Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No. 3762

PROJECT PERFORMANCE AUDIT REPORT

SPAIN AGRICULTURAL RESEARCH PROJECT(LOAN 768-SP)

December 31, 1981

Operations Evaluation Department

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

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ABBREVIATIONS

BOE - Official Bulletin of State

CRIDA - Regional Research Center

CSIC - High Council for Scientific Research

GOS - Government of Spain

INIA - National Agricultural Research

Institute

IRI - IRI Research Institute, Inc.

LDA - Livestock Development Agency

MOA - Ministry of Agriculture

SEA - Agricultural Extension Service

PMM - Official Mobile Park

FOR OFFICIAL USE ONLY

PROJECT PERFORMANCE AUDIT REPORT

SPAIN AGRICULTURAL RESEARCH PROJECT(LOAN 768-SP)

TABLE OF CONTENTS

Page No.

Preface ............................................................. iBasic Data Sheet . ................................................... iiHighlights ................................................. ...... iv

PROJECT PERFORMANCE AUDIT MEMORANDUM

I. SUM4MARY ........................ 1

II. THE MAIN ISSUES ........................... 3

A. Project Origin and the Role of theBank/FAO Cooperative Program ....................... 3

B. Overview of Project Developments:

the Success Story .................................. 5

1. The Approach to Research ......................... 52. The Technical Assistance Component .................... 7

C. Overview of Projects Developments:

the Other Side ............................... 12

1. Switching to a Commodity-Oriented

Approach to Research ............. 12

2. The Hissing Extension Link ......... .............. 12

D. Some Notes on Current Status and FutureProspects of Agricultural Research in Spain .......... 14

1. Post-Implementation Developments .............. 14

2. Possible Future Risks ............. ......... 15

E. Bank Performance ........... 16

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

TABLE OF CONTENTS (Continued)

Page No.

ATTACHMENT: PROJECT COMPLETION REPORT

I. INTRODUCTION ....................................... 19

II. BACKGROUND ................................ 20

III. PROJECT IMPLEMENTATION ............................. 21

IV. COSTS AND DISBURSEMENTS ........... . .......... 36

V. BORROWER PERFORMANCE ................................ 38

VI. CONSULTANTS PERFORMANCE ................. ..... . 40

VII. BANK PERFORMANCE ............................ 40

VIII. ECONOMIC IMPACT ........................................ 42

IX. CONCLUSIONS ............................................ 44

Annexes

1. Organization and Management .......................... 472. Disbursement Schedule .................................. 503. Fellowship Program ............................. 51

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PROJECT PERFORMANCE AUDIT REPORT

SPAIN AGRICULTURAL RESEARCH PROJECT(LOAN 768-SP)

PREFACE

This is a performance audit of the Spain Agricultural ResearchProject, for which Loan 768-SP was approved in May 1971 in the amount of

US$12.7 million. The loan account was closed in December 1979, fully dis-bursed.

The audit report consists of an audit memorandum prepared by theOperations Evaluation Department and the Project Completion Report (PCR),dated June 4, 1981. The PCR was prepared by the Europe, Middle East and North

Africa Regional Office on the basis of a PCR prepared by the National Agri-cultural Research Institute (INIA) of Spain, the executing agency.

An OED mission visited Spain in November 1980. The mission held

discussions with staff of the INIA, the Superior Agricultural Council, and the

Agricultural Extension Service; visited three of the six regional researchcenters (CRIDA) whose development was financed under the project, and inter-viewed INIA's field staff. Information obtained during the mission was usedto test the validity of the conclusions of the PCR and permitted discussion of

some aspects not covered by the PCR.

The audit memorandum is based on these discussions, on interviewswith Bank staff, and on the review of the PCR, the Appraisal Report (PA-74A,dated April 29, 1971), the President's Report (No. P-926 of May 3, 1971), theLoan Agreement dated June 28, 1971, correspondence with the Borrower and theexecuting agency and internal Bank memoranda on project issues as contained in

relevant Bank files.

The audit finds that the PCR covers adequately the project's salient

features. The PPAM generally agrees with the PCR conclusions, but puts someconclusions on project success in a different perspective, and discussessome of the risks the project may be facing in the future. Further, sincethis was the first research project the Bank had ever financed, the PPAManalyzes several issues where PCR comments were found to be too brief. The

PPAM thus focuses principally on project generation and the Bank's contribu-tion to its design and success, further analyzes the main project features,and discusses the project process and results.

The draft report was sent to the Borrower on November 18, 1981 forcomments; however, none were received.

The valuable assistance provided by the Government of Spain andstaff of the executing agencies met during the preparation of this report isgratefully acknowledged.

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PROJECT PERFORMANCE AUDIT REPORT BASIC DATA SHEET

SPAIN AGRICULTURAL RESEARCH PROJECT

(LOAN 768-SP)

KEY PROJECT DATA

AppraisalItem Expectation Actual

Total Project Cost (US$ million) 26.OZ-a 30.3.k

Overrun (%) - 17%Loan Amount (US$ million) -- 12.7

Disbursed -- 12.7

Cancelled -- None

Repaid to 04/30/81 -- 2.85

Outstanding to 09/15/91 -- 9.85

Date Main Physical Components Completed 1976 1979Proportion Completed by above date 65 100

Time Overrun (%) -- 80

Cumulative and Actual Disbursements

(US$ million)

FY72 FY73 FY74 FY75 FY76 FY77 FY78 FY79

(i) Estimate 1.6 5.1 8.6 12.0 12.7 - - -

(ii) Actual - 1.28 2.22 4.18 8.07 9.89 10.86 12.7(iii) Actual as % 0 25 26 35 64 78 86 100

of Estimate

OTHER PROJECT DATA

OriginalItem Plan Actual

First Mention in Files or Timetable 11/01/66

Government's Application 05/01/76Negotiations 03/26-30/71

Board Approval 05/20/71

Loan Agreement Date 06/28/71

Effectiveness Date 11/01/71 11/01/71

Closing Date 06/30/76 12/31/79

Borrower Government of Spain

Executing Agency Instituto Nacional deInvestigaciones Agrarias

Fiscal Year of Borrower January 1 - December 31Follow-on Project None

/a Excluding US$2.2 million for land acquisition./b Excluding US$3.8 million spent on land acquisition.

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MISSION DATA

Month/ No. of No. of Man- Date ofItem Year Weeks Persons weeks Report

Preparation Report 10/68 - - - 10/69

Pre-Appraisal 06/70 - 3 - -

Pre-Appraisal 08/70 - 5 - -Appraisal 11/70 4 5 20 04/71

Subtotal 4 20

Supervision I 07/72 3 1 3 08/72Supervision II 11/72 2 1 2 12/72Supervision III 11/73 3 2 6 01/73Supervision IV 06/74 1 1 1 07/74Supervision V 07/74 4 1 4 08/74Supervision VI 12/75 1 2 2 12/75Supervision VII 09/76 1 2 2 12/76Supervision VIII 03/77 5 1 5 04/77Supervision IX 02/78 3 1 3 03/78

Subtotal 23 28

Completion 12/79 3 2 6 05/81

Total 30 54

COUNTRY EXCHANGE RATES

Name of Currency (Abbreviation) pesetas

Exchange Rate at Appraisal US$1 = pesetas 70

Exchange Rate for Completion studies US$1 = pesetas 70Range of Exchange Rate during Project Period US$1 = pesetas 46-70

s

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PROJECT PERFORMANCE AUDIT REPORT

SPAIN AGRICULTURAL RESEARCH PROJECT(LOAN 768-SP)

HIGHLIGHTS

The Agricultural Research Project was expected to upgrade the levelof research in Spain, a pre-requisite for effective introduction of moderntechnology in plant and animal production. This up-grading was to be achieved

by restructuring the National Crop Research Institute (INIA), re-directing theInstitute's emphasis from diverse regional programs to specialized commodityprograms and further developing its research staff. Six, strategically

located, commodity research centers were to be established. Research at thesecenters would encompass forage and animal production in both humid and aridzones, cereals, grain legumes, oilseeds and fruits and vegetables. The

project also provided for about 200 overseas training fellowships for INIApersonnel and the employment of 2 to 4 research specialists in selected fields

who would be located in each of the six regional centers. Finally, the

project provided for Locating two specialists from the Extension Service ineach of the centers in order to insure an effective liaison between researchand extension. It was expected that through the project both professional and

technical personnel would be able to concentrate fully on research work. INIA

was to be the executing agency and the project was expected to cost aboutUS$26.0 million of which US$12.7 million would be financed by Loan 768-SP.

The project was fully implemented as forseen at appraisal. Allsix regional research centers were established. Two hundred of the research

staff studied abroad under project provided scholarships, 87 obtained advanceddegree and the 113 others attended primarily short-term courses. All of theexpatriate experts recuired for the project were employed and, in general,carried out their envisaged assignments well. Eight years were requiredto complete the project, three and one-half years longer than expected atappraisal. This delay was due partly to reorganization, start-up and financ-

ing problems, and pari:ly to optimistic scheduling of a complex, pioneeringproject. At completion, total project cost came to US$30.0 million, repre-senting a 17% overrun.

The project introduced new research planning and administrativesystems. Research is now more relevant to Spanish conditions in areas sup-ported by the project and research efforts are more efficiently conducted.The project has been successful in supporting INIA's research organization and

expansion, and in establishing a commodity-based research program. Because ofthe long-term pay-off nature of research, it was not possible to ascertain the

ultimate benefits of this project. However, some of the intermediate benefits

have been: sunflower production has been greatly increased through introduc-tion of new varieties in areas which had previosuly only grown dryland barley

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and wheat (PCR, para. 8.05), and methods to control tristeza and other viruses

of citrus have been developed and virus-free material is now being distributed

through commercial nurseries. If these materials are widely adopted, thecitrus industry of Spain will be saved from extinction (PCR, para. 8.06).

Other points which may be of special interest are:

- the expectation that the project would exercise a far reachinginfluence in Spain as well as on Bank lending for agricultural

research has been only partly realized (PPAM, paras. 10 and 47);

- improved liaision between research and extension has not devel-oped as envisaged mainly due to a failure at appraisal to assessthe Agricultural Extension Service's (SEA) staffing and status

and to discuss project's objectives with SEA (PPAM, paras. 35-37);

- agreement to recruit and manage expatriate experts and scholarships

through a consulting firm proved to be appropriate; however, thetime-frame and other conditions for retaining such a firm may havebeen overly restrictive and burdensome to the Borrower (PPAM, paras.

29-31); and

- failure to approve and implement a follow-on project, mainly due to

ministerial disagreement, may eventually reduce the scope and

effectiveness of the research program (PCR, paras. 7.06-7.11).

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PROJECT PERFORMANCE AUDIT MEMORANDUM

SPAIN AGRICULTURAL RESEARCH PROJECT(LOAN 768-SP)

I. SUMMARY

1. During the sixties Bank missions found that Spain's agriculturalsector was slow to introduce and adopt modern technology in plant and animalproduction, and that this was a serious constraint to improved production.Crop yields and animal output were substantially lower than those of otherEuropean countries and well below identified potentials. Agricultural

research was in dire need of reorganization. It was not focussed on clear-cut

objectives, and. trained research workers were in short supply, dispersed overmany scattered and isolated units with far too diverse responsibilities.

2. The project as appraised was expected to upgrade the standard ofagricultural research as a pre-requisite to effective introduction of moderntechnology in plant and animal production. Upgrading would be achieved byrestructuring the National Crop Research Institute (INIA), re-orienting itsresearch emphasis away from diverse regional activities and towards special-ized programs on a commodity basis and expanding and developing its humanresource base. Six commodity-oriented specialized research centers, designedto meet national requirements for the commodities concerned, were to be

established under the project. These 'national research centers' would bestrategically located at regional centers for agricultural research and would

cover pastures, forage crops and animal production for both the arid and humid

zones of Spain; fruits and vegetables; citrus; cereals and grain legumes, andoilseeds. Together, these five commodity groups covered 85% of all of Spain's

agricultural output and 70% of its major agricultural export and import

commodities.

3. The project would permit professional and technical personnel toconcentrate fully on research work and would provide about 200 training

fellowships to allow selected personnel of INIA, of the High Council for

Scientific Research (CSIC) and of the Agricultural Extension Service (SEA) toobtain training abroad In modern production technology as well as in research

and extension techniques. The project would also provide 2-4 expatriate

research specialists per center in selected fields essential to effectiveoperations. One of these would act as research coordinator at each center.

At headquarters, a senior agricultural scientist of international repute would

serve as national research coordinator. Finally, the project would provide

for the location of at least two regional extension specialists at each center

to expand effective liaison between research and extension.

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4. The project was originally identified and prepared by the Bank/FAQCooperative Program (CP). The Bank substantially changed the CP proposalmainly through introducing commodity-oriented research, reducing in the numberof centers supported, and expanding technical assistance. These changes haveproved to be crucial to project success.

5. The project was fully implemented as envisaged at appraisal. Allsix specialized, commodity-oriented, applied research centers were establishedat regional agricultural research stations. All expatriate experts, whosediscipline was not then available in Spain, were recruited. Two hundredSpanish staff obtained scholarships for studies abroad, and obtained 20 PhD,67 MSc degrees. The other 113 attended primarily short-term courses.Altogether 262 man-years of scholarships were utilized. Because of exchangerate fluctuations, almost US$1 million remained unutilized at the end of theproject; the Bank and the Government agreed to reallocate these funds towardfurther enlarging the fellowship component. It took, however, eight years forproject activities to be completed, three-and-a-half years longer thanexpected at appraisal. Part of these delays was due to reorganization,start-up and financing problems, and part to overly optimistic scheduling ofsuch a complex project - the first agricultural research project ever support-ed by the Bank. Total project cost was US$30.3 million. This represents a17% overrun over the US$26 million anticipated at appraisal.

6. The project was implemented by the National Agricultural ResearchInstitute (INIA), which, however, had undergone a major reorganizationsince appraisal in 1970. On October 19, 1971, when the loan was not yeteffective, the Government merged the National Crop Research Institute (the oldINIA), the Forestry Research and Experimentation Institute (IFIE) and theAnimal Biology Board (BA) into the National Agricultural Research Institute(the new INIA). Although the new INIA performed creditably, several changesin its top management created problems during implementation or compoundedexogeneous problems. Among these, inadequate counterpart funding by theMinistry of Finance during certain years was the most serious. Difficultiesin changing the administrative status of INIA staff in accordance withprovision of the loan agreement, and problems with some of the buildingcontractors, should also be mentioned.

