report wereand Marketing Project new extension project by prepared and to be used

HMGN. as a basis for furtherpreparation work.

19

Table 8A: Project Costs

Appraisal estimate (US$M) Actual/latest estimate (US$M)

Item Local Foreign Total Local Foreign Totalcosts costs costs costs

1. CivilWorks 1.3 1.3 2.6 2.60 - 2.60

2. Vehicles & Equipment 0.2 0.8 1.0 0.27 0.47 0.74

3. Incremental Staff 1.6 - 1.6 7.28 - 7.28

4. Incremental Operating Cost 0.5 0.3 0.8 2.29 - 2.29

5. Training 0.4 - 0.4

6. Monitoring& Evaluation 0.1 - 0.1 2.14 0.19 2.33

TOTAL BASE COSTS 4.0 2.4 6.5

Physical Contingencies 0.4 0.3 0.7

Price Contingencies 0.9 0.5 1.4

TOTAL 5.3 3.2 8.5 14.58 0.66 15.23

Table 8B: Project Financing

Appraisal estimate (US$M) Actual/latest estimate (US$M)

Source Local Foreign Total Local Foreign Totalcosts costs costs costs

IBRD/IDA 4.0 3.2 7.2 7.77 0.66 8.43

Domestic contribution 1.3 - 1.3 6.80 - 6.80

TOTAL 5.3 3.2 8.5 14.58 0.66 15.23

Table 9: Economic Costs and Benefits

There was no net present value (or economic rate of return) estimated, as such measures are not relevantforthis type of project.

20

Table 10: Status of Legal Covenants

NEPALAgricultural Extension II Project

Original RevisedAgreement Coven- Status fulfillment fulfillment Description of

Section ant type date date covenant Comments

DCA 3.01 5 C - The Borrower shall carry out the Project withdue diligence and efficiency

DCA 3 02 5 CD 12/31/85 - Employ architects to assist with civil works Complied with only February 1988.program

DCA 3.03 (a) 5 C - Insurance of imported goods against hazardsincident to acquisition, transport and delivery

DCA 3 03 (b) 13 CP Goods and services to be used exclusively for Not completely complied withthe Project. during project, as regional offices

from time to time commandeeredvehicles

DCA 3.04 (a) 5 C Preparation of plans, specifications, reports,contract documents and construction andprocurement schedules of Project.

DCA 3.04 (b) 5 C Fumish IDA semi-annual progress reports

DCA 3.04 (d) 5 CD - Submit compILtion report not later than 6months after closing date.

DCA 3 05 5 C Take action to acquire land and land rights

required for carrying out the Project.

DCA 3.06 (a) 5 C 8/11185 - Maintain in DOA the professional posibons Professional positions not alwaysexistng in the project area and shall continue filled with suitably experiencedto fill such positions with suitably experienced officersofficers.

DCA 3 08 (b) 5 Ensure that the Panchayat-level agriculture By HMGN decision of Novemberassistants appointed for prolect be qualified/ 17, 1991, agriculture assistantsexperienced and residents of Panchayats in posts were abolishedwhich they are assigned to work.

DCA 3.08 (c) 5 3/311/87 Review with IDA adequacy of staff assigned for By HMGN decision of Novembercarrying out project, in particular, Panchayat- 17, 1991, agriculture assistantslevel agnculture assistants posts were abolished.

DCA 3.07 (a) 5 C 12131/85 - Establish/maintain a District Technical Disttict Technical Committees didCommittee for each district, chaired by not perform satisfactorilyAgriculture Development Officers shall meet atleast every six months.

DCA 3.07(b) 5 1231/85 - Appoint/maintain Sr Agric. Ext. Officers in the As monitoring functions of the Reg.Eastern. Central and Western regions of Nepal. Director of Agriculture Office was

adequate, HMGN decided not toappoint SAEOs.

DCA 3.07 (c) 5 831/86 - Appoint/maintain Sr. Agnc. Ext. Officers in the As monitoring functions of the Reg.Far-Westem and Mid-Western regions of Director of Agriculture_ Office wasNepal. adequate, HMGN decided not to

appoint SAEOs.

DCA 3.08 (a) 5 C Appoint/maintain incremental staff required Created and appointed newpursuant to a staffing schedule. JTlJTAs.

DCA 3.08 (b) 5 C - Upon complebon of project, maintain Incremental SMS staff notincremental staff employed, maintained and AO positons

abolished on Nov. 17. 1991.

DCA 3 08 (c) 5 C Ensure that all ext. staff of DOA assigned toproject shall carry out exclusively agric ext.work under project

DCA 3.09 5 C 8130/95 - Furnish to IDA. a statement of progress inlocation of sites for offices, training sub-centresand staff housing to be constructed undr theproject.

DCA 3.10 5 C Provide facilities/incentives to field prolect staff. After project restructuring creditincluding establishment of credit scheme scheme was not extended topursuant to which all Jr. Technical Assistants livestock extension staff.may purchase bicycles and providemaintenance allowance to encourage optimumuse of such bicycles.

DCA 3.11 (a) T C 37131/87 Provide results of benchmark studies in six new Benchmark studies completed inproject districts to IDA for review and comment. five districts

21

DCA 3.11 (b) 5 C - Establish a Monitoring and Evaluation System Satistactory M&E system neverto provide reports to IDA on semi-annual basis, established

DCA 312 5 CP - Efficiently maintain at all times buildings, Poor standards and maintenance ofvehicles and equipment provided under the buildings and vehicles.project

DCA 4.01 2 C - Maintain appropriate accounting practices IDA agreed on March 8, 1989 toamend OCA to extend submissiondeadtines for audit reports to 12months after end of each fiscalyear

Covenant Type Present Status

1 = Account/Audits 8 = Indigenous people C = covenant complied with2 = Financial/peforlmance/revenue 9 = Monitoring, review, and reporting CD = complied with after delay

generaton from beneficiaries 10 = Protect imptementation not CP = complied with partially3 = Flow and utilization of protect funds covered by categories 1- 9 NC = not complied with4 = Counterpart funding 11 = Sectoral or cross-sectoral5 = Management aspects of the budgetary or other resource

protect or executing agency allocation8 = Environmental covenants 12 = Sectoral or cross-sectoral policyl7 = Involuntary resettlement regulatory/institutional action

13 = Other

Table 11: Compliance with Operational Manual Statements

The project is in compliance with the applicable Bank Operational Manual Statements.

22

Table 12: Bank Resources: Staff Inputs

Planned Revised ActualStage of

project cycle

Weeks US$ Weeks US$ Weeks US$

Preparation to appraisal - n.a. - n.a. 52.2 n.a.

Appraisal - n.a - n.a. 9.9 n.a.

Negotiations through Board approval - n.a. - n.a. 3.6 n.a.

Supenrision - n.a. - n.a. 151.1 n.a.

Completion - n.a. - n.a. 10.01/ n.a.

TOTAL 216.8

planned

23

Table 13: Bank Resources: Missions

Performance rating

Number Specialized Implementabon Development

Stage of Month/ of Days in staff skills status objectves Types of

project cycle year persons field represented problems

Through appraisal Sep./Oct 1 28 A - -

1983

November 1 E - -

1983

Appraisal through Board March 1984 1 7 - _approval

May 1985 1

Supervision Mission 1 Jan./Feb 2 10 A,E 2 11986

Supervision Mission 2 Sep/Oct 4 7 A(2).E(2) 2 1 F1988

Supervision Mission 3 October 1987 2 8 A(2) 2 1 F

Supervision Mission 4 January 1988 1 5 F - -

Supervision Mission 5 February 2 15 A(2) 2 1 F

1988

Supervision Mission 6 Sep/8Oct 2 21 A,E 2 2 F1988

Supervision Mission 7 February 2 7 A,E 2 2 F,M,T1989

Supervision Mission 8 Nov/Dec 3 23 EC(2),E 2 2 F,M,T

1989

Supervision Mission 9 March 1990 2 29 E,A 3 2 F,M,T

SupeMsion Mission 10 November 4 20 E,A,EN,F 3 2 F.M1990

Supervision Mission 11 Mar/Apr 3 20 A,EN,F 4 3 F,M,T1991

Supervision Mission 12 November 2 19 E,A 4 3 F,T1991

Supervision Mission 13 Mar /Apr 2 18 A(2) 3 3 F,T1992

Supervision Mission 14 November 2 15 A(2) 3 3 F,M,T1992

Supervision Mission 15 Mar /Apr 2 17 A(2) 2 2 F,M,T1993

Supervision Mission 16 Sep/Oct. 3 28 A(2).EC 2 2 F,T1993

Supervision Mission 17 Feb/Mar. 3 27 A(2),EC 2 2 F,T1994

Supervision Mission 18 Nov/Dec. 2 28 A(2) 2 2 F,T1994

Staff Skills: A = Agnculturist: E = Extension Specialist EC = Economist; EN = Civil Engineer, F = Financial Analyst

