Document of The World Bank FOR OFFICIAL USE ONLY Report No: 25503 IMPLEMENTATION COMPLETION REPORT (CPL-35760; SCL-3576A; SCPD-3576S) ON A LOAN/CREDIT/GRANT IN THE AMOUNT OF US$40 MILLION TO THE GOVERNMENT OF EL SALVADOR FOR AN AGRICULTURAL SECTOR REFORM AND INVESTMENT PROJECT 02/28/2003 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS (Exchange Rate Effective ) Currency Unit = FISCAL YEAR January 1 December 31 ABBREVIATIONS AND ACRONYMS BTO Back-to-Office Report CDG Livestock Development Center (Centro de Desarrollo Ganadero) CENTA National Agricultural Technology Center (Centro Nacional de Tecnología Agropecuaria y Forestal) CNR National Registry Center (Centro Nacional de Registros) CVP Neighborhood Producers Group (Circulo Vecinal de Productores) DGDR Directorate General of Rural Development (Dirección General de Desarrollo Rural) DIPEI Division of Institutional Planning and Strategy