7. The Bank required, as a condition for presenting the project tothe Board, that INIA retain a consulting firm to identify and select theexpatriate technical advisors and to administer the fellowship program. Infulfillment of this requirement, INIA retained the services of a consultingfirm which performed most creditably in administering the fellowship program,but the Government has found some of the experts provided under the con-tract unsatisfactory. On these grounds, the Government temporarily refused toextend the consulting firm's contract beyond the original term. The newcontract was signed only after some Bank pressure and the replacement of onesenior expatriate expert.

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8. The project has been successful in supporting INIA's reorganizationand expansion, as well as in expanding and improving INIA's facilities,equipment and staff. Concentration of research on a commodity basis provedsuccessful, even though it is still too early to assess the eventual impact ofthe project on the future performance of Spanish agriculture. However, theaudit concludes, unlike the PCR (para. 9.10), that the project did not changeINIA's overall approach towards research: it affected only activities in-cluded in the project, i.e., about 50% of the total. Recent constitutionaland political developments, as well as the lack of a follow-on effort tobuttress and consolidate results already obtained, cast some doubts on thefuture impact of the project on agricultural in Spain.

9. The project introduced new research planning and administrationsystems. As a result, research now undertaken is more relevant to Spanishconditions in areas supported by the project, and the research effort is moreefficiently conducted.

10. At appraisal, it was expected that the project would exercise afar-reaching influence in Spain as well as on Bank operations in lending foragricultural research ijn general. These expectations were only partiallyrealized. Within Spain, the linkage envisaged at appraisal between researchand extension was not successfully established during project implementation.Scholarships earmarked for the extension services were not utilized; extensioncoordinators were not placed in the national research centers. The omissionof an appraisal of the conditions and performance of the SEA and its poorworking relations with INIA was the main reason for this failure. Recentdevelopments, however, allow some optimism regarding improvements in thisaspect (see para. 40 below). Moreover, the Bank failed to take advantage ofthe pilot nature of its first endeavor in supporting agricultural research indesigning agricultural research projects in other countries several yearslater (see para. 47 below).l/

II. THE MAIN ISSUES

A. Project Origin and the Role of the Bank/FAO Cooperative Program (CP)

11. On August 3, 1967, the Minister of Agriculture requested Bank assis-tance in reorganizing the Government's agricultural research activities. A CPreconnaissance mission visited Spain in June-July 1968. A joint UNESCO/Bank/FAO project identification mission, carried out later that year, confirmedthe findings of the reconnaissance mission and recommended an agricultural

1/ CPS however state that ... "the lessons that can be learned are limitedby the large differences between Spain and many of the Bank's borrowers".Undoubtedly, such differences, -- as indeed between any two countries, --exist, but the audit still maintains that the Bank should, and could,have utilized the lessons toward on this project more fully.

research, extension and training project 1 /. In December 1969, the Bank andFAO agreed to a proposal of the Minister of Agriculture not to include highand intermediate level agricultural schools in the project. The Bank alsothought that the integration of agricultural vocational training centers fornon-adult students within the reformed education system should be postponed.An FAO project preparation mission visited Spain in March-April 1970 proposinga project focussing on agricultural research and extension, with education andtraining as marginal components.

12. Originally, the project was the responsibility of the Bank's Agri-culture Projects Department; later, responsibilities were transferred to theEducation Projects Department. In May 1970, it became clear that the educa-tion and training components would be quite marginal, and therefore theproject was transferred back to Agriculture. In June of the same year amission supervising the Livestock project checked on the status and nature ofthe proposed research project. The mission found that the CP proposalsconcentrated on recommending structural changes in the organization of re-search services but did not specify clearly defined research objectivesrelative to the needs of Spanish agriculture. Furthermore, the mission foundthat the project, as conceived by CP, was not in line with the wishes orintentions of the Spanish Government. The mission reformulated the projectand adjusted it to national needs and capacity. The Spanish Government didfurther preparatory work on the re-formulated project. A second Bank missionwas sent to Spain in July-August 1970 and succeeded in going some way towardscompleting the appraisal.

13. The major difference between the CP proposal and that of the Bankwas the approach to research. While the former recommended regional researchcenters which would carry out all research required for each region's develop-ment irrespective of the subsectors, the Bank's mission thought that research,to be effective, should concentrate on the most important commodities. Eachregional research center should specialize in the commodity or commoditiesmost important for the particular region, but with research programs tosatisfy most or all national needs. Besides placing greater emphasis on anational/specialized -approach to research rather than on a regional/generalapproach, the Bank proposal also reduced the number of research centers to besupported from nine to six and significantly increased the technical assis-tance component. With full Government support, the amended project wasappraised and approved. Since the project identified and prepared by CP wasquite different from the project which was eventually supported by the Bank,no full evaluation of the CP's role and proposals can be made.

I/ In addition, it also recommended a general education project.

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B. Overview of Project Developments: the Success Story

1. The Approach to Research

14. The commodity-oriented research policy was the most crucial Bankcontribution to project design. It permitted concentration of efforts onthe most important commodities (representing 85% of agricultural production),led to the establishment of inter-disciplinary teams to confront the multiple

problems faced by each of these commodities, and greatly increased the effec-

tiveness and efficiency of the country's agricultural research effort. Asindicated by the PCR, some results are already beginning to flow, and theseshould become more consistent and effective as time passes. The audit shares

the PCR views and stresses that the project did establish successful inter-disciplinary teams for several major commodities. However, the PCR appears

too optimistic (PCR paras. 5.01a, 7.01, 7.05 and, particularly, 9.10), sinceINIA has not yet fully accepted the commodity-oriented research approach forall its activities; actually, only about one-half of them (i.e., those whichwere in the Bank-supported project) are organized in this manner. The other

half are still departmentalized by disciplines (genetics, plant pathology,entomology, etc.).I/ 2/

15. Another major change introduced by the project was planning ofresearch programs. Before the project, each researcher selected his ownresearch subjects, which did not necessarily take into consideration national

priorities, regional needs or the work being conducted by other researchers

on the same or related subjects. Under the project, the research effort was

constantly reviewed and coordinated with these three factors in mind. Ini-

tially, research programs were identified by the expatriate coordinators, indiscussion with researchers in the newly created commodity oriented national

research centers under the project. As far as possible, adaptive research was

given priority over basic research. Farmer needs as observed in the field andsimilarities to problems and solutions researched elsewhere were the main

factors behind the definition of the earlier research programs. By and large,

the resulting program proved to be appropriate and produced relevant and

useful results.

1/ The Regional Office has indicated that the CRIDA at Valencia, which has

this administrative organization, is operating on the commodity-approach

system with teams from the various disciplines, and individuals from

several departments.

2/ In CPS's view, the project objective to organize all the research along

commodity lines might be questioned. In their view, many very success-

ful research organizations have a mixture of commodity and discipline-

oriented research strategies.

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16. In 1979 the research program was reviewed. As a result, severalprograms were scrapped or modified, and the need for new ones was identified.Projects with high priority, relevance and urgency emerged out of this discus-sion. These were allocated specific resources from INIA's budget. To securethese funds, each researcher had to present a written proposal with thejustification of the project (protocol), indicating the project's objectives,justification, current status of the problem, research previously undertaken,methodology, working plan and time framework, resources available, additionalresources required and currently not available, resources obtained/obtainableoutside of INIA, travel required, budget (total and per year), cooperationwith other agencies, results expected within a time frame, means and agencieswhich would be involved in the extension of research results to farmers. Theset of all approved projects of high priority, relevance and urgency consti-tute the national program of research for each of the commodities. Allresearch projects are then monitored. There is technical monitoring, carried

out by each of the commodity research coordinators, and financial monitoring,which is the responsibility of the research follow-up division at INIA'sheadquarters.

17. Agencies and agents outside INIA are also consulted in the planningprocess, but their input is not easy to determine. The main source of infor-mation on what technological problems need to be researched comes from peri-odic visits by INIA staff to farms. For a long time, INIA did not have enoughexperimental stations, and most of their work -had to be carried out on "col-laborator farms". Even now that enough space and facilities are available,most researchers continue visiting some farms to get first hand knowledge ofproblems as seen by the farmers. Recently, some research centers, likeZaragoza, specializing in fruits and vegetables, have presented their researchprograms to meetings of fruit growers specially convened for this purpose.One such meeting had taken place the day before the audit mission visitedZaragoza. According to the INIA staff members attending the meeting, theirresearch program had been fully endorsed by the growers.

18. The second external source of information for research planning areother agencies in the Ministry of Agriculture (MOA), particularly the Agencyfor Livestock Development (which is the executing agency for Bank-supportedlivestock development projects) and the Extension Service. At INIA's re-quest, both produced a list of technological problems encountered in theirday-to-day activities. However, most of the identified subjects were found tobe obvious, long-standing problems; INIA had to analyze them in greater depthto identify the real issues underlying some of the constraints.

19. A third, albeit hypothetical source of information is farmer organi-zations. One would generally assume that, next to the individual farmer,farmer organizations would be of assistance in identifying major technologicalproblems within their sphere of interest. Unfortunately, they proved to be aninefficient interlocutor: all they seem to be concerned with are pricingproblems, credit availability, input supply aspects, etc. INIA has not been

able so far to obtain any useful information or requests from them.

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20. An additional source of information on research priorities isavailable to the Valeacia national center for research, specializing incitrus. Fruit processors, exporters and commercial nurseries discuss theirindividual problems with the research center . In several cases, an agreement(convenio) has been signed whereby the commercial firm provides the researchcenter with financial resources to research a particular problem.

2. The Technical Assistance Component

21. Scholarships. Scholarships constitute the most successful componentof the project (see para. 5 above). In view of the limited foreign contactsthe Spanish agricultural research system had had prior to the project, most ofthe studies' scope (subject, place of study and degree to be pursued) wasrecommended by the expatriate technical advisors and coordinators. Withalmost no exception, the fields of specialization and universities selectedproved appropriate. Although the majority of the fellows went to the UnitedStates, a satisfactory geographical distribution was accomplished and seven-teen countries were involved. The fellows' return provided most of theimpetus INIA needed to expand and modernize its research activities. Re-grettably however, support staff shortages continue on all of the researchstations, which undoubiably prevents the full utilization of the fellows'foreign training (PCR, paras. 3.08, 3.18, 3.30, 3.40 and 3.48).

22. When project investments were completed, almost US$1 million re-mained uncommitted because of the favorable exchange rate between the USdollar and the Spanish peseta. The Bank and the Government agreed to utilizesome of these funds for additional scholarships to students who were on theverge of completing their degrees; some other staff members were grantedshort-term overseas trips. However, most of the remaining funds were utilizedto expand scientific fields different from the six major subjects supported bythe project, such as forestry development, veterinary sciences, genetics,etc.

23. There was one minor problem associated with the fellowship program,which somewhat reduced its effectiveness. Since INIA had to be substantiallyexpanded under the project, most of the fellowships were awarded to younggraduates just leaving university and officially not yet staff members ofINIA. As a result, fellows participating in the program had had no previousresearch experience and very limited exposure to Spanish agricultural prob-lems. Many of them had not even majored in the subject for which they wereundertaking specialized studies. This led to two unsatisfactory results.Firstly, the fellowship component did not envisage further training of re-searchers already working with INIA, only that of new entrants. Secondly,some of the young graduates on their return tried to initiate research onsubjects in which they had gained specific experience abroad but which may nothave been sufficiently relevant to Spain. They had to go through a learningprocess, g'etting acquairLted with the national problems of the crops in which

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they have specialized. By and large, this learning process has been satisfac-torily completed. The main change came through junior staff participating inmeetings with more experienced researchers and through periodic field trips todiscuss with farmers their main problems.

24. For such a large fellowship program, the staff retention rate issurprisingly high. More than 90% of the 200 participants are still workingwith INIA.

25. Foreign Experts and Consultants. The quality of the experts pro-vided under the project and their usefulness for project implementation is amore contentious issue. Almost all INIA staff members interviewed by theaudit mission expressed views markedly different from those expressed in thePCR. This document states: "the performance of the consultants was verysatisfactory" and "in general, the quality of all specialists provided wasexcellent, with one or two exceptions," and goes on attributing the "very fewfailures...to personality clashes in a developing environment" (para. 6.01).INIA staff, while acknowledging that many of the experts proved satisfactory,listed several cases where the expertise of the expatriate technician did notfit the needs of the station. For example, Zaragoza was to have specializedin fruit and vegetable research, but the two experts provided under theproject were vegetable specialists with no experience in top fruits. InBadajoz, which was going to specialize in pasture, forage crops and animalproduction for arid zones, the first research coordinator was perceived bymany INIA staff as being specialized in a field irrelevant to CRIDA's work,and had no experience in animal productionl/. In contrast, the researchspecialist collaborating with him was perceived by INIA as being an out-standing expert in a relevant field. The research specialist in the secondteam working at Badajoz had experience only in semi-arid tropical pastures andwas found by INIA to perform poorly (the research coordinator, this time, wasfound outstanding). In other instances, complaints voiced by INIA staff didnot concern the professional quality of the expert or his suitability tofill the needs of a specialized research center, but his lack of initiativeand drive (e.g., one citrus specialist in Valencia) due to his age. Mostofficials interviewed stated that, with very few exceptions, the expert'sscientific contribution had been limited. INIA's dissatisfaction with theperformance of one of the top expatriate technicians was one of the reasonsthat has led INIA to refuse for several months to renew the contract with theconsulting firm responsible for expert selection. Eventually the contractbetween INIA and the firm was renewed, but the expatriate concerned did notreturn.

26. Although INIA officially has always acknowledged the need forexpatriates, many staff members resented their pressure. They believedthat the Bank has underrated the expertise available in Spain. The conflict

1/ The Regional Office has indicated that he was an animal scientist whohad studied toxicology of certain diseases of sheep as one of his re-search activities.

