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Document of
The World Bank
Report No: ICR00003639
IMPLEMENTATION COMPLETION AND RESULTS REPORT
(IDA-43250 TF-90773)
ON A
CREDIT
IN THE AMOUNT OF SDR13.8 MILLION
(US$21.0 MILLION EQUIVALENT)
TO BOSNIA AND HERZEGOVINA
FOR AN
AGRICULTURE AND RURAL DEVELOPMENT PROJECT
December 21, 2016
Agriculture Global Practice
South East Europe Country Unit
Europe and Central Asia Region
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CURRENCY EQUIVALENTS
(Exchange Rate Effective November 28, 2016)
Currency Unit = SDR
1.00 SDR = US$1.35
US$1.00 = 0.74 SDR
FISCAL YEAR
ABBREVIATIONS AND ACRONYMS
APPH Administration of Bosnia and Herzegovina for the Protection of Plant Health
ARDP Agriculture and Rural Development Project
BATA National Accreditation Body
BiH Bosnia and Herzegovina
CAS Country Assistance Strategy
CPF Country Partnership Framework
CSF Classical Swine Fever
EMF Environmental Management Framework
EU European Union
FADN Farm Accountancy Data Network
FBiH Federation of Bosnia and Herzegovina
FSA Food Safety Agency
FY Fiscal Year
GMO Genetically Modified Organism
HACCP Hazard Analysis and Critical Control Points
IPARD Instrument for Pre-Accession Assistance for Rural Development
M&E Monitoring and Evaluation
MAFWM Ministry of Agriculture, Forestry and Water Management
MAWMF Ministry of Agriculture, Water Management and Forestry
MoA Ministry of Agriculture
MoFTER Ministry of Foreign Trade and Economic Relations
MTDS Medium-Term Development Strategy
PCU Project Coordinating Unit
RS Republika Srpska
SAA Stabilization an Association Agreement
SAFRD Sector for Agriculture, Food, Forestry and Rural Development
SIDA Swedish International Development Cooperation Agency
SPIRA Streamlining Permits and Inspection Regimes Activity
SVO State Veterinary Office
SWA Sector Wide Approach
USAID United States Agency for International Development
WTO World Trade Organization
Country Director: Ellen Goldstein
Country Manager: Tatiana Proskuryakova
Senior Global Practice Director: Juergen Voegele
Sector Manager: Julian Lampietti
Project Team Leader: Daniel Gerber
ICR Team Author: Jeren Kabayeva
BOSNIA AND HERZEGOVINA AGRICULTURE AND RURAL DEVELOPMENT PROJECT
CONTENTS
Data Sheet:
A. Basic Information B. Key Dates C. Ratings Summary D. Sector and Theme Codes E. Bank Staff
F. Results Framework Analysis G. Ratings of Project Performance in ISRs
H. Restructuring (if any) I. Disbursement Profile
1. Project Context, Development Objectives and Design ............................................................... 1
2. Key Factors Affecting Implementation and Outcomes .............................................................. 4 3. Assessment of Outcomes .......................................................................................................... 12 4. Assessment of Risk to Development Outcome ......................................................................... 20
5. Assessment of Bank and Borrower Performance ..................................................................... 21 6. Lessons Learned........................................................................................................................ 23
7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners........................... 24
Annex 1. Project Costs and Financing .......................................................................................... 25
Annex 2. Outputs by Component.................................................................................................. 26 Annex 3. Economic and Financial Analysis ................................................................................. 32
Annex 4. Revised Results Framework .......................................................................................... 35 Annex 5. Bank Lending and Implementation Support/Supervision Processes ............................. 40 Annex 6. Beneficiary Survey Results ........................................................................................... 42
Annex 7. Stakeholder Workshop Report and Results ................................................................... 43 Annex 8. Summary of Borrower's ICR and/or Comments on Draft ICR ..................................... 44 Annex 9. Comments of Cofinanciers and Other Partners/Stakeholders ....................................... 46
Annex 10. List of Supporting Documents .................................................................................... 47
MAP
i
BOSNIA AND HERZEGOVINA AGRICULTURE AND RURAL DEVELOPMENT PROJECT
A. Basic Information
Country: Bosnia and Herzegovina Project Name: Agriculture and Rural
Development Project
Project ID: P101213 L/C/TF Number(s): IDA-43250,TF-90773
ICR Date: 10/04/2016 ICR Type: Core ICR
Lending Instrument: SIL Borrower: BOSNIA AND
HERZEGOVINA
Original Total
Commitment: XDR 13.80M Disbursed Amount: XDR 12.69M
Revised Amount: XDR 13.80M
Environmental Category: B
Implementing Agencies:
FBiH MAWMF
RS MAFWM
Cofinanciers and Other External Partners:
B. Key Dates
Process Date Process Original Date Revised / Actual
Date(s)
Concept Review: 12/01/2006 Effectiveness: 02/26/2008 02/26/2008
Appraisal: 04/25/2007 Restructuring(s):
06/16/2010
07/12/2011
04/25/2012
05/21/2013
06/17/2015
Approval: 06/19/2007 Mid-term Review: 10/11/2010 10/11/2009
Closing: 06/30/2012 06/30/2016
C. Ratings Summary
C.1 Performance Rating by ICR
Outcomes: Moderately Unsatisfactory
Risk to Development Outcome: Moderate
Bank Performance: Moderately Unsatisfactory
Borrower Performance: Moderately Unsatisfactory
C.2 Detailed Ratings of Bank and Borrower Performance (by ICR)
Bank Ratings Borrower Ratings
Quality at Entry: Moderately
Unsatisfactory Government:
Moderately
Unsatisfactory
ii
Quality of Supervision: Moderately Satisfactory Implementing
Agency/Agencies: Moderately Satisfactory
Overall Bank
Performance:
Moderately
Unsatisfactory Overall Borrower
Performance:
Moderately
Unsatisfactory
C.3 Quality at Entry and Implementation Performance Indicators
Implementation
Performance Indicators
QAG Assessments (if
any) Rating
Potential Problem Project
at any time (Yes/No): Yes
Quality at Entry
(QEA): None
Problem Project at any time
(Yes/No): Yes
Quality of Supervision
(QSA): None
DO rating before
Closing/Inactive status:
Moderately
Satisfactory
D. Sector and Theme Codes
Original Actual
Sector Code (as % of total Bank financing)
Agricultural extension and research 10 10
Central government administration 24 24
General agriculture, fishing and forestry sector 22 22
Sub-national government administration 44 44
Theme Code (as % of total Bank financing)
Export development and competitiveness 14 14
Regional integration 14 14
Rural markets 14 14
Rural policies and institutions 29 29
Rural services and infrastructure 29 29
E. Bank Staff
Positions At ICR At Approval
Vice President: Cyril E Muller Shigeo Katsu
Country Director: Ellen Goldstein Orsalia Kalantzopoulos
Practice Manager/Manager: Julian A. Lampietti Marjory-Anne Bromhead
Project Team Leader: Daniel P. Gerber Rita E. Cestti
ICR Team Leader: Jeren Kabayeva
ICR Primary Author: Jeren Kabayeva
iii
F. Results Framework Analysis
Project Development Objectives (from Project Appraisal Document) The Project Development Objective is to assist BiH to strengthen the capacity of its State-level and
Entity-level institutions to deliver more efficient and effective agricultural services and support programs
as well as to make a substantial contribution to an acceleration of BiH's eligibility to access support under
the European Union Instrument for Pre-Accession Assistance for Rural Development (IPARD).
Revised Project Development Objectives (as approved by original approving authority) N/A
(a) PDO Indicator(s)
Indicator Baseline Value
Original Target
Values (from
approval
documents)
Formally
Revised
Target Values
Actual Value
Achieved at
Completion or
Target Years
Indicator 1 :
Before restructuring: Sixty percent of disease and pest inspection implemented on the
basis of expected
Value
quantitative or
Qualitative)
Poor understanding of pest
and disease epidemiology.
Little risk based inspection
Sanitary inspection
is 60% risk based
Substantially
achieved, about 70%
of the target value.
See the details in
section 3.2 of the
ICR.
Date achieved 05/23/2007 06/30/2012 06/30/2016
Comments
(incl. %
achievement)
Although this indicator was dropped, it was substantially achieved. FSA, SVO and
APPH provide input at the Entity level and border inspection planning based on risk
assessment, and inspection plans are revised quarterly or more frequently.
Indicator 2 :
After restructuring: Structured disease and pest control system, informed by surveys and
supported by reliable lab diagnostic capacity and databases, are developed, coordinated
and implemented with data sharing at State and Entity level approximating EU
Value
quantitative or
Qualitative)
No systematic disease and
pest control systems for
plants, animals, and
foodstuff in place
Maintain and
monitor situation
through inspection
services, begin risk
targeting of
inspections
Substantially
achieved, about 70%
of the target value.
See the details in
section 3.2 of the
ICR.
Date achieved 07/12/2011 06/30/2016 06/30/2016
Comments
(incl. %
achievement)
A new PDO indicator added after restructuring in July 2011
iv
Indicator 3 :
Before restructuring: Pluralistic, stakeholder driven and outcome-based contracted
extension services operational at the level of each Entity and benefitting 20 percent of
commercial farmers
Value
quantitative or
Qualitative)
Limited public extension
services in the RS and none
in the FBiH. Few public
private extension
partnerships
Stakeholder
managed contracted,
public/private
extension service
reaching 20% of
commercial farmers
Partially achieved,
about 40% of the
target value. See the
details in section 3.2
of the ICR.
Date achieved 05/23/2007 06/30/2012 06/30/2016
Comments
(incl. %
achievement)
Although this indicator was dropped, good progress on extension services was achieved
in the RS.
Indicator 4 :
Registries and databases for the effective management of incentive payments, tracking
sanitary inspection data at Entity level with reporting capacity to State level agencies
and MOFTER are in place approximating EU systems
Value
quantitative or
Qualitative)
No systematic registry and
reporting capacity in place
Link various
registries for Farm
Information System
Substantially
achieved, about 80%
of the target value.
See the details in
section 3.2 of the
ICR.
Date achieved 05/23/2007 06/30/2012 06/30/2016
Comments
(incl. %
achievement)
The links at Entity and State level have been established. The outcome was affected by
the project inability to establish an agreed payment structure.
Indicator 5 :
Before restructuring: One hundred of rural development structural payments made
through harmonized, EU-IPARD compliant institutions and systems at the level of each
Entity
Value
quantitative or
Qualitative)
Un-transparent agricultural
and rural development
support targeting and
administrative procedures.
Poor monitoring and impact
evaluation
Harmonized, EU
IPARD compliant
rural development
structural payments
made at the level of
each Entity
Not achieved. See the
details in section 3.2
of the ICR.
Date achieved 05/23/2007 06/30/2012 06/30/2016
Comments
(incl. %
achievement)
The indicator was dropped after restructuring in July 2011.
Indicator 6 :
After restructuring: Flood rehabilitation grants help communities recover to pre-flood
level of economic
Value Some 15% of community Execution of works Fully achieved. See
v
quantitative or
Qualitative)
assets destroyed
and goods contracts
the details in section
3.2 of the ICR.
Date achieved 07/12/2011 06/30/2016 06/30/2016
Comments
(incl. %
achievement)
This is a new indicator added after restructuring in July 2011 to measure impact of
flood rehabilitation activities.
(b) Intermediate Outcome Indicator(s)
Indicator Baseline Value
Original Target
Values (from
approval
documents)
Formally
Revised Target
Values
Actual Value
Achieved at
Completion or
Target Years
Indicator 1 : A1: State Veterinary Office of BiH implementing effective animal identification system
Value
(quantitative
or Qualitative)
Animal ID only covering
50% of cattle population
Animal
identification: 10%
of cattle and 3% of
small ruminants are
randomly checked
each year
Fully achieved
Date achieved 05/23/2007 06/30/2012 06/30/2016
Comments
(incl. %
achievement)
See the details in Annex 4 of the ICR. Bovines registered and ear tagged by >90%
across the country. Sheep/goats registered and ear tagged by >70% in FBiH and
approximately 25-30% in the RS. The campaign for sheep-goat ear tagging in the RS
was launched.
Indicator 2 : A2: SVO implementing brucellosis and CSF control programs
Value
(quantitative
or Qualitative)
Brucellosis and CSF
epidemiology data outdated.
Limited test and slaughter
program for Brucella
Risk based
inspection
operational.
Brucella incidence
in sheep reduced
30%
Partially achieved,
about 50%
Date achieved 05/23/2007 06/30/2012 06/30/2016
Comments
(incl. %
achievement)
See the details in Annex 4 of the ICR. The animal vaccination in 2015 was completed
and involved at least 75% of total number of target animals. Eradication policy has not
been established and mass preventive vaccination continues.
Indicator 3 : APPH implementing plant health monitoring and risk assessment systems
Value
(quantitative
or Qualitative)
APPH only recently
established and not fully
staffed or operational
Phytosanitary
inspection shifts to
risk mostly based
80% of seed
and plant
material
Fully achieved
vi
inspection system
producers/impo
rters are
registered,
potato pest
survey repeated
yearly
Date achieved 05/23/2007 06/30/2012 06/30/2016
Comments
(incl. %
achievement)
See the details in Annex 4 of the ICR. Potato pest survey ongoing in 2016, now for the
6-th time with funding provided by each entity. The APPH conducts ad-hoc risk
assessment, identifies priorities for enhanced control.
Indicator 4 : A4: APPH develops and implements phytosanitary and plant register database
Value
(quantitative
or Qualitative)
No centralized database for
phytosanitary or plant
production or trade
Link phyto-plant
health registry with
FSA and SVO
databases and
MOFTER farm
information system
Fully achieved (new
indicator)
Date achieved 07/12/2011 06/30/2016 06/30/2016
Comments
(incl. %
achievement)
The APPH operates a phyto register database that include plants and producers as well.
The link is accessible by entity inspections services and Ministries of Agriculture.
Indicator 5 : A5: FSA implementing a risk based food safety system
Value
(quantitative
or Qualitative)
FSA only recently
established and food
regulations and inspection
procedures incomplete
FSA performs at
least 3 risk
assessments and
coordinates a risk
communication
program
Fully achieved
Date achieved 05/23/2007 06/30/2012 06/30/2016
Comments
(incl. %
achievement)
See the details in Annex 4 of the ICR. The FSA conducts a risk assessment for
aflatoxins and phosphates in food, and commissioned a Total Diet study to assess
prevailing nutritional habits and help identify inherent risks.
Indicator 6 :
A6: Entity-level Inspection Directorates are implementing BiH plant health, animal
health and food safety laws and regulations
Value
(quantitative
or Qualitative)
No effective agricultural
inspections undertaken
All Entity
Inspectorate
reporting of food,
animal and plant
health is web-based
Apply risk
based in section
based on
regulations
from FSA, SVO
and APPH
Substantially
achieved, about 75%
vii
Date achieved 05/23/2007 06/30/2012 07/12/2011 06/30/2016
Comments
(incl. %
achievement)
Both Entity Inspectorates operate web-based databases and share data with state-level
agencies. Their IMS systems are not linked. Information is shared on a daily basis
through uploads, but not yet in a real-time manner.
Indicator 7 : A7: FBiH MAWMF/RS MAFWM agricultural information units and databases and
FADN pilot established assembling farm level information.
Value
(quantitative
or Qualitative)
Limited agricultural or farm
level information collected
Pilot FADN
program includes
>300 farmers
Integrate FADN
survey data in
entity MOA
information
system
Partially achieved
(about 50%)
Date achieved 05/23/2007 06/30/2012 07/12/2011 06/30/2016
Comments
(incl. %
achievement)
FADN pilot established in both entities however regular update of database not
maintained in FBiH once responsibility was handed down to cantons. To date in the RS
a total of 128 farms are being surveyed on an annual basis.
Indicator 8 :
A8: WAN linking MOFTER with State level agencies, entity MOAs, and Inspection
services under establishment for AIS
Value
(quantitative
or Qualitative)
No coherent agricultural
information collection at
State level
Begin interface of
various entity level
and State agency
databases for AIS
Fully achieved (new
indicator)
Date achieved 07/12/2011 06/30/2016 06/30/2016
Comments
(incl. %
achievement)
See the details in Annex 4 of the ICR.
Indicator 9 : RS MAFWM/FBiH MAWMF Department for Extension with a multi-stakeholder
governing body established
Value
(quantitative
or Qualitative)
Limited public extension
services in the RS and none
in the FBiH
Extension Boards
manage a
contracted,
pluralistic extension
system
The indicator was
dropped after
restructuring in July
2011
Date achieved 05/23/2007 06/30/2012 06/30/2016
Comments
(incl. %
achievement)
Indicator 10 :
Market and results-oriented Entity extension systems operational and effective in
accordance with clearly defined policy objectives
Value
(quantitative
or Qualitative)
Few public/private
extension partnerships
On-farm extension
delivery primarily
through contracted
The indicator was
dropped after
restructuring in July
viii
private sector and
civil society
extension agent
2011
Date achieved 05/23/2007 06/30/2012 06/30/2016
Comments
(incl. %
achievement)
Indicator 11 :
No of contracted extension/advisory service providers accredited with specific
competencies
Value
(quantitative
or Qualitative)
0
100
The indicator was
dropped after
restructuring in July
2011
Date achieved 05/23/2007 06/30/2012 06/30/2016
Comments
(incl. %
achievement)
Indicator 12 : No of extension packages prepared and disseminated
Value
(quantitative
or Qualitative)
0
50
Date achieved 05/23/2007 06/30/2012 06/30/2016
Comments
(incl. %
achievement)
The indicator was dropped after restructuring in July 2011
Indicator 13 :
No of commercial and semi-subsistence farmers undergoing restructuring and agro-
processors within target group who implement activities directly related to advisory
services extended with Project assistance
Value
(quantitative
or Qualitative)
0
3000
The indicator was
dropped after
restructuring in July
2011
Date achieved 05/23/2007 06/30/2012 06/30/2016
Comments
(incl. %
achievement)
Indicator 14 : B1: Transparency Entity level paying systems established
Value
(quantitative
or Qualitative)
Un-transparent, manual
paying system operating
100% of Entity
payments made
through the
accredited paying
system
Not achieved
ix
Date achieved 05/23/2007 06/30/2012 06/30/2016
Comments
(incl. %
achievement)
All IPARD like Rural Development Grants are made through paying system. A
software application to handle direct payments remains to be developed.