Types of Problems: F = Financial: M = Management; T = Technical

24Aopendix 1

NEPAL: Agricultural Extension Project (Phase II)(Credit 1570-NEP)

FAO/World Bank Cooperative Programme ICR Mission28 February - 21 March 1995

Aide-Memoire

A. INTRODUCTION

0.1 At the request of the World Bank, an FAO/CP Mission l visited Nepal from 28February to 21 March 1995 to meet with officials of His Majesty's Government of Nepal(HMGN) concerned with the implementation of the above project and to obtain relevantinformation for the preparation of the Implementation Completion Report (ICR) for thisproject. Meetings were held with the Coordinating Unit for the project in the Department ofAgricultural Development (DOAD), the World Bank Resident Mission, the FAORepresentative and other government officials. Field visits were made to thirteen projectdistricts in the Terai area and one district in the Hills area. New facilities constructed underthe project were inspected and meetings were held with government officials and farmers inthese districts.

0.2 The mission wishes to thank all staff of HMGN involved in the meetings andfield visits for giving generously of their time, information and assistance with the preparationof the ICR for this project. The views presented in this aide-memoire reflect those of themission, based on discussions with staff of HMGN and farmers and from extensiveconsultation of project documents, and has been amended slightly to take into account pointsraised in a final wrap-up meeting, chaired by the Secretary of Agriculture and attended byJoint Under-Secretaries of Divisions and heads of sections within the DOA on March 21,1995.

B. THE PROJECT

0.3 The general project objective was to reorganise and strengthen the agriculturalextension service in 11 administrative districts of the Nepal Terai in order to provide aninstitutional framework within which all agricultural development programmes, aimed atachieving early and sustained improvement in production and incomes, would be incorporated.The improvements in agricultural production were expected to come from the wide adoptionof low cost and labour intensive agricultural practices, proper irrigation and watermanagement, and use of appropriate crop varieties and levels of fertilizer.

0.4 The Agriculture Extension Project II (AEP II) was a continuation of IDA supportfor the introduction of the Training and Visit (T&V) system of agricultural extension to

" Messrs. D. A. Ivory (Mission Leader) and A. F. Willens (Extension Specialist, Consultant).

25

various districts of Nepal. Earliest support for extension development was provided inconjunction with several irrigation projects (Credit Nos. 373, 654, 812, 856 and 1055-NEP)in a number of districts in the Terai area, commencing in 1973. These were followed by theAgricultural Extension Research Project (AERP; Cr. 1 100-NEP) and the Hill Food ProductionProject (HFPP; Cr. 1101-NEP), which introduced the T&V extension system in nine Terai andfour Hill districts, respectively, both commencing in 1981.

0.5 The AEP II was originally designed to cover the eleven districts of the Terai notcovered by AERP, namely Bara, Parsa and Rautahat (previously under Birgang and NarayaniIrrigation Project; Crs. 373 and 856-NEP), Sunsari and Morang (previously under Sunsari-Morang Irrigation Project I; Cr. 812-NEP), Kanchanpur (previously under Mahakali IrrigationProject; Cr. 1055-NEP), Kailali, Bardiya, Dang Deukhuri, Siraha and Saptari. The district ofDang Deukhuri did not participate in the project at any time because of the presence of acontinuing USAID funded project. With the completion of the AERP and HFPP in i990, bothafter three annual extensions, it was decided to restructure AEP II to include the nine Teraidistricts covered in the AERP (Jhapa, Sarlahi, Mahottari, Dhanusha, Kapilbastu, Rupandahi,Chitawan. Nawalparasai and Banke) and four hill districts (Tanahun. Gorkha, Syangja andLamjung) covered in the HFPP. Under the amended Development Credit Agreement (DCA),agreed on 6 December, 1990, provision was made to provide financing to support extension,adaptive research and training activities in the thirteen additional districts, as well as forcompletion of on-going civil works not completed in the previous projects. Under the originalproject design, AEP II was to support the development of two Regional Agricultural TrainingCentres (RATC) at Ihumka (Sunsari district) and Parwanipur (Bara district), and this supportwas extended to Khajura (Banke district) and Bhairahawa (Rupandehi district) RATCs underthe restructured project. The project became effective on September 9, 1985 and after threeannual extensions of the IDA Credit, closed on December 31, 1994.

0.6 The specific project objectives were to: (i) reorganise agriculture extension in sixnew districts and strengthen the existing extension organisation in the five project districts tobring them into line with extension districts included in the AERP and HFPP; (ii) providefrequent training for all staff; (iii) enlarge two extension training centres at Jhumka andParwanipur; (iv) improve staffing in four Regional Agricultural Development Offices; (v)provide Production Officers in selected areas at subcentre level to coordinate input, credit andirrigation water supply; (vi) strengthen the Extension Training and Planning Sections of theDirector General of Agriculture; (vii) construct office accommodation and housing for staff;(viii) furnish and equip field extension and training programmes; (ix) provide vehicles andtravelling allowances to ensure greater staff mobility; (x) provide incremental operating costs;and (xi) undertake baseline studies in the six new districts and project monitoring andevaluation (M&E) in all project districts.

C. MISSION FINDINGS

Achievement of Objectives

0.7 The design of the project placed emphasis on physical achievements inestablishing and strengthening the T&V extension system, but failed to emphasize generalobjectives concerned with activities and outcomes. While the criteria set for judging projectachievements in terms of institutional and physical targets were found to be generally

26

satisfactory, the extreme weakness or non-existence of M&E activities meant that it was verydifficult to assess the effectiveness of the extensior. system introduced and its impact onagriculture production and farm incomes.

0.8 The specific project objectives were only partially achieved, even after threeannual extensions. The project failed to reach any of the physical targets set in the StaffAppraisal Report (SAR) by the original scheduled end of the project (31 December, 1991) andall were considerably delayed according to the original implementation schedule. The SARprovidel for 210 units (office buildings, housing and improved facilities at RATCs). Duringproject implementation, targets for civil works were sharply revised downwards. Even so, atproject completion, after three annual extensions, the revised civil works programme was only81% completed. with office and house construction 13% and 91% completed and handed over,resuectivelv. Ir. addition. many offices and houses were compietelv constructed but not handedover to HMGN or uncompleted, due to litigation by contractors, which has been pending formore than two years, for additional payments to accommodate sharp rises in material costs.Assistance to RATCs was minimal. A number of civil works which were uncompleted underthe previous AERP and HFPP were scheduled for completion under AEP II following projectreconstruction and financed by AEP II. The headquarters building for the Ministry ofAgriculture (MOA) was completed, but is still not handed over to HMGN, two AgriculturalService Centres (ASCs) were completed, while five JT quarters were completed but none havebeen handed over to HMGN.

0.9 The target for vehicle purchases was revised upwards by 36% during the projectand at project closure was 100% completed. Two minibus purchases were cancelled, however,and while 100% of bicycles were purchased, only 43% of motorcycles were procured. Someoffice, furniture and audio-visual equipment was purchased, but not as envisaged in the SARin terms of individual items.

0.10 Most incremental technician staff positions, such as Agricultural Assistants (AAs),Junior Technical Assistants (JTAs) and Junior Technicians (JTs) were filled, together withpositions for Production Officers (POs), Subject Matter Specialists (SMSs), AssistantAgricultural Development Officers, Agricultural Development Officers (ADOs) and Sub-Centre Chiefs (Agricultural Officers; AOs) at the district level. Positions for SeniorAgricultural Extension Officers (SAEOs) at regional offices were never approved. Allincremental positions were temporary positions which were not converted to sanctionedpositions until April 1992. PO and AO positions were never sanctioned and the services ofstaff appointed to these positions were terminated at this time. AA positions were abolishedin 1991.