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flared up twice. Once, disagreement between the Bank, the consulting firm andINIA on the performance of one of the expatriates,--as well as on its researchprogram,--led to the temporary suspension of disbursements for the Badajozresearch station. This was overcome through, among other things, a change inthe leadership of INIA and a larger role of INIA in selecting the new consul-tants. The other case was the delay in renewing the consulting firm's con-tract (para. 25). The fact that negotiations on the follow-on project brokeoff because of the insistence of the Ministry of Finance to reduce the projectbeyond what the Bank considered the minimum size (PCR paras. 7.09-7.10.)preempted the consultant issue from becoming an area of contention oncemore. The issue of how many consultants would be needed would also havebecome an area of controversy. The Government did not want foreign con-sultants for the Badajoz research station under a second project, while theBank insisted that without foreign consultants there would be no projectsupport for the station.Y

27. The "very few failures" mentioned in the PCR (para. 6.01) thusappear to be an understatement. Nevertheless, even taking these failures intoaccount, considering the several cases where personality clashes occurred andincluding the cases where experts did not attempt to learn Spanish (in acountry where English-speaking people were scarce), the overall performance ofthe consultants as a group was commendable. One major contribution was theselection of areas of specialization and places for study in the fellowshipsprogram; everybody acknowledges that they were right in almost every case. Asecond was in the design and specification of buildings and equipment; third,their assistance in designing the research programs. These three impact areasare widely acknowledged by INIA and the Ministry of Agriculture, and even mostof those who criticize the performance of some individual consultants acknowl-edge that the Government and INIA have to accept part of the blame and thatthey are speaking with the benefit of hindsight, i.e., through the projectthey have learned how to handle certain aspects, and consequently they prob-ably conclude that they could have done it all by themselves.

28. The expatriate technicians employed through the project had anothereffect which is difficult to quantify or even to appreciate in qualitativeterms: foreign contacts flourished, additional inflows of technical litera-ture occurred, contacts with researchers elsewhere in the world were estab-lished and expanded, etc. Even if individually the experts did not contributetoo much, they functioned as a catalyst by their presence.

29. Role of the ConSulting Firm. According to Section 3.01 and 3.02 ofthe Loan Agreement, the Borrower was obliged to retain outside expertise toassist with various aspects of the project. During negotiations, an agreementwas reached and this expertise will be recruited through a firm, and not by

1/ Most of the discussion actually referred to the Badajoz case, but infor-mation available indicates that the Government did not want any consul-tants at any of the stations.

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seeking several individual experts.!/ There are very few firms world-widewith the requisite scientific expertise and managerial capabilities. There-fore, the Bank provided the Government at negotiations with a list of fourfirms which, in the Bank's view, qualified. The Spanish delegation negotiatedimmediately a contract with a firm whose Vice-President they had already metas a member of the Bank's appraisal mission.

30. In retrospect, the requirement was appropriate, for INIA had neitherthe experience nor the expertise to identify, recruit and manage a largenumber of consultants. But two issues need to be raised in this connection.The first is the conflict of interest arising from the fact that the ExecutiveVice-President of the selected consulting firm had been a member of theappraisal team.!/ According to his contract with the Bank, he undertook notto seek or accept professional work arising out of, or related to, the scopeof that assignment for three years, without prior Bank consent. This issuewas formally raised within the Bank. It was ascertained that the proposal toengage a consulting firm to handle the contract came after receipt of theappraisal mission's draft report, when organizational requirements were beingfurther considered at Bank headquarters, and was in no way connected by thepresence of the consulting firm's Vice-President on the appraisal mission.Bank management agreed that this particular consulting firm, which is part ofa non-profit organization, could be retained by the Government. The audit issatisfied that this matter was properly handled by the Bank. However, neitherthe conflict of interest issue nor the reasons for the Bank to waive thethree-year contract moratorium were mentioned to the Spanish Government.

31. Secondly, the audit is not satisfied with the way the Bank handledthe time frame for retaining this firm. The usual procedure is to makethe requirement public, by introducing a covenant in the Loan Agreementrequiring the Borrower to identify a qualified firm and allow enough time tonegotiate a contract, requiring that this be signed within a certain period.Frequently, contract signing is made a condition of effectiveness, but depend-ing on the size of the contract and the complexity of finding a proper firm,it may become a dated covenant. In this case, however, a US$6.5 millioncontract for retaining a consulting firm was made a condition for Board

1/ The PCR, in para. 6.01, states, "In acccordance with the Loan Agree-ment, INIA contracted with (a) research institute...to provide theforeign specialists...." The Loan Agreement did not specify that anorganization, and not discrete, individuals should be contracted.

2/ Since at the time of project appraisal, the Bank did not have in-houseexpertise in agricultural research, the appraisal team was composedexclusively of consultants.

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presentation. This had two negative effects. Firstly, the Government wasgiven less than two months from loan negotiations, (when the Government wasinformed for the first time of this requirement) to analyze the issue, callfor proposals, evaluate candidates, and select the best qualified. Actually,the Spanish delegation found itself negotiating with the consulting firm whileit was still negotiating the loan agreement with the Bank. Although, inretrospect, everybody is satisfied that the consulting firm performed prop-erly, the time allowed for closing such a substantial contract was insuffici-ent, and did not permit the Borrower time for proper consideration. Secondly,the fact that the services of a consulting firm would be required received no

publicity at all. Concrary to Bank guidelines, the Government of Spain hasapproached only one of the four firms whose name the Bank made available aspre-qualified (see para. 29 above). The Bank itself could not publicize thefact that a consulting firm, as opposed to individual consultants, would berequired because this fact was made a condition of Board presentation, and nota loan covenant. The requirement is only mentioned in the Appraisal Report(paras. 3.20 and 5.03), which is an internal Bank document. Even there, thereference is misleading, for it is stated that the contract would be made"prior to loan signing" - i.e., after Board consideration - while the actualcondition required INIA to retain the consulting firm prior to Board presenta-tion. The Government selected one firm out of the short list supplied by theBank without inviting all of them to submit offers which should have beenevaluated according to accepted Bank guidelines. By the time the project was

submitted for consideration by the Bank's Board of Directors, the contract hadalready been signed..L

32. Timing. The three principal project components were to design and

develop the physical facilities for an effective research program, to arrangefor suitable training abroad of the future researchers and to initiate anappropriate, well-conceived research program. As noted (para. 31 above) theneed for expatriate help was foreseen for all three. The issue was: when

should expatriate assistance commence and for how long should it continue.The solution adopted which necessarily had to be a process of optimization,was to engage the expatriates at the very beginning to assist with the designof the facilities and the arranging of the fellowship programs. This meantthat the initial contracts would terminate at about the time when the traineesreturned. Therefore, assistance with the utilization of the research facili-

ties and the developing of the research program would have to be done either

1/ There is a minor puzzle here. The Appraisal Report submitted to the Bank

is dated one month after the short-list was delivered to the SpanishDelegation. It lists "examples of the type of organization that couldfulfill this role" (para. 3.20). However, it does not mention firms in

the short-list--supposedly, the Bank's best judgment. It lists IRB--inthat mentioning that the contract with it was about finalized by then--,the Rockefeller Foundation--which had already excluded itself--, and twoother bodies (Ford Foundation and British Agricultural Council) which hadnot been in the short-list.

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without expatriate help, or with a new set of consultants, not as familiarwith local requirements as the original appointees were at the end of theirterm. However, the audit is satisfied that this compromise served the inter-ests of the project best.

C. Overview of Project Developments: the Other Side

33. Project expectations failed to materialize in two respects: inchanging INIA's whole approach towards research, and in improving the linkagebetween research and extension.

1. Switching to a Commodity-Oriented Approach to Research

34. The PCR conveys the impression that the project succeeded in havingall research activities of INIA recast along commodity lines (see para 8 aboveand PCR, para. 9.10). However, research reorientation affected only about 50%of INIA activities - an achievement commendable on its own. The other halfcontinued to develop along traditional disciplinary lines. To a large extent,this is the result of INIA's development. The project was conceived for, andnegotiated with, the old INIA, and all project activities were designedto fit its work program. The Government, however, decided to merge INIA withagencies in charge of veterinary and forestry research (see paras. 2 and 6above). At this stage, INIA management did not have anything to offer to thejoining departments. All project-provided facilities, experts, and fellow-ships had been allocated to the lines of research carried out by the old INIAdepartments. While the old departments received land for new experimentalstations, buildings and laboratories, experts and training, the departmentsnewly absorbed were not expanded, and even their normal development washampered by the fact that most of INIA's financial resources had to beallocated as counterpart financing to project-supported activities. There-fore, non-project supported activities had their budgets reduced in absoluteterms. This led to jealousies, conflicts, internal divisions and resentment.Only very late during project implementation could management allocate part ofthe project funds to some of the needs of the rest of INIA. This was a majorreason why the Government had put much emphasis on veterinary and forestryresearch in the second research project, which eventually did not materialize.Now that the project has been completed, INIA management has more freedom toallocate its budget and is trying to extend some of the project-inducedbenefits to the neglected departments.

2. The Missing Extension Link

35. The project plan was to post at least two regional extension agentsat each research center, to expand effective liaison between research andextension, and to provide 12 scholarships (on average one year each) tosenior Agricultural Extension Service (SEA) staff. Neither materialized asenvisaged, mainly due to a failure at project appraisal to assess the SEA'swillingness and the conditions of its participation. In fact, the audit wasadvised that SEA was never informed about the proposed developments.

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36. The appraisal process ignored four important facts regarding SEA.(a) With the exception of a handful of graduate agriculturists, SEA wasstaffed with technicians who could not benefit from the type of scholarshipsthe project was to provide. (b) At the time of appraisal SEA was a verystrong agency, managed by a strong personality, while research was fragmentedamong several small agencies and carried no prestige. Therefore, SEA ignoredthe research agencies and did not maintain any contact or liaison with them.(c) At the time of appraisal, there was a substantial gap between the tech-nology SEA recommended and the level actually applied by farmers; thus, SEAhad adequate technical packages to "sell" without any new input from re-search. (d) There were restrictions on SEA using project-provided fellow-ships: (i) SEA could not recruit new personnel, however well qualified; (ii)career personnel were not given assistance to take their families abroad withthem which made them reluctant to accept long fellowships; (iii) peopletrained through these scholarships were to be assigned to Regional ResearchCenters (CRIDA), under INIA direction, with SEA relinquishing control overthem; and staff "benefiting" from the project would lose part of their salarythroughout the scholarship period and during whatever period they were assign-ed to the CRIDAs (allowance for exclusive dedication). Therefore, the effortto strengthen SEA was doomed from the very beginning.

37. Some of these problems might have been alleviated during implementa-tion by proper handling., However, personality problems and poor institutionalrelations continued to hamper SEA participation in the project. Only inNovember 1974, i.e., three years after project effectiveness, did INIA informSEA of the availability of the 12 scholarships for extension staff (see para.35 above). SEA found the covenant stipulating that those staff members of SEAbenefiting from the scholarships had to be assigned to work in the researchstations under INIA direction unacceptable and submitted a counterproposalwhereby SEA would retain some degree of control over their staff, includingthe possibility of removing them from CRIDA if either SEA or the staff memberwere not satisfied with current arrangements (March 1975). According to SEAstaff, INIA did not reply to this proposal. Some exchanges of views on thelocation of regional extension specialists at each CRIDA continued for sometime, but without any reference to scholarships. Eventually, one SEA staffmember was posted to Cordova and one to Jaen (for a time, two extension agentswere assigned to Cordova) 1 /. In both cases, they remained under the con-trol of SEA. In 1978-79, INIA insisted again on the need of locating suchextension agents at all. CRIDAs. Some senior SEA managers supported INIA'sproposal, but SEA's Director rejected it. Since then, because of changes inthe constitution and the creation of the autonomias, SEA can no longer inde-pendently assign its provincial staff to CRIDA or elsewhere (see paras. 44 and45). Finally, SEA was never a party to the loan agreement, nor did the Bankprovide for a project agreement with it.

1/ The Regional Office indicated that, by project completion, two othershad been stationed at Valencia and one at Logrono (station subsidiary tothe Zaragoza CRIDA) for one to three years.

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D. Some Notes on Current Status and Future Prospects of AgriculturalResearch in Spain

1. Post-Implementation Developments

38. The synergistic effects of new buildings and facilities, foreignexperts, and scholarships resulted in a great impetus being given to INIA asthe central research service. Project success has led INIA to continue itsdevelopment and modernization after project implementation was completed andloan proceeds fully disbursed. Additional equipment and more sophisticatedfacilities are being imported, bought, or installed. Contacts with otherresearch institutions abroad have continued to expand. Liaison with farmershas been given high priority. Agreements with exporters and universitieshave been signed to undertake particular research of interest to them. TheValencia CRIDA (citrus) has led the way in this particular aspect. Agreementshave been signed with citrus processors and citrus exporters to carry outseveral studies perceived by them as important for future development, or toprevent or reduce some of the phytosanitary problems currently affecting thearea. Similar agreements have been signed with commercial nurseries for theproduction of virus-free seedlings.

39. By far the most important project-related development followingproject completion has been the steady improvement of the relations betweenINIA and SEA, which eventually assigned two staff members to each CRIDA.Field days with farmers, to demonstrate and explain research being conducted,to answer questions and to receive suggestions, are carried out in collabora-tion with or with the participation of extension agents. 1 / A Commission forTechnology Transfer has been established at the request of the Minister ofAgriculture; tripartite commissions (INIA/SEA/Livestock Development Agency)have been established to link closely research and extension on pasturedevelopment. Results have been very successful so far.

40. The reasons for positive developments in the research-extensionlinkage over the last couple of years, when most had failed during projectimplementation are: (a) a change in personalities: the new executives inboth agencies are more open to dialogue and innovation; (b) a change in thepolitical regime, which has become more open; (c) the previous gap of knowl-edge between SEA and the farmers has been reduced over the years, forcingextension to look for new sources to expand its technical know-how; and (d)the project succeeded in expanding and improving the quality and scientificlevel of INIA, which made INIA an attractive and reliable source of contin-uously growing knowledge. The Bank can take part of the credit for thischange: although faults in project design prevented earlier participation ofSEA under the project (see para. 36 above), the Bank's insistence on orientingresearch towards actual farmer problems and production constraints, and its

1/ In many cases, these were begun before project completion.

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continuing insistence on coordination have contributed to increasing coopera-

tion between research and extension. Developing such cooperation, though,required much more time than expected at appraisal and had first to await some

evidence of success from reorganized research.

41. INIA's relationship and cooperation with other government agencieshave also improved, particularly with the National Institute for Seeds andSeedlings. Here again, the new leadership was instrumental in obtainingthe desired changes.

2. Possible future risks

42. The long-term development perspective of INIA and the project-supported investments and activities face one minor and one possibly impor-tant risk: the lack of continuity in the staff training program and, moreseriously, constitutional changes.