Indicator 15 :
B2: Entity level rural development plans established and overseen by Monitoring
Committees
Value
(quantitative
or Qualitative)
No BIH rural development
plan
Monitoring
Committee
reformulating RD
program based on
M&E report
Partially achieved,
about 50%.
Date achieved 05/23/2007 06/30/2012 06/30/2016
Comments
(incl. %
achievement)
See the details in Annex 4 of the ICR. Both entities have developed their respective
rural development programs and agricultural strategies.
Indicator 16 :
B3: Increase in RD funding and number of grants supporting competitive agriculture
activities
Value
(quantitative
or Qualitative)
Only 10% of agricultural
subsidies are structural
More than 50% of
all payments are
structural
Partially achieved,
about 50%
Date achieved 05/23/2007 06/30/2012 06/30/2016
Comments
(incl. %
achievement)
Approximately 25% of agricultural payments are in structural form, for investments.
Ratio used to be higher before floods in 2014, but it is expected to recover to 50% over
the next couple of years.
Indicator 17 : MOFTER RD payment and registries database and reporting system established
Value
(quantitative
or Qualitative)
No central collation or
reporting of market or
structural payments
MOFTER publishes
a consolidated
report of BiH
market and rural
development
payments
This indicator was
dropped after
restructuring in July
2011
Date achieved 05/23/2007 06/30/2012 06/30/2016
Comments
(incl. %
achievement)
Indicator 18 :
B4: Rehabilitation investments completed before end of construction and farming
season in October, 2011
Value
(quantitative
or Qualitative)
Some 15 of community
assets destroyed
All rehabilitation
completed
Fully achieved (new
indicator)
x
Date achieved 07/12/2011 06/30/2016 06/30/2016
Comments
(incl. %
achievement)
See the details in Annex 4 of the ICR. All rehabilitation completed. It should be noted
that this indicator was achieved before the end of the project, i.e. June 30, 2016 and not
in October 2011.
G. Ratings of Project Performance in ISRs
No. Date ISR
Archived DO IP
Actual Disbursements
(USD millions)
1 09/10/2007 Satisfactory Satisfactory 0.00
2 11/30/2007 Satisfactory Satisfactory 0.00
3 05/29/2008 Satisfactory Satisfactory 0.00
4 12/30/2008 Satisfactory Moderately Satisfactory 1.47
5 08/07/2009 Moderately Satisfactory Moderately Satisfactory 2.85
6 12/02/2009 Moderately Satisfactory Moderately Satisfactory 3.54
7 06/10/2010 Moderately Satisfactory Moderately Unsatisfactory 4.08
8 02/25/2011 Moderately Satisfactory Moderately Unsatisfactory 5.75
9 10/23/2011 Moderately Satisfactory Moderately Unsatisfactory 7.46
10 04/24/2012 Moderately Satisfactory Moderately Satisfactory 9.06
11 11/27/2012 Moderately Satisfactory Moderately Satisfactory 11.54
12 12/30/2012 Moderately Unsatisfactory Moderately Unsatisfactory 12.25
13 06/29/2013 Moderately Satisfactory Satisfactory 13.98
14 01/04/2014 Moderately Satisfactory Satisfactory 15.62
15 07/03/2014 Moderately Satisfactory Moderately Satisfactory 16.17
16 12/22/2014 Moderately Satisfactory Moderately Satisfactory 17.40
17 06/10/2015 Moderately Satisfactory Moderately Satisfactory 17.89
18 09/17/2015 Moderately Satisfactory Moderately Satisfactory 17.89
19 04/27/2016 Moderately Satisfactory Moderately Satisfactory 18.51
H. Restructuring (if any)
Restructuring
Date(s)
Board
Approved PDO
Change
ISR Ratings at
Restructuring
Amount
Disbursed at
Restructuring
in USD millions
Reason for Restructuring & Key
Changes Made DO IP
06/16/2010 MS MU 4.08
To allow disbursement categories
2a, 2b, 5 and 10 that had a
deadline for disbursement of June
30, 2009 to become effective; and
to increase financing percentage of
disbursement categories 7 and 12
from 15% to 85%.
07/12/2011 MS MU 6.96 Restructuring in response to (i)
xi
Restructuring
Date(s)
Board
Approved PDO
Change
ISR Ratings at
Restructuring
Amount
Disbursed at
Restructuring
in USD millions
Reason for Restructuring & Key
Changes Made DO IP
changes in the country priorities in
the pre-EU-accession context; (ii)
implementation issues identified as
part of the Bank’s Implementation
Support Activities; and (iii)
damage rehabilitation needs
pertaining to rural infrastructure
and assets following the severe
floods that hit the country during
the 2010/11 winter season.
Adjustment of the RF to reflect the
changes proposed by the
restructuring, which included (i)
redesign of Sub-component
B3 from formerly “Increasing
investment grants for target
objectives and areas” to
“Financing for flood damage
rehabilitation activities in selected
areas affected by the floods in both
Entities”; and (ii) reallocation of
funding from Sub-component A4
due to delays with implementation
of extension activities, to the flood
damage rehabilitation activities
under Sub-component 3.
04/25/2012 MS MS 9.06
Extension of the Closing Date for
12 months, i.e. from June 30, 2012
to June 30, 2013
05/21/2013 MU MU 13.83
Extension of the Closing Date for
24 months, i.e. from June 30, 2013
to June 30, 2015
06/17/2015 N MS MS 17.89
Extension of the Closing Date for
12 months, i.e. from June 30, 2015
to June 30, 2016
I. Disbursement Profile
xii
1
1. Project Context, Development Objectives and Design
1.1 Context at Appraisal
1. In the early 2000s, Bosnia and Herzegovina (BiH) requested Bank support for an
Agriculture and Rural Development Project to address the challenges and constraints that existed
in the agricultural sector. The sector accounted for 10 percent of Gross Domestic Product (GDP) in
2005 and employed about 21 percent of the total labor force in 2006. The country’s agroclimatic
conditions allowed for a variety of agricultural activities ranging from intensive horticulture in the plains
and lower plateaus, to extensive livestock husbandry in the prealpine and mountainous regions of the
country. About half of the rural population (which accounted about 55 percent of the total population)
depended on crop and livestock production, agriculture and wood processing, fishery and bee-keeping for
employment. Despite comparative advantages - that included the country’s closeness to the European
Union (EU), a moderate continental climate, clean and abundant natural water resources, and abundant
labor – the country remained a net agricultural importer, and the agriculture sector was characterized by
low productivity.
2. Various challenges and constraints negatively impacted the sector’s growth. The main
structural issues faced by the agriculture sector were believed to be underdeveloped rural credit markets
and low investments; the unfavorable structure of agricultural land including multiple small plots;
deteriorating infrastructure in rural areas; and inadequate irrigation. There were critical institutional issues
– both domestically and internationally – which contributed to the poor performance of the agricultural
sector and limited the increase of its competitiveness. These included (i) the underdeveloped capacity for
standardization, certification and food quality control systems; (ii) the fragmented institutional framework
to coordinate and administrate systems that facilitated the introduction of modern technologies and
processing; (iii) the lack of appropriate advisory support services; (iv) weak organization of producers,
both regionally and on commodity lines; (v) weak integration and coordination (between producers,
processors and exports) along the value chains; and (vi) a poor knowledge base.
3. Institutional capacity at the state-level to harmonize, coordinate and monitor agriculture
and forestry policies, legislation and rural development programs was almost non-existing. Public
spending in the agriculture sector was relatively low, highly fragmented and poorly coordinated between
the various levels of government. Agricultural support programs implemented by institutions covered a
range of products and activities, but they were determined on an ad-hoc basis, sending inconsistent
signals to farmers and agro-processors. In addition, there was a lack of accurate and reliable data and
information as a basis for sound planning as well as for decision making process in the agriculture and
forestry sectors. Overcoming the abovementioned constraints called for improved policy formation and
public services support for the sector. In the context of EU integration, BiH’s priority was to move from
the status of a potential candidate to the status of a candidate country to fully utilize the Instrument for
Pre-Accession (IPA). This required (i) the appointment of a Managing Authority responsible for rural
development with the oversight of a Monitoring Committee, (ii) setting up of a paying system for rural
development, (iii) collection of reliable statistical information, and (iv) the formulation of a National
Agriculture and Rural Development Plan.
1.2 Original Project Development Objectives (PDO) and Key Indicators
4. The Project Development Objective (PDO) is to assist BiH to strengthen the capacity of its State-
level and Entity-level institutions to deliver more efficient and effective agricultural services and support
2
programs as well as to make a substantial contribution to an acceleration of BiH's eligibility to access
support under the EU Instrument for Pre-Accession Assistance for Rural Development (IPARD).
5. Key outcome indicators at appraisal included:
60 percent of disease and pest inspections implemented on the basis of expected risks;
Pluralistic, stakeholder driven and outcome based contracted extension services operational at the
level of each Entity and benefiting 20 percent of commercial farmers;
100 percent of rural development structural payments made through harmonized, EU IPARD
compliant institutions and systems at the level of each Entity.
6. Key output indicators at appraisal included:
Veterinary Office of BiH implementing effective animal identification system encompassing 70
percent of cattle, swine and small ruminants;
Classical Swine Fever (CSF) test and slaughter program established and incidence of brucellosis
reduced by 30 percent;
Administration of BiH for the Protection of Plant Health implementing plant health monitoring
and risk assessment systems;
Food Safety Agency of BiH implementing a risk based food safety system;
Entity-level Directorates effectively implementing BH plant health, animal health and food
safety laws and regulations
Entity-level Agricultural Information Units established and assembling Farm Accountancy Data
Network (FADN) information from 300 farms;
Entity-level Department for Extension with a multi-stakeholder governing body established and
approved CY2010 Entity extension work plan and budget;
At least 100 of contracted extension/advisory service providers accredited with specific
competencies implementing at least 50 outcome-based extension contracts;
Entity-level farm and entitlement registries and Paying Systems established and accredited by the
World Bank to disburse project funds;
EU IPARD compliant rural development plans established and overseen by effective Monitoring
Committees;
50 percent of agriculture and rural development funding used for structural payments through a
World Bank accredited paying system in each Entity;
100 percent of project funds disbursed according to plan, timely and accurate completion of all
annual operating, training and procurement plans;
Beneficiary surveys indicate 50 percent awareness of Project and overall satisfaction with Project
activities.
1.3 Revised PDO (as approved by original approving authority) and Key Indicators, and
reasons/justification
7. There were no changes to the PDO. However, the Results Framework was substantially modified
through the restructuring in July 2011. This was to reflect the changes in indicators required due to (i) the
conversion of sub-component B.3. “Increasing investment grants for target objectives and areas” for
“Financing for flood damage rehabilitation activities in selected areas affected by the floods in both
Entities”; and (ii) the lack of support for the state level structures for the paying system and more
adequate reflection of activities related to the State Veterinary Office (SVO), Administration for the
Protection of Plant Health (APPH) and Food Safety Agency (FSA). In total, US$6.5 million (or around 30
3
percent of the total IDA envelope) was re-allocated towards the flood damage rehabilitation activities. See
the ICR Datasheet for more details and Annex 4 with the revised list of indicators.
1.4 Main Beneficiaries
8. Primary beneficiaries comprised a number of institutions and agencies. At the State-level, they
included the BiH Ministry of Foreign Trade and Economic Relations (including the Sector for Agriculture,
Food, Forestry and Rural Development), State Veterinary Office of BiH (SVO), Administration of BiH
for the Protection of Plant Health (APPH) and Food Safety Agency of BiH (FSA). At the level of the
Federation of Bosnia and Herzegovina (FBiH), they comprised FBiH Ministry of Agriculture, Water
Management and Forestry (including the Rural Development and Extension Services Department and
Payment System Department) and FBiH Inspection Directorate. At the level of the Republika Srpska (RS),
the beneficiary institutions and agencies were RS Ministry of Agriculture, Forestry and Water
Management (including RS Agriculture Department and RS Agricultural Payments Agency), RS Agency
for Agricultural Extension Services (later renamed as Extension Services Department), and RS Inspection
Directorate. Secondary beneficiaries included: local farmers, agricultural producers and agricultural
associations, representatives of regional development agencies, representatives from the chambers of
commerce and other non-governmental organizations in RS and FBiH as well as Municipalities.
1.5 Original Components
9. The approved project components were:
Component A: Agricultural Information and Institutional Capacity Building (total cost US$17.31
million out of which SDR5.94 million -or US$9.04 million equivalent- financed by IDA; US$2.30
million financed by SIDA; and US$5.97 million financed by the BiH counterparts). This component
aimed to support the Entity-level Ministries of Agriculture as well as the various State-level agencies
serving both Entities to fulfil their respective mandates as planning and policy making institutions. A key
objective was the harmonization of the various activities and functions at the level of both Entities to
facilitate the consolidation of State-level systems as and when such opportunity arises. This Component
comprised of the following sub-components: (A1) Improving agricultural information systems; (A2)
Strengthening veterinary, food safety and plant health protection; (A3) Strengthening inspectorate
capacity; and (A4) Strengthening agricultural advisory services.
Component B: Enhanced Agriculture and Rural Development Support Program (total cost US$17.47
million, out of which SDR7.11 million -or US$10.83 million equivalent- financed by IDA; US$3.70
million financed by SIDA and US$2.94 million financed by the BiH counterparts). The 2006 budgets of
the two Entities included about EUR13.4 million for FBiH and EUR18.6 million for the RS for
agricultural support programs, and these figures were set to increase in the next few years. This
Component aimed to provide assistance to address those constraints through the following sub-
components: (B1) Strengthening rural development program planning and coordination; (B2)
Strengthening the systems for providing rural development payments; (B3) Increasing investment grants
for target objectives and areas.
Component C: Project Coordination, Administration and Monitoring (total cost: US$1.41 million, out
of which SDR0.75 million -or US$1.13 million equivalent- and US$0.28 million financed by the BiH
counterparts). This component aimed to build capacity within the FBiH Ministry of Agriculture Water
Management and Forestry (MoAWMF) and the RS MoAFWM and within the Sector for Agriculture,
Food, Forestry and Rural Development (SAFRD) under the MoFTER to coordinate, administrate, monitor
4
and evaluate the Project. It also supported the establishment of the Project Coordination Units (PCUs)
within MoFTER, FBiH MoAWMF and RS MoAFWM.
1.6 Revised Components
10. The project components were not revised, but following the restructuring in July 2011 sub-
component B3 was changed from “Increasing investment grants for target objectives and areas” to
“Financing for flood damage rehabilitation activities in selected areas affected by the floods in both
Entities” (see details of this restructuring below).
1.7 Other significant changes
11. In June 2010, the project was restructured to introduce two changes in the Disbursement
Categories of the Financing Agreement, i.e. (i) to extend the deadline for disbursement categories 2a, 2b,
5 and 10 to be able to disburse the remaining funds in these categories; the funds were not disbursed prior
to the deadline of June 30, 2009 due to delayed effectiveness of the project; and, (ii) to increase the
financing percentage of disbursement categories 7 and 12 from 50 percent to 85 percent to synchronize
this percentage with the linked Swedish International Development Corporation Agency (SIDA) Co-
financing TF090773 that already financed the mentioned categories at 85 percent.
12. Following severe floods that hit the country during the 2010/11 winter season, the project was
restructured in July 2011 to (i) re-design sub-component B3 from “Increasing investment grants for target
objectives and areas” to “Financing for flood damage rehabilitation activities in selected areas affected by
the floods in both Entities”; (ii) re-allocate funding from sub-component A4 due to delays with
implementation of extension activities, to the flood damage rehabilitation activities under sub-component
B3; and (iii) revise the Results Framework and Monitoring to reflect the changes above and to adjust
targets given lack of progress in establishing the administration of the payment system at State level and
the agreement on a centralized payment authority and policy. In total, US$6.5 million (or around 30
percent of the total IDA envelope) was re-allocated towards the flood damage rehabilitation activities.
13. There were three extensions of this project. The first occurred in April 2012 and was for a period
of 12 months. The second occurred in May 2013 and was for a period of 24 months, while the third one
was in June 2015 for a period of 12 months. Cumulatively, the project received a 4-year extension from
the original Closing Date of June 30, 2012.