0.11 Establishment of Effective T&V System of Extension. The T&V system wassatisfactorily institutionalised and became operational in all project districts. The onlydocumented evaluation of the T&V system" showed that there was no difference in cropyields in districts which had received extension advice for 5-6 years compared with otherswhich did not have the T&V system. Mission interviews with extension staff indicated thatin the early years the T&V system seemed to have worked well. Mission interviews withfarmers indicated the system had worked less well. Problems cited by farmers included; lack

Sustainability of Training and Visit system of agriculture in Nepal, APROSC, May 1988.

27

of adoptable messages, some farmers were not aware they were contact farmers while otherswho did were not contacted, and many contact farmers did not pass on messages to non-contact farmers and thus were widely regarded by other farmers as favoured recipients ofgovernment assistance rather than as a source of information. The system of using AAs topass on recommended messages provided from the fortnightly training programmes to contactfarners. aiso meant that the extension system was not adequately responsive to itsbeneficiaries, except where they were progressive farmers and/or had particular resources oropportunities which could be developed. Active contact farmers did, in fact, rapidly adoptrecommended practices appropriate to them, where they were not already using them. Sincethese altered only slightly from year to year the AAs had little new technologies to pass on.However, the system as developed had neither built-in flexibility to allow for reducedfrequencv of visits to such farmers nor regular rotation and recruitment of new contactrarmers.

0.12 Group Extension Approach. During 1990-91, a number of factors contributedto the demise of the T&V system, including the abolishment of AA positions (which werecritical to the T&V system) because of political agitation and increased pay claims, thereorganisation of the MOA, where the Departments of Agriculture, Livestock and VeterinaryServices and Horticulture were joined together in a newly established DOAD, and thecompletion of the AERP and HFPP. The realisation that at the field level there was inadequatemotivation and resourcing of field staff and poor management control led to the HMGN toeventually abandon the T&V system, claiming "Agricultural production is still staggering inspite of decades of these projects... Several thousand AAs, and even JT/JTAs, are foundcontributing very little to generate any economic return and mass awareness"". HMGN thenintroduced a farmer group based system to incorporate problem census/problem solving(PC/PS) techniques in order to make extension responsive to farmers needs. Initially thePC/PS technique was introduced in two VDCs in three pilot districts and subsequentlyextended to six other districts. Technical assistance to develop the PC/PS group approach wasprovided directly by WB (an international consultant for 10 days) and project funds wereutilized to provide periodic inputs from one international consultant and continuing assistancefrom three local consultants from March 1993 to December 1994. Farmer groups have nowbeen formed in all project districts, according to targets based on geographical areas of wardsin Village Development Committees (VDCs), with ten farmer representatives from each ofthree wards forming one group of 30 members. Each group elected a group leader to act asa pivotal link between the group and the extension department. Three such groups wereformed to cover all nine wards of each VDC throughout the project area.

0.13 The mission interviewed some 26 farmer groups in 13 Terai and one Hill district.These groups included mixed gender groups as well as separate men and women farmergroups. The women farmer groups were primarily involved with livestock raising, goats anddairying, and were very active and had benefited from extension advice and assistance. Thefarmers cited many advantages from forming groups. However, after more than two yearsexperience with the group approach, only between 10% and 50% of groups are claimed to beactive. Most farmers are satisfied with the group approach but, as with T&V, at present itseems to produce real benefits for those with specific opportunities to exploit, particularly

" Letter from Acting Secretary of Agriculture to Director, Country Department, Asia Region,World Bank, November 16, 1989.

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those systems producing higher value products, such as vegetables, seed production, dairyingand goat production, but only limited benefits for other farmers. In order to enable activationof all groups, considerable emphasis has to be given to providing training to JT/JTAs in groupformation, motivation. facilitation and the PC/PS technique, as well as farrmer awarenessprogrammes on advantages of group formation.

0.14 Strengthening of Regional Training Centres. The project was to provide fundsfor expanding the facilities at Jhumka and Parwanipur RATCs by providing incremental staffand supplementing the equipment and furniture available. While some of the furniture andequipment was supplied according to the project design, vehicles and important items ofaudio-visual equipment were not. This substantially reduced the effectiveness of training atthe centres. At Jhumka RATC. farm facilities on the centre campus were handed over toAgricuitural Input Corporation (AIC) for seed production. leaving the centre with no land orfacilities to carry out practical training. In addition, it had to reduce its external venues andrestrict its training schedules due to shortages of staff. The Parwanipur RATC was closeddown during the course of the project and regional training transferred to another site.Assistance was to be extended to Khajura and Bhairahawa RATCs under the restructuredproject, but assistance has been minimal.

0.15 Frequent transfer of staff to and from RATCs has reduced the quality of trainingsince staff are mainly SMSs who have received some trainer training rather than specialisttrainers with long teaching experience. Minibuses, needed for field trips were cancelled aswere cassette tape recorders. Slide and film projectors had not been procured by the intendedcompletion date of the project and the National Planning Commission did not agree to theirprocurement in the extended period of the project.

0.16 Provision of Regular Training for Staff. Under the T&V system, field levelextension staff received regular training and this was felt to be useful by the staff involved,although the quality of this training was well below that intended and required. Training wasbased on improving knowledge of recommended practices and technologies and failed todevelop practical skills and comprehension needed to enable field staff to adaptrecommendations to local conditions and fully interface with farmers. Training of more seniorstaff was equally unsatisfactory. Whilst the actual training was of reasonable quality, thoughagain lacking in practical content, training was widely perceived as a means of obtainingpromotion rather than as a means of developing skills. This largely reflects the lack of acoherent manpower development and staffing structure within DOAD, to the extent thatexpertise and experience in a particular discipline is not regarded as a prerequisite toappointment as a SMS in that discipline. Coupled with frequent staff changes this considerablyreduced the effectiveness of SMSs in training of field staff and providing the necessarytechnical expertise and information to assist farmers.

0.17 Strengthening of Extension Training and Planning Sections of DOAD. ThePlanning Section has received the equipment intended. Many districts have no PlanningOfficer or if posted are located elsewhere. There is no evidence at the District Level that anycomprehensive planning is being carried out but rather that planning is treated as an annualexercise in target programming and implementation reporting.

0.18 Monitoring and Evaluation. Although budgetary line items were provided forM&E in the project design and on several occasions WB supervision missions insisted that

29

M&E units be established and appropriate M&E activities should be undertaken, the projectfailed to establish any effective M&E system and no guidance was given to establishingappropriate M&E survey, data collection, analysis and evaluation procedures.

Project Implementation Record and Major Factors Affecting the Project

0.19 Overall. the project only partially achieved its objectives. A number of factors"contributed to substantial delays in achieving physical targets during implementation. resultingin the need for three annual extensions to the project. Frequent implementation problemsrecorded by WB supervision missions included: inadequate fund release and slowdisbursement of funds; the use of the special project account remained problematic;procurement was slow and considerable delays occurred in the civil works programme;positions of incremental staff were not regularized; and professional capacity ot field staffworkers weak and inadequate supervision at that level.

0.20 Total Project Costs. Of the total IDA Credit (SDR7.4 million), SDR870,650(US$1.2 million) was cancelled on 13 Mav, 1994, and at Credit closure on 31 December,1994, SDR5.65 million had been spent and SDR877,503 remained unspent. The Bank hasallowed disbursements on expenditure incurred prior to closure of Credit to be withdrawn until30 April, 1995. Total project cost was NRs571.55 million (estimated US$15.23 million atcurrent annual exchange rates), which was 262% above the original estimated project cost inRupee terms, due to a 268% devaluation of the Rupee against the Dollar and SDR, threeannual project extensions and to an expansion of project area caused by project restructuring,and was 79% above estimated project costs in Dollar terms.

0.21 Extension System. A number of factors associated with management andimplementation of the T&V extension system affected project performance and impact.

0.22 Management. Line management of the extension service was weak. Manymanagers had received little or no training in management techniques and were frequentlytechnical specialists acting in a management role. Management was almost entirely a top-downprocess based on the achievement of physical targets and results. No account was taken ofimpact, which in the absence of any M&E system could not be accurately determined. Settingof management targets was only a participatory process in relation to discussing technicalissues and activities but not in quantitative or budgetary terms.