43. The project has provided advanced training in production and re-

search techniques to two hundred individuals who are today among the besttrained INIA staff members. But since their return more than two years ago,nobody else has gone abroad for training, nor are any more scholarships

envisaged. Without additional scholarships, the project would prove to be aonce-for-all boost to INIA, with benefits necessarily decreasing over time.In this respect, the aborted second agricultural research project would have

been most helpful. By now, Spain is, however, no longer eligible for Bankloans.

44. The change in. Spain's constitution, which calls for drastic decen-tralization of public authority and responsibilities in a country previouslyhighly centralized, is likely to have an impact on the continuing success ofthe research approach introduced under the project. The strengthened pro-vincial governments are now being given considerable autonomy (hence theirname, autonomias). The new constitution reserves for INIA headquarters only

the tasks of coordination, promotion, and foreign relations, as well as

advisory services to the central government. All field operations, allresearch personnel, and all facilities are to be transferred to the provincial

governments. The transfer process has already started with the Basque prov-inces and with Catalonya, where no project-supported national research centersare sited. The terms established in these transfer discussions will set

important precedents for the forthcoming discussions with the remainingSpanish provinces.

45. Decentralization might deal a fatal blow to the commodity-orientedresearch approach and, thus, to the national research centers establishedunder the project. Once the experimental stations, laboratories, and researchpersonnel, are handed over to the provincial governments, they might decide tore-orient their research programs towards solving regional problems. They arelegally entitled to do so: regionally owned experimental stations operated bythe former INIA staff transferred to the autonomias can be assigned by the

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autonomous government to whatever activity it finds more appropriate forregional development. The final outcome will depend on how the term "coor-dination" - one of the three attributions reserved to central government - isdefined. If too narrowly, the autonomias will do as they wish; if, however, awider interpretation is adopted, three national programs, their budgets andstaff allocation may continue to be managed by the central government throughINIA's headquarters. In this case, the national government would decideon national research programs and transfer required resources to relevantnational research centers, while autonomous provincial governments coulddevote their resources to research of regional priority. Which of the twoscenarios will eventually prevail is undecided. INIA's control over regionalresearch stations would be equivalent to that retained by of the High Councilfor Scientific Research or by the Ministry of Agriculture in other fields or,even beyond, the power which would remain at national government level. Inbrief, there is a definite risk that the main project contribution, i.e.,commodity/oriented research, could be lost.

E. Bank Performance

46. Project supervision. The appraisal report explicitly stated that"in view of the unique and highly complex character of the project, the Bankwould recruit on retainership a group of three scientists of top level reputa-tion. This group would visit Spain at six-monthly intervals with a Bank staffmember to assess progress and to advise INIA and the Bank on the desirablechanges and to assist the Bank in normal project supervision functions"(Appraisal Report, para. 3.22). This intention of the Bank was manifest inonly one visit of a group of three internationally known scientists. Other-wise, the project was supervised like any other more traditional project inthe Bank's portfolio.

47. Abandoning the Bank-wide "Pilot Project" concept. The project wasthe very first agricultural research project the Bank ever financed (seepara. 10 above). It was followed by some 30 other projects in 12 othercountries. However, despite the appraisal's intention to do so, the Bankfailed to make a special effort to learn from the Spanish experience, conveyto other countries the most successful project features, and prevent repeti-tion of any identified shortfalls. Only one staff member on a personal basis,conveyed the experience he was obtaining while supervising the project toother projects designed elsewhere. He was, occasionally and informally,consulted by Bank staff involved in other projects. But no formal attempt wasever made to take advantage from the Spanish experience. No formal meetings,seminars, workshops, etc., were ever organized; no paper ever published; nomid-term evaluation produced. The Bank never invited officials of otherprospective borrowers to visit Spain to learn of the strengths and weaknessesof the project before finalizing the design or appraisal of their own proj-ect. Only recently have some officials from Portugal visited Spain, where aresearch project may materialize. No Spanish consultant was ever employed by

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the Bank to appraise or supervise any of the ensuing research projects. Inbrief, the Bank has allowed the opportunity to learn from an interestingproject to be lost.i/

48. Evaluating Project Results. CPS has indicated that the Bank alsomissed the opportunity to work with the Government in developing a system formeasuring progress in a research project, particularly the quality of theresearch (e.g., qualit.y of the design and conduction of the research pro-grams). This is badly needed in all research projects, yet most attentioncontinues to be given to the physical and financial aspects.

1/ For CPS's views on this issue. See footnote to para. 10.

000

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I. INTRODUCTION

1.01 It is essential to recognise that agricultural research can makevarious contributions; not only the one that directly increases a country'sagricultural output. A partial quote from a Bank Working Paper prepared by

Schuh and Tollini 1 states: "It may improve the quality of agriculturalproducts, conserve or save production inputs ... improve institutions

1.02 It is equally important to recognise that the goals of theresearch program need to be specified, and that the criteria used toevaluate research depends upon the time span after completion of theresearch.

1.03 The goal of the Agricultural Research Project in Spain was toupgrade the standard of agricultural research as a prerequisite toeffective exploitation of modern technology in plant and animalproduction. Spain had been slow to introduce and adapt modern technologyin plant and animal production, and this had seriously constrainedproduction. Well-organized agricultural research, focused on clear-cutobjectives and adapted to local conditions, would accelerate agriculturaldevelopment, a key component of the country's economy.

1.04 The primary objectives of the Project were to establish a soundresearch program to improve the productivity of the commodities included in

the Project, develop and improve the physical and human resources of theInstituto Nacional de Investigaciones Agrarias (INIA) and to organize theresearch efforts on a commodity instead of a discipline basis.

1.05 The project was the Bank's seventh operation in Spain and thefirst Bank-supported project for agricultural research. It financed theforeign exchange costs of physical development including civil works,automotive and farm equipment, scientific equipment, the fellowship programand technical assistance including both full-time specialists and

short-term consultants.

1/ Costs and Benefits of Agricultural Research: The State of the Arts,prepared by G. Edward Schuh and Helio Tollini, World Bank Staff WorkingPaper No. 360, October 1979.

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II. BACKGROUNDProject Origin

2.01 The Project stems from a Bank/FAO mission which surveyed Spanishagriculture in late 1965. This and subsequent missions recommended thathigh priority be given to strengthening agricultural research as a means ofintroducing modern technology to increase productivity.

2.02 The Government of Spain (GOS) agreed with these recommendationsand requested Bank assistance in 1967. Initially GOS intended toconcentrate on nine regional centers, each with complete coverage of all

research fields. Because of shortage of competent agricultural researchscientists in Spain and the cost of developing duplicate facilities at somany centers, Bank missions recommended that an alternative approach be

taken, namely, the development of commodity oriented centers, eachorganized with teams of scientists from the various disciplines formed tohandle the problem of key commmodity or commodity groups. The logic ofthis approach was accepted by GOS as a desirable modification of theoriginal proposals.

Preparation, Appraisal and Date of Loan Effectiveness

2.03 Project preparation was carried out with the assistance of theBank/FAO Cooperative Program and submitted to the Bank in October 1969.

2.04 The appraisal report, dated April 29, 1971, was based on the

findings of three Bank missions during 1970. The first in June 1970 drewattention to the lack of any clearly defined research program. The second,

in July-August 1970, provided guidelines for such a program and carried

appraisal as far as was practical at that time. The third mission ofNovember-December 1970, completed appraisal. At this time, Spanish

agriculture produced 16% of GDP, provided employment for about one-third ofthe active population and accounted for about 50% of total foreign trade.The growth in agricultural GDP lagged behind the non-agricultural GDP (3.1%compared to 8.9%). Although farm exports had grown, they did not keep pacewith imports and the agricultural trade balance was in deficit. Spain had

been slow to introduce and adapt modern technology in plant and animalproduction and this resulted in a serious constraint to production. Crop

yields and animal performance were substantially lower than those of other

European countries and below the potential possible. Well organizedagricultural re,sParch, focused on clear-cut objectives and adapted to local

conditions, should accelerate agricultural development.

2.05 At appraisal, total Project cost was estimated at US$28.2 million,including US$2.2 million for land purchase. The foreign exchange componentwas approximately UStl2.5 million or about 45% of the total. Excludingland purchase, the capital inputs, mainly for buildings, equipment, landdevelopment and services amount to US$15.5 million, or 60% of the total.

Technical services accounted for US$6.9 million, or 25% of the total.Contingencies were allowed at USt4.0 million or 15% of the total to

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compensate for some uncertainty in building costs, as buildings would bedesigned during the construction period. Excluding land, the foreignexchange cost amounted to 49% of capital requirements.

2.06 The loan was US$12.7 million. The loan was to be disbursed over afive-year period with the closing date June 30, 1976, or such other date asagreed between the borrower and the Bank. The terms were 20 years,including five years of grace. The borrower was the Government of Spainwhich provided local conts of the project. The loan was signed June 28,1971, and became effective as scheduled on November 1, 1971, following theadditional conditions o- effectiveness having been met, namely, theselection and firm arrangements for employment of a senior agriculturalscientist and the identification of and firm arrangements for theacquisition of additional lands for four research centers. The closingdate was postponed three times; the Project closed on December 31, 1979.

III. PROJECT IMPLEMENTATION

Project Organization and Management

3.01 INIA, an agency of the Ministry of Agriculture (MOA) wasresponsible for the organization and management of the project (Annex I).It is headed by a President, with offices in Madrid, the regional researchcenters (CRIDA) report to him through the Center Director. At six of thesecenters, the commodity research programs were carried out by the staffassisted originally by expatriate coordinators and research specialists,both short- and long-term. These scientists were provided by the IRI undercontract with INIA for these services. IRI also administered thefellowship program. In October 1971, the Government issued a PresidentialDecree which modified the organization of the MOA. The Instituto Nacionalde Investigaciones Agronomicas (the old INIA), Instituto Forestal deInvestigaciones y Experiencias (IFIE) and the Patronato de Biologia Animal(PBA) were merged into the Instituto Nacional de Investigaciones Agrarias(the new INIA).

Project Programs and Accomplishments

3.02 To enhance the agricultural research capabilities of INIA, thecapital investments in human resources and physical facilities wereoriented toward specific goals and were provided within each commodityresearch program at its respective research center. Program goals andmajor accomplishments are summarized for each of the six centers and theirsatellites supported under the project (paras. 3.03-3.64). Some highlights

of results of research underway are presented under the various commodityprograms. Final solutions to the many problems have not been obtained butresults are promising and indicative of the lines pursued and which arecontinuing. Further development of the programs along with appliedresearch and demonstrations with the cooperation of the Extension Serviceand the Livestock Deve.opment Agency will be carried out in farmers'fields. The expansion and intensification of these activities should help

reach the goal of improving the productivity of these commodities wnic1.

comprise about 8"% of Spain's agricultural production.

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National Research Center for Pastures, Forages, and Animal Production forthe Arid Zones at the Regional Research Center for Agricultural Research ofExtremadura near Badajoz (CRIDA 08)

3.03 Research Program - Major attention was directed towards beefcattle, dairy cattle and sheep production in relation to the utilization ofpastures and forage crops. Priority was given to ways and means ofincreasing the output of animal products based on pastures and foragesunder both dry land and irrigated conditions. Work fell into three majorcategories: (a) pasture production studies; (b) forage crop studies; and(c) animal production studies.

3.04 One of the main thrusts of the pasture and forage research programfor the arid zone has been the introduction, selection and improvement ofsubterranean clover as a step in increasing the animal output of therangeland. Initially, this program was restricted to commerciallyavailable Australian cultivars, but more recently Spanish and Portugueseecotypes have been included. Many of these exhibit superiorcharacteristics. The sub-clover improvement program has, to date,registered six promising types with the official register for varieties andthe locally selected cultivar, Victor, has been released for commercial

distribution. This cultivar has shown superior performance in medium tohigh rainfall areas and will replace the late maturing Australian cultivar,Mt. Barker. Unfortunately, Spain produces only about 10% of its needs ofsub-clover seed. Therefore a program of research on seed production hasrecently begun at the center. The superior performance of many local

types, not available elsewhere, has given new impetus to the seedproduction program.

3.05 Large-scale grazing trials with sheep indicated that liveweightgain is greater on sown sub-clover pasture than on natural pasture. Thefertilization of natural pasture also increased liveweight gains. Thecarrying capacity of sown pasture was about the same as fertilized pasture,but double that of unfertilized natural pasture.

3.06 Currently, the livestock population (cattle and sheep) on therange capable of improvement in Southwest Spain is estimated at 1.5 millionmature cattle units (M.C.U.). However, by applying pasture and forage crop

improvements this same "dehesa" land alone has the capacity to carry twicethat. Besides this, a further one million M.C.U. could probably be carriedon less-suited and marginal grazing lands. Pasture and forage cropimprovement not only allows more livestock to be carried but the number ofcattle that can be sold for slaughter increases, costs of production shoulddecrease, and slaughter weight may increase. On the other hand, carcassweights of cattle and sheep are already reasonable because expensiveconcentrates are used extensively. The research program is aimed atreducing this dependence upon a high cost input by making much better useof grasslands, forages, and agricultural by-products. Carcass weightincreases can be forecast from 220 kg to 250 kg for cattle and from 10 kgto-15 kg for lambs. The reduction in costs is possible by as much as 50%

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by the use of a cheaperc source of food such as pastures, better managementand genetically superior animals.

3.07 Staffing - To provide a well-balanced team, a total staff of 250was estimated. This was to comprise 52 professionals, 100 technicans and98 clerical and field assistants. The center was also to be assisted bytwo to four foreign research specialists, subject to modification dependingupon the inputs from the UNDP project at this center.

3.08 By the end of the project, professional staff at CRIDA 08 and itssatellite center CRIDA 03 numbered 54 but technicians were far below the100 estimated and only numbered 24. Clerical and field assistants werealso less than anticipated with only 49 instead of 98. They were assistedby four foreign livestock research specialists with crop specialists beingprovided by UNDP.

3.09 Fellowships - Fellowships (majority at graduate level) were to beprovided to this center. The Director also was; to be given an opportunityto visit approved animal production research institutes. A total of 29fellowships were awarded for training abroad. Of that number, two receivedPh.D's and 15 M.Sc's.