2. Key Factors Affecting Implementation and Outcomes
2.1 Project Preparation, Design and Quality at Entry
14. The project was prepared at a time when the country had substantially recovered from the
physical loss and destruction after the war (1991-1995), and was optimistic about the prospect of
EU accession. The Dayton agreement had been effective in bringing peace and had been able to establish
institutions that could gradually provide the political direction in the country. This achievement was
possible despite the much decentralized governance structure composed of two Entities (FBiH and RS),
one of which (the FBiH) was further decentralized into ten cantons. However, reaching agreement over
the joint institutions remained politically controversial. The project design took note of this reality and
focused its efforts on the relevant Entity and the State level institutions.
5
15. The project was designed to help BiH with the EU and World Trade Organization (WTO)
accession and to address long-term needs for the sector that had not been covered by the Bank, EU
and other donors in the past. While two previous Bank-supported operations in the country’s
agricultural sector1 focused on emergency interventions to stabilize the sector from the effects of war, and
on developing marketing chains and improving access to agricultural credit, the Agriculture and Rural
Development Project (ARDP) was driven by its long-term development goals such as modernizing the
national agricultural research, food safety and extension systems, and harmonizing BiH’s policies and
institutions in line with the accession requirements. The ARDP design was consistent with the Entity-
level strategies for agriculture (and rural development) and the BiH’s Medium-Term Development
Strategy (MTDS), which aimed at enhancing the contribution of agriculture and rural development to
overall economic growth and poverty reduction. The project also contributed to two of the key pillars of
the Country Partnership Strategy (CPS) for the period of FY2008-2011: (i) job creation through expanded
and better targeted investments in the agriculture and rural non-farm economies, and (ii) improving public
services, including sanitary and phytosanitary protection, business inspection, farm advisory and payment
systems, under the overreaching theme of EU accession.
16. A number of alternatives were considered during the project preparation. Considerations
were given to: (i) a programmatic approach to address the remaining issues, including the outstanding
forestry agenda, affecting rural development in BiH, and (ii) an adoption of a Sector Wide Approach
(SWA). Both options were rejected due to the lack of a unified agriculture and rural development strategy
and action plan, the absence of a common policy framework, and the presence of a complex
administrative structure. Considering the lack of agreement about the level of authority to be granted at
the state-level, the project focused on strengthening and harmonizing both the State and Entity-level
capacity, as well as their programs and reporting systems to facilitate further integration between relevant
Entity and the State-level institutions.
17. This project was part of a series of Bank-funded projects that were prepared in nearly each
of the countries in the Balkan region to help with reforming institutions approximating EU
accession requirements. All these projects provided substantial support to institutions responsible for
food safety, animal health, plant health and capacity building of Ministries of Agriculture with registers,
databases and information necessary for transparent subsidy payment management approximating EU
requirements.
18. The project design reflected lessons from the experience of the Bank and other donors in
agricultural support projects in BiH and other EU accession countries. These included: (i) support
driven by private sector interest to be provided by the private sector; (ii) implementation to be done by
existing institutions; (iii) improved food quality requiring capacity building efforts in both the public and
private sectors; (iv) introduction of new programs adding complexity; and (v) sufficient beneficiary
demand and absorption capacity facilitating an effective and efficient disbursement of EU rural
development support funds in the pre-accession period. The project design was also informed by the
experiences gained from the Bank-financed Emergency Farm Reconstruction Project and Small Scale
Commercial Agriculture Project. Both of these projects focused on supporting farmers and producers at
the grassroots level and did not attempt broader policy or institutional reforms. The ARDP, in turn, was
expected to address weak public services. Finally, the project design benefitted from being prepared
shortly after a similar project in Croatia, and in parallel with similar projects in Serbia and Macedonia that
had very similar aims as mentioned in the paragraph above.
1 An Emergency Farm Reconstruction Project approved in March 1996 and a Small Scale Commercial Agriculture Development
Project approved in March 2003.
6
19. The project team ensured complementarity with the EU and other donors’ supported
activities through active participation in the EU-led Donor Coordination Group for the
Agricultural Sector in the formulation of a national agriculture and rural development strategy and
action plan. At project entry, the following specific agreements were made among the donors:
The ARDP would support the EU’s ongoing activity related to drafting of a State Agriculture Law
and a national agriculture and rural development strategy. The objective of this effort was a more
harmonized development approach across both Entities, with the State level institutions playing a
significant coordinating role. In this regard, the project would contribute to this activity by (i)
strengthening the state agencies for food safety and veterinary and plant health protection; (ii)
supporting a harmonized approach to agricultural services development at the Entity-level, and
building capacity at the State level for monitoring and reporting rural development information.
The ARDP would adhere to the three EU initiatives for agriculture and rural development,
including (i) support to implementation and enforcement of the BiH food legislation; (ii) support
to strengthening and harmonizing BiH’s agriculture and rural sector information system; and (iii)
pilot support to rural development programming in BiH.
While supporting the database management and risk assessment and mitigation, the ARDP would
complement the twinning project financed by the EU. Specifically, the project would work with
the German Technical Cooperation Agency (GTZ) along with the Bavarian Inspection services
that signed an agreement with the SVO on supporting inspection services.
The ARDP would complement the USAID-funded Streamlining Permits and Inspection Regimes
Activity (SPIRA) Project, which supported the agricultural sector with reforms in the area of food
safety, particularly in rationalizing inspection to strengthen the business environment.
20. The Swedish International Development Corporation Agency (SIDA), a key partner in BiH,
collaborated closely in project design/preparation. While the ARDP mainly supported investments in
State- and Entity-level food safety institutions and laboratories, SIDA provided grant funds of SEK$41.16
million (which became effective on October 14, 2008) to co-finance technical assistance and training
activities. Specifically, SIDA focused on training of staff in these institutions, including: (i) increasing
capacity of the national accreditation body (BATA); and (ii) supporting the FSA staff in drafting laws and
regulations; and providing the hazard analysis and critical control points (HACCP) training for the FSA
staff, industry representatives and inspection services. In addition, the SIDA program supported the
drafting and implementation of Laws and Rulebooks. Substantial SIDA resources were also allocated for
the rural development grants financing, however following the restructuring in July 2011, they were re-
allocated to the flood rehabilitation activities.
21. The project was prepared in close consultation with the broad spectrum of stakeholders.
The ARDP preparation team held several meetings with agricultural producers, agricultural associations,
representatives of regional development agencies, representatives from the chambers of commerce, and
other nongovernmental organizations in the RS and the FBiH. All groups voiced one common concern
over the difficulty for the government in determining appropriate interlocutors among the various
associations given the lack of a unified voice or representational mechanisms. A rural forum was
proposed to be included in the projects as a means to foster dialogue between the government and the
various producer associations on agriculture and rural development issues.
22. Although most critical risks and related mitigation measures were clearly assessed during
the design phase, a few were underestimated. The project ambitiously aimed at promoting institutional
7
changes in the country with a complex government structure2 comprised of a Council of Ministers at the
State level, and two Entities holding considerable powers over budgeting and resources allocation. The
assumption that harmonization of the project activities would only be challenged by cantonal objections
was overly optimistic. Ultimately, the major risks that affected the project implementation and delayed
some of its activities included: (i) fragmentation and lack of coherent vision in the Entities that posed
greater challenges due to inability by the Entities to adopt an extension law for years; (ii) challenges with
getting inspection services at the Entity and cantonal levels to establish a uniform inspection IT system;
and, (iii) extensive differences in Entities’ institutional policies to determine bodies with national
reference capacities located on their respective territories, including the agreement on the location of
livestock registration, Genetically Modified Organisms (GMO) testing capacity, and the network of
reference. Further, three project risks that were related to the implementation of the rural development
grants program did not materialize as the program was never launched. Finally, the risk of limited
institutional and human capacity that could slow or constrain implementation of the project was
adequately rated High as these two constraints contributed considerably to the delays and inefficiencies
during project implementation.
23. The PDO was broadly defined. The project development objective, i.e. “to assist BiH to
strengthen the capacity of its State-level and Entity-level institutions to deliver more efficient and
effective agricultural services and support programs as well as to make a substantial contribution to an
acceleration of BiH's eligibility to access support under the European Union Instrument for Pre-Accession
Assistance for Rural Development (IPARD)” was broad. The selected key PDO indicators clarified this
ambiguity to some extent, but there seem to be only a few factors (among many others) that could
contribute to the achievement of this PDO. On the other hand, the list of intermediate indicators was
exhaustive and covered most aspects of the PDO and components. The project could have benefitted from
a stronger Theory of Change at design stage to ensure that the PDO was not overly ambitious, and was
matched by proper PDO indicators and outcomes.
24. Proper assessment of baseline values individually for each Entity could have informed
better design of activities. Brief and generic descriptions of baseline values provided in the Results
Framework provided limited idea of ex-ante situation in each entity. Since progress on project activities
varied for each entity during project implementation (e.g. with more serious delays in launching extension
activities in the FBiH due to lack of relevant legislation), an adequate presentation of baseline values at
the onset of the project could have helped the team effectively tailor project activities for each Entity and
minimize some of the delays.
2.2 Implementation
25. The project was implemented within a complex institutional structure. Institutionally, the
project was complicated not only due to a large number of public agencies involved in the project, but
also due to the two Entities functioning as two parallel projects. There were two Ministries of Agriculture,
Water Management and Forestry at entity level with only an incipient ministry at the national level.
Further, in the FBiH, there were 10 cantons and cantonal ministries which also had responsibility for
agriculture. In the absence of a national agricultural ministry, an agricultural department supported with
EU funds was established within the MoFTER, as the nucleus for the future agricultural ministry. Finally,
2 The Dayton Peace Agreement of 1995 created a governance structure which involves a Council of Ministers at the state level
and two Entities: the Federation of Bosnia and Herzegovina and Republika Srpska, with FBiH further divided into ten cantons.
Brcko District was later added to the BiH governance structure.
8
there were three common national-level food institutions: the State Veterinary Office, the Plant Health
Administration, and the Food Safety Agency.
26. The change in the country’s mood towards EU accession accompanied by the institutional
confusion and lack of vision for sharing of responsibilities between the State and Entities hampered
the implementation of the ARDP. While BiH was eager to move from the current status of a potential
candidate country to the status of a candidate country at the design stage, this prevalent enthusiasm
vanished during the project implementation. Following signing the Stabilization and Association
Agreement (SAA) with the EU in 2008, the country’s path to EU accession has stalled. The key factor
was the failure of the main political representatives to reach consensus on how political authority and
even administrative competencies should be arranged to ensure continued progress towards the EU and to
create conditions for the country’s sustainable economic development. The strong push to build state level
bodies left the institutions at the level of Entities in somewhat of a limbo uncertain of what their mandates
were and how decision making would be organized.
27. The Bank’s role was complementary to the EU. Since various donors (with EU being the
largest) were supporting the sector and influencing its policies, the project took an opportunistic approach
to close gaps that EU and other donors did not finance. Regular donor coordination meetings were held
whenever the supervision team visited the country to discuss progress on project interventions to avoid
duplication and maximize complementarity. Therefore, the project’s successful results were possible
thanks to joint donor efforts to support the country’s sector.
28. Overall, project implementation was mostly considered Moderately Satisfactory (MS) with
a few Moderately Unsatisfactory (MU) ratings. At the Mid-Term Review (MTR) in June 2010, the
implementation progress (IP) rating was rated MU due to the low disbursement rate (30 percent) and
accumulated delays in implementation of activities related to plant health and phytosanitary services,
extension services, harmonization of rural development planning and payment systems. The delays at
APPH were caused by lack of staffing, hiring of which had to be put on hold due to the budgetary crisis at
the Institute. Furthermore, half way through the project, it was clear that given the political complexity of
reaching agreement on a single paying system and rural development program, the two EC’s requirements
to establish a joint Rural Development Grants Program and Payment system could not be met. The IP
rating was upgraded to MS in April 2012 as performance under the plant health and phytosanitary
services sub-component improved, the Rural Development Grants program and extension activities (the
weakest sub-components) were discontinued, and the project resources were reallocated to support
rehabilitation needs following the severe floods that hit the country during the 2010/11 winter season.
29. Although project suffered from a slow start and low disbursement up to the MTR stage, its
implementation accelerated after project went through a few rounds of restructuring and
extensions, and it was almost fully disbursed (92 percent) at project closing. In December 2012, both
PDO and IP ratings were again downgraded to MU due to: (i) unresolved issue of data sharing between
Entities and State-level institutions, as well as the FSA and the MoFTER; (ii) failure by the MoFTER to
secure resources for adequate maintenance of IT infrastructure provided by the project, and staffing to
operate it; and (iii) low disbursement rate (around 60 percent) with only seven months remaining before
project closure. The PDO rating was upgraded to MS and IP rating to Satisfactory in June 2013 following
the extension of the project’s closing date for an additional two years, which allowed completion of
outstanding activities.
30. The project Results Framework was substantially modified following the restructuring in
July 2011. The project was restructured in response to: (i) changes in the country priorities in the pre-EU-
accession context; (ii) implementation issues identified as part of the Bank’s Implementation Support
Activities; and (iii) damage rehabilitation needs pertaining to rural infrastructure and assets following the
9
severe floods that hit the country during the 2010/11 winter season. The RF was adjusted to reflect the
changes proposed by the restructuring, which included: (i) redesign of Sub-component B3 from formerly
“Increasing investment grants for target objectives and areas” to “Financing for flood damage
rehabilitation activities in selected areas affected by the floods in both Entities”; and (ii) reallocation of
funding from Sub-component A4 due to delays with implementation of extension activities, to the flood
damage rehabilitation activities under Sub-component 3. As a result, (i) three key PDO indicators were
replaced with three new ones; (ii) six intermediate indicators were dropped; and three intermediate
indicators were newly added; and (iii) six intermediate indicators were revised. The full list of revised
indicators is provided in Annex 4.
31. Cumulatively, the project received a four year extension to address various delays during
its implementation. In April 2012, the project was restructured to extend the Closing Date for 12 months,
i.e. from June 30, 2012 to June 30, 2013 to permit the completion of many activities that were delayed in
part due to the difficulties in getting agreement by all stakeholders on their mandates, structure of data
exchange, and ownership. In May 2013, the project was restructured to extend the Closing Date for 24
months, i.e. from June 30, 2013 to June 30, 2015 in view of delays with construction of laboratories and
certification process. Finally, in June 2015 the project was restructured to extend the Closing Date for
another extension for 12 months, i.e. from June 2015 to June 30, 2016, to complete a compatible payment
system in both RS and FBiH for agricultural subsidies. The last extension was also seen as an opportunity
for the Bank to maintain engagement in the agricultural sector with a new government (elected in April
2015), and to preserve client capacity on priorities for agriculture and rural development in the newly
prepared Country Partnership Framework.
32. Persistent legal ambiguity and lack of institutional capacity in the food safety sector,
specifically in the SVO and FSA were a challenge during project implementation. They led to
duplicating and overlapping and sometime to conflicting initiatives that hindered planning and monitoring
arrangements, and undermined the optimal utilization of resources. The Food Safety Information system
for the FSA was dropped due to the difficulties related to ownership of data among the various
stakeholder institutions notably at Entity level where food operator registration was already taking place
by the respective Ministries of agriculture and monitored by entity inspection services. Ultimately, the
FSA opted to reallocate these resources to the Butmir faculty of the Agricultural Institute in Sarajevo. The
faculty, which had already received significant investments from the Federation in the past, was expected
to house the risk assessment capacity of the FSA. This decision was also in line with discussions and
agreements at the Council of Ministers to modify legislation related to the Food Safety Agency to focus
its efforts mainly towards risk assessment and analysis while the State Veterinary office and Plant Health
and Phytosanitary Agency would take on a more direct role in ensuring food safety and interfacing Entity
inspection services.
33. The project supported the country’s capacity for GMO testing, and at appraisal the
Agricultural Institute in Banja Luka had been initially identified as the competent lab for this
function, but it was later dropped. During project implementation a competing proposal emerged from
the laboratory serving the forensic research to identify war crimes in Sarajevo. Ultimately, the Bank and
project coordinators agreed to split the resources that supported GMO testing between both facilities. A
series of events led to cancellation of project activities at the Banja Luka Agricultural Institute and
laboratory facilities. Initially, there was a one year delay in commencement of works in this Institute due
to lengthy resolution of the Bank’s resettlement policy OP 4.12.3 Later, following the subsequent
budgetary situation resulting from the floods in 2010/11, the decision was made not to reconstruct the
3 It was triggered after the project learned about two households residing in close proximity to the Institute. They were eventually
relocated to an apartment that was found in coordination with the social services and support of the city Banja Luka.
10
Institute as part of this project, but instead to support its reconstruction in a future Bank-supported project.
Despite being selected at inception to perform the GMO function, and still playing a key role as a
reference laboratory for plant based testing, the Agricultural Institute in Banja Luka was not accredited
for GMO testing, while the Sarajevo forensic Laboratory received the GMO testing accreditation.
34. Harmonization of State level Agencies legislation with Entity Legislation was delayed. Since
its inception, the project suffered from lack of clarity in some of the institutional changes related to the
conflicting mandates and authority at each government level and between the various agencies at each
level of government (State, Entity, Cantonal and Municipal functions). A full-fledged effort between the
State and Entities on legislation pertaining to Agriculture, Food Veterinary services to harmonize state
level agencies legislation with entity legislation began in spring 2013, however the process was
suspended for several years. It has only been recently revisited by both Entities and State within the
context of the determining the coordination mechanism that is part of the reform agenda.