0.23 Key management problems were low motivation of staff, little accountability andlack of any performance related reward system. Problems particularly arose with supervisionof JTs and JTAs whose numbers are considered excessive under the T&V system and whomade the link from technical specialists to the farmer too long for effective communication.Supervision was so lax that many JTs and JTAs reportedly attended training but rarely visitedthe field. This was undoubtedly a major cause of the AAs going on strike for betterremuneration and regularisation of their positions. Despite the AAs being widely recognisedas the key frontline staff making the greatest contribution to the success of the extensionsystem, the borrower decided to abolish their positions and retain the JTs and JTAs. Therewas also a high staff turnover, partly due to the temporary nature of the posts.

" Mostly subject to Government/lmplementing Agencies control.

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0.24 Impact and Relevance. Some of the activities set out in the SAR appear to havereceived less attention than was envisaged: very few low cost, labour saving technologies wereintroduced and advice on proper irrigation water management was left almost entirely toirrigation projects. The extension messages under the T&V system were largely technologybased, focusing on a package approach involving improved seed, fertiliser and pest anddisease control. It was generally geared to farmers with access to irrigation and followed the,then standard practice of carrying out all variety trials with recommended applications offertiliser and plant protection. Results were recorded as physical yield and profitability to thefarmer was not determined.

0.25 Certainly the T&V system and subsequently the group approach of extensionproduced good results for those farmers who could access sufficient resources to implementit. Where particular opportunities existed. as with high vaiue vegetable crops or seedproduction, and later in the project in relation to certain livestock activities, most farmersfound the advice from extension helpful and profitable. Livestock rearers reported significantimprovements in production due to improved health services, introduction of improved breedsand in some instances improved forage production and feeding. However, where theseopportunities did not exist, farmers reported that the improved technologies were not costeffective due to the low prices prevailing at harvest, such that they were considering ceasinguse of the improved technology. This was mainly a problem of financing the productioninputs, though coupled with lack of skills and physical facilities for efficient crop storage.Technologies such as row planting of maize, which had no direct cost, were widely adopted,but there were few of these.

0.26 The SAR did not adequately address the need for extension materials. Emphasiswas on low cost aids such as charts, flannelgraphs and flipcharts which extension staff wereto design themselves. This pre-supposed that SMSs had the ability and experience to produceeffective extension materials but no specific training was built in for this. The project madeno specific use of more advanced media such as radio, film and video except where individualstaff took the initiative to rent TVs and VCRs. Field staff were consequently largelydependent on the leaflets and posters produced centrally by DOAD. This was not supportedunder the project and most field staff lacked adequate leaflets for their own use, far less todistribute to farmers. Good colour posters showing pests and diseases were particularly lackingand could not therefore be displayed at ASCs and subcentres where farmer training took place.

0.27 Demonstrations were carried out across the whole project area. While manyfarrners benefitted from minikit demonstrations of new varieties the impact of otherdemonstrations was not as great as anticipated. Many were located away from roads or maintracks and had no sign boards describing them. This was in marked contrast to those organisedby commercial sugar and tobacco companies which were sited to be clearly visible from mainhighways. Shortage of operating funds, particularly for transport, severely restricted thenumber of farmers who could be taken to visit demonstrations and also constrained field daysand visits.

0.28 Staff Skills. The technical skills and level of competence of staff employed inthe project was very variable. The AAs reportedly had generally good practical skills and wereable to interact well with contact farmers. The general educational level of the JTs and JTAswas not high enough to enable them to interpret the components of the technology packagesto be able to recommend individual components to farmers. The training which they received

3 1

was, therefore, primarily a passing on of factual information for them to pass on to AAs andfarmers. In any event, none of the components were tested individually so that theperformance of improved varieties without fertiliser or plant protection was not known.

0.29 Under the T&V system, SMSs were supposed to spend one third of their time intraining groups of AAs, JTAs and JTs, one third in field visits to provide technical supportand monitor adoption and non-adoption of recommended practices and the remaining third oftheir time in building their own stock of knowledge through regular dialogue with researchworkers and attending short training courses. The extent to which this latter activity took placewas relatively minor, partly due to lack of mobility and partly to weak research-extensionlinkages. The ability of the SMSs and indeed most officers to keep up to date with advancesin their field was also constrained by extremely low availability of technical joumals and upto date Wooks. The mission observ,ed that no district offices had any reference materialsbeyond the personal collections of staff themselves.

0.30 Research - Extension Linkages. Research-extension linkages were establishedas planned but their effectiveness was less than anticipated. No clear definition existed of therelative and interacting roles of research and extension. Neither organisation perceived a needto keep up to date with and draw on information and technologies developed in othercountries and neither was adequately resourced to do so. As a result, the more progressivefarmers were often better informed than extension staff on developments in India and evenon technologies from other research stations located elsewhere in Nepal.

0.31 Provision was made for bimonthly meetings between SMSs and staff at regionalresearch stations. According to the SAR these were to be training sessions crucial to thesuccess of the project but in reality, as set out in the SAR, they were group discussionsreviewing extension recommendations and discussing future research topics and field trials.Whilst these were a valuable exercise, they were not training per se.

0.32 Inadequate SMS training was reflected in inadequate training of the JTs, JTAsand AAs and ultimately farmers. The regular training sessions served primarily to pass onseasonal cropping information which hardly changed from year to year. This led field staffto complain that they had nothing new to pass on to farmers, a direct result of only dealingwith the same contact farmers. This also applied to pre-season workshops for AAs, JTAs andJTs which were often delayed so that they took place after farmers had planted the crops.Research staff conducting the training were generally inexperienced in practical field problemsand wvere rarely trained as trainers.

0.33 Extension leaflets and posters are produced centrally, though district offices dohave some very limited funds for local production. Thus even where research-extensionlinkages generate area specific recommendations these are not necessarily incorporated in theextension material available to field staff.

0.34 Civil Works. The serious delays in the civil works programme was due tolengthy procedural processes for approval of design and estimates for construction, tendering,recosting and dispute management of construction contracts. Additional problems associatedwith poor design, quality of construction and finish came from poor supervision. Initially therewas considerable delay with the appointment of personnel to positions designated forarchitects to supervise the civil works progranmme and then agricultural engineers were

32

appointed to these positions. Problems associated with legal disputes still continue with manybuildings remaining partially constructed or completed but not handed over to HMGN. Thishad a continuing negative impact on project activities, as such buildings were unoccupied andtheir condition is deteriorating as little or no maintenance funds are provided in districtbudgets.

0.35 Vehicles. Lack of adequate transportation proved to be a problem throughout thelife of the project. There were several reasons for this. Vehicles provided under the projectwere unavailable for project use for an excessive percentage of time. Some of the vehiclespurchased were inappropriate having excessive engine capacity and hence fuel consumptionand being of a standard of luxury which made them over-attractive to other organisations foruse by senior officials. Vehicle maintenance costs were high due to the poor standard of roadsand budgetcd maintenance xas inadequate. M\Ianagement control of vehicles was often poor.Motorcycle procurement and distribution was well below intended levels (43%) and far lessthan required to provide appropriate mobility to field staff. This made it extremely difficultfor SMSs and JTs to properly supervise JTAs and ultimately AAs. Bicycle loans generallyproved to be successful and were widely used. However since the staff owned the bicycles,they took them with them when they transferred out of the project area so that the numberof project staff having bicycles rapidly declined and mobility problems retumed.

0.36 Project Benefits. It is not possible to determine the real impact of the projectactivities on beneficiaries since no M&E of impact was done, although specified in the SAR,and because of concurrent improvements in other factors of production, such as irrigated area.Undoubtedly many farmers in project areas who were in direct contact with extension workersincreased their crop production and incomes. Increases in yields of major crops that wouldbe required to obtain a 50% ERR from the proposed project investments were estimated inthe SAR. Analysis of crop yields for paddy, wheat, maize, millets and sugarcane in the Teraiover the I 0-year period 1984-94 showed that yields increased significantly and were in excessof those estimated to be required in the SAR to obtain high rates of return to projectinvestment. Since 1990, however, yields for paddy and wheat have declined. This has resultedin farmers being placed in a cost price squeeze with input costs rising faster than productprices. Further analysis of paddy and wheat yields before and during the project (1980-89)showed no significant differences in trends between new districts where T&V was introduced,districts where extension was strengthened and non-project districts. The baseline surveyscarried out for the project indicate that most farmers already knew of improved varieties ofwheat and of the value of using chemical fertiliser such that 85% of those growing wheatalready followed the recommended practices. With paddy, around 60% of farmers knew ofrecommended practices but less than 40% actually used them.