3.10 Physical Development - The newly constructed laboratory block wasfurnished and equipped in accordance with the office and laboratory needsof the specialist staff groupings. Although bpsic farm buildings existedat the main center, La Orden, physical improverients were provided inequipment, stock handling facilities, weighing equipment, fencing, haybarns, storage facilities and suitable livestock for experimentalpurposes. Livestock b:uildings were built at the satellite center, ElGaitan.

3.11 Inputs were restricted to La Orden, the site of the main center,and El Gaitan, a field station for sheep research. During the course ofthe Project, the need for a natural grassland (range) experimental farmwhere long-term studies of animal husbandry techniques and pastureutilization systems could be conducted became clear. However, theacquisition of such a farm was not included in the project and consequentlyin spite of all efforts by the Bank it was not possible to secure thenecessary land.

3.12 The major land improvements at La Orden consisted of the expansionof the irrigation system and fencing. The inp-it at El Gaitan was confinedto fencing civil works included the remodeling of the existing mainbuilding to expand laboratory facilities and provide for manipulation offorage samples; erection of an airconditioned prefabricated building tohouse the cafeteria and library; erection of a climatized greenhouse;repair and enlargement of mechanics workshop; covered parking area;corrals, crush and handling yards for cattle; open housing for cattle and asheep shed with a wing for shearing and feed storage. Other minor works

projects were installations of high voltage tension line and transformer,low voltage line, and electric and livestock water distribution to thedryland portion of the farm.

3.13 In 1974, it was agreed to include part of CRIDA 03 at Zaragoza

(Montanana) as a satellite center to CRIDA 08 under the national program of

pastures, forages and animal production for arid zones. Buildings at CRIDA

03 were constructed for the following purposes: (i) feed preparation and

lamb fattening; (ii) housing for breeding ewes; (iii) feeding trials with

attached laboratory; (iv) housing for beef cow herd; (v) housing for steerfattening; (vi) plastic silos with reinforced concrete; (vii) complementary

wing to the sheep shed; and (viii) carcass dissection. Minor works

projects included installations for high tension line and transformer,electrification and fencing of pastures.

National Research Center for Fruits and Vezetables at the Research andAgricultural Development Center for Ebro near Zaragoza (CRIDA 03)

3.14 Research Program - The program was expanded to cover all phases ofcultivation and harvest of all tree fruits, nuts and vegetables of

importance to the Spanish economy. This would require studies on improvedvarieties, fertilization, plant protection, cultural practices andmechanized harvesting. It would include post harvest research on

processing and marketing. Factors to reduce production costs and improvequality would receive attention. Cooperative mechanization schemes wculdbe considered, market research would be conducted to locate and retain

local and world markets. Post harvest research on processing, packing,canning, storage, transport and marketing would be contracted to theConsejo Superior de Investigaciones Cientifecos (CSIC) at Valencia andMurcia.

3.15 Vegetable crops research has resulted in the development ofsuperior breeding lines of tomatoes adapted to Spanish conditions.Sufficient seed was being produced in 1979 to supply national needs for thefollowing season. Yields are expected to increase with these new varietiesso that by 1980 these developments could contribute 10% of the crop value(approximately US$20 million per year). Spain is the leading producer of

bell pepper. Evaluation of superior endemic types are being completed andit is estimated that these developments could add 15% to the farm value ofthe crop.

3.16 Asparagus is a long lived perennial. Fields are maintained about10 years and it takes about three years for good production fromtransplants. Assuming a 10% turnover in acreage each year, it would take

about 15 years for the new improved types of asparagus to replace thecurrent varieties. By 1980, at current prices, a US$3 million yearlybenefit should result, with about 10% occuring each year beginning in1979. With encouragement from the research center a commercial nursery hasbeen established in Navarra to produce genetically improved virus free

asparagus, artichokes and strawberries for distribution to producers. It

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is expected that this aursery would produce planting stocks for 50% ofSpain's needs.

3.17 Staffing - The total staffing was to be 240, broken down into 43professionals, 85 technicians and 112 clerical and field assistants.Foreign specialists were to be contracted in fruit and vegetable

production, marketing and soil-water relations.

3.18 Professional staff amounted to 41 at CRIDA 03 and 29 more at the

satellite center, or well above the 43 originally envisioned. Technicalstaff of 24 and assistants of 51 was well below targets. Professionalstaff were assisted by two foreign specialists.

3.19 Fellowships - Fellowships were to be awarded for advanced degreetraining plus the assignment of five fellowships to the CSIC. Fellowshipswere awarded to 33 which included four to Ph.D. degree level and 10 toM.Sc. level.

3.20 Physical Development - A condition of Loan effectiveness was thepurchase or lease of approximately 93 ha of land adjacent to the center.In addition, a new office and laboratory building was constructed for anadditional 20 professional personnel in horticulture, soils and cropprotection.

3.21 Approximately 130 ha of additional land was purchased anddeveloped. Small fields were consolidated intc large ones, The land was

leveled and three types of irrigation were installed; namely, flood and two

types of sprinkler. A new well was drilled anc a pump purchased for this

purpose. Existing roads were improved and new ones constructed also

including a small reinforced bridge over the main irrigation canal thereby

assuring complete access to all parts of the farm.

3.22 To support INT A's fruit tree research program, the projectfinanced construction of prefabricated buildings to house research

laboratories and offices. Other building included greenhouses and a largefarm structure for storage and repair of farm machinery and vehicles, aswell as fertilizer and farm products. Minor works were a high-tension

line, transformers and telephone installation. Additional office andlaboratory furniture was purchased for the new prefabricated buildings.

3.23 The provincial government of Navarra made available to INIA, in1974, 52 hectare of irrigable land outside Lcg,:ono in the center of the

vegetable growing area for a sub-station for CRIDA 03 for vegetable crops

research. As this area was more typical of the vegetable producing areasand the land available at Zaragoza was limited, INIA requested and the Bankagreed to move the vegetable crops research to Logrono. Land development

involved grading and leveling, installation of a sprinkler irrigationsystem, provision for drainage and a road netwnrk.

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3.24 The civil works included prefabricated structures for the offices,laboratories and related services. A storage building was constructed formachinery, fertilizer and farm products. Nearby a laboratory has been setup in a warehouse type building to do research in food processing. Agreenhouse completes the building complex. Minor works included fencingand urbanization around the prefabricated building, high and low tensionlines, transformer and general electrification, telephones, waterdistribution and sewage disposal and installations for gas and fuel oil.Furniture for the offices and laboratories was purchased and installed.

3.25 To carry out research in fruits and vegetable crops atagroecological locations other than those in the area of CRIDA 03, land wasacquired at Torre Pacheco, in the heart of the flood plain known as Campode Cartagena in the Province of Murcia. INIA acquired 14 ha of land forthe purpose of developing an experiment station (under the administrativecontrol of CRIDA 07). As part of station development, the projectsupported the installation of an irrigation system, including a portion ofa desalinization plant, a road network, high and low tension lines withtransformers, electrification, telephone line and hook up, and waterdistribution. A plastic-covered greenhouse was erected and a storagebuilding was constructed.

3.26 In 1974, CRIDA 11, on the island of Tenerife, was approved forsupport as a satellite sub-tropical station under the national program offruit and vegetable crops. Major construction investments were threegreenhouses. The irrigation.system was improved by constructing a largestorage tank, a secondary control tank and related connecting pipes and a

high tension line and transformer were installed.

National Research Center for Plant Oils at the Regional Center forAgricultural Research for Andalucia at Cordoba (CRIDA 10)

3.27 Research Program - Research on oilseeds was substantiallyincreased to encovpass all phases of plant studies to assure increased

production of sunflower, soybean, rape and safflower. This would requirestudies on fertilizers and soil fertility, improved varieties under dryland and irrigated conditions, plant production, cultural practices, waterrequirements and harvesting techniques. Varieties of high yield and

disease resistance would be obtained from available sources.

3.28 Andalucip and much of the rest of Spain has a typicallyMediterranean cli-tate. Rainfall is relatively limited with most of it

occuring during the winter. The summers are hot and dry. These conditionsare quite different from those in the major sunflower growing areas

elsewhere in the world. As a consequence, the oilseed research program

endeavoured and succeeded in developing new agronomic practices andproduced new varieties and hybrids of sunflower adapted to Spanish

conditions. Studies have shown that sunflower sown as much as six weeksearlier than usual can increase seed yields from 25 to 50% along with

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higher oil content of the seed. Spacing between the rows should be 35 to40 cm rather than the :raditional 70 to 100 cm and repeated interrowtillage is of no value where early weeds are not a problem. Five inbredcytoplasmic male steriLe (CMS) lines for use as female parent with amildew-resistant restocer line as the male parent for production ofsunflower hybrids have been released by the program. A mildew-resistantform of the most widely grown variety, Peredovik, is nearly ready fordistribution. Literally hundreds of newly produced CMS and restorer linesare undergoing tests for selection of the best combinations for release asnew disease resistant, high yielding, high oil hybrids. Prior to 1972,rapeseed crops were dismal failures. The research program found thatunexpectedly high yields ranging from 2,500 to 5,00 kg/ha in small plotscould be obtained by sowing spring and summer varieties with low erucicacid from Canada, as a fall-winter crop and extend the rotation betweensunflower sowings, on from 200,000 to possibly 500,000 ha in the forseeablefuture.

3.29 Staffing - Local staffing requirements for initiating oilseedsresearch were to be 165, consisting of 29 professionals, 57 technicians and79 clerical and field assistants. The foreign staff were to providespecialists in oilseeds agronomy, production economy, plant diseases andsoil-water relations.

3.30 Professional staff amounted to 23, technical 12 and assistants17. Once again techni:al and assistant staff fell far short of goals. Twoforeign experts assisted in staff and research program development.

3.31 Fellowships - Fellowships were to be awarded for advanced degreetraining in the various lines of research specified previously. A total of21 fellowships were awarded of which one was trained to the Ph.D. level and10 to the M.Sc. level.

3.32 Physical Development - The farm at the main center at Alameda delObispo near Cordoba was considered sufficient for experimental purposes forproduction under irrigation and under dryland conditions, the existingsub-station at Tomejil, a farm near Carmona, was also consideredsufficient. At Cordoba, a new building was constructed to house offices,laboratores, lecture rooms and a library. In addition, greenhouses,workshops and warehouses were needed and appropriate equipment for bothfarm and laboratory was purchased. Improvements were made in theirrigation system utilizing the water from the Guadalquivir River toirrigate the entire experimental farm. At To-i'jil, the existing storagefacilities were remodeled and a truck scale was installed.

3.33 The main center for oilseed crops research at Alameda del Obisponear Cordoba was the first to have a new main laboratory and officebuilding designed and completed under the Project. Staff moved into thenew building in the fall of 1976 which was also provided with green andscreenhouses.

3.34 At Cordoba, land improvement emphasized expansion and improvement

of the irrigation system, fencing and roads. irior to the Project it was

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only possible to irrigate about 50 of the 180 ha of land despite the factthat the farm borders on the Guadalquivir River. Two pumps were installedat the river's edge, land was leveled and underground pipes were laid. Itis now possible to irrigate the entire farm, either by gravity orsprinkler. Since a small public road passes through the farm, trespassingwas a problem until fences were erected. Also, the existing roads wereimproved enabling year round access to all parts of the farm. Other minorwork projects included installation of a high tension line, transformer andtelephones.

National Research Center for Cereals and Grain Le2umes at El Encin at theRegional Center for Agricultural Research near Alcala de Henares (CRIDA 06)

3.35 Research Program - Plant production and improvement research wasto concentrate on both the coarse grain and small grain cereals and grainlegumes. The major areas to receive attention would be improved agronomicpractices, varietal development and improvement, varietal and straintesting and seed maintenance and multiplication.

3.36 The main thrust of cereals research has been the selection andimprovement of the principal varieties of cereals grown in Spain. The mostoutstanding results to date have been the official registration of the hardwheat varieties, falon and Jiloca, which are characterized by lodgingresistance and high yield and two improved varieties of soft wheat, Tormesand Tajo. Also, varieties of wheat resistant to brown rust have beenobtained through crossings of wheat with aegilops and agropyron. Withinthe existing varieties of barley developed by INIA, Berta and Albacete,mutant types were obtained through radioactive treatment, which haveincreased yields. By 1978 higher-yielding, better varieties were availableto the farmers.

3.37 Until 1975, legume inoculation in Spain was done with commercialinoculants imported from the United States and Australia. In general, theresults were poor because of the poor quality of the product by the time itreached the local grower. In 1975, INIA started a priority program of

research and production of soybean inoculum locally. First it wasnecessary to test and select the best rhizobia strains available as well asthe behaviour of local sources of peat as an important component of theinoculant. Rudimentary facilities at La Rinconada satellite center near

Sevilla were improved and modified to meet the needs of the inoculantproduction plant.

3.38 By 1976, the plant produced the first soybean inoculant forlimited farmer use and by 1977 it produced enough inoculant for 8,000 ha ofsoybeans, of which about 6,500 ha were actually planted by farmers usingthe INIA inoculant. Prior to the release of the inoculant, meetings wereheld throughout Spain with extension agents, representatives of seeddistribution housQs and farmers, to teach inoculation techniques. Theresults were successful in that nodulation of soybean with the INIAinoculant proved to be very effective. Parallel to the progress in

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inoculant research and production was a program of "fitting together" thebest management practices for the different environments where soybeans canbe grown in Spain with concentration on the southern half of the country.Recommendations are available on varieties, row spacings, plant densities,fertilization and irrigation. Of particular interest are varieties withhigher protein content and shorter growing season to produce as a secondcrop following wheat, thereby maximizing farm income per cropping unit area.

3.39 Staffine - The total staff requirements were estimated at 223,comprised of 44 professionals, 80 technicians and 99 clerical and fieldassistants. The above staff were to be assisted by three foreignspecialists during the construction period of the Project.

3.40 Professional staff totalled 39 with technicians and assistantswell below expectations at 15 and 11 respectively. Three foreignspecialists were employed to assist in development of the project.

3.41 Fellowships - There were to be fellowships allocated to the fieldsof plant production and improvement. About two-thirds of these were foradvanced degree and the remainder post-doctoral of 12 months andprofessional improvement of two to four months. Actually 35 fellowshiposwere awarded of which 5 received Ph.D. degrees and eight M.Sc's.