35. Inability or lack of support by respective Ministries to address the declining schedule of cost
sharing for wage payments caused delays and undermined capacity building. There were concerns
over the substantive use of project consultants for the tasks outside of their agreed terms of reference; this
practice had particularly negative effects on the establishment and development of a functional FBiH
MAWMF Rural Development Department. Absorption of consulting positions by the civil service was
not always successful. This inability to regularize consultants into the public service led to collapse of the
FADN in Federation as there was none to survey farmers and coordinate efforts with cantonal extension
services to maintain the pilot activity.
36. The project managed to achieve impressive results in improving the quality of services
provided by the key sectoral agencies despite the range of challenges during design and
implementation. Specifically, the project strengthened capacity of the State-level agencies for veterinary
services, plant health and phytosanitary services, and food safety. In addition, inspection services were
improved, and good progress was made in the implementation of farm and client register, and livestock
identification and registration systems. However legal frameworks clarifying mandates between agencies
at State and Entity level still need harmonizing for systems to become functional and to comply with
international and EU requirements. Finally, the Entities’ policy framework was improved by adoption of
the Federation's Medium-term Development Strategy of the Agricultural Sector for 2015–2019, and of the
Strategic plan for development of agricultural and rural areas of Republika Srpska for 2016-2020. Other
project positive results are provided in detail in Annex 2.
2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization
37. M&E Design: The project development objective was broad. The project could have
benefitted from a stronger Theory of Change to ensure that the PDO was not overly ambitious, and was
matched by proper PDO indicators and outcomes. The selected key PDO indicators clarified this
ambiguity to some extent, but there seem to be only a few factors (among many others) that could
contribute to the achievement of this PDO. However, the list of intermediate indicators was exhaustive
and covered most aspects of the PDO and components. Finally, the baseline data was of questionable
quality mainly because it had been based on a vague explanation of an “ex ante” situation in the two
Entities, and without a proper consideration of differences in institutional methodologies and policies
between the Entities.
38. Implementation: Results Framework indicators were consistently used to measure project
progress throughout implementation in the semi-annual progress reports and Bank’s
Implementation Status and Results Reports (ISRs). Following the restructuring in July 2011, grants
11
program and extension activities were dropped due to implementation delays, and a new flood damage
rehabilitation activity was added instead. Consequently, the Results Framework was substantially
modified to reflect these changes. As a result, the following changes were made: (i) three key PDO
indicators were replaced with three new ones; (ii) six intermediate indicators were dropped; and three
intermediate indicators were newly added; and (iii) six intermediate indicators were revised. This
restructuring allowed the upgrade of the ratings of IP and PDO achievement from MU to MS. However,
in view of such substantial changes to the initial project design (cancellation of key project activities, and
consequent re-directing of 30 percent of funding) and PDO indicators, this restructuring was not used to
also revise the broad PDO. The team believed that conversion of the rural grants program into to flood
rehabilitation activities contributed to the objective to improve agricultural services. While a number of
indicators have been substantially achieved, it is still difficult to link that achievement with the broadly
defined objective of the project.
39. Utilization: The M&E of the various activities under the project was coordinated among the
Entity-level Ministries of Agriculture and the MoFTER. An M&E Specialist was recruited to work
under the MoFTER-PCU and was in charge of updating the Results Framework on a semi-annual basis.
The specialist compiled all the information obtained from the Entities and presented the data in six
monthly reports shared with the MoFTER, the FBiH MoAWMF, the RS MoAFWM, and the World Bank.
This information was reviewed and confirmed by regular World Bank supervision missions. No MTR
Progress Report and final Project Beneficiary Survey were produced by the Beneficiary, and the Bank
team did not follow-up with the Beneficiary regarding these reports.
2.4 Safeguard and Fiduciary Compliance
40. Environmental Safeguards (OP 4.01): The Project was qualified for Categories B and C.
Activities under Component A were expected to have environmental implications including
rehabilitation/refurbishing of laboratory facilities and disposal of laboratory waste. In accordance with the
Bank’s Operational Policy, this required an Environmental Management Framework (EMF) and the
accompanying Environmental Management Plan. Supervision missions were carried out regularly and
confirmed that adequate mitigation measures were implemented. The project produced additional
environmental benefits. It provided training for laboratory personnel and thus contributed to increased
environmental safety of existing laboratories. For the purposes activities on flood damage, an EMP was
prepared with disclosure and consultations prior to start of works.
41. Pest Management (OP 4.09): The EMF considered the relevance of the pest management
operational policy and identified measures to mitigate possible environmental impacts associated with the
strengthening of extension services in case they encouraged the increased use of pesticides. There were no
issues of non-compliance with this safeguard policy during project implementation.
42. Social safeguards (OP 4.12): During project preparation, social safeguards were not triggered as
envisaged activities did not require land acquisition or involuntary resettlement. However, during project
implementation, the project had to deal with the relocation of the two households from the premises of the
Agricultural Institute in Banja Luka. During the mission visit in April 2011, the team learned about the
building adjacent to the laboratory. After the Bank team received the necessary documentation confirming
the status of the tenants’ ownership rights over the apartment adjacent to the laboratory, as well as
confirmation that the bio-safety certificate for the site would allow for residence in close vicinity, the
Regional Safeguards Advisor (RSA) concluded that no further action was necessary. In coordination with
the Ministry of Health and Social Affairs, an apartment was found in the city of Banja Luka for these
residents. Both residents signed the document that had been developed in collaboration with the RSA
under which relocation took place without triggering the Bank resettlement policy OP4.12.
12
43. Financial Management: The PCUs in both entities carried financial management responsibilities
in a satisfactory manner. Quarterly financial reports were prepared and submitted on time, providing
reliable financial information. The financial statements were regularly audited by independent auditors,
resulting in unqualified opinions.
44. Procurement: Procurement was carried out in line with the applicable Procurement and
consultant Guidelines, in a diligent, professional and timely manner. There were no deviations from the
agreed provisions during the process. Procurement filing was also good. All documentation related to
each procurement procedure was duly filed and readily available. Most of the contracts were implemented
on time. The project team and the Procurement Specialist properly managed the procurement process and
contract implementation, as well as the recording of processes and file maintenance. The project benefited
from experienced project coordination bodies that have worked with Bank financed projects for years and
were well versed in Bank procedures. In the later stages of the project they alerted the Bank of a case of
suspected collusion. The case was investigated and while inconsistencies of testimony were identified,
INT closed the case without sanctioning any of the suppliers named, but it illustrated the effectiveness of
the fiduciary functions performed by both coordination Units.
2.5 Post-completion Operation/Next Phase
45. The systems and institutions that were developed and strengthened under the project, even
in their somewhat incomplete shape, are important to BiH’s progression to eventual EU and WTO
accession and will serve to improve agricultural competitiveness of the country. As neighboring
countries are now part of the EU (Croatia) or progressing towards accession (Serbia, Montenegro), the
country has a growing pressure to accelerate reforms as it risks to become a landlocked island surrounded
by EU members. There is a strong commitment by the Governments in BiH, local stakeholders and the
donor community to sustain the project efforts and build further on the basis established by the project
and other initiatives. Even though more work is needed to ensure long-term sustainability and maximum
impact, clear evidence exists that all stakeholders recognize BiH’s agricultural competiveness as a major
asset. FBiH and RS implementing agencies have already indicated need for further Bank investments in
capacity building, public awareness, trans-boundary cooperation efforts, and expansion of information
databases.
46. While the current Country Partnership Framework (CPF) FY16-20 does not provide
explicitly for a follow-on operation, there may be a need for additional technical assistance support
from the Bank and other donors to sustain the reform achievements to date, especially in the area
of food safety and improving access of BiH food products to the EU market. The Governments in
BiH secured additional support from the donor community to support the veterinary and food sector.
SIDA informed the Bank that their new regional strategy for the Western Balkans for the period of 2014-
2020 has been completed and will pursue economic development and growth, both of the public and
private sector, and place emphasis on quality infrastructure, e.g. certification and standard of products,
inspections, etc.
3. Assessment of Outcomes
3.1 Relevance of Objectives, Design and Implementation
47. Relevance of objectives: Significant. Although the objectives of the project were broad and
ambiguous, they were and remain highly relevant to country priorities and sector strategies,
particularly on its path towards EU accession and its ability to integrate the agricultural sector in
the economic environment of the EU. Aligning with EU requirements and the necessary competitive
13
and structural adjustments remains the primary policy driver in the country’s agricultural sector today.
The project design was consistent with the Entity-level strategies for agriculture (and rural development)
and the Medium-Term Development Strategy (MTDS), which aimed at enhancing the contribution of
agriculture and rural development to overall economic growth and poverty reduction. The project also
contributed to two of the key pillars of the Country Partnership Strategy (CAS) for the period of FY2008-
2011: (i) job creation through expanded and better targeted investments in the agriculture and rural non-
farm economies, and (ii) improving public services, including sanitary and phytosanitary protection,
business inspection, farm advisory and payment systems, under the overreaching theme of EU accession.
The BiH’s CPF for FY16-20 continues its focus on improving sector competitiveness and alignment
towards the EU and, as such, the project remains fully in line with the current CPF.
48. The objective of “delivering more efficient and effective agricultural services” and “making
a substantial contribution to an acceleration of the country’s eligibility to access support under the
EU instrument for IPARD” were broad. Given the decentralized and fragmented nature of the country,
the PDO was not sufficiently specific as which level substantial contribution would be required to access
EU IPARD. In addition, the expected PDO target indicators were only some of the elements that could
have contributed to the achievement of the PDO. At the same time, other key sectoral challenges pointed
out by the Project Appraisal Document (PAD) including (i) an underdeveloped rural credit markets and
low investments, (ii) the unfavorable structure of agricultural land including multiple small plots, (iii)
deteriorating infrastructure in rural areas, and (iv) inadequate irrigation – which could have, in theory,
contributed to the achievement of this ambitious PDO, were not targeted by the project.
49. Relevance of design and implementation: Modest. There were, however, some weaknesses in
project design. Like all the other projects that were prepared almost simultaneously to support EU
approximation, there was insufficient recognition that institutional strengthening takes time. In BiH with
its fragmented institutional set-up, and lack of a coherent vision by the Entities, and cantons of the role of
the State and the lack of clarity for delegated functions, that oversight was even more consequential. In
part because of this lack of clear vision, and foreseeing challenges ahead, the selected PDO indicators did
not fully capture and clarify the broadly defined PDO, i.e. “to deliver more efficient and effective
agricultural services and support programs” and “to make a substantial contribution to an acceleration of
BiH’s eligibility to access support under IPARD.” As a consequence of this lack of clarity, the project
design did not sufficiently address all the challenges faced by the sector and gaps that hindered the
capacity to attract IPARD funding. Following cancellation of key project activities at the MTR stage, i.e.
extension activities and rural development grants program, and re-direction of 30 percent of IDA
proceeds toward flood damage rehabilitation activities, it appears that the project drifted further away
from its initial design which exclusively focused on strengthening institutional capacity.
50. At the same time, given that the reallocation to flood rehabilitation was in part to avoid
cancellation of concessional IDA funds and resources under the SIDA grant, this disbursement
objective was met. The conversion of rural grants to flood rehabilitation was made in the context of the
PDO relating to improved agricultural services. Considering that the MAFWM and MAWMF in both the
RS and the FBiH are responsible for water related infrastructure and forestry it was thought that
rehabilitation after floods fell under their mandates and fit within the logic of the PDO in improving
agricultural services.
3.2 Achievement of Project Development Objectives
51. The PDO was broadly stated defining two general outcomes, i.e. “more efficient and
effective agricultural services and support programs” and “substantial contribution to an
acceleration of BiH’s eligibility to access support under IPARD.” These outcomes were too broad to
be in tune with what could reasonably be achieved within the framework of a US$21 million project.
14
While many of the project activities were substantially delivered, it is somewhat difficult to claim that the
project fully contributed to achievement of these two main outcomes. However, the key PDO indicators
specify what PDO outcomes were assumed and demonstrate the level of their achievement as described
below.
52. PDO Indicator #1 before restructuring: Sixty percent of disease and pest inspection
implemented on the basis of expected risks – This indicator was substantially achieved. FSA, SVO and
APPH provide input at the Entity level and border inspection planning based on risk assessment from
prior events, and inspection plans are revised quarterly or more frequently in case of an emergency as is
the case currently with the Lumpy Skin Disease outbreak that threatens the country. There remain issues
with the proper harmonization and mandates notably as it relates to the authority of entity level inspection
services to certify products nationally. There is also a significant shortage of inspectors to fully inspect all
food operators including producers, traders, and restaurants, retailers. However inspections do take place
based on constant risk monitoring including variables with weather conditions, notifications from the
European Food Safety Network to which BiH belongs, and issues arising from typical sanitary
inspections. As such this indicator has been substantially achieved.
53. PDO Indicator #1 after restructuring: Structured disease and pest control system, informed
by surveys and supported by reliable laboratory diagnostic capacity and databases, are developed,
coordinated and implemented with data sharing at State and Entity level approximating EU standards -
This indicator involves a number of inputs that have to function in conjunction with each other at the level
of the State Veterinary Office, Food Safety Agency and Plant Health and phytosanitary agencies working
with counterparts at the Entity and cantonal levels, in order to be achieved. The list of inputs included: (i)
strengthening capacity of laboratory staff, (ii) full operability of entity Farm and Client (F&C) registers,
(iii) launch of production stage by the Agency for Animal Identification and Registration, and (iv)
ongoing work on legal framework and its adaptation as required by the EU. The livestock registration
system when combined with the disease notification system that had been supported by the Bank’s
financed HPAI (Highly Pathogenic Avian Influenza) project a few years ago has helped the SVO in
improving its disease control and animal health management capacity. Thanks in part to these systems
that help tracking animal movement combined with regular sampling and laboratory testing, as well as
coordination with neighboring country’s vet services, the Lumpy Skin Disease that has been infecting
much of the Western Balkans over the past 2 years was contained at the border.
54. Also, necessary trainings in the use of procured laboratory equipment, as well as analytical
protocols contributed towards the goal outlined by the indicator. At sub-indicators level: (i) while
some designated laboratories got accredited for a certain number of testing methods during the reporting
period (i.e. Federal Agro-Mediterranean Institute, Banja Luka Agriculture Institute)4, other laboratories
still strive to fulfil necessary preconditions for accreditation; and (ii) data sharing occurs at the entity
level, and the state is involved in the federal Farm and Client register and phyto-register exercise, but only
in terms of data replication from the FBiH MoAWMF’s server(s) to the ones belonging to MOFTER;
apart from this routine exercise, no move was made in 2016 to replicate the data from MAFWM RS to the
MOFTR server.
55. The Food Safety Agency (FSA) has performed three risk analyses (diet study, nitrate study,
aflatoxin study) as expected at project design and as reflected in indicators. It was one of the first
food safety agencies that alerted the Western Balkans about the risks of aflatoxins in milk stemming from
poorly processed corn silage. Since this revelation, the aflatoxin testing of animal fodder has become a
4 The Banja Luka Agriculture Institute was not accredited for GMO testing as indicated previously, but was eventually accredited
for reside testing and other plant related testing.
15
common practice in a greater part of the EU. The FSA effectively interacts with inspectorates and
Ministries of Agriculture at the entity level to monitor food related risks and provides policy guidance to
improve surveillance. While challenges remain notably with the introduction and integration of the
hygiene package, the FSA has been growing in its role to ensure a safe food supply.
56. The Plant Health and Phytosanitary Agency (APPH) has effectively coordinated efforts for
potato pest surveys for the past three years to ensure the export of seed, industrial and food potato
to Europe. It has implemented a phyto-register that records all plant product traders and operators
including pesticides and herbicide products. It informs inspection monitoring plans to ensure detecting
diseases at entity and border inspection posts. Recently attention has been concentrated on packaging
material to verify the kilning of wooden transport crates to reduce the risk of import of animal, plant, and
fungi based pests.
57. The outcome of the various investments have led to the acceptance for the export of honey,
heat treated milk, eggs and poultry products, potato, and other horticultural products to the EU
according to the report of the EU Food and Veterinary Office (FVO) in Dublin. Capacities of
institutions serving the agricultural sector in general have improved as reported by the EU Commission
Staff Working Document on Bosnia Herzegovina dated November 10, 2015.
58. Pluralistic, stakeholder driven and outcome-based contracted extension services operational at
the level of each Entity and benefitting 20 percent of commercial farmers – Although this indicator was
dropped following cancellation of extension activities, it should be reported that the RS was close to its
achievement, and the FBiH made a few important steps to establish extension services. The RS extension
services have acquired significant capacity since project inception including equipment for the officers as
well as a variety of training courses to help officers to provide basic advice on business development to
farmers. Recently it has established a website (www.pssrs.net-advisory), which serves for daily
publication and reporting on activities of extension services, publication of laws and bylaws, daily
publishing of various recommendations for farmers as well as a forum where counselors/advisors answer
questions of farmers. It is estimated that 80 percent in the RS&C register their personal computers. On the
other hand, with adoption of the extension law, the Federation is upgrading its extension strategy to
reflect the structure of the extension system including defining the role of cantonal services in the
structure. To further strengthen its coordination role, the Federation extension department of the Ministry
with project funding has also procured a package of basic IT equipment for cantonal offices. It is
presently in the midst of developing an extension information software identical in concept to the one
developed and used in the RS also financed with project resources. This application will help with
improving programming and delivery of services in response to farmer requests with the Federal Ministry
functioning as a coordinating body as had been envisaged at project design.