Project Sustainability

0.37 It is likely that in purely physical terms the extension system is sustainable, butwithout considerable additional support it will remain at a low level of effectiveness. Whilethe current level of budgetary support for extension has been maintained at project levels, itis inadequate for proper maintenance of existing resources and is extremely limited in relationto replacement or purchase/investment in new resources needed for development of theextension services.

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Bank Performance

0.38 The WB undertook 18 supervision missions during the course of projectimplementation. Generally, their reports were perceptive and helpful in relation to problemswhich occurred and suggestions for improvements in implementation. Although the projectwas supervised by a number of Task Managers and project supervision staff changedfrequently, staff of the WB resident mission in Nepal provided the necessary continuity andsupport for the project. The Bank performance was, however, weak in several key areas. Thesaga of vehicles being requisitioned by other organisations runs right through theimplementation period. While the Bank persistently complained to the Secretary of Agriculturethe Bank appeared to fail to come to terms with the fact that the MOA could not of itself doanything and the matter should have been taken to a higher level. Supervisory missions, apartfrom in the early years of the project. did not consistently point out the absence of M&E norgive it appropriate prominence. The Bank consequently failed to insist that the M&Enecessary to determine project impact and effectiveness be carried out. A number of problemshave arisen for HMGN in maintaining a proper set of accounts in terms of WB reportingrequirements. Appropriate guidelines should have been provided at the beginning of theproject.

Borrower Performance

0.39 The Borrower recognised that the extension system, as introduced, was notworking well. Thus at their initiative the extension system was changed to a farmer groupapproach with PC/PS used as the key technique to promote a more demand-driven assistanceto farmers. This approach, while still in an evolutionary and widening stage of development,is potentially more effective than the previous approach. Also the Borrower has supported andassisted the preparation of an Agricultural Perspective Plan and National AgriculturalExtension Strategy for Nepal to provide guidance and direction in development of agriculturalservices and agricultural development.

0.40 Some aspects of Borrower performance were, however, unsatisfactory and wouldhave to be seriously addressed in any future project. The whole management of the civilworks programme was unsatisfactory. Steps should have been taken to streamline the completesequence of document preparation, processing, contract negotiation and approval, andsupervision of civil works. Such action would have prevented the long-continuing situationof litigation by contractors against the Government. General management of the extensionservices has also been unsatisfactory and requires systems put in place to improve staffperformance and accountability. Disbursement of project funds, particularly the operation ofthe Special Account, was often cited by WB supervision missions as problematic. WBreviewed the operation of these accounts in all IDA-financed projects in Nepal and maderecommendations to improve their operation, but to date no action has been taken by HMGN.The Borrower also failed to respond to a number of requests from WB supervision missionsto establish an effective M&E system and thus monitoring was confined to the physicalimplementation of the project, not its impact on agricultural production. Many of thesedeficiencies breached the covenants of the DCA.

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Future Operational Plan

0.41 HMGN has provided a future operational plan based on the experience andoutcome of the project (refer attachment). Future developments would be in line with theNational Agricultural Extension Strategy and success obtained using the group approach toextension and would aim to expand the use of PC/PS techniques in farmer groups, furtherencourage women's participation in groups, expand a bottom-up approach to planning andbudgeting at district levels, bring increased numbers of Water User groups under the PC/PSapproach, provide more training for extension staff in the group approach, fill vacant SMSpositions, strengthen District Agricultural Implementation Committees, and complete theunfinished civil works programme.

Lessons LearnCd

0.42 There are a number of lessons to be drawn from the implementation and outcomeof this project, including:

(i) The group approach to extension has three major elements whichpotentially give significant advantages over the T&V system; moredemand driven to resolution of farmerg problems, wider coverage ofextension contact with farmers, and greater direct interaction oftechnicians and SMSs with farmers. These potential advantages willonly be fully realized if JT/JTAs are better trained in the principlesand techniques of the group approach, an awareness campaign ismounted to inform farmers of the advantages of forming groups, theactivities of the field extension services are better organized andregularized, and that availability of technical services andinformation are improved.

(ii) The change to the group approach to extension has meant thatJT/JTAs no longer receive regular fortnightly/monthly training anddistrict budget limitations severely restrict alternative in-servicetraining for them. Consideration has to be given to establishingappropriate and regular in-service, short-course training programmesfor all JT/JTAs at IAAS.

(iii) Extension services can only interact directly with a minority of thefarming community. Farmer training needs to be greatly expandedwith course curriculum designed to provide both increasedknowledge in new technologies and more fundamental principles ofagricultural production processes and financial analysis so that theyare empowered to become better and more independent decisionmakers. It is suggested that the RATCs should become solelyresponsible for farmer training.

(iv) The potential value of SMSs to provide technical back-stopping toJT/JTAs, to lead the introduction, evaluation and promotion of newtechnologies, to provide technical information to farmers and toprovide an essential link between research and extension is greatly

35

under-exploited. SMSs are under-qualified for their tasks andresponsibilities and need specialized in-service training or post-graduate training to upgrade their specialist knowledge and skills.

(v) Management of extension services at all levels is weak. due to lackof detailed operational plans. lack of individual job descriptions andassociated duties and responsibilities, lack of staff and unitoperational accountability, little scope for effective reward andpunishment, weak supervision, and a system of service that allowsrapid staff turnover in individual positions. It is essential thatmanagers at all levels be given appropriate management training, jobdescriptions be detailed for all staff and proper planning and M&Esystems be introduced to ensurc individual and ,oilectiveaccountability in performance, achievement and output.

(vi) Many of the problems associated with weak management are a resultof very weak or non-existent M&E. M&E requirements for analysingthe performance of the extension service, impact of extensionservices on agricultural development and needs for further extensionand research programming, need to be spelled out precisely. It isessential that DOAD establish an effective and efficient system ofsurvey, data collection, analysis and evaluation procedures and thatthis information feeds back to management at all levels.

(vii) DOAD requires a clearly defined staffing programme linked to acoherent manpower development policy and planning and careerstructure. Staff need motivating and improved reward andremuneration has to form a key element. Provision of housing andtransport and associated allowances can achieve this while benefittingproject effectiveness. The quality and skills of staff at all levels needto be substantially upgraded by further training. Consideration shouldbe given to the possibility to substantially increase salaries andbenefits through performance related pay.

(viii) Research-extension linkages are extremely weak. Urgent attention isrequired to introduce mechanisms to ensure formal linkages betweenextension and research, such as: reintroduction of bi-monthlymeetings at district level between DOAD and NARC researchstations; joint systematic diagnosis of farmers problems andopportunities to improve agricultural production; joint budgeting andactivity responsibility in research outreach programmes of NARC;joint involvement in production, implementation and evaluation ofmini-kits and other demonstrations; joint operation and provision ofsupport services, such as laboratories for soils analysis, plantprotection, etc.; and establishment of a joint Research/ExtensionLiaison Office in DOAD or NARC at regional level.

(ix) Field extension staff are inadequately resourced with extensionmaterials. Increased emphasis has to be given to the utilisation of

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modem media production technologies to quickly produce leafletstailor-made for local situations as well as supply pamphlets andbrochures on recommended cultural techniques and technologies, andto reference printed materials from commercial suppliers of seed,fertiliser, chemicals and equipment. These materials together withgraphic reference materials, such as full colour posters of crop pestsand diseases, need to be widely available for farmers to see indistrict offices and ASCs.

(x) Better use needs to be made of modem communications, especiallyradio and video. Both TV and radio can be used, outside normalbroadcasting hours. to transmit material for recording and later use.Video materials are available from libraries and agricultural inputsuppliers.

(xi) Operating budgets need to be realistically set and updated annuallyin line with inflation. Overall project impact will be greatlyimproved by properly funding a reduced number of activities ratherthan by spreading resources too thinly.