3.42 Physical Development - One of the objectives of the cereals andgrain legume program was to consolidate the staff working on this commodityin and around the Madrid area into one single research facility at El Encinnear Alcala de Henares and about 40 kms from Madrid. A main laboratory andoffice building was completed in December 1975. However, occupancy did notbegin until two years later due to delays in completing essential minorworks such as sewage disposal, water and electrical connections andacquisition of laboratory furniture. Other new construction consisted ofgreenhouses and a building for seed drying, cleaning, grading and storage.Provision was also made for storage of farm machinery. Minor worksincluded resurfacing entrance roads, high tension line and transformer, anew well, pump and underground storage tank.

3.43 The amount of arable land at El Encin was more than adequate;however, significant improvements were made by expanding the irrigationsystem and converting it to sprinkler.

3.44 In 1975, a sub-center at San Jose de la Rinconada near Sevilla,under the jurisdiction of CRIDA 10, was developed for soybean agronomyresearch and inoculum production. The major civil works project at LaRinconada was the conversion of a small chapel into an integrated unit toproduce legume inoculum and investigate related subjects. Other workprojects were the installation of an electrical sub-station and themodernization of an existing laboratory and storage building.

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National Research Center for Citrus at the Regional Center for AgriculturalResearch of Levante near Valencia (CRIDA 07)

3.45 Research Program - Research was designed to increase citrusproduction through improved cultivation practices, reduction in productioncosts and quality improvement and would involve research into improvedvarieties, better fertilizer and water use and pest control. Research onland use, mechanization and cooperative techniques for planting, sprayingand harvesting was conducted to reduce costs and improve profitability onthe small land holdings of citrus growers. All post-harvest research,including processing, contamination, packaging, transport and marketingaspects of the program was contracted to the CSIC institutes at Valenciaand Murcia. Market and economic research was required to retain and expandlocal and world markets.

3.46 There are approximately 200,000 ha of citrus in Spain and as muchas 95% of the oranges are susceptible to the destructive effects of thetristeza virus. In 1972, it was estimated that 82,000 ha had alreadybecome infected with virus. Many of these trees had died while othersshowed various stages of the effects of the disease and the diseasecontinues to spread. An economic fact of life is that Spain's presentcitrus industry, left as it is, would eventually be out of the exportingbusiness, possibly within 15 to 20 years. Estimates place over 60% of thecitrus crop (fresh and processed) as exported and the value at over USt300million. It is evident that even small crop reductions would have animmediate impact on foreign exchange inflow. Trials underway show thatvirus-free budwood can be developed and used without loss of production andquality. Significant quantities of such material is now available and themajor infected areas could be transformed within 15 to 20 years. The valueof this research has been estimated at US300 million over the next 20years in foreign exchange inflow alone as well as the effect a decliningcitrus industry would cause this farming sector in Spain.

3.47 Staffing - Staff requirements were estimated at 175, of which 30would be professionals, 59 technicians and 86 clerical and fieldassistants. Three foreign specialists were specified; one citrusspecialist, one agricultural engineer and one virologist.

3.48 More professionals were on hand by the end of the project, 38,than originally planned. Technicians and assistants, as with the otherresearch centers, were well below estimates with only 21 technicians and 28assistants available. Three citrus specialists were employed on theproject as well as a short-term consultant virologist.

3.49 Fellowships - Fellowships were to be awarded to provide advancedtraining in the various disciplines related to citrus research. In

addition, five fellowships were to be awarded for advanced degrees to theCSIC personnel. Total fellowships awarded were 26 with 4 receiving Ph.D.degree and 11 M.Scs.

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3.50 Physical Development - A new research facility was developed atMoncada, outside of Valencia, on 44 ha of irrigated land which was alreadyunder citrus cultivation. The main laboratory and office building wascompleted in mid-1976. Personnel began transferring from the old center atBurjasot to Moncada in November of the same year. Besides laboratories andoffices, the building contains a library, auditorium, meeting andconference rooms, cafeteria and auxiliary services. In addition to themain building, two warehouses and greenhouses, both glass and plasticcovered, as well as screenhouses were constructed nearby.

3.51 Minor works related to center development included improvement ofthe irrigation system. New entrance roads were constructed and theexisting farm roads were improved and asphalted. Other installationsincluded high and low tension lines and transformer, electricaldistribution and illumination around the main building and waterdistribution to the greenhouses.

National Research Center for Pastures, Forages and Animal Production forthe Humid Zones at the Regional Center for Agri.:ultural Research near LaCoruna (CRIDA 01)

3.52 Research Program - The research progran was similar to that at thecenter at Badajoz with differences related to tie specific ecologicalcharacteristics of the north-west and northern Spain. Beef would receiveattention with due recognition of the interdependence of beef and milk inthe region. Milk production, as the major prodict of the region, was givenhigh priority, with special emphasis on grazing and milking management andthe production of an improved quality product. Concentration would beplaced on intensive, rather than extensive operations on improved rainfedgrassland. Pig meat production would also be carried out. The centerwould not duplicate the basic studies on animal health proposed for theBadajoz center although it would include evaluation studies of feed andfodder characteristics of the region, using standard non-traditionaltechniques, thus complementing the comparable Badajoz work on dry land,native and irrigated pastures.

3.53 One of the most striking characteristics of the region of Galiciain Northwest Spain is the expanse of scrubland, covered predominantly withgorse. The total area of scrubland in Galicia is estimated at 1.3 millionha, representing an untapped resource for agricultural development.Research has shown that this scrubland can be converted to productivepasture not only by use of heavy machinery bur. more importantly, throughthe use of less intensive and costly methods. These range from minimumtillage to non-tillage methods combined with judicious burning,fertilization, seeding and use of grazing animals. Controlled grazing bysheep has been very effective in stopping gorse regrowth and at the sametime promoting establishment and growth of the seeded pasture species. Inthe year following pasture establishment on reclaimed scrubland, using lowcost methods, dry matter production can reach yields of 4 to 5,000 kg/ha.This production can be expected to increase in succeeding years under acontrolled grazing program.

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3.54 INIA has acquired a several-hundred hectare tract of scrubland inorder to conduct large-scale comparisons, using livestock, betweendifferent methods of scrubland transformation and the integration of thesetransformations into livestock farming systems subject to economicanalysis. This work, which has had its beginning at the new center atMabegondo, will have a strong impact on the agriculture of Galicia.Studies have refined the technology of establishing productive grass legumepastures on cultivated land. Recommendations include the choice of seedingmixture; correction of excessive acidity with lime; adequate soilpreparation and cultural practices; and use of fertilizer, particularlyphosphorus and legume inoculants. The more important species forgeneral-purpose sown pastures are perennial and Italian rye-grass,orchard-grass, and white and red clover. Yields up to 14,000 kg/ha/year ofpasture dry matter would be capable of producing 14,000 kg of milk.

3.55 The maize improvement program has concentrated on the developmentof early maturing hybrids adapted to Galicia and the North of Spain, wherethe commercially available varieties in Spain have not provedsatisfactory. Seven early maturing pure lines of high yield, combiningability and lodging resistance, have been obtained from local germplasm foruse in hybrid production. Experimental hybrids using these lines haveyielded 20% more than the best available hybrids. In 1978, 50 kg of hybridseed of four early hybrids was produced for farmer distribution in 1979 forlarge-scale testing. At the same time these varieties will be registeredwith the official seed institute. In addition, the pasture improvementprogram has published a list of recommended varieties based on fieldtrials. Three superior synthetic varieties of orchard-grass based on localecotypes have been developed and are now undergoing further testing priorto release.

3.56 Traditionally, dairy cows in Galicia are kept indoors protectedfrom the elements of weather and fed a diet high in concentrates. Theexperience at the center has shown that this is not necessary, at least inthe coastal regions, and higher production may result. Spring calving cowsand heifers were exposed to different conditions for a two-month periodprior to calving. Those wintered outside on pasture all the time, althoughthey gained less weight, produced heavier calves, had higher milk yieldsand appeared in better condition than the groups that were housed and fedsilage and concentrates. Heifers continuously on pasture from April toJuly receiving 1.5, 3.0 and 5.0 kg of concentrate daily showed no economicbenefit in giving the heifers more than 1.5 kg of concentrates daily.Also, use of concentrates with pregnant cows can be restricted to the twomonths following calving thereby reducing current costs of production. Inthe case of beef animals, it was found that there was no difference inliveweight gain or final carcass weight between young cattle rotationallygrazed on pasture or fed cut grass during spring and summer. To date,grazing of autumn saved pasture has proven superior in terms of calfliveweight gain and cow fertility, to cows and calves maintained indoors onsilage. In no case has concentrate supplementation proven economic andoutdoor feeding is better than indoor feeding. With the exception of

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color, there was no difference in meat quality between one year old calves

and steers of about 18 months. The tendency in Galicia to slaughter young

animals is not justified, and only contributes to a low output of meat per

animal at a higher cost per kilo of carcass meat.

3.57 Staffing - The estimated staffing requirements was 52professionals, 99 technicians and 99 clerical and field assistants for a

total of 250 individual:;. The local staff would be complemented with

foreign specialists.

3.58 Professional, technical and assistant staff has remained far below

estimated goals. Only 28 professionals, 11 technicians and 35 assistantswere available to carry out the research program by the end of the

project. They were assisted by five foreign specialists in the fields of

livestock, pastures and soils.

3.59 Fellowships - The Project was to provide overseas fellowships for

a total of 45 man-years in countries with similar ecologies. Of 27 that

vent abroad for training, four received Ph.D. degrees and 13 M.Scs.

3.60 Physical Development - The existing center at CRIDA 01 at Bos whenthe Project began, consisted of a two-story building containing offices for

administrative and research personnel and a farm of 60 ha. This was

inadequate for the proposed work program under the project. Consequently,

a new site was developed into a new research center at Mabegondo.

Acquisition of approximately 325 ha of land for the new farm proved

difficult as over 200 owners and 700 individual parcels of land were

involved. Two years from the time the site was chosen, it became the

property of INIA in 1973.

3.61 The implementation plan for the physical development of Mabegondo

was elaborated by center staff in early 1973 and by the end of 1973 the

contractor had completed 90% of the work. A planting program consistingmostly of pasture mixtures and winter annual crops immediately followed the

land clearing and,preparation.

3.62 The main laboratory and office buildings were built at Mabegondo.The major buildings are: (i) central administration which also includes a

library, cafeteria, auditorium, the Department of Regional Development and

the Technical Support Unit; (ii) Department of Animal Production; (iii)Department of Pastures and Forages; and (iv) a general laboratory for soil

and plant analysis. Staff moved into these facilities in August 1977.

3.63 A farmyard uras constructed containing a completely integrated

center for housing and support of animals including a dairy unit. This

nucleus contains provisions for 900-1,000 animals in modern well-designedfacilities composed of 23 units. The farm buildings were divided into

animal housing and dry buildings. A second 100 cow dairy unit is sited

elsewhere on the farn; this unit was the first to be put into operation in

1974. All necessary farm equipment and transport were purchased.

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3.64 Two dairy herds and one beef herd were established by Projecttermination date with a total of over 500 head of cattle. Sheep were addedfor the purpose of initiating studies on scrubland transformation. A pigunit was proposed originally but was eliminated because of the threat ofcontaminating the river supplying water to La Coruna.

Central Services (INIA Headouarters)

3.65 The Appraisal Report did not consider miscellaneous developmentexpenses required for INIA headquarters. During the progress of theProject, Central Services was added as a separate section in the investmentplan. Items included payment for international tendering notices,advertisements for prequalification of contractors, project drawings andpreparation, price increases for the main buildings under construction at

the research centers, and greenhouses for virology and cereals and grainlegumes.

3.66 Vehicles for the National Research Coordinator and the sixCommodity Research Coordinators were included. Research equipmentconsisted primarily of an electron microscope with accessories for virologyin support of cormiodity research programs at the CRIDAs.

3.67 Staff at Central Services were supported by two foreignspecialists, the National Research Coordinator and an Architect. Ten ofINIA Headquarters staff visited research institutions abroad.

Construction and Procurement

3.68 The inve:;tment plan was the key to the implementation of theconstruction and procurement program of the Project. The equipment andmaterial needs fo.. each commodity research program were developed. Itemswere described and priced as accurately as possible within each of themajor categories: (a) civil works (including buildings, furnishings,services and utilities); (b) farm development; (c) automotive and farmequipment; and (d) scientific equipment. The first investment plan wasprepared and approved by the Bank in June 1973. It presented a moreaccurate estimate of the physical needs of INIA than the Appraisal Report.This and subsequent plans were reviewed and updated periodically in keepingwith the needs of the research programs as well as rising costs. Eachrevision reflected modifications of type or price of items. The last plan

was dated March 1977. No project was tendered or item purchased without

having been inc' ded in an approved investment plan or a special requestapproved by the Bank.

3.69 Planning of the four main laboratory and office huildings atCordoba (CRIDA 10), Valencia (CRIDA 07), La Coruna (CRIDA 01) and El Encin(CRIDA 06) began in 1972 with assistance of 4.24 man months of consultantservices. Area requirements for these buildings were derived from INIA

estimates and projections of scientific and administrative staffingrequirements, for staff growth through 1980. Schematic drawings were made

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and turned over to a Spanish architect for development into tenderdocuments. Final design concepts were left to the architect withoutrestriction as to type or materials. Civil works projects for farm andlivestock buildings were elaborated either by center personnel or staffwithin the Directorate of Services at INIA Headquarters in Madrid. As arule, tender documents for projects constructed under the loan lackeddetail and description to have permitted a lump sum contract to be signed.They were adequate to estimate the cost plus profit and overhead. Tenderdocuments in Spain normaLly are only a guide to indicate approximately whatwill be required of the contractor. Decisions on exactly what is to bedone and how it is to be done are made by the "Director of Works" while theproject is under construction.

3.70 The expatriate Development Coordinator (Architect) was authorizedearly in the Project to review all civil works projects for the Bank and tomake administrative and technical comments on tender documents prior toadvertisement or invitation to bid. These comments were sentsimultaneously to INIA management and the Bank. Project review prior toapproval to tender is lengthy and delays of four to six months between Bankapproval to tender and award of contract were common on minor civil worksprojects.