59. PDO Indicator #2: Registries and databases for the effective management of incentive
payments, tracking of sanitary inspection data at Entity levels with reporting capacity to State level
agencies and MOFTER are in place approximating EU systems – This PDO indicator was substantially
achieved. The links at entity and state level for various registries for the Farm Information System
approximating EU requirements have been established. Most of these registers are, in fact, playing a key
role in food safety and animal health. It is also worth noting that the web service is a facility that has been
reported to be ready for linking with eligible users, but has not been in use by any of the respective entity
ministries to access the Agency’s database. At sub-indicator level: (i) reportedly, both data quality and
integrity are checked upon entering into corresponding databases; and (ii) the links with entity
inspectorates have been established, but no information was received to confirm the start of risk
assessment and management in administering incentive payments at entity level.
16
60. PDO Indicator #3 before restructuring: One hundred percent of rural development structural
payments made through harmonized, EU-IPARD compliant institutions and systems at the level of
each Entity – As reflected earlier in the ICR , there was a considerable resistance by a number of donors
including the EU to disburse Rural Development Grant resources along the lines of EU IPARD principles
at Entity levels for fear that this would set a precedent that would prevent the development of a State level
paying agency. This very strong resistance waned over the years when it became clear that the political
decision for a full-fledged Paying agency handling IPARD and national funds would not emerge soon.
The Bank faced the dilemma of cancelling substantial IDA funds or directly clashing with much of the
donor community by disbursing these funds. The floods of 2010/11 ultimately affected the decision on
the use of funds. While funding for the grant program under this indicator was redirected, the institutional
capacity building support to improve entity level capacity to manage their own fund and setting up
structure substantially in compliance with IPARD was continued. The expectation is that eventually a
payment structure would become politically palatable to which the entity systems based on harmonized
process procedures, software protocols, these capacities would be linked. While with the cancellation of
rural development grants this indicator became obsolete, many pieces necessary for an EU IPARD
compliant payment structure are in place today. Since the cancellation of these funds, the donor
community has come to appreciate that in many ways the Bank’s perspective of working bottom-up has
own merits in getting institutions harmonized in the complex political environment of BiH.
61. PDO Indicator #3 after restructuring: Flood rehabilitation grants help communities recover
to pre-flood level of economic activity – The support for flood rehabilitation including delivery of
productive assets in farm to recover production as well as works to rehabilitate rural infrastructure that
was damaged during the floods were fully delivered and completed. Both entities produced final reports
of the activities providing an insight in the impact of these investments. Altogether some US$6.5 million
was disbursed benefitting over 7,000 individuals. Support has helped rebuild small rural bridges, access
roads to remote villages, as well as water supply systems for rural communities and small irrigation
systems that have been refurbished. Nearly 100 households had their greenhouses rehabilitated and 14
farms in Ravno Municipality had their orchards and vineyards replanted.
3.3 Efficiency
62. Component A aimed to improve capacity to identify and manage risks in animal and plant health
along the human food chain. The financial analysis for Component A is based on predictions of reduced
prevalence of key animal diseases, including ovine/caprine brucellosis; bovine brucellosis and
tuberculosis; and other zoonoses and zoonotic agents. The reduced prevalence predictions, and
assumptions about the costs incurred dealing with the disease, provides the basis for calculations of the
savings resulting from reductions in slaughter and compensation costs for diseased animals; destruction of
milk from infected animals; and reductions in human cases that require treatment.
63. Project analysis based on predicted prevalence/incidence rates and estimates of costs of incidence
of the diseases indicates that the financial internal rate of return (FIRR) for the support provided under the
Project to the Veterinary Office of BiH and Food Safety Agency of BiH is 14 percent. Recalculating
using the same methodology because of the difference in disease pattern relative to appraisal, the
estimated IRR is at 18 percent. This is a conservative estimate of the benefits from this investment, since
Component A also includes support to animal identification and movement control that provides un-
quantified benefits in terms of reduced identification costs through the use of electronic monitoring
systems and improved disease control and traceback, as well as increased market compliance and hence,
opportunities. The ability to track livestock movements, along with better inspection regime and border
controls is thought to have played some role in containing the Lumpy Skin Disease infection that has
recently affected a number of neighboring countries.
17
64. Support to plant health sector: The project envisaged significant benefits from the introduction
of GMO testing capacity. While only partial capacity was established, experience from the neighboring
countries shows that testing of a GMO plant material is considerably less frequent than anticipated and
never exceeds a few hundred samples per year. Rather than calculating the incremental value from the
GMO testing capacity, this analysis has estimated the potential incremental benefit from investments in
the plant health and phytosanitary sector, specifically from the investment in potato testing. Potato
production in BiH is equivalent to around 300,000 tons representing a value of some US$50.0 million
including seed as well as industrial and consumption potato. Assuming only five percent of the
production to be exported represents a value of some US$2.5 million per year compared to three seasons
of project support amounting to some US$300,000 per year and continued financing of the yearly
monitoring program. The investment rate of return over 20 years at 12 percent discount rate, assuming
no change in production volume and constant prices amounts to an IRR of 18 percent.
65. Under Component B support benefitted essentially two regions that were heavily affected by the
fall/winter 2010 floods in the Eastern and Northeastern part of the country. Support was also provided in
Popovo polje that was flooded, specifically the Municipality of Ravno where floods reached levels up to
20 meters as a consequence of poor synchronization of dam releases. Some 18 farm households in Ravno
had their permanent orchards uprooted and fully destroyed. In the RS the focus was primarily on
rehabilitating the damaged rural infrastructure under small works, while in the Federation support focused
primarily on restoring livelihoods of farmers and some smaller rural rehabilitation works. A total of 63
pieces of infrastructure including river banks, drainage canals, bridges, roads and drinking infrastructure
serving a total of some 29,000 people in rural towns were rehabilitated. Similar flood protection works in
Serbia with a similar topography to North Western BiH resulted in an estimated EIRR of some 36 percent
using Loss Avoidance Estimates modelling5
to estimates benefits from drainage infrastructure
rehabilitation.
66. Finally the establishment of systems, registers and databases at entity level based on the logic and
protocols that can be used with an EU compliant payments system will also facilitate BiH’s attainment of
candidate country status and access to future IPARD funding, estimated to range between EUR11-30
million per year and continue to serve the country in future towards the improved management of its own
subsidy resources in agriculture.
3.4 Justification of Overall Outcome Rating
Rating: Moderately Unsatisfactory
67. The overall ratings are justified on the basis of the project contribution to achieving two parts of
the PDO of “strengthening the capacity of its State-level and Entity-level institutions to deliver more
efficient and effective agricultural services and support programs” and “making a substantial
contribution to an acceleration of BiH’s eligibility to access support under the EU instrument for IPARD.”
These two sets of objectives were and remain relevant to the country, even if the initial prospects for
extension services and rural development grants were not realized. Project efficiency is assessed as
Moderately Satisfactory given the fairly good ex-post rate of return of various project activities. Two out
of three key PDO indicators were achieved, and important steps were taken towards achieving the third
PDO indicator, i.e. “Structured disease and pest control system, informed by surveys and supported by
reliable laboratory diagnostic capacity and databases, are developed, coordinated and implemented with
data sharing at State and Entity level approximating EU standards.” In addition, the intermediate
indicators were largely achieved (see Annex 2).
5 R.N. Forbes, Drainage, Flood Control and Soil Conservation Projects. Cost Benefit Procedures in New Zealand Agriculture
Economics Division, Ministry of agriculture and Fisheries new Zealand, 1977
18
68. The Moderately Satisfactory rating for the overall outcome of the first part of the PDO, i.e. “to
deliver more efficient and effective agricultural services and support programs” was confirmed through a
split evaluation exercise (based on the ICR guidelines and OPCS guidance received by email), where the
outcome rating was assessed against the original and revised PDO indicators before and after
restructuring in July 2011 as shown below:
Summary of PDO Indicators Efficacy Ratings
PDO Indicator Pre-2011 Restructuring Post-2011 Restructuring #1 before restructuring: Sixty
percent of disease and pest
inspection implemented on the
basis of expected risks
Substantial
Substantial
#1 after restructuring:
Structured disease and pest
control system, informed by
surveys and supported by
reliable laboratory diagnostic
capacity and databases, are
developed, coordinated and
implemented with data sharing
at State and Entity level
approximating EU standards
n/a
Substantial
#2 before restructuring:
Pluralistic, stakeholder driven
and outcome-based contracted
extension services operational
at the level of each Entity and
benefitting 20 percent of
commercial farmers
Negligible
Modest
#2 after restructuring:
Registries and databases for the
effective management of
incentive payments, tracking of
sanitary inspection data at
Entity levels with reporting
capacity to State level agencies
and MOFTER are in place
approximating EU systems
n/a
Modest
#3 before restructuring: One
hundred percent of rural
development structural
payments made through
harmonized, EU-IPARD
compliant institutions and
systems at the level of each
Entity
Negligible
n/a
#3 after restructuring: Flood
rehabilitation grants help
communities recover to pre-
flood level of economic activity
n/a
Substantial
Average Rating Modest Substantial
19
Original PDO
indicators
Revised PDO
Indicators 2011
Overall
Rating Moderately
Unsatisfactory
Moderately
Satisfactory
Rating value 3 4
Disbursement US$6.96 US$12.41 US$21.00
Weight (%
disbursed after
PDO change)
30%
70%
100%
Weighted value 0.9 2.8 3.7
Final Rating Moderately Satisfactory
69. As evidenced from Sections 3.2 above, the project achieved impressive results in strengthening
veterinary, food, plant and animal health capacity, and still managed to promote improved extension and
advisory services at least in the RS despite this activity being dropped following the restructuring in 2011.
However, there is no clear evidence that the project achieved the outcome of the second part of the PDO,
i.e. “making substantial contribution to an acceleration of the country to access IPARD.” In fact, due to
the lack of an agreed coordinating structure, BiH was excluded from accessing EU funds (IPA2014-2020)
for establishment of the administrative system for the use of IPARD II fund in the new financial
perspective 2014-2020 until 2017. While it is understandable that no progress was made on accelerating
access to IPARD due to a considerable resistance by number of donors including the EU to disburse Rural
Development Grants resources along the lines of EU IPARD principles at Entity level (which would have
prevented the development of a State level paying agency), the team missed the opportunity to revise this
part of the PDO during the project lifetime. Thus, the overall outcome rating for the second part of the
PDO is Unsatisfactory.
70. This project development objective was and is still relevant to the country, even if the initial
prospects for extension services and rural development grants were not realized. Project efficiency is
assessed as Moderately Satisfactory given the fairly good ex-post rate of return of various project
activities. Two out of three key PDO indicators were achieved, and important steps were taken towards
achieving the third PDO indicator, i.e. “Structured disease and pest control system, informed by surveys
and supported by reliable laboratory diagnostic capacity and databases, are developed, coordinated and
implemented with data sharing at State and Entity level approximating EU standards.” In addition, the
intermediate indicators were largely achieved (see Annex 2). However, in light of the Unsatisfactory
rating assigned to the second part of the PDO, the overall project outcome is rated as Moderately
Unsatisfactory.
3.5 Overarching Themes, Other Outcomes and Impacts
(a) Poverty Impacts, Gender Aspects, and Social Development
71. The project mainly focused on strengthening institutional capacity, and had an indirect effect on
poverty reduction. Agriculture has traditionally been important as a social buffer in the country, absorbing
unemployment and alleviating poverty by supplementing incomes and food in rural areas, where poverty
is concentrated. Although there is no supporting evidence, the assumption is that the project contributed
to alleviate poverty by enhancing capacity of the State-level and Entity-level institutions to deliver
improved agricultural services, in particular in terms of reduction of zoonoses (diseases which affect both
animals and humans), improved phytosanitary and food safety standards, and increased agricultural
exports. It is also believed that enhanced rural sector information capacity including strengthening of the
20
rural development program laid the groundwork for determining the extent of gendered differentiation in
agricultural activities. Gender aspects were envisaged under the rural development grant program at
project design, however since this activity was cancelled, this gender-oriented objective did not
materialize.
(b) Institutional Change/Strengthening
72. The project achieved important institutional strengthening objectives. It significantly contributed
to strengthen the capacity of the MOFTER, SVO, FSA and APPH to implement effective agricultural
policies and apply EU-compliant food/plant safety standards. The MOFTER has increased its capacity to
coordinate agricultural policies nationally by regulation of trade of agro-food products and through
defining and implementing food safety rules relating to veterinary policy and plant health protection. The
governments at each Entity level prepared and adopted the Agriculture and Rural Development Strategies.
The Strategies were modeled on the principles that are compatible with IPARD and will serve a good
basis for the preparation of the IPARD program in the future. The project has also increased the capacity
of the SVO to monitor and control zoonoses, as well as to implement the national residue monitoring
plan. The range of residue tests performed in the country at present has been expanded to cover milk, and
thanks to the project, recently the FVO approved the action plan submitted by the SVO with a view to
allow export of milk and dairy products from BiH to EU.
(c) Other Unintended Outcomes and Impacts (positive or negative)
73. As mentioned earlier in the document, the outcome of the various investments have led to the
acceptance for the export of honey, heat treated milk, eggs and poultry products, potato, and other
horticultural products to the EU according to the report of the EU Food and Veterinary Office (FVO) in
Dublin. Capacities of institutions serving the agricultural sector in general have improved as reported by
the EU Commission Staff Working Document on Bosnia Herzegovina dated November 10, 2015.
74. The project aimed at “making a substantial contribution to an acceleration of BiH’s eligibility to
access support under the EU instrument for IPARD,” and made a number of important steps towards
achieving this objective. However, the lack of an agreed coordinating structure has excluded BiH from
accessing EU funds (IPA2014-2020) for establishment of the administrative system for the use of IPARD
II fund in the new financial perspective 2014-2020 until 2017. The Entities have their own strategic and
legislative frameworks, which serve them for the purposes of creating agricultural policy and support the
preparation of the IPARD program in the future. However, they still lack an effective mechanism to
coordinate and harmonize different policies, strategies, and programs between Entities, cantons and
municipalities.
3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops
75. No Beneficiary Survey was conducted for the project. A Stakeholder Workshop was held on
October 13, 2016. The report on the workshop is provided in Annex 7.
4. Assessment of Risk to Development Outcome
Rating: Moderate 76. Overall, risk to the development outcome varies by outcome. The risk to institutional
sustainability is low in spite of the lack of unified vision over the agricultural sector. The activities related
to the establishment of EU compliant systems have reasonable sustainability prospects simply because
21
EU accessions remains a key objective for the BiH authorities. The Bank has been taking an active role
around the reform agenda along with other donors towards reaching an agreement on a coordination
mechanism which has led to the recent signing of the Stabilization an Association Agreement (SAA).6
The Government will therefore need to continue to deliver its government assistance to the agriculture
sector in a manner consistent with the European Union's principles. Even if the EU accession process
were to falter, the Borrower is expected to continue to use the mechanisms developed under the project to
support its agricultural sector, and to continue to address food safety both for its own domestic market and
the EU market. The relationships with the EU are expected to remain strong with or without accession.
On another note, the 2015 Systematic Country Diagnostic Report stated that “BiH risks having some
trade benefits with the EU suspended—including those with Croatia, a significant export partner—if it
fails to adopt quality standards (notably in agriculture) by end of 2015. Around 19 percent of
standardization requirements needed to join the European Committee for Standardization and the
European Committee for Electrotechnical Standardization remain to be adopted.”
77. The economic and financial risk to development outcome is Moderate. As observed throughout
project implementation, inadequate budgetary resources - that led to lack of human resources and put at
risk sustainability of investments in equipment and information databases - severely affected several
project activities and outputs. Given the economic importance and potential of the agricultural sector in
the country, and the need to become competitive in the context of the EU, a significant increase in public
funding will be required for agricultural research, extension and food safety. Finally, the environmental
risk might also pose some concern to the project outcome as climate change and unpredictable natural
disasters could continue to affect the agricultural sector and rural livelihoods.
5. Assessment of Bank and Borrower Performance
5.1 Bank Performance
(a) Bank Performance in Ensuring Quality at Entry
Rating: Moderately Unsatisfactory
78. Preparation of the project was carried out by a large team of experts, providing needed technical
skills to produce a proper design. The project design was built upon key lessons learned from the Bank-
financed agricultural projects in the BiH and other EU accession countries, best international practices, as
well as broad consultations with a wide range of stakeholders and donor agencies in the country. A
number of alternatives and main risk factors were considered by the team during the preparation process
prior to finalizing the project design. In addition, the team ensured that the project design is in line with
the Government Strategy and Bank’s Country Partnership Strategy.
79. However, the project design suffered from a few shortcomings. First, the project had a very broad
objective which did not adequately reflect the fact it aimed at addressing only a few challenges faced by
the agricultural sector, and that it played only a complementary role along with the EU accession
programs. Second, an insufficient baseline assessment of an ex-ante situation in each Entity was done at
entry, which could have informed a more effective design of Entity-specific activities. At appraisal,
relatively a few risks were anticipated in the implementation of the project, and those that were
anticipated were mostly related to the rural development grants program, which never materialized during
6 The SAA constitutes the framework of relations between the EU and the Western Balkan countries for implementation of the
Stabilization and Association Process. The agreements are adapted to the specific situation of each partner country and, while
establishing a free trade area between the EU and the country concerned, they also identify common political and economic
objectives and encourage regional co-operation.
22
implementation. The risk that was not foreseen was that such key activities as the launch of the grants
program, establishment of the payment system and extension services could be significantly delayed due
to changes in the country priorities in the pre-EU-accession context, overall political complexity in BiH,
and extensive differences in Entities’ institutional policies and legislative framework. Due to the above
listed issues, the quality of entry rating is Moderately Unsatisfactory.