D. FOLLOW-UP

0.43 On return to Rome, the mission will prepare the ICR for submission to WorldBank by about the end of April, 1995. HMGN agreed to provide the mission with their ownassessment of the project as a separate Implementation Completion Report by HMGN withintwo weeks of the wrap-up meeting. The mission aide-memoire, with any amendmentsrequired, and a copy of the HMGN Implementation Completion Report will be attached to theICR document prepared by the FAO/CP mission.

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Proposed Operational Plan of the Project after its closure(Dec. 31, 1994)

1. INTRODUCTION

The Project closed on Dec. 31, 1994 after three extensions of its closing date each for one year.The project during its operation helped to strengthen agicultural extension service in the projectdistricts by providing basic infrastructures and institutions for staffs and farmers training staffmobilitv and supervision and research-extension-fanner linkages. It provided financial supportsfor constructions of office buildings, staff quarters, and other needed civil works andprocurement of furnitures transport facilities and equipments. In the later part of the projectphase the project initiated Farmer Centered Group Approach (FCGA) of Extension with ProblemCensus / Problem Sohing (PC/PS) methodology as a suitable replacement for the individualcontact by the Training & Visit ( T & V ) System in the three Pilot Districts. Encouraged by theexperiences of FCGA and PC/PS in the three pilot districts the approach has already beenexpanded to six more districts . The National Agricultural Extension Strategy for future has beendeveloped with mass consensus based on the experiences in the pilot districts and an OperationalManual on PC/PS has also been finally drafted. HMG/MOA in future would persue theapproach for further strengthening of the extension service and consolidate the gains achievedduring past eight years of the implementation of the project. The following operational plan isproposed to achieve the above stated objectives.

2. Operational Plan

S.N. Activities Time Frame Responsibilities Monitoring(what to do?) (When to do?) (Who to do?) Indicators.

Taking Inventory of total Will continue DOADlDADOs DADOs willgroups in the districts and in phased provide reportsexpanding PC/PS in self manmer as eveIy four monthinitiated effective groups. planned in on number of

AEMP groups practisingpreparation PC/PS in thereport districts, on an

I agreed format2. Encouraging women do do do

participation in the group byfacilitating them in meeting

.___ their needs throuh PC/PS

38

3. Expanding bottom-up do do Yearly programmeplanning & budgeting process and budget for thein districts directly with farmer districts will bebeneficiaries groups through based on PC/PS.PC/PS

4. Bringing increased nos. of Continuous DOI/DOAD Four monthlyWater Users Group (WUG) in starting from /DIOs/DADOs report by DADOsthe in-igated area within the Jan. 1, 1995 indicating WUGs

group approach & PC/PS involvement inex-tension. extension groups.

5. Expanding use of transiated Widthin i995 DOAD - for Extension staffs atversion of Operational Manual translation & all level will bein Nepali language in circulation and oriented on FCGAorientation of extension RADDs, CATC, & PC/PSservice and training of staff at RATCs,all level DADOs - for

___________________ __________ training of staffs.6. Filling up vacant positions of Within 1995 MOA/DOAD AU SMSs

important SMS in the districts. positions will befilled up in thedistricts.

7. Strengthening District Within 1995 MOA/DOAD More effective co-Agricultural Implementation ordination linksCommittee (DAOIC) in will be establisheddistricts. among agriculture

developmentrelated Govt.agencies, NGOsand private sectorsin the districts.

8. Completion of unfinished civil Approximately MOF/MOA Incompleteworks witdin 1996 DOAD building

construction willI be completed.

39Appendix 2

His Majesty's Government P' 1:l

j ~~~~~~~Miwistry of Agricul

SkUsh mdubar

Ref: <tz'; ri=-'t sXx KATHIIMANOU, NE

Date: May 18, 1'

Dr. David Ivory, OMAY 1995c r, C r;:-.Ia,ICR Mi5sion

Kathmandu.

Subject:- Implementation Comoletion Reoort of

AEP !I.

Please find a_tached herewith a copy of ICR of AEP - II, Sorrower'

.vieu point, to be ineluded in the final ICR prepared by you for IC

This report has been prepared as per the Aide-Memories af dated

April 30, 1995 of the IDA Mission.

Thanking You.

With Seat Regards.

Sincerely Yours,

Joint Secretary

c C:

C/o Tha I4orld Bank

Kathmandu.

Mr. 0. Manickavasagum,

The World Bank

KathmandU. : Plaase send one copy to LJ9 Washington

tbroLgh your regular pouct

40

ON AGRICIJLTURAL EXTENSION PROJECT - 1I:Borrower's View Point

Upon compicting the impircmcntation of the Agricuhurai Extension Project II ( 1985-1994 ), this report attempts to (a) assess project objctives, design, implementation andoperanon experience and (b) evahlate its own and BankCs peiformancz during the evolutionand impicmcntaion af the project, as per section 9.06 (c) of general condition of the DCA.The report consist of four sections. Tle frst section presents MOAS evaluaton on theoveraa performance of the projee- The second section comments on project objecives,d implementation and opcration expenence. Mhe third section evahates its own andBanks peifomianc. FmaUy, the fourth section states some major lessons leamed from theimplementation of the project

Proiect's Overall Assessment

Mhe Agricultural Fxtension - U Project (AEP-1I), which onginaly was a secondphase of IDA support to complete introduction of Training and Visit (T & V) System ofAgulural Exension in the reminig eleven disticts in the Temr became effecwtie inSeptember 1985. It wis restrucred and amended in December 1990 to mclude additionalight Terai and four Hill districts previously covered under Agricultural Extension and

Research Project (AERP) and Hill Food Production Project (HFPP) respectively aftcr theirclosure. Tho Prcject closed on December 31, 1994, after three extension of closing dates,each for one calendar year. The ovrall achievement of the project could be sumunarizedas below:

1.1 Despite the fact that the project could not achieve most of is physical targets of civilwork constructions, procurements of vehicles and equipments, it has significantycontributed to institutional development of MOA's agicultural extension service and7taf'farmcrs trairings, and to strgthening research-exrension linkage and intr-agncies co-ordination to a certain degree. All these have considerably contn-buted toincreases in agicultural production and growth that have occurred over the past yearsin the country.

1.2 The project could provide a basic institutional frame work and significant number ofmanpower for extension services from the center to villages and wards andintroduccd an effecttve systm of extension. However, implcmentation lacked thecxpectations due mainly to management deficicncics and lacuna in quaty manpowerassociated with appropriate technological support. Efforts need to be geared tofurther consolidatc and improve on thems foundaions.

1.3 People's interest in public sector extesion services got heightenedi As a result theaovernment is put into increasing pressure by the people to raise investmcms in

41

extension, and stengLhen it fiurthcr to make it mo responsive to farmers necds,priorities and problems. Prnject activities such as initiation of a farmercenteedgroup approach with Problcm Cersus/Soling tcchniqu m agricultal c=nsion andits contribution to formuiate National Agriculhral Extension Stratey provide a fewexamples.

1.4 Importance of improving rcscarch-extension linkages and co-ordiation with otherrelated azencics (fl-aion. 1n-- sunpy, crca, :naLetimg e=c.) has ocen reaiidand ned to continue ailampms to further strngthen these linkages and co-ordnaionL

1.5 The conccpts of rcgional agricuural trairing centers have been itutionalzedthrugh a regional agciuural aing not work of tranig centers under theDepartment of Agriculture Developmcnt

1.6 Provision of Subject Matter Specialists in Districn Agiculture Dvelopmnt OEcedmining the project period was one of the major strcngths. This has been extended inthe structure of the reorganized district agriculturv devlopment ofesi

1.7 The Project was very much helpful in human resources development at villages andlocal levels. Besides the group leadersfnnbe:rs tho large number of d-aied PLAAsand AAs even after beig rcivd Som their contact sevics are stM contributingsigificantly to Aanzontal tasfer of technology among faimers in the VDCs. Mazy-E-PLAAs and'"As are actively engaged m mobiliwg and providing leadships for

frm=er groups and private production and distribution of agriculture inputs andmarketing of agriculture products.