3.71 In mid-1972, an expatriate architect consultant, assisted INIA todevelop formats and to initiate international prequalification of companiesinterested in constructing one or more of the four main research centers.Late in 1972, thirteen companies had been prequalified and were allowed toparticipate in future tendering. All thirteen companies were representedlegally in Spain. No companies outside Spain indicated interest inbecoming prequalified. Lack of international iiterest prompted INIA torequest a waiver of the requirements to tender Lnternationally otherprojects of smaller scope and less cost. The Bank authorized a waiver ofinternational tendering on civil works projects costing less than 5.0million Pesetas. Projects costing from 2.5 to 5.0 million Pesetas wereadvertised nationally in the Boletin Oficial del Estado (BOE), the officialgovernment gazette. Projects less than 2.5 million Pesetas were notpublically advertised. INIA management, following Spanish legal procedure,allowed each research center to obtain three quotations for these projects,from which the successful contractor was selected taking into account therecommendations made by the center.

3.72 Spanish civil works contracts provide for payment of materials andlabor installed in the p:roject, as measured a, the job site uponcompletion, rather than pay a lump sum to a contractor for a projectcompleted in accordance with detailed plans and specifications, As aresult INIA did not know what the final price for any given civil workscontract was until final measurements were made and the final certificateof payment was authorized by the Director of Works. Civil works on thisProject were contracted using cost of materials and labor plus profit andoverhead expressed as a percentage of cost of materials and labor. Normalprofit and overhead were calculated to be from 19 to 25%.

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3.73 Final award of contracts was made by the Secretary General of INIAfor projects exceeding 2.5 million Pesetas upon completion of the bidopening and Bank approval. Also in attendance were a legal counsel for theState, the Ministry of Finance representative in INIA, one representativeeach from the Services Section and the Financial Section of INIA, theexpatriate National Research Coordinator and representatives of thecompanies submitting bids. After the low bidder was selected the Bank wasadvised and concurrence requested. For projects costing up to 2.5 millionPesetas a simple, standard form contract was signed, normally by the centerdirector and the contractor. A majority of contracts on this project werefor works costing less than 2.5 million Pesetas, to gain flexibility andaccelerate procedures. Two copies of each civil works project wereforwarded promptly to the Bank by INIA.

3.74 At the start of the Project INIA had little importationcapability. Virtually all purchases were made from local sources. By 1974a special office had been set up within the Directorate of Services tohandle importations of goods and since that time it has operatedeffectively. For the purpose of local purchases three proforma invoiceswere normally required. The supplier with the lowest price offer wasselected but this was waived for cases in which a certain item was onlyavailable from a single supplier. INIA was not permitted to purchasevehicles directly from dealers. All vehicles are bought by the officialmobile park (PMM) and then assigned to INIA. This procedure causedexcessive delays.

IV. COSTS AND DISBURSEMENTS

4.01 Appraisal estimated total development costs to be approximatelyPtas 1,086 million, (US$15.5 million at Ptas 70 to USW1) excluding purchaseof land. Actual development costs were Ptas 1,230.5 million (US$17.6million at same rate). In fulfilment of one of the conditions of Loaneffectiveness, IN'A purchased land in support of the Project at a totalcost of Ptas 265.3 million (US$3.8 million). Appraisal estimated this costat Ptas 154 milion (US$ 2.2 million).

4.02 The appraisal cost estimates for civil works (including buildings,furnishings, services and utilities), farm development, automotive and farmequipment, and scientific equipment were refined as the Project gotunderway in the form of the investment plan. The investment plan attemptedto reassess the -eeds of the Project in the light of changed circumstancesand increasing knowledge of agricultural research problems that had arisensince Appraisal. The basic concept of commodity oriented research waspreserved with six national centers carrying the responsibility for theirrespective areas of research, both within and outside the regions in whichthey were located. The investment plan listed all the proposed needs ofphysical development and equipment for each commodity research program ateach location. Individual items were described and priced as accurately as

possible, and each investment plan was approved by the Bank. No project

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was tendered or purchase made without having been included in an approvedinvestment plan or approved by a special request to the Bank.

4.03 The first investment plan estimated the Project cost to be Ptas1,144.5 million (US$16.4 million). As a result of subsequent revisions andmodifications, the final investment plan dated March 1977, estimated theProject cost at Ptas 1,2.92.8 million (US$19.0 million at Ptas 68 to US$1),or 20% more than was estimated by Appraisal six years earlier. Appraisalallowed for contingencies of US$4.0 million, or 15% of total Project costsexcluding land. Development costs were US$17.6 million (Ptas 70 to UStl).Of the Bank loan of US$12.7 million, US$3.3 was expended on civil works,US$0.4 million on farm development, US$0.7 million on vehicles and farmequipment, US$1.4 million on scientific equipment and US$6.9 million ontechnical services and fellowships. The appraisal estimate and actualdisbursement schedule is in Annex II.

4.04 The original INIA-IRI Contract estimated technical services costsat US$4,986,000 in foreign currency and local costs at UStl,443,000equivalent for a five year period. Appraisal estimated these costs at US$5and US$1.5 million, respectively (not including contingencies). As aconsequence of Project extensions and amendments to the INIA-IRI Contract,and with prior approval of the Bank, additional dollar funds were madeavailable to IRI to finance certain agreed upon technical services. Thefourth amendment which -ermitted technical services until December 31,1979, brought the new aggregate total up to US$6,983,000. No additionallocal currency funds were required. Below is a summary of technicalservices costs from Project initiation until December 31, 1979.

Ependitures for Technical Services:November 1, 1971 through December 31, 1979

Local Foreign Total

-------------------------- US$000----------

Research Specialists 440 3,171 3,611

Short-term Consultants 9 90 99

Fellowships 18 3,722 3,740

Total 467 6,983 7,450

4.05 Administration

The Project was administered, both financially and technicallywithin the regular framework of INIA in accordance with GOS ascribedprocedures. Final accountability rested with the Ministry of Finance

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auditor within INIA. The Borrower met all of its financial commitments;

however, there were times during Project implementation when financialrestraints adversely affected the desired progress in civil works projects,acquisition of equipment, contracting of INIA personnel and meeting center

operating costs. These restraints were overcome with Bank assistance andexecution of the project continued at a satisfactory rate.

4.06 A total of 26 long-term research specialist positions were filledfor the six research centers where national research programs were

developed. At each center a research coordinator was selected from the

research specialists. The first National Research Coordinator was

contracted on November 6, 1971. Since that time there have been twoothers. This position was filled continuously from project initiation totermination INIA, with the administrative assistance of IRI, established

and operated a very effective fellowship program for training abroad ofINIA personnel. A total of 222 fellowships were awarded including 19 toCSIC.

V. BORROWER PERFORMANCE

5.01 The overall performance of the Borrower in the implementation ofthe Project, was satisfactory. Some of the achievements with respect toProject implementation were:

a) The concentration of research effort on the agreed commodities

through a restructuring of the research centers and the formation

of multidisciplinary teams of investigators to work on thesecommodities;

b) the highly successful completion of the fellowship program. Of

the total 222 fellowships to 200 staff that were awarded to INIA

personnel for study abroad in 17 different countries, all weresuccessfully completed (Annex III). They culminated in 20 Ph.D.

degrees, 67 M.Sc. degrees or equivalent and 113 of the

non-academic type all of whom were absorbed on their return into

their respective Research Centers. Of the 200 fellows that were

employed on their return by INIA, only eight had left INIA by the

end of the project. Two joined another agency of the MOA and the

remainder joined the private sector in Spain. The highly

commendable performance that the INIA fellows achieved in their

academic pursuits abroad is verified by their academic records ani

by the favourable comments of their advisors and by their

performance on their return to INIA;

c) the eventual success in obtaining support from the Ministry ofFinance and Public Administration to incorporate approximately 500

contract personnel into the "permanent" staff on INIA over a four

year period beginning in late 1978 thereby giving the professional

staff job security; and

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d) the change in Management philosophy that occurred as a result ofthe project, such as the acceptance that research staff, underSpanish conditions, should be permanent rather than contract civilservants, will have a lasting effect on the organization and itsability to meet the applied agricultural research needs of thecountry and serve as an example to other government agencies aswell as highlight the need for greater financial support foragricultural re3earch.

.5.02 The project was designed to support research on the more importantcommodities of Spanish agriculture and these commodities represented 85% ofthe country's agricultural production. Because of the Bank supportedprograms, other research in INIA often received less support than normaland staff of these programs were often resentful of their colleagues in theBank assisted project.

5.03 INIA provided sufficient professional staff to undertake theresearch programs on the selected commodities assisted by the project.However, in spite of all efforts by the Bank, there was a major shortfallin the provision of support staff to the professionals, both in techniciansand clerical staff. The ratio of professionals to technicians neverreached the level estimated at appraisal. This inevitably reduced thevolume of research that could be carried out but did not affect the qualitynor the objectives of the project.

5.04 Effectiv, start-up was delayed with respect to the physicaldevelopment aspec:s of the Project and the rate of progress from start-upto completion flu.:tuated greatly. The reorganization of INIA contributedto a tardy and sl3w start-up. Some of the individuals of the old INIA, whowere directly involved in Project formulation, did not maintain theirpositions in the ceorganized INIA. Although the Loan Agreement clearlydefines the nature of the Project and its execution, any possible advantageaccruing from initial personal involvement and subsequent follow throughwas lost at the critical stage of start-up. As a result of thereorganization, two other large research entities, forestry and animalhealth, were fused with agronomy to form the new INIA. Although the Loanagreement only affected a portion of the total activities of the old INIAits involvement in the new INIA was even of a lesser magnitude. Thisresulted in pressures, some misunderstandings and in a few cases,resentment on the part of those not included in the INIA/World BankProject. More serious, however, was that almost two years were consumed inreorganizing ani planning before the Project was placed in properperspective and support!d to the degree necessary to achieve its objectives.

5.05 Operating budgets and personnel contracts, periodically placedrestraints on Project progress. INIA cannot be blamed for thesedifficulties. It was here that the Bank, through discussions with the MOAand the Ministry of Finance, assisted in obtaining the increased budgetarvsupport for INIA and the conversion of contract staff to permanent staff.The working relationship between INIA and Finance steadily improved in thelater years of the Project.

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VI. CONSULTANTS PERFORMANCE

6.01 In accordance with the Loan Agreement INIA contracted with the IRI

Research Institute (IRI) of New York, a non-profit organization, to provide

the foreign specialists, both long- and short-term, required under theproject as well as to administer the large fellowship program. The

performance of the consultants was very satisfactory. In general the

quality of all specialists provided was excellent with one or two

exceptions. The very few failures were not due to lack of experience or

professional quality but to personality clashes in a developing

environment. The fellowship program was excellently administered and the

recipients had nothing but praise for the arrangements made on their

behalf. Their interest and that of the specialists provided in and

dedication to the project's aims and objectives were commendable and

appreciated by INIA.

VII. BANK PERFORMANCE

7.01 In general, Bank performance was satisfactory. As a result ofclose supervision of the project both in the development and revisions ofthe investment program coupled with the able assistance of the consultantsand their experts in the field, the management of agricultural research was

improved and the research programs were organized into national commodity

programs. Duplication of efforts at the different regional stations waseliminated. Buildings, farm development, machinery and scientific

equipment, partially financed by Bank loan funds, were built and installedand put in use.

7.02 The fellowship program was one of the most valuable and effectiveelements of the project. All of the foreign exchange cost came from loanfunds and the formal training and the short team visits abroad proved very

beneficial. Almost without exception all returned staff were well trainedand are working effectively in their positions and contributing to thecommodity research programs of INIA. The expatriate coordinators and

specialists and IRI were very effective in arranging for places of studyand especially the short-term in-service training trips to various foreign

countries.

7.03 The expatriate coordinators and specialists were, in general, mosteffective and assisted the planning and implementation of the project.There were, however, a few individuals who were highly specialized but not

able to contribute effectively to research program planning or the

development of equipment needs for new research programs because ofpersonality clashes. In some cases, the coordinators did this type of work

without fully consulting with their Spanish colleagues. Some of thespecialists were not needed at the time they were appointed and

consequently unable to contribute much to the program. The cost of eachexpatriate position was high, probably 6-8 times that of the INIA

researcher.

-- 41 -

7.04 Some of INIA staff believe that the selection of fellowshippositions was not as careful as it should have been and that a longerpre-fellowship appointment period would improve the selection (the practicewas to recruit trainees who had had at least one year's service in INIA),give the individual more experience in his field of research and enable himto help plan facilities and equipment needed in the future. Any longerperiod of service, however, would have delayed the return of trained staffto the project with resultant delay in the implementation of the commoditywork programs in the Research center. The policy adopted enabled thefellowship program to get underway reasonably quickly and bring the trainedstaff back to INIA as soon as possible.

7.05 At appraisal it was envisaged that the project would be completedin five years. With the delay in completion of the first investmentprogram of two years, partly occasioned by the reorganization of INIA, theproject was completed in 8-1/2 years. It was only in the last year of theproject that INIA, on its own initiative, adopted the commodity orientedresearch policy for all its agricultural research. If the project had beencompleted in five years, as originally envisaged, it is quite probable thatINIA might not have then decided to switch all its agricultural research toa commodity basis. The longer implementation period permitted managementto see the preliminary results obtained by a commodity approach as well asenabled returned fellows to influence policy. Experience in this projectindicates that a minimum time to reorientate applied agricultural researchfrom a discipline to conmodity basis should be at least seven years.Anything less could only be accepted if there is a clear understanding thatthere would be a follow-up project.

7.06 In 1974, when it was expected that the project would be completedin 1977, the Bank feared that there would be insufficient time toconclusively demonstrate to INIA the value of the commodity approach inapplied agricultural research. INIA held the same view. Consequently afollow-up research project was proposed.

7.07 The Bank sent a five man mission to Spain during November of 1975to supervise the on-going Project and to appraise a proposal for a secondagricultural research project. The initial appraisal was not completed in

Spain on that occasion due to insufficient documentation for some of theproposed programs. A special follow-up mission went to Spain to evaluatethe African swine fever component. The final appraisal was completed in

Washington as additionaL material was received from INIA. In mid-May 1976,a one-man Bank mission handcarried the finalized appraisal proposal toSpain.

7.08 This report appraised a project which would continue to supportand strengthen the commodity research activities started in the firstProject and added three new activities that were considered essential tothe development of Spanish agriculture. The total cost was about US$81.7million, of which the proposed Bank loan would contribute USS15 million.The momentum of the first Project would be maintained by continuing to

- 42 -

strengthen the research capabilities of INIA in the six national commodityresearch programs started under the first project and with the addition ofthree new programs, namely, African swine fever, fast-growing pulpwood andsugar beet.