(b) Quality of Supervision
Rating: Moderately Satisfactory
80. The Bank performance during project implementation was Moderately Satisfactory. Sufficient
budget and staff resources were allocated, and the project was adequately supervised and monitored. The
aide memoires provided evidence of regular supervision and professional advice was given by the Bank’s
experts throughout the project’s lifetime. Project supervision missions also facilitated communication and
resolution of inter-agency obstacles, as well properly maintained a joint donor coordination effort.
81. The Bank team was committed not only in performing close supervision of project
implementation, but also tried to overcome any shortcomings from project design, and address project
delays and low disbursement. In particular, at the MTR stage in April-May 2010, the team had to cancel a
few ill-performed activities, re-allocate the project proceeds from these activities towards flood
rehabilitation activities (to address emergency situation faced by the country), and adjust the Results
Framework to reflect these substantial changes to the initial project design. To address various delays, the
project required three extensions for a total period of four years. It is particularly worth noting that close
involvement and leadership by the CMU and sector management were instrumental in ensuring the
required adjustments. Unfortunately, despite several restructurings, the opportunity to revise the
broadly defined PDO was missed. Although there were frequent changes of the task team leaders (four in
total), they all ensured smooth transition and guaranteed continuity. Fiduciary and safeguard policies were
well managed and reported. Overall, the feedback received during the interviews with stakeholders
clearly showed the government’s appreciation of the technical skills and advice provided by the Bank’s
experts.
82. It is again worth noting that the project was implemented in an extremely difficult environment as
it solely aimed at strengthening institutional capacity in the country with the complex institutional
structure. In addition, the structure of the project itself was complicated as it was comprised of two
parallel projects implemented in Entities with different institutional set-ups and legislative frameworks.
Due to all these challenges, implementation delays and a low disbursement ratio in the first few years of
project would have been anticipated. It would have been easier for the team to drop the project altogether,
however they opted to stay even though it took a few rounds of restructuring and extensions to move the
project forward. The team, thus, should be commended for continued support of the client despite the
adverse context.
(c) Justification of Rating for Overall Bank Performance
Rating: Moderately Unsatisfactory
83. The overall performance of the Bank team is rated Moderately Unsatisfactory. The quality at
project preparation was Moderately Unsatisfactory, and Bank’s performance during project supervision
was Moderately Satisfactory. Although the performance improved during project supervision, the
shortcomings from the design phase (mainly lack of proper assessment of ex-ante situation in each Entity
and risks that could affect project implementation, as well as the broadly defined PDO) could not be fully
overcome.
23
5.2 Borrower Performance
(a) Government Performance
Rating: Moderately Unsatisfactory
84. While there have been several changes in Ministerial counterparts, and uncertainty in institutional
policy defining the layout of the various institutions which led to some delays, the projects’ activities
were always seen as priority by the government. The Entity government in the FBiH and RS approved
many changes to their legal frameworks and adopted the important Agriculture and Rural Development
Strategies. However, the government did not always fully seize the opportunities that the project provided
to adjust its policies towards more clarified competencies and removing duplication or overlapping, more
cost-efficient allocation of resources, ensuring complementarity of scientific inputs with executive
responses, and securing subsequent investments required for effective enforcement. Further, as described
in paragraphs #26, 32, 34 and 35, the project suffered from serious delays in its activities due to: (i) the
institutional confusion and lack of vision for sharing of responsibilities between the State and Entity level;
(ii) legal ambiguity and lack of institutional capacity in the food safety sector, specifically in the SVO and
FSA; and, (iii) inability or lack of support by state institutions to provide adequate staffing. The project’s
development outcome is also at risk as the government agencies do not have sufficient budget to sustain
human resources and maintain equipment/information databases provided by the project.
(b) Implementing Agency or Agencies Performance
Rating: Moderately Satisfactory
85. The Sector for Agriculture, Food, Forestry and Rural Development of MOFTER was responsible
for overall project coordination, monitoring and evaluation, and reporting. Implementation of project
activities were shared between MOFTER, the FBiH MAWMF and RS MAFWM and the various state-
level agencies as well as the PCUs to be established within MOFTER, FBiH MAWMF and RS MAFWM.
It is particularly worth noting that the implementation team in each PCU was very pro-active and is in
large part responsible for the overall positive outcomes achieved under “the two projects.” Both units
worked together on resolving common issues and shared experiences in resolving implementation
problems in a pragmatic fashion. Both implementation units had adequate financial management and
procurement arrangements for project implementation. However, the last Aide Memoire in 2016 noted
that the large number of projects being managed by both implementation bodies led to some delays and a
lack of problem solving that were necessary to conclude some of the project activities. In addition, no
MTR Progress Report and final Project Beneficiary Survey were produced by the Beneficiary, and the
final project progress report, prepared by the MOFTER did not offer a comprehensive and robust final
evaluation.
(c) Justification of Rating for Overall Borrower Performance
Rating: Moderately Unsatisfactory
86. The Moderately Unsatisfactory performance of the government and Moderately Satisfactory
performance of the Implementing Agencies averages to a rating of Moderately Unsatisfactory for overall
Borrower performance.
6. Lessons Learned
87. A thorough baseline analysis of ex-ante situation in each entity would have been helpful prior to
designing the project activities and avoiding the risks of delay in project implementation. This would have
avoided some of serious delays in certain project activities that were caused by extensive differences in
institutional policies in each Entity at project entry.
24
88. Institutional development takes time. Given the institutional development focus of the project in
the country with a complex institutional structure and political complexity, it is reasonable to consider to
the project lifetime of more than four years. Furthermore, the EU Accession process is affected by many
variables that are beyond the reach of the client Country, and often takes longer than the typical Bank
project timeframe. To that effect, the willingness of the Bank to extend the project closing date and adjust
the procurement plan to better reflect the client Country EU requirements during implementation makes it
a valuable partner and provides continuity to the client Country.
89. Having a realistic development objective, adequate baseline and risk assessment at appraisal are
key for project success. When a project has a very broad objective that is beyond the reasonable purview
of the project, full achievement of the PDOs becomes very difficult. It is, therefore, very important to take
advantage of the MTR or a restructuring to help guide potential re-formulation of the PDO and/or Results
Framework. An adequate baseline and risk assessment at entry will be helpful in designing an effective
project and avoid serious delays during project implementation.
90. In future, the Bank needs to better assess the risk of engaging in institutional capacity building in
the agricultural sector in the BiH comprised of various number of the State and Entity level institutions
given their extensive differences in institutional set-ups and legislative frameworks. Given the complex
institutional set-up in BiH, the Bank will need to pursue a less complicated operation with a more simple
design covering a fewer institutions.
7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners (a) Borrower/implementing agencies
91. The draft ICR was shared with the implementing agencies and partners on December 1, 2016. No
comments were received by December 21, 2016. The RS PIU colleagues shared their comments by using
track changes in the file itself.
(b) Cofinanciers
92. The draft ICR was shared with the SIDA colleagues on December 1, 2016. No comments were
received by December 21, 2016.
(c) Other partners and stakeholders
93. N/A
25
Annex 1. Project Costs and Financing
(a) Project Cost by Component (in USD Million equivalent)
Components Appraisal Estimate
(USD millions)
Actual/Latest
Estimate (USD
millions)
Percentage of
Appraisal
Component A: Agriculture
information system and institutional
capacity building
US$9.04 US$5.84 64%
Component B: Enhanced agriculture
and rural development incentive
programs
US$l0.83 US$5.71 53%
Component C: Project coordination,
administration and monitoring US$1.13 US$1.49 131%
Total Project Costs US$21.0 US$13.05 62%
(b) Financing
Source of Funds Type of
Cofinancing
Appraisal
Estimate
(USD millions)
Actual/Latest
Estimate
(USD millions)
Percentage of
Appraisal
Borrower 9.19 0.00 .00
International Development Association
(IDA) 21.00 19.40 93%
SWEDEN: Swedish Intl. Dev.
Cooperation Agency (SIDA) 6.00 5.90 98%
26
Annex 2. Outputs by Component
With respect to outputs by component, the following results were achieved by the project:
Component A: Agricultural Information and Institutional Capacity Building
Intermediate Indicator Target Value Status of achievement
A1: State Veterinary Office of
BiH implementing effective
animal identification system
90% of cattle and 70%
of sheep and goats are
ear tagged
Fully achieved. Over 90% of
bovines are ear tagged. For
sheep, the value reaches >70% in
FBiH and 25-30% in RS. The
EU-compliant upgraded and
expanded animal I&R system
operational, software developed,
hardware (server) installed and
consumables supplied. Data for
bovines from old database and
for sheep/goats from AMI
Mostar migrated into new
database and in the process of
validation. New Rule Books
drafted and in the process of
adoption. The country-wide
census planned to establish
baseline livestock population.
Roughly 10% of flock is being
verified by the veterinarians
during the routine interventions
on an annual basis. The
campaign for sheep-goat ear
tagging in the RS was launched
in June 2015 and has been
ongoing.
A2: SVO implementing
brucellosis and CSF control
programs
Classical Swine Fewer
(CSF) test and slaughter
program established and
incidence of brucellosis
reduced by 30%
Partially achieved (about
50%). The animal vaccination in
2015 was completed and
involved at least 75% of total
number of target animals.
Eradication policy has not been
established and mass preventive
vaccination continues on grounds
of (i) occurrence of CSF in
neighboring countries, and (ii)
estimated high compensation
costs in case of outbreak(s). This
is a policy decision not supported
by results of the serological and
epidemiological survey
supported by the project,
indicating low sporadic incidence
27
of CSF in wild boar. Vaccination
against Brucellosis continued for
the 5th year, but the SVO
provided no monitoring/
surveillance data allowing an
objective estimation of the
vaccination impact on disease
prevalence.
A3: APPH implementing plant
health monitoring and risk
assessment systems
Phytosanitary inspection
shifts to risk mostly
based inspection system
Fully achieved. At present it is
mandatory for both seed and
plant material producers/
distributors to be registered; the
registration data is collected and
maintained at both entity and
APPH level. The potato pest
survey was ongoing in 2016, now
for the 6-th time with funding
provided by each entity. The
APPH conducts ad-hoc risk
assessment, identifies priorities
for enhanced control and
instructs Inspectorates
accordingly.
A4: APPH develops and
implements phytosanitary and
plant register database
Fully achieved. The APPH
operates a phyto register database
that include plants and producers
as well. The link is accessible by
entity inspections services and
Ministries of Agriculture.
A5: FSA implementing a risk
based food safety system
FSA performs at least 3
risk assessments and
coordinates a risk
communication program
Fully achieved. The FSA
conducts a risk assessment for
aflatoxins and phosphates in
food, and commissioned a Total
Diet study to assess prevailing
nutritional habits and help
identify inherent risks. The FSA
applies a public information
strategy and coordinates a risk
communication Working Group.
A6: Entity-level Inspection
Directorates are implementing
BiH plant health, animal health
and food safety laws and
regulations
All Entity Inspectorate
reporting of food, animal
and plant health is web-
based
Substantially achieved (about
75%). Both Entity Inspectorates
operate web-based databases and
share data with state-level
agencies. Their IMS systems are
not linked. Information is shared on
a daily basis through uploads, but
not yet in a real-time manner.
A7: FBiH MAWMF/RS
MAFWM agricultural
information units and
databases and FADN pilot
Partially achieved (about
50%). FADN pilot established in
both entities, however regular
update of database is not
28
established assembling farm
level information
maintained in FBiH once
responsibility was handed down
to cantons. To date in RS a total
of 128 farms are being surveyed
on an annual basis.
A8: WAN linking MOFTER
with State level agencies,
entity MOAs, and Inspection
services under establishment
for AIS
Fully achieved.
(i) Federal MoA has already
established this interface with
MOFTER and it has been
operations ever since;
(ii) Launch of web service by
AI&R Agency that would be the
interface between the Agency
itself and entity ministries of
agriculture and inspectorates,
with the door open to the
Agency’s database to be used by
MOFTER, too, although the link
has not been reported to be in use
by the eligible institutions;
(iii) Phyto register became
operational in 2013, with links
open to all key stakeholders in
the field of plant health, i.e.
entity ministries, inspectorates
and MOFTER;
(iv) VPN connection, being an
essential part of widely seen
WAN has been established for
the purpose of F&C data
replication from federal MoA to
MOFTER server. The same kind
of connection was set up with the
MAFWM RS, for test purposes,
but it never got used in terms
originally outlined.
Component B: Enhanced Agriculture and Rural Development Support Program
Intermediate Indicator Target Value Status of achievement
B1: Transparency Entity level
paying systems established
100% of RD payment at
entity level processed
through new paying
system
Not achieved. All IPARD like
Rural Development Grants are
made through paying system. A
software application to handle
direct payments remains to be
developed.
B2: Entity level rural
development plans established
Monitoring Committee
established providing Partially achieved (about
50%). Both entities have
29
and overseen by Monitoring
Committees
policy input developed their respective rural
development programs and
agricultural strategies. The
new Minister of Agriculture in
the FBiH suggested a review
and modest changes to the
recently produced agricultural
strategy to better reflect the
priorities for sector
development. In the RS, the
MAFWM is foreseeing to move
more towards area based direct
payments in the sector to
simplify the payment structure
and further foster the
emergence of larger more
competitive farms.
The RS formally established a
supervisory board; in FBiH
supervisory board was not
formalized.
B3: Increase in RD funding and
number of grants supporting
competitive agriculture
activities
More than 50% of all
payments are structural Partially achieved (about
50%). Approximately 25% of
agricultural payments are in
structural form, for
investments. Ratio used to be
higher before floods in 2014,
but it is expected to recover to
50% over the next couple of
years.
B4: Rehabilitation investments
completed before end of
construction and farming
season in October, 2011
All rehabilitation
completed
Fully achieved. It should be
noted that this indicator was
achieved before the end of the
project, i.e. June 30, 2016 and
not in October 2011. The
support for flood rehabilitation
including delivery of
productive assets in farm to
recover production as well as
works to rehabilitate rural
infrastructure that was damaged
during the floods were fully
delivered and completed. Both
entities produced final reports
of the activities providing an
insight in the impact of these
investments. Altogether some
US$6.5 million was disbursed
benefitting over 7,000
individuals. Support has helped
rebuild small rural bridges,
30
access roads to remote villages,
as well as water supply systems
for rural communities and small
irrigation systems that have
been refurbished. Nearly 100
households had their
greenhouses rehabilitated and
14 farms in Ravno Municipality
had their orchards and
vineyards replanted.
Component C: Project Coordination, Administration and Monitoring
Intermediate Indicator Target value Status of achievement
C1: Project funds disbursed
according to plan, timely and
accurate completion of all
annual operating, training and
procurement plans
100% Achieved.
C2: Beneficiary surveys
indicate awareness of Project
and overall satisfaction with
Project activities (mechanisms
in place to receive and resolve
complaints)
50% Partially achieved with a note
that beneficiary surveys were
only conducted for flood
rehabilitation activities.
Additional Outputs include:
1. FADN information was assembled only in the RS, and reportedly (i) data from 128 farms were
collected and checked as of the end of the 1st quarter of 2016; and (ii) an IT consultant recruited
through the project produced an online application for data processing as well as network across all
regions in the RS.
2. The animal identification and registration (I&R) software was provided by the project, and has been
fully functional and in production since 2014, including small ruminants and pigs under a common
set of protocols and designations.
3. The project provided equipment for residues testing;
4. The APPH compiled a country-wide phyto-registrar accessible to the Entity Inspectorates and
published a Plant Pest Diagnostic Manual (Atlas) intended to serve as a reference textbook for
phytosanitary inspectors.
5. The project conducted 3 potato pest surveys with budgets allocated from the entity level Ministries,
and reports were produced.
6. As reported previously in the ICR, the animal vaccination campaign was conducted in 2015 that
involved at least 75 percent of total number of targeted animals.
7. A computerized serum database management system (DBMS) was established through the Classical
Swine Fever (CSF) study.
8. The project conducted a workshop solely dedicated to the CSF epidemiology.
9. The FSA performed at least 3 risk assessments and coordinated a risk communication program.
10. Both Entities developed their respective rural development programs and agricultural strategies.
31
11. The Farm and Client register has been operational in both entities for over two years. To date
registers include some 58,000 farms with 98,000 ha registered in the Federation, and some 30,000
farms and 131,000 ha of land registered in the RS.
12. Advisory services unit in the RS operates within the Ministry, has a total of 7 consultants who
provide professional services and coordinate extension services delivery. The RS extension services
unit established a website www.pssrs.net-advisory, which serves for daily publication and reporting
on activities of extension services, publication of laws and bylaws, and various recommendations for
farmers as well as a forum where counselors/advisors answer questions of farmers. It is estimated that
80 percent of farmers in the register have their personal computers.
During the project implementation, the activities related to technical and material capacities of
Extension Services were carried out: the Entity Extension Services strategies were developed, the
trainings of advisors in the EU regulations, new technologies, business planning and other were
financed. These strategic documents provided a framework for the development of Extension
Services in the period from 2010-2015 and provided details of the function and organizational model
of Extension Services. At the end of 2012, the Extension Agency of RS was merged into the
Department of the MoAFWM together with Agency for Selection in Livestock Breeding.