2. On AsEricultural Extension Proiect El

2.1 Proiect obiectives

In generaL projcmt objectives appear sound. HIowever, the extnsion approach,which was supposed to reorgnize and stengthen tho extension servics on aiustainod basis in the countmy had shalow and temporary foundation. For examplo,on the one hand, the Project mtended to make the then Panchayat Level AgdculturalAuistants (PLAAs) funl time extension workers at village leveL On the other hand,the PLAAs were appoited temporariy on contract wih very low financialremuneration, not commnuranng with their responsi'iwes and work load. ThcsePLAAs complined abour remunration and other facilities avaiable to them.Moreover, in 1990 after the restoration of multiparty democracy, they petitoned thegovernimnt to recognize thum as civil servants, inarease thao remImeraflonconmcsurating with an appropnate leve of ciyll servic cadrc and provde otherreled benefits. As the demand was unffordae, the govcment decided toteminate themn from the contact service. This necessated not only seamcing foran alternative arrangement, but also brought about discomninuadon of fornighltyuri which in tun, led to the cesation of schcduled vit to the farms of contactfaame. Finay, this brought about the and of the T&V approach.

42

2.2 Project comyonqnt/desiM

2.2.1 Agicultural extension

The promision of programmed visits to fazmers from rcgulariy trined feld staffnupporzed by professional advice from Subjcct Matter Specialists was well conceived.However. the project missed to understand that it was diffcult to find well trainedand experienced Subject Mar Specialists in counny such as NepaL As a result,fresh B.Sc. graduatcs with no work experences were hired to the post of SMSs. Asthcy were on temporary recrut1enL }they werc compelled to scarch of permanentjob elsewhere. The countrs research system was also not stong enough to evolhetechnologies on continuous mamer to support to SMSs.

2. 2 The e.xnsion methodology

Making local people ( eight grade completed) PLAAs (full time extension workers)after a one-month long intensive ttaining could not prove to be a sound proposition.On one hand, AEP - 1I intended to professionaize extension service, and on dteother, extension work was left to local people who had completed merely eight yearsof schooling and taken to job on yearly contract service. Though many of the PLAAsdue to thew practical experience wer quit competnt in dimnsination of impletoelmology among fanners but due to their low educational background were unableto grsp complex technology. In addition, they could not be raken into permanentcivil senrice job- As a result, profss on of cxtnsion servie rcmaincd just an*attempt

Due to lack- of sufficient provision of oxientarion and tra.iing to SMSs and fTlJTAs,.b~ extension approach remained "top down' and farmers knowlcdge skill andcapabiities were not adequately addressed. Under the project support farmer -cenered group approach of extension with Problem Census/Solving technique duringtho last two years of project period was consequently introduced.

2.2.3 Monitorin& and evaluadon

- The project design realized the inportance of M&E and stated that under the project,farther monitorng /evaluation surveys would be caxied out on a regular basiscovaing qualty of training programs, dcevlopment of appropriate recomrdationsnreguladity and quality m visits, adoption of recommendation, increased productionand consequent increase in farm incomes and effectiveness of productionoficcrsISMSs. However, M & E could not become regular acd%itics. Weaksupervision and guidance reduced the effetvenss of the extension efforts. Fillingthe vacant posiDon of Senior Agdculual Offic n Regimal Directorates ofAgriculture, and the position of Senior Agriculdral Extenion Ocr (SAEO) aspro-visoned in the Project Appraisad could not materialize. Specifically, SAEOs whowero to monitor, supenise and suppost extension activities could perhaps holps incffective monitoring, whdch somehow remained unaccomplished.

43

3. Evaluation of Proiect Derformance

3.1 H IL formanc

As has been stated earlier, the project missed to achieve many of the physical targetsset in the project appraisaL Not only were then targets rCvisCd, but also project wasrestructured in 1990 to include twelve Terai and HIll districts making it all together23 disricts covered by IDA funded other two projects, Agricultural Extension andRosearch Project (Cr. 1100-NEP) and Hil Food Production Project (Cr. 1101-NEP). The Ifcloimzs were somc cf the factors affecting the peifornznce of theproject, in gen=Ua

3.1.1 As the project was initiated in 1985, it could not remain unaectcd from the tradeemba-go imposed by India during 198S189 and the subsequent policy of the thengovemment which discouraged projects to purchase vehicles such as Minibus andMotorcycles to economize fuel consumpion. Construction of buildingiinfrastructurewas aso haltrd

3.1.2 The project could not function properly during people's movemenr for democracy in1989 and even after the rcstoraton of democracy in 1990 for about a yoar or so asthe counny Was then polticaly disturbed . Besides this, in I99Z the nistry of

dultur undertook a major reorganization, bringng parallel extension services ofed crops and fisheies, horticulture and lvestock under a sinle administratve

managcment of the newly organized Depariment of Agriculture Development(DOAD). Thkv MOA was reorganizod with a view to re-orient it to deal with farmers'reliie. This ro n ad a significant impact on AEP - II and dectlyaffected project operations because of changes in staff positions and o tinalUtenors.

3.1.3 Frequent tumovcr of the Project Co-ordinators hmnpered timely implcmentacion ofproject actWies to certain degrees.

3.1.4 The infrastructures, mainly the buildings constructed by the project at service centersand village level did not match with the needs of the target groups and the new

nization of development of Agricultural Development.

3.1.5 The quality of the civil works was not to the desired standards due to inadequaremonitoring and supevision from the qualified enginees. There was problem oftimly payment for the pnice escalation because of lack of provision in some of thecontactual agreements.

44

Apart from aforementioned facts, tic project had several constraiuts such as the folloing.

1. Procurement under AEP II was slow, largely due to lengthy processing procedures.

2. The Subject Marer Specialists who were the most impor-anr actors for the relevantand responsive extension system, lacked specialized technical capacity and lack ofdiagostic abilty which affected the implementation process.

3. Aftr the establishment of the autonomous agricultural research system in thecoun, rcsearch - extenon iinkages weakenen An NIMO' is in process to be si-gedbetween DOAD ana NARC ro strngthen the extension - research linkage for thefi:ture.

Despite the aforemrntioned constrs and problems, the performance of the project overc last three vears period has been highly satisfactorv and gained outstanding momentum.

During this later part, the project initiated Farmcr Centered Group Approach (FCGA) ofExtension with Problem Census/ Problen Solving (PC/PS) methodology as an appropriatereplacement for the individual contact by the Trairing & Visit (T&V) System in the threepilot districts. Encouraged by the experiences of FCGA and PCOPS in the threc pflotdisticts the approach has alreadv been expanded to six more distrcts.

Th National Aricultural Extension Strategy for future has been developed withconsensus based on the experiences in the pilot districts and Operational Manual on PC/PSha also been fnully drafted. HMGIMOA in future would pursue the approach for furnhersavngthnisng of the'extension serice and consolidate the gauns achieved during past eightyeam of the m of the project.

Thcre was a remarkable success in working with farning community with this approach.but, throe years of its tcnure could not be sufficicnt to test and apply the whole process ofPCPS in thc pilot districts as well as in other districts too.

An Operational Plan of the project has been proposed after its closure to achieve the abovestated objectrves and lIMGN/MOA is following the Operational Plan.

3.2 - Bank's Perfonnance

Iu general, Bank;'s performance during the implenentation of the project was higwsatifactory. The Bank supersed the Project thoroughly and well, and made manyconstructive comments for improvements dusng implemcntation whic-h includedactiities such as iitiation of farmer cente.red group approach (ICGA) and PC/Stccluuque in agricultural extension. Its support for the formulation of NationalAVicultural Extension Strategy was highly appreciated by HMGN.

3.2.1 Supervision and monitoring of project acti-vites were done rcgularly by the WBmison. The missions suggestions and recomnrnendations provided useful guidanceto the implementing agency for improvements.

45

3.2.2 The Bankes contmued support for te project was highly appreciated as agaisseveral problems and constraints with the borrower in the face of the polidcalchanges in the coumty durnng the implementation of the project

3.2.3 The ovcrall credit disbursement was 92 percen which was due to the devaluaionof Nepaleso cunency as aainst US dollars. Otherwise m nerms of Nepaleaccency, the disbursement was at satisfactory leveL

3.2.4 The missions recommendations helped to simplify and improve some of the rigidand traditional bureaucratic rules such as procurement procedures and conveionof temporary project posts to permancnt posts.

4. Lessons learned

4.1. A clar vision/mission for agaculkiral development and its commiment for executinat all levels of governme arte sinequanon before startng a project Any new projectshould be in line with the total agncultural development polcics, objectives andsutraegies so as to uinst et and make project acivities sustanablc even after thu

4.2 The iipleenions and the beneficiaries of the project must be invled to identifythe real nceds during project fonnulariozL

4.3 Oricntation meetngs and workshops of policy makers, implnemors andbeneficianies are very important in the begining of the project so as to obtain allsorts of support and co-operation at different leveL

4.4 Auwnity and responsibiities for project unplementation at differcnt leIels must bespecified. Monitoring plans and measurble indicators should be developed atdifferent levels (vllage, serv:ice center, district, regional, central) and their verificationand feedback by The concerned supervisors are very essenial to strengthen the propernnplemctatiorL

4.5 Provision of TA Team from the donor side within the project secms crucial, if theproject is to achieve its objectives effectively.

4.6 The cxtension approach wil not sustain if it is gromded on shalow and temporaryfoundation.

4.7 It requires dine, expedence and training to produce a 'Subject Matter Specialist4 .

4.8 3Msmatch among vaious componcnts of knowledge system ( rcsarchers, fames,extensiomuts and their organization) will likely make a project "top down".

46

4.9 Untading of local processe of expi on and rmowtioin, andincorponion of indigous knowldge and kldls aro crucial if the project is tooome out for the donant uaecr of wchnogy mode of £ntv=on.

4.10 Providing to mobize entwu vilae level extension works to PLAAsvaout srong suct ma supp rom more qualifid and expericncedpmuonnel was a lmamial sortcomig ia tX project dign.

4.11 Contned support by the Bank would be of great value for firther carrying on theapcullwal developmen through ft instniienr of appropiate projects.

4 7 Appendix 3

-2 His Majesty'b Government Phone 2-15322

2515507

e 4feitrs v ~~~~~~~~~~~~~~~~M;oDstr of Agricl

Ref: < _ CKATHMANIDV NEPALDate ; July 10,1995

5'&b: Amicu1Zu Extcnsion l Proiect lIrrlemen Dtion

Co=pltion &== for Commnert 10 JUl 1995

Mr. Joe MnkkavasagResident Representat&ceThe World BankKatladu.

DearMr Joe,

Thank you for youretcr- datcd lune 26, 1995. Please fnd attached?copy of our

cmments on Ilcmcnlion Completion Report (ICR) of Agicmftul Etension 11

Project (Cr. 1570/.NEP) prepared by FAO/CP.

With Best Regards.

Sincerely Yours

(.L

Joint Sse:rc'ay

C.C. with attachunents:

Mr. S. K1 ShresthaDirector GCncralDOAD, Harihar Bhawan.L

lr. 3. P. BiraolAEP f, Harih-ia Blsawz-

Mr. _ K ShresthaUnder SecretaryMOF, Bgd='bar.

48Appendix 3

COMMENTS ON ITPLEMENTATION CONfPLETION REPORT OFAGRICULTURAL EXTENSION PROJECT II (Cr. 1570-NEP)

49Appendix 3

MOA's Comments on the Lmplementaton Completion Report (Report No. 67/95CP-NEP 51 ICR) of Agricultural Extension Project II ( Cr- 1570/NEP )

This paper presents MOAMs comments on the implermentation completion report No. 67/95 CP-

NEP 51 ICR of the World Bank fimded Agricultral Extension Project IT prepared by FAOICP.

The reporc was sent to the MOA/EMG earlier by the World Bank on 26 June 1995.

The Ministzy of Agiculure, in general, agrees vih most of the findings and recommendations ofthe ICR, however, the Mivlnistry would li;e to bring forth the following issues flither. - -_:

(a) DespiEe that the ICR realzed the possfibe effect of the past poliical sitaton and 1990's civil

unrest on project implementation (article 22), it seemed that the ICR did not take into

account thes issues whie rating the project peformance in terms of achievement of project

objectves, project sustainabiliry and borrower's petformance (Table 1: Surmmary of

Assessments).

(b) The ICR has ovelooked the weakaesses of the extension approach/system (I & V) intenal

to it The report suggested that the AEP did not functon properly and failed to achicve some

of tho physical target. However, the MOA feels that not only the implemcntation of the,

project but also thc systerns shortcomings (e.. T & V system) are equally responsible to

lack iwexpected perfonnance. The ICR has overiooked this fact AS for cxample, replicatingthe Trainng and Vsit system of agiculural exnsion introduced ta 1975-76 in two

imgation command districts (Bara and Parsa) in 1985 w%hour carcful assssment andappropnate modification was a fimdamental shrtomg of tle AEPI LMe wice, theproject was not very clear with the role of agzicukural assistants. Although the idea of

develomng local farmer volhmner leaders as para-professionals was very sound, yet, inpractice, they were trcated not as volunteer local leader but as pardy paid extension agentswhich ultimately trned to be counter productive.

(c) The Misson did not mention the MOAs concern to strengthen and improve agriculturaltrainmg activics. The establishment of the Cental Agdculmal Training Centre (CATC) tomomtor and supervise regonal agrcultural training centers should be viewed from this

pespective. The CATC has been providing not only trainers' training to traines of the

regional taining centers and district offlices, bu; also providing overseas taininag and visit

opportunities to them. The assistance of the CATC ix training materials development andpublication of taners' manual is worth mrnticni,g However, MOA is fully aware of the

50Apnendix 3

nced to further improve tLe quality of taining. The frequent transfer of staff to and from

RATCs has reduced the quality of training. In the futLe the Nfinistry, wiv be careful for notto transfer =AkLers firom RATCs fteuenly.

Ia addiiion to the above, the MtOLA would l;e to note the fobliowng points about thefunctiornng of the AEP II.

1. On management and implementation of the T&V system:

The IOA nores the comamens of rhe management and 'uzplemenmadon of the T&-V systern-. in Nepal and its affect on the pro,ect pz--6onance. The XIlnistr; has realizcd the

shortcongs and weak-nesses in the endsta Sinanc-ial ruls and regulations, so steps hav-e aJreadybeen takecn to amnd such. rulcs and reguladamos that blooked the corstructior: and prc-curement in

time.

2. On monitorin- and evaluation:

Despite that the World Barnk supervision rmissions insisred to estaLlish M&E units and the MIOA

recogized the value of M&E srve; data colectiOnL analysis and evaluation procedures. it wassomething wanting. This is pa'ly'due to Lhe on-going reorganization of tho MOA structure wlhich

was iuitiated together NIth the promulgation of the Basic Needs programe inm 19S7. And therewere sevcral reasons for not appro%ing the position of Serior Agriculrural Extension Officer as

provisioned in the project appraisal In short the need for this position was not fully justified since

Regional Directors in each of the five regions wvera meant to perform the job similar to SAEOs.

3. On research-extension linkage

The Ministry has felt that research-extension luinkges have been weakzned following the granting

of auronomy to national research system and subsequent establishment of Nepal AgriculturalRcsearch Council. The linkages have become wveak- due to thc reorganization of the researchsvstem also. Not only has the Ministry taken this issue se-doushl, but also, the concmrned e-xtnsion

and research establishments at all levels. Heac a workable arrangement-MOU is in the process.

Fimally; the ICR report is fine and useful to improv edistina agricultural exrension system. Of theree importamt findings stated in the ICR (page ti). he Mnisy does not fully aszre with the

statement that inadequate and inappropriato etaining for JTJTTAs and SMSs onrd- has limited their

51kAppendix 3

effecrveness m par,iding the necessaxy support to farmers in. agicuturAl development. indeed,part of the problem lies in trairig, Bu4 part of the problem lies i; the selection and rez2tmeneprocodurcs of the SBS&. On one hand SMSs wcre to be appointed from among fresh graduateswith no specialization in their field of expertise and wo&k On the other hand, project performance

crtirely depended on these temporary' staff. In trms of job responsibilty, they were overestimated.wh:re as. in tems of job security and qualificadon, they were employed temporarily to discharge

duies.

As mentioned in che ICR, the project has changed its course of action over the last three years,made farmers realize the imporunce of improved extension serice. and s-cceeded to dernonstratethe value of problem census/problem solving technique wthi the group approach. In Niewv of this.the mistr- of Agricultae is conminced for initiatin a new project with new vision mission adstructure which would be resDonsive to fame' needs, problems and realitiecs boEh in the theory

And the practico 5u a9asP.

MAP SECTION

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