7.09 Preliminary discussions were held in Washington in June, 1976between COS officials and the Bank. At that time it was agreed to reducethe scope and cost of the project proposal. A revised appraisal proposalwas completed by the Bank in August 1976 and delivered to the GOS in earlySeptember. The total number of programs was reduced to six, namely:animal production for the humid zone, African swine fever, wood pulp,citrus, cereals and grain legumes, and oilseed crops. The total cost wasUS$40.8 million, of which the proposed Bank loan would contribute US$11.0million.

7.10 In subsequent weeks the Ministry of Fi.nance instructed INIA toreduce, once again, the proposal to the absolute essentials. Acounter-proposal was sent to the Bank in mid-November 1976. It containedthe same six programs but the total cost was reduced to approximately USt2lmillion. The Bank responded with a communication indicating that it wouldconsider a package containing continued suppor: for the on-going programsof animal production in both the humid and arid zones, cereals and grainlegumes, citrus and oilseed crops. The total cost was for the same amountas in the August revised appraisal proposal, namely, US$40.8 million, butexcluding the two new programs, African swine Lever and forestry. In lateDecember of 1976 the GOS officially notified the Bank that it did notdesire to continue further discussions for a second agricultural researchproject.

7.11 The decision to break-off discussions was unfortunate and duebasically to a disagreement between the Ministries of Agriculture andFinance mainly unrelated to the project. Although, in the event, it didnot jeopardize the re-orientation of all applied agricultural research byINIA, which took place in 1979, it did prevent the continuation of thevaluable fellowship program as well as retarded the development of theswine fever research program, in which Spain had already made aconsiderable preliminary investment in buildings and a wood pulp program.

VIII. ECONOMIC IMPACT

8.01 Evaluation of cost benefit relation.'ips of agricultural researchefforts has been on a specific crop basis as well as on all agriculturalresearch. Studies have estimated, i.e., that hybrid corn research in theUnited States up to 1955 had an annual rate of return of 700%. In theUnited States agricultural research and extension for 1949, 1954 and 1959had an estimated annual rate of return of 300% and in Japan a rate of only

-43 -

35% for education, agricultural research and extension. The rates ofreturn for individual successes seem to be greater than for a broadprogram. 1

8.02 Return from past research and relevance of such studies to costsand benefits in Spain only indicate the ranges in which returns are likelyto fall. Even for specific research results, the effects on production,sales (both local and export) will be hard to determine and separate fromother factors. Increases in total production, yield per hectare, area ofland utilized for a new crop, variety or practice may all be affected byweather, cultivation methods, soil variation and by demand for the product.

8.03 The economics department of INIA has issued a report "EvolucionDel Sector Agrario En Espana 1968-1977". Among other items, this studyshows that the active farm population has decreased from 32.5% in 1968 to21.4% in 1977, which is indicative of the movement of people from farms toindustry in the cities. This departure from the farm has gone on in everydeveloping society. Thus to maintain and increase agriculturalproductivity under such circumstances requires greater efficiency on thepart of those left to farm and the need to adopt improved methods and growless of crops requiring much hand labor or to replace this withmechanization.

8.04 Data from this publication do not reflect any of the researchresults of the oroiect. This is because even the most Dromising of theseresults are only beginning to be put into-practice by farmers and, as yet,only a small percent of the area is utilized for these crops. Until asignificant portion of the area is utilized using new crops and/ortechniques, an economic rate of return cannot be calculated. Consequently,in research projects in agriculture, results cannot be realisticallyquantified in economic and financial terms for at least ten years followingcompletion rather than six months as is presently required.

8.05 New varieties of sunflower plus the growth of this crop in areaswhich before only grew dryland barley or wheat has greatly increased thetotal production of sunElower seed although the yield per hectare has gonedown. Improved new varieties and adoption of improved practices developed

under the project should lead to higher yields per unit of land.

8.06 Control of the tristeza and other viruses of citrus has beendeveloped under the project and virus-free material is now beingdistributed through cormnercial nurseries. If this practice is widelyadopted, the Spanish cil:rus industry will be saved from extinction.

8.07 INIA should continue to keep statistics on crops and animalproduction to monitor the effect of utilization of research progress.

1/ Source: Schultz, T.W. Economic Growth in Asriculture 1968.

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Rates of return from these research results can after a few years beaccurately determined. At present, none of the effects of the researchhave been adopted on a large enough scale.

IX. CONCLUSIONS

9.01 Project objectives were generally reached by the end of thedisbursement period which was postponed until December 31, 1979 from theoriginal date of June 30, 1976.

9.02 The standard of agricultural research has been improved and theincrease in professional staff equalled the appraisal projections. Becauseof limitation of budgeted funds, support technical staff did not increasethereby underutilizing the expertise of the professional staff.

9.03 Professional staff that benefitted from the fellowship programunder the Project have returned to Spain and been incorporated into thepermanent staff of INIA. These individuals were very successful in theirtraining programs and are performing efficiently in the various commodityresearch programs and should greatly improve INIA's efficiency in time.

9.04 Physical progress was also largely achieved. The buildings andfacilities constructed during the project are being utilized effectively asare the scientific equipmcnt and farm machinery.

9.05 Stronger and more effective management of INIA, especially in theplanning phase, is being demonstrated. The commodity research programs areestablished and a national coordinator for each program has been appointed

based on election by his professional colleagues.

9.06 Although funds budgeted for INIA are still not completelyadequate, it is encouraging that the percentage of the total budget forsalaries has increased from 36% in 1972 to about 62% in 1978.

9.07 Prior to the project, research was already in progress at INIA'scenters throughout the country. Its organization and productivity variedand limited support resources were dissipated in overlapping andduplicating research activities. Each center sought to cover the wholefield of applied research. With the project, six specialized

commodity-oriented research centers were established within the INIAsystem. Each was designated as a National Research Center for a specificcommodity; such as, animal products including pastures and forages (twocenters, one each in the humid and arid zones); fruits and vegetables;cereals and grain legumes; citrus; and oil plants.

9.08 During early project implementation, much time was spent planningand organizing research. This culminated in a dynamic master research planfor each of the commodities. General lines of investigation were

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identified, within which, priority research projects were phased. By end1977, three hundred projects were in progress. It was the research programthat provided the basis and justification for Bank financed improvement ofphysical and human resources of INIA to backstop this research. Withoutthe project some research results obviously would have been generated.However, with the project, research was more efficiently conducted; it wasfocused on priority needs; and the ensuring results were accelerated andclearly identified with specific project supported research.

9.09 Commodity-based agricultural production research is advantageousbecause it directs attention to an identifiable end product; a producthaving intrinsic value; a product whose output is affected by measureableconstraints; and a product on which resources can be focused to alleviatethese constraints to enable increased output. It also promotesteam-research; research in which specialists of diverse fields eachcontribute information to the solution of a problem. The team approach toagricultural research has proved effective and efficient in Spain.

9.10 Prior to the project, INIA's research centers were organized intodepartments by disciplines; for example, genetics, plant pathology,entomology, etc. With project emphasis on commodity research through thespecialized national centers, the restructuring of the centers stressingcommodities was the nect logical step; consequently, research staff werereassigned into departnents as: animal production, cereal production,citrus culture, etc. In fact, a total of 94 departments were condensedinto 47, throughout the six-centers in the Bank project. Reorganization,in itself, is not a guarantee for improved research output. Generalattitude and willingness of staff to cooperate as a team are essentialingredients. The reorganization did succeed in promoting improvedcollaboration amcng researchers and creating an awareness of mission and

purpose of work, all of' which enhanced research productivity.

9.11 It is essential to recognise that agricultural research can makevarious contributions; not only the one that directly increases a country's

agricultural output. It is equally important to recognise that the goalsof the research frogran need to be specified, and that the criteria used toevaluate research depends upon the time span after completion of theresearch.

9.12 The goal of the Bank's Agricultural Research Project in Spain wasto upgrade the standard of agricultural research as a prerequisite toeffective explcization of modern technology in plant and animalproduction. The project was completed in eight and a half years, three anda half years beyond the original date; and evaluated six months later inaccordance with Bank policy. All involved in the project would agree thatit is premature to evaluate this research project on its contribution toincreased national agr:.cultural output six months following completion.However, a sound alternative is to base evaluation on the project'scontribution towards achieving the goal of upgrading the standard of

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research. Institutional development, fundamental to establishing a strongresearch base, becomes the main criteria for evaluation. The project wassuccessful in achieving this goal. Project evaluation based on othernational goals, such as, agricultural output, would have to be deferred forat least ten years after project completion.

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ANNEX I

Page 1 of 3

ORGANIZATION AND MANAGEMENT

Instituto Nacional de Investigaciones Agrarias (INIA)

(formerly Instituto Nacional de Investigaciones Agronomicas)

1.01 The Project was administered by the Instituto Nacional deInvestigaciones Agrarias (INIA), which is the NationalAgriculturaL Research Institute of the Ministry of Agriculture(MOA). INIA headquarters is located Ln the Capital of Madrid.The following units are directly responsible to the Presiaent ofINIA: Dire:tive Council, Secretary General, Technical Directorateof Coordination and Programs, Technical Directorate of Servicesand network of nine Regional Centers of Investigation andAgricultural Development (CRIDAs), which constitute theoperational units of INIA throughout :he country. Ultimately, twoadditional CRIDAs may be added so that each one of the 11Divisions of the country, as officialLy established by the MOA,would contain a CRIDA.

1.02 The organic structure of INIA is established as follows:

President

Secretary General

Section of Regional CentersSection of Internal AdministrationSection of Property and Economic AffairsSection of Personnel

Technical Directorate of Coordination and Programs

Section of Identification and CoordinationService of Coordination of the following Sections:

Section of FeasibilitySection of ProgressSection of Evaluation

Technical Directorate of Scientific Relations

Deputy DirectorSection of General StudiesSection of National OrganizationsSection of International Organizations

Technical Directorate of Services

Section of Technical ServicesSection of Documentation, Library and PublicationsSection of Data Processing

- 48 -

ANNEX IPage 2 of 3

In addition to the above, an Accounting Office of the Ministry ofFinance is located in INIA as a separate administrative unitascribed to the President of INIA. Also, for legal matters asascribed by law and for legal opinions, the Legal Counsel of theState Public Administration is available to the President of INIA.

1.03 The INIA/World Bank Project initially operated out of six of thenine centers as shown by an asterisk below:

(a) *CRIDA 01: Galicia and the North - La Coruna(b) *CRIDA 03: Ebro -.Zaragoza(c) CRIDA 04: Cataluna - Barcelona(d) CRIDA 05: Duero - Salamanca(e) *CRIDA 06: Tajo - Madrid(f) *CRIDA 07: Levante - Valencia(g) *CRIDA 08: Extremadura - Badajoz(h) *CRIDA 10: Andalucia - Cordoba(i) CRIDA 11: Canarias - Santa Cruz de Tenerife

1.04 As the Project evolved the Bank approved additional sites withinthe INIA System for support. The list below indicates eachlocation which received Project support, either in way of theimprovement of physical facilities and/or technical services.

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ANNEX IPage 3 of 3

NATIONAL RESEARCH PROGRAMS AND WORK LOCATIONS

SUPPORTED BY THE PROJECT

CRIDA LOCATIONNATIONAL RESEARCH PROGRAMS No. Region Province Place

Pasture, Forage & Animal Production -

Humid ZoneNational Center 01 Galicia and

North La Coruna Mabegondo

Pasture, Forage & Animal ProductionArid Zone

National Center 08 Extremadura Badajoz La OrdenSatellite Centers 03 Ebro Zaragoza Montanana

05 Duero Salamanca Salamanca

Oil CropsNational Center 10 Andalucia Cordoba Alameda de

Obispo

CitrusNational Center 07 Levante Valencia Moncada

Cereal and Grain LegumesNational Center 06 Tajo Madrid El EncinSatellite Certer 10 Andalucia Sevilla La Rinco-

nada

Fruit Tree CropsNational Center 03 Ebro Zaragoza Montanana

Vegetable CropsNational Center 03 Rioja- Logrono- Valdegon

Navarra Navarra

Fruit and Vegetable CropsSatellite Centers 04 Cataluna Barcelona Cabrils

07 Levante Murcia TorrePacheco

10 Andalucia Malaga Malaga11 Canary Tenerife La Laguna

Islands

Central ServicesINIA Headquarters Madrid Madrid

- 50 -

ANNEX II

SPAIN

AGRICULTURAL RESEARCH PROJECT

Disbursement Schedule------ (US$ '000)-----

Appraisal Estimate Actual

Annual Accumulated Annual Accumulated

1972 1,600 1,600

1973 3,500 5,100 1,282

1974 3,500 8,600 940 2,222

1975 3,400 12,000 1,960 4,182

1976 700 12,700 3,890 8,072

1977 1,820 9,892

1978 968 10,860

1979 1,840 12,700

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ANNEX III

NUMBER OF INDIVIDUALS GRANTED

FELLOWSHIPS ABROAD

Objective

NATIONAL RESEARCH PROGRAMS Nos./l Man-Yrs PhD MSc Others /2

Pasture, Forage and Animal Production

Humid Zone: National Center - CRIDA 01 27 49.27 4 13 10

Pasture, Forage and Animal Production

Arid Zone: National Center - CRIDA 08 19 25.89 1 10 8- CRIDA 03 6 10.77 1 2 3

- CRIDA 05 4 6.27 0 3 1

Oilseed Crops: National Center - CRIDA 10 21 29.60 1 10 10

Citrus: National Center - CRIDA 07 26 39.25 4 11 11

Cereals & Grain Legumes:

National Center - CRIDA 06 32 35.17 5 7 20

Satellite Center - CRIDA 10 3 2.30 0 1 2

Fruit Tree Crops: National Center - CRIDA 03 9 15.38 3 2 4

Vegetable Crops: National Center - CRIDA 03 8 12.27 0 4 4

Fruit Tree and Vegetable Crops:

Satellite Centers - CRIDA 04 2 1.33 0 0 2- CRIDA 07 4 3.13 0 1 3- CRIDA 10 3 4.97 0 1 2- CRIDA 11 7 8.65 1 2 4

Central Services - INIA Headquarters 10 0.29 0 0 10

Subtotals INIA 181 244.54 20 67 94

CSIC 19 17.22 0 0 19

Grand Total 200 261.76 20 67 113

/1 A total of 222 fellowships were awarded, but some individuals were

granted more than one.

/2 These non-degree fellows'iips were primarily short study tours.

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