13. Approximately US$6.5 was disbursed for flood rehabilitation activities that directly benefitted over
7,000 individuals. Support has helped rebuild small rural bridges, access roads to remote villages, as
well as water supply systems for rural communities and small irrigation systems that have been
refurbished. Nearly 100 households had their greenhouses rehabilitated and 14 farms in Ravno
Municipality had their orchards and vineyards replanted. In addition, in line with the proposals of the
RS MAFWM, 12 flood protection and 63 rural infrastructure facilities were rehabilitated in 24
municipalities.
14. 92 percent of project funds were disbursed in accordance with annual operating, training and
procurement plans.
32
Annex 3. Economic and Financial Analysis Introduction:
1. The ICR has attempted to recalculate estimates following the identical logic as was used in the
PAD. The logic, however, had to be modified to reflect the changes that were introduced at restructuring
and reflecting on the developments that have taken place in the country as it relates to the IPA program
and withdrawal of support from the EU to the Agriculture and other sectors. The analysis is based on the
impact from the various activities performed under the project, but which may have also benefited from
support from other donor programs working on strengthening capacities at the Ministries of Agriculture at
the two Entities level and MOFTER.
Estimated benefits from Component A:
2. A primary aim was to improve the capacity to identify and manage risks in animal and plant
health and along the human food chain. The financial analysis is based on reduced prevalence of key
animal diseases, including ovine/caprine brucellosis; bovine brucellosis and tuberculosis; and other
zoonoses and zoonotic agents. The reduced prevalence, and related costs incurred from dealing with the
disease, provided the basis for calculations of the savings resulting from reductions in slaughter and
compensation costs for diseased animals; destruction of milk from infected animals; and reductions in
human cases that require treatment.
3. The above savings were measured against the cost of the interventions to provide a conservative
estimate of the financial benefit from the Project, based on the assumption that there will be other
significant benefits, related to transaction costs, reduced disruption of trade, reduced working days lost to
sickness, social impact, among others.
4. Bosnia and Herzegovina’s livestock numbers at appraisal included approximately 900,000 sheep
and goats, and 350,000 heads of cattle. Animal disease prevalence in BiH for ovine and caprine
brucellosis was estimated around 2.5 percent, while and bovine brucellosis and tuberculosis was
estimated around 0.6 percent. Statistical data reflected a growth in the incidence of Brucella melitensis in
sheep rising by 200-300 cases per year at time of appraisal. Costs are incurred from the destruction of
infected animals and compensation of owners, in loss of milk from infected animals, and in testing for the
disease. These animal diseases can also spread to humans; there were nearly 1,000 reported cases of
brucellosis reported in humans in 2006. In humans the infection produces a persistent disease with acute
and chronic phases.
5. There was no monitoring of Salmonellosis in host animal populations due to lack of resources at
the time of project preparation and appraisal. There was no baseline in regards of prevalence with the
exception of the number of hospitalizations resulting from salmonella infection. In 2012, a first audit of
Salmonella in the poultry sector was undertaken by the EU’s DGSANCO. Eggs and poultry meat are the
most common infections sources for salmonella infections in humans. This led to the recommendation of
some 12 measures that the Government needed to implement to obtain an export authorization of poultry
products to the EU. The SVO provided an action plan in response to the DG SANCO report in March
2012 that was fully executed in June 2016, the export of table eggs from BiH to the EU was approved as a
consequence in 2015.
6. At appraisal, the number of human infections from Salmonella were estimated at 14 per 100,000
people, this figure would be equivalent to approximately 530 cases per year. According to the WHO
statistics, this figure has dropped to some 460 by 2010 and continues to fall to the long term average over
33
the past 25 years. Using this logic and subtracting the years during the war period where data collection
was weak a long term average of some 416 cases can be estimated, equivalent to about 11 cases per
100,000.
7. The Project activities have strengthened the overall capacity of the SVO and FSA and APPH to
undertake effective controls in the animal and public health sectors, in line with the current and relevant
EU veterinary acquis and practices, thus reducing the prevalence of animal and food diseases, including
those described above. Even if direct attribution of the project in the reduction of these numbers is
difficult to prove, certain assumptions can be made about the effect of Project activities on these
prevalence rates, which are compared with prevalence rates estimated at appraisal vs historical data
Project in Table 1.
Table 1. Disease Prevalence and Incidence relative to estimates at appraisal
Estimated impact of the Project at appraisal 2006 2007 2008 2009
Ovine/caprine brucellosis in animals 2.5% 2.55% 2.6% 2.65%
cases 22,500 22,900 23,400 23,850
Bovine brucellosis and tuberculosis 0.60% 0.60% 0.60% 0.60%
cases 2,160 2,160 2,160 2,160
Brucellosis in humans cases 174 174 174 174
Salmonella in humans (14 cases/100,000 people) cases 266 266 266 266
Ovine/caprine brucellosis in animals 2.5% 2.55% 2.6% 2.65%
Actual Situation Yr 1 Yr 2 Yr 3 Yr 4
Change in disease incidence
Ovine/caprine brucellosis in animals 4.6% 14.5% 0.5% 0.07%
cases 6830 22122 2426 294
Brucellosis in humans cases 994 458 168 72
Salmonella in humans cases 295 695 532 502
8. Based on the prevalence/incidence rates of the costs of incidence of the disease (Table 2), the
incremental benefit from the Project the costs of investments in the Veterinary Services and treatment
were recalculated using the same base costs estimated at appraisal to effectively compare with the
baseline.
Table 2. Assumptions of Cost of Disease Control and Treatment
Measure Cost per case ($)
Ovine/caprine brucellosis
Destruction and compensation of infected animal 100.0
Destruction of milk from infected animal 15.0
Hospitalization and treatment of human case 1,150.0
Difference in price between old and new testing
methodology* 1.4
34
Bovine brucellosis and tuberculosis
Destruction and compensation of infected animal 200.0
Destruction of milk from infected animal 270.0
Salmonella
Hospitalization and treatment of human case 300.0
9. The with/without Project analysis based on the assumptions in Tables 1 and 2 lead to an estimated
financial internal rate of return for Component A of the Project was estimated at 14 percent. In reality
based on statistical data published by the WHO and from the SVO, and in response of the vaccination
campaign the drop in the number of cases in Brucellosis has been much sharper than estimated at
appraisal. Recalculating the model using these new figures the new IRR amounts to some 18 percent
including yearly monitoring costs born by the SVO. However, it needs to be recognized that the project
only has played a partial role in this sharp reduction of cases given other donor funding in for vaccination
to control the Brucellosis outbreak that was estimated to cost at its peak some US$8.2 million per year.
10. Support to animal health sector: The Project supported the epidemiological study on CSF which
was controlled in BiH through an annual vaccination program. Such vaccination programs preclude the
export of pork and pork products to the EU and its accession countries. The SVO will use the Project
CSF program to fill gaps in the disease’s epidemiology including the role played by wild pigs. The study
found no cases of CSF in domestic animals and only a very low prevalence of the disease in wild boars
albeit based on a fairly limited sample as hunters were not systematically informing the SVO of a kill for
sampling purposes. While results would lead to conclude to plan a long term strategy for shifting from
vaccination to test and slaughter for CSF management, the decision remains pending in large part due to
the remaining prevalence of the disease in the neighboring countries. Support to the SVO also included
animal identification and movement control, which will bring substantial, un-quantified benefits in terms
of reduced identification costs through the use of electronic monitoring systems and improved disease
control and reduction in “tracing” costs and increased market compliance. It must be noted however that
thanks to the investments in SVO have allowed BiH to remain unaffected by the Lumpy Skin disease
outbreaks that have affected a number of the neighboring countries including Greece and Bulgaria, both
are EU members. There was insufficient data available to make a quantitative estimate of the economic
benefit from the successful response to the LSD disease. For comparison, the costs of containing LSD in
Serbia, a similar sized country that is however more densely populated, the Veterinary authorities
estimate between 5,000 to 6,000 cows would be infected of which treatment would amount to EUR7 to 9
million.7
11. Support to plant health sector: The project envisaged significant benefits from the introduction
of GMO testing capacity. While only partial capacity was established, experience from neighboring
countries shows that testing of GMO plant material is considerably less frequent than was estimated and
never exceeds a few hundred samples per year. Considering this reality, for the ICR rather than
calculating the incremental value from GMO testing capacity, the analysis has estimated the potential
incremental benefit from investments in the plant health and phytosanitary sector from the investment in
potato testing.
12. The introduction of the phyto register allowing for phytosanitary risk analysis has improved plant
and seed health in BiH. As of July 2015, all fruit and vegetables produced in BiH are qualified for export
7 GAIN REPORT, USDA Foreign Agriculture Service, July 08, 2016
35
to the EU from a food safety perspective. The Bank project had a significant role in this realization due to
the support to organize the regular potato testing program, the implementation of the phyto register, and
the production of the pest identification manual. Potato production in BiH is equivalent to around 300,000
tons representing a value of some US$50.0 million including seed as well as industrial and consumption
potato. Assuming only 5 percent of the production to be exported represents a value of some
US$2.5million per year compared to 3 seasons of project support amounting to some US$300,000 per
year and continued financing of the yearly monitoring program. The investment rate of return over 20
years at 12 percent discount rate, assuming no change in production volume and constant prices
amounts to an IRR of 18 percent. This analysis does not account for the economic benefits all the other
horticultural products that are complying with EU regulations that are being exported as a result of an
adequate phytosanitary and inspection regime in fruit and vegetables. While BiH remains a net importer
of food stuff, especially processed, the actual import to export ratio has dramatically shrunk over the past
decade partially of course also a consequence of sector recovery from the war.
13. Flood Rehabilitation Benefits: As reflected in previous sections, rural development grants along
with some resources for extensions were reallocated to Flood rehabilitation activities following the
restructuring in July 2011 based on a request from the Government to provide assistance to recover from
the impact of the floods. This involved some US$7.2 million and thus a sizeable share of the project
financing. The actual values disbursed in US dollars are substantially larger than allocated in the legal
amendment mainly because at the time of the reallocation the EURO was substantially stronger than it is
today, which leading to much higher expenditures in the early part of the project when the reallocation
was made. Given that the reallocation to flood rehabilitation was in part to avoid cancellation of
concessional IDA funds and resources under the SIDA grant, this disbursement objective was met. The
conversion of rural grants to flood rehabilitation was made in the context of the PDO relating to improved
services. Given that the Ministries of agriculture in BiH in both RS and Federation are responsible for
water related infrastructure and forestry it was thought that rehabilitation after floods fell under their
mandates and fit within the logic of the PDO in improving services.
14. The support under this component benefitted essentially two regions that were heavily affected by
the fall/winter 2010 floods that affected mainly the Eastern and Northeastern part of the country. Support
was also provided in Popovo polje that was flooded, specifically the Municipality of Ravno where floods
reached levels up to 20 meters as a consequence of poor synchronization of dam releases. Some 18 farm
household had their permanent orchards uprooted and fully destroyed. In the RS the focus was primarily
on rehabilitating damaged rural infrastructure, while in the Federation support focused primarily on
restoring livelihoods of farmers and some smaller rural rehabilitation works. In RS the works covered 20
municipalities rehabilitating a total of 63 pieces of infrastructure including river banks, drainage canals,
bridges, roads and drinking infrastructure serving a total of some 29,000 people in rural towns. The works
on near Derventa performed under the project substantially limited the flooding of the same town in May
2014 when the region was hit by historic rainfalls and 300 year flood levels. Similar flood protection
works in Serbia with a similar topography than North Western BiH resulted in an estimated EIRR of
some 36 percent using Loss Avoidance Estimates modelling8 to estimates benefits from drainage
infrastructure rehabilitation.
15. In the Federation resources were primarily invested in rehabilitation of on farm immovable assets
mostly orchard installations and plastic covering for green house installations benefitting some 106
farming households replanting a total of some 92.3 hectares of orchards and wine yards and 1.5 hectares
of greenhouses. Assuming average yields of higher value horticultural and orchard crops for the region,
8 R.N. Forbes, Drainage, Flood Control and Soil Conservation Projects. Cost Benefit Procedures in New Zealand Agriculture
Economics Division, Ministry of agriculture and Fisheries new Zealand, 1977
36
the rate of return of the rehabilitation of these on-farm investments is expected to approximate around 25
percent over 20 years and 12 percent discount rate.
16. Harmonized, EU IPARD compliant institutions and systems for agricultural and rural
development payments: As reflected in the document, the entry into force of the Stabilization and
Association Agreement has been delayed. When BiH will finally achieve candidate status, it may receive
each year anywhere from €5 to €13 per hectare of agricultural land in IPARD funding. This Projection is
based on the experience of the new member states, where the average SAPARD allocation from 2000 to
2004 was €9 per hectare of agricultural land (Table 3). Estonia and Slovenia received the highest
allocations and Hungary, and Slovakia received the lowest allocations.
Table 3. Annual SAPARD Allocations
Agricultural Land
('000 ha)
2000-2004 Average
Annual SAPARD
allocation (€'000)
SAPARD per ha of
agricultural land (€)
Czech Republic 4,279 22,445 5
Hungary 5,854 38,713 7
Poland 18,413 171,603 9
Slovakia 2,441 18,606 8
Slovenia 518 6,447 12
Estonia 986 12,347 13
Latvia 2,485 22,226 9
Lithuania 3,489 30,345 9
Bulgaria 5,582 53,026 9
Romania 14,857 153,243 10
Average 5,890 52,900 9
Source: Authors’ calculations based on SAPARD Annual Report (2004) and FAO Stat, 2006.
17. As reflected at project inception, in the absence of any certainty over the level of future IPARD
funding, financial and economic analysis of benefits of investment in entity level paying systems is
difficult. However, recent analysis of likely improved farmer uptake of IPARD funding in Macedonia
resulting from the accelerated development of its paying system showed an internal rate of return of 48
percent over the period 2007-2010, during which Macedonia will receive EUR31.3 million in IPARD
funding. This outcome is based on an average 25 percent improvement in IPARD disbursement over the
Project period. The pre-IPARD development of a comprehensive, EU IPARD compliant paying system
in BiH will place it in a strong position to disburse IPARD funds effectively and equitably once they
become available.
35
Annex 4. Revised Results Framework
Project Development Objective (PDO):
To assist Bosnia and Herzegovina to strengthen the capacity of its State-level and Entity-level institutions to deliver more efficient and effective agricultural services
and support programs as well as to make a substantial contribution to an acceleration of Bosnia and Herzegovina’s eligibility to access support under the European
Union Instrument for Pre-Accession Assistance for Rural Development (IPARD).
Revised Project Development Objective:
No Change
PDO Level Results
Indicators* Co
re
D=Drop
ped
C=Conti
nue
N= New
R=Revised
Unit of
Measure Baseline
Cumulative Target Values** Freque
ncy
Data
Source/
Method
ology
Respons
ibility for
Data
Collection
Quarter 1
Quarter 2
Quarter 3 June 30, 2012
Sixty-percent of disease and
pest inspections implemented
on the basis of expected risks
D Yes/No Poor
understanding of
pest and disease
epidemiology.
Little risk based
inspection
Disease and
pest incidence
and
epidemiology
studies
initiated
Disease and
pest survey
completed
and databases
established
Risk based
disease and
pest
management
control
systems
operational
Sanitary
inspection is
60% risk based
Indicator One: Structured
disease and pest control
system, informed by surveys
and supported by reliable
laboratory diagnostic capacity
and databases, are developed,
coordinated and implemented
with data sharing at State and
Entity level approximating EU
standards
N Yes/No No systematic
disease and pest
control systems
for plants,
animals, and
foodstuff in
place
Develop
regulatory
framework
Undertake
surveys and
laboratory
analysis in
line with
regulations,
Develop
registries and
reporting
systems
Maintain and
monitor
situation
through
inspection
services, begin
risk targeting
of inspections
Annual SVO,
APPH,
FSA and
entity
inspector
ate
reports
SVO,
APPH,
FSA
and
entity
inspect
orate
reports
Pluralistic, stakeholder driven
and outcome based contracted
extension services operational
at the level of each entity and
benefitting twenty percent of
D Yes/No Limited public
extension
services in the
RS and none in
the FBiH. Few
Extension
Departments
established
and staffed
Extension
agencies
established/re
structured and
regional
Extension
Board elected.
Outcome
based,
contracted
Stakeholder
managed
contracted,
public/private
extension
36
commercial farmers public private
extension
partnerships
offices
established.
Extension
contracting
formats
finalized and
tenders
advertised.
extension
delivery
operational
service
reaching 20%
of commercial
farmers
Un-transparent agricultural and
rural development support
targeting and administrative
procedures. Poor monitoring
and impact evaluation.
D Yes/No Paying System
and
Management
authority staffed
and equipped
Farm
registries
established
and used to
verify
agricultural
and rural
development
payments
Paying
system
hardware and
software
operational
and tested
Indicator Two: Registries and
databases for the effective
management of incentive
payments, tracking of sanitary
inspection data at Entity levels
with reporting capacity to State
level agencies and MOFTER
are in place approximating EU
systems.
N Yes/No No systematic
registry and
reporting
capacity in place
Develop
Farm and
client
registry
Develop an
Farm and
client, and
livestock
registry
Enter new
data and
update
information
on continuous
basis and data
auditing
Link various
registries for
Farm
information
System
Annual SVO and
I&R
Agency
Reports
and
livestock
statistics
SVO
and
I&R
Agency
Indicator Three: Flood
rehabilitation grants help
communities recover to pre-
flood level of economic
activity.
N Yes/No Some 15% of
community assets
destroyed
Assets for
replacement
adequately
recorded and
valuated
Development
of design and
technical
specifications
Execution of
works and
goods
contracts
All
rehabilitation
completed
PIU and
APCU
quarterly
status
reports
PIU
and
APCU
INTERMEDIATE RESULTS
Intermediate Result (Component One): Agricultural Information and Institutional Capacity Building a) State sanitary and phytosanitary laws, regulations and inspection systems approximate EU norms. b) Agricultural information systems support strategic planning, policy making and monitoring. c) Knowledge and technology available for agricultural producers and processors to raise competitiveness and access and make effective use of the structural support provided
by the MAFWM/MAWMF.
Revised Intermediate Result (Component One): Agricultural Information and Institutional Capacity Building a) State sanitary and phytosanitary laws, regulations and inspection systems approximate EU norms. b) Agricultural information systems support strategic planning, policy making and monitoring approximating EU requirements.
37
Intermediate Result indicator
State Veterinary Office of BiH
implementing effective animal
identification system
C Yes/No Animal ID only
covering 50% of cattle population.
TA recruited and
strategy for animal ID identified.
Animal
identification systems
upgraded and
pilot tested. 70% of cattle
ear tagged.
80 % of cattle
ear tagged. Sheep and
swine
identification system piloted.
Animal
identification: 10% of cattle and
3% of small
ruminants are randomly
checked each
year,
Annual SVO and
I&R agency
SVO &
IR agency
Intermediate Result indicator
SVO implementing brucellosis
and CSF control programs
C Yes/No Brucellosis and CSF
epidemiology
data outdated. Limited test and
slaughter program
for Brucella.
Strategy for disease
epidemiology
work finalized.
Veterinary epidemiological
studies initiated.
Reference laboratories for
CSF and
brucellosis testing established
Animal disease database and risk
assessment
systems under development.
b) In animal health: >75% of small
ruminants are
vaccinated for Brucellosis each
year,
Annual SVO disease
monitorin
g reports
SVO with
entities
MoA
Intermediate Result indicator
APPH implementing plant
health monitoring and risk
assessment systems.
R Yes/No APPH only
recently established and
not fully staffed
or operational.
TA recruited and
regulation for plant health
monitoring
developed.
Complete EU
required pest surveys
Upgrade
designated plant health and
Phytosanitary
laboratories
- 80% of seed and
plant material producers/importer
s are registered
potato pest survey repeated yearly
Annual APPH
pest monitorin
g reports
APPH
with entities
MoA
Intermediate Result indicator
APPH develops and
implements phytosanitary and
plant register database
N Yes/No
No centralized
database for
phytosanitary or plant production
or trade
Develop rules and
regulations for
plant health and phytosanitary
function in
cooperation with entities MoA and
inspections
Plant health
surveys
operational. Database
design
tendered. Laboratories
upgraded.
Establish
Phyto-plant
health registry database
linking entity
MoA and Inspection
databases
Link phyto-plant
health registry
with FSA and SVO databases
and MOFTER
farm information system
Quarterl
y
progress reports
APPH &P
IU
APPH
& PIU
Intermediate Result indicator
FSA implementing a risk based
food safety system
C Yes/No FSA only
recently established and
food regulations
and inspection procedures
incomplete
TA recruited and
strategy for food risk assessment
program
established in partnership with
EU IPA program
Food safety
surveys operational.
Database
design tendered.
Laboratories
upgraded
FSA performs
risk assessment and coordinates
a risk
communication program.
FSA performs at
least 3 risk assessments and
coordinates a risk
communication program.
Annual
progress reports
FSA FSA
Intermediate Result indicator
Entity-level Inspection
Directorates are implementing
BiH plant health, animal
health and food safety laws and
R Yes/No No effective agricultural
inspections
undertaken
Develop inspection plans in
collaboration with
FSA, SVO and APPH
Enter inspection data
and registration
of establishments
in IMS
Apply risk based in section
based on
regulations form FSA,
SVO and APPH
c)
sa
f
e
Annual Inspection Statistics
Entity Inspecto
rates
38
Regulations
l
y
Intermediate Result indicator
RS MAFWM/ FBiH MAWMF
agricultural information units
and databases and FADN pilot
established assembling farm
level information.
R Yes/No Adhoc record
keeping and no
M&E for formulation of
policy for
support programs
Develop FADN
survey and
implement
Implement
FADN survey
for 120 farms
Implement
FADN survey
for 180 farms, establish
agricultural
information database
Integrate FADN
survey data in
entity MoA information
system
6
months
progress reports
RS AND
FBiH
MoA
Reports
submitte
d to PIU and
APCU
Intermediate Result indicator
WAN linking MOFTER with
Sate level agencies, Entity
MoAs, and Inspection services
under establishment for AIS
N Yes/no No coherent
agricultural information
collection at
State level
Coordinate
development of registries for
livestock, clients,
plant health and inspection services
Develop and
agree State level WAN
strategy with
entities
Develop
Software and hardware
requirements
and identify server room
Begin interface
of various entity level and State
agency databases
for AIS
6
months progress
report
MOFTER MOFTE
R PIU
Intermediate Result indicator
RS MAFWM/ FBiH MAWMF
Department for Extension with
a multi-stakeholder governing
body established.
D Limited public
extension services in RS
and none in
FBiH.
RS MAFWM/
FBiH MAWFM Extension
Departments.
Established.
RS MAFWM/
FBiH MAWFM Extension
Departments
and Agencies trained and
operational.
Extension
Boards elected.
Extension Boards
manage a contracted,
pluralistic
extension system
Intermediate Result indicator
Market and results-oriented
Entity extension systems
operational and effective in
accordance with clearly
defined policy objectives.
D Few
public/private
extension
partnerships.
Extension
management
system established
and contracting
systems designed.
Initial round of
30 outcome-
based extension
contracts issues.
Contract based
extension
service delivery
system fully
operational at farm level.
On-farm
extension
delivery
primarily through
contracted private sector
and civil society
extension agents.
Intermediate Result indicator
Number of contracted
extension/advisory service
providers accredited with
specific competencies.
D None 30 50 80
Intermediate Result indicator
Number of extension packages
prepared and disseminated.
D None 15 20 30
Intermediate Result indicator
Number of commercial and
semi-subsistence farmers
undergoing restructuring and
agro-processors within target
group who implement activities
D None 300 800 1,500
39
directly related to advisory
services extended with Project
assistance.
Intermediate Result (Component Two): Enhanced Agriculture and Rural Development Support Program
(a) Rural Development Coordination Department/ Unit within MoFTER established and is playing an effective role in liaising with EU and in coordinating rural development activities.
(b) Systems for agricultural/rural development payments and their reporting is transparent and compatible with EU IPARD funds administration.
(c) Increased RD investment in activities and enterprises related to efficient agricultural technology and sustainable land use
Revised Intermediate Result (Component Two): Enhanced Agriculture and Rural Development Support Program
(a) Entity-level farm and entitlement registries and Paying Systems established and maintained.
(b) Thirty percent of agriculture and rural development funding used for structural payments through transparent policy based paying system in each Entity.
(c) EU IPARD Entity rural development plans established and overseen by effective Monitoring Committees.
Intermediate Result indicator
One: Transparent Entity level
paying systems established
R %
achievement
Opaque manual
paying systems
Paying staff
appointed and
procedures developed
First
applications
received by paying system
& processed
100 % of RD
payment at
entity level processed
through new
paying system
First M%E report
on first season
payments
Annual Yearly
M&E
reports
PIU &
APCU
Intermediate Result indicator
Two: Entity level rural
development plans established
and overseen by Monitoring
Committees
R %
achievement
No rural
development
plans
Rural development
plan at entity level
Entity rural
development
plan with harmonized
measures
Monitoring
Committee
established providing
policy input
Monitoring
Committee
reformulating RD program
based on M&E
report
Annual Plan PIU &
APCU
Increase in RD funding and
number of grants supporting
competitive agriculture activities.
R % achievement
Only 10% of agricultural
subsidies are
structural
RD plan informs RD support
priorities
30% in Federation and
50% in RS are
structural payments
More than 50% of all payments
are structural
(RD)
More than 50% of all payments
are structural
(RD)
Annual Yearly M&E
reports
MoFTER RD payment and
registries database and reporting
system established.
D No central
collation or reporting of
market or
structural payments
MoFTER
SAFFRD equipment and
staff
procurement initiated.
MoFTER
SAFFRD fully staffed including
paying system
Coordination Unit. LAN and WAN
established.
MoFTER pilot
tests a database and
coordination
and reporting system for RD
payments and
registries.
MoFTER
publishes a consolidated
report of BiH
market and rural
development
payments.
MoFTER
publishes a consolidated
report of BiH
market and rural development
payments.
Annual
Intermediate Result indicator
Three: Rehabilitation
investments completed before
end of construction and
farming season in October,
2011
N Some 15% of
community assets
destroyed
Assets for
replacement
adequately recorded and
valuated
Development of
design and
technical specifications
Execution of
works and
goods contracts
All rehabilitation
completed
quarterl
y
Procurem
ent plan
PIU &
APCU
40
Annex 5. Bank Lending and Implementation Support/Supervision Processes
Names Title Unit Responsibility/
Specialty
Lending
Samra Bajramovic Program Assistant ECCBM
David A. Bontempo Operations Analyst GGODR
Anna Georgieva Country Sector Coordinator ECSSD -
HIS
Mirjana Karahasanovic Operations Officer GENDR
Robert Kirmse Sr Forestry Spec. ECSSD -
HIS
Ritta Cestti Practice Manager GWA04 TTL
Jolanta Kryspin-Watson Lead Disaster Risk Management
Specialist GSURR
Julian A. Lampietti Practice Manager GFA03
Paula F. Lytle Senior Social Development Spec GSU07
Erwin H. R. Tiongson Senior Economist GPVDR
Philip Van der Celen Junior Professional Associate ECSSD -
HIS
Sohaila Wali Temporary ECCU3
Supervision/ICR
Jeren Kabayeva ICR Author GFA03
Samra Bajramovic Program Assistant ECCBM
Ama Esson Program Assistant GFA03
Maria Josefina M. Gabitan Senior Executive Assistant GFADR
Daniel P. Gerber Sr. Rural Development Specialist GFA03 TTL
Mirjana Karahasanovic Sr. Operations Officer GENDR
Holger Kray Lead Agriculture Economist GFA13 TTL
Nikola Kerleta Procurement Specialist GGODR
Martin Henry Lenihan Senior Social Development Spec GSURR
Lamija Marijanovic Financial Management Specialis GGODR
Rohan G. Selvaratnam Operations Analyst GFADR
Sandra Schlosser Social Development Spec GSURR
Cora Shaw TTL
41
(b) Staff Time and Cost
Stage of Project Cycle
Staff Time and Cost (Bank Budget Only)
No. of staff weeks USD Thousands (including
travel and consultant costs)
Lending
FY07 57.13 288.2
FY08 1.0
Total: 289.20
Supervision/ICR
FY08 37.18 122.5
FY09 30.26 113.6
FY10 23.53 147.8
FY11 23.17 97.8
FY12 21.59 182.1
FY13 22.88 160.0
FY14 17.88 101.1
FY15 19.73 85.7
FY16 .58 78
FY17 6.69 21
Total: 148.90
42
Annex 6. Beneficiary Survey Results
No Beneficiary Survey was produced.
43
Annex 7. Stakeholder Workshop Report and Results
1. A stakeholder workshop was held on October 13, 2016 in which most beneficiary
institutions participated. Each Institution presented a brief presentation of the situation before the
project started, the present situation and the gaps needing filled moving forward.
2. The institutions present were the FSA, the APPH and the SVO of BiH and MOFTER.
The meeting was similarly attended by the entity level Ministries of agriculture, the PIU for both
entities as well as the M&E consultant that had supported the project. The Inspection services of
FBiH were similarly represented.
3. The meeting did not include beneficiaries from the works related to Flood rehabilitation,
however surveys have been conducted that reflected beneficiary perspectives from work related
to flood rehabilitation works as well as direct support to families that had lost their livelihood
notably around the municipality of Ravno where some households experienced floods of nearly
20 meters that had totally devastated permanent crops and orchards as well as related installations.
4. Overall, stakeholder institutions in spite of the challenges faced due to opposing views of
the role of the state had a very positive feedback as it relates to the project impacts. For some
agencies, the project represented the first significant support in assuming their mandate including
basic information systems and databases related to the performance of their mandates, such as the
(i) establishment of a phyto register, (ii) the establishment of a functional livestock identification
and registration system, (iii) a farm and client register to identify all farms that receive incentives
from their respective ministries, (iv) as well as inspection databases to conduct risk based food
product related inspections.
44
Annex 8. Summary of Borrower's ICR and/or Comments on Draft ICR
1. The ARDP is a project with designed complex objectives which are relevant even 7 years
after beginning of its implementation, which can be interpreted also as an indication of slow
progress in political situation. The project design envisaged simultaneous work on strengthening
and development of both State and Entity institutions, which was result of consensus and political
will present at the time of project design and approval. During project implementation it was not
possible to achieve some of the planned objectives, partly due to non-conducive political climate.
As result of that, at certain periods it was simply impossible to implement certain activities.
2. Although the Project was implemented in institutions which often have different political
views, in technical terms it was implemented in the most efficient possible way under given
circumstances. The technical nature of the project was proven to be its part in which was most
often easiest to reach agreement, enabling implementation in these technical segments. The
ARDP experience showed that in a country with complex constitutional structure and political
setup, it is very difficult to achieve programmatic objectives that depend on political consensus,
however it is much easier to achieve the objectives of technical nature which do not require
consultations at higher level of authorities. In view of this reality, the Project achieved success in
its technical segment, such as IT systems, namely registries development, laboratory equipment,
quarantine pests and potato diseases monitoring, etc.
3. The implemented technical outputs improved significantly work of the institutions for
which they were designed, e.g. Inspectorate IMS. However, problems similar to the above-
described ones have emerged here as well. This is partly the result of growing needs and volume
of information to be processed, and partly due to lack of further development at technical level,
both in terms of operational modifications and maintenance.
4. Although the implementation period was characterized with some remarkable and less
remarkable technical innovations, they are nevertheless the most valuable achievements. This is
because in a situation when it is not possible to implement objectives of policy nature,
development of technical capacities built with project financing, pave the way towards
achievement of policy objectives, which would, hopefully, take place at some point.
5. Technical capacities were built and made functional early enough during implementation
period to enable testing, which concluded that the same technology with common characteristics
in all relevant institutions leads to more or less identical problems, which opens room for seeking
for mutually agreeable solutions.
6. The ARDP introduced the M&E system as an important aspect of project implementation,
where monitoring reports served as a significant input/tool for WB supervision missions. Since
such reports were intensively discussed with various project beneficiaries, M&E reports were an
important document for project management to make timely and appropriate decisions. The
monitoring system based on a typical LogFrame concept showed a number of weaknesses during
implementation period, one of which was the fact it is not possible to use such concept to monitor
changes in real time, given the fact that M&E reports are cumulative documents with value as
archive.
7. The said weakness indicates to the need to introduce an implementation monitoring with
real time elements, enabling evaluation at each implementation stage and taking necessary actions
in timely fashion which would achieve best effects, without a need for expensive ex post
45
evaluation which mainly gives material for so called “lessons learned”, which, though interesting,
are of no significant practical use.
8. The positive effects achieved by the project are result of work of all teams involved in
implementation, as well as flexibility shown by the WB team as project administrator, to
accommodate beneficiaries’ wishes and needs and to approve activities which were often
significantly different from the ones envisaged by the PAD. Implementation flexibility is one of
important characteristics of the ARDP, and it could be said that thanks to such flexibility it was
possible to “rescue” the Project, and achieve important project implementation results.
9. Besides the joint work of numerous teams with various institutional backgrounds, thanks
to which it was possible to achieve impressive project results, the ARDP was also important test
for partnership among various institutions. The project showed clearly that not only a team work,
but also a partnership, is possible during implementation which takes place in such political
climate which often does not encourage such type of relationship. Project experience shows that
in future joint activities, for achievement of optimal results, which would satisfy all the involved
stakeholders, it would be very important to ensure equal decision making power, which can be, as
in case of political decision, based on consensus principles.
46
Annex 9. Comments of Cofinanciers and Other Partners/Stakeholders
The draft ICR was shared with the Government counterparts and SIDA colleagues on December
1, 2016, but no comments were received by December 21, 2016. The team received the document
with comments in track changes from the RS PIU, and those were addressed in the final version
of the ICR.
47
Annex 10. List of Supporting Documents
Project Appraisal Document, Bosnia and Herzegovina Agriculture and Rural
Development Project; Report No.: 39384-BA;
Restructuring Project Papers (Restructuring Papers dated June 2010; July 2011; April
2012; May 2013; and June 2015);
Project Aide Memoirs and ISRs;
MOFTER BiH Project Semi-Annual Progress Reports;
Project Final Project Progress Report;
Country Partnership Strategy (FY08-FY11), World Bank, November 2007;
Draft Country Partnership Framework (FY16-FY20), World Bank, September 2015;
Agricultural Sector Policy Note for Bosnia and Herzegovina; Trade and Integration
Policy Notes, World Bank, May 2010;
Final Reports on the Agriculture and Rural Development Project activities financed by
SIDA produced by the Federal Ministry of Agriculture, Water Management and Forestry
and RS Ministry of Agriculture, Forestry and Water Management
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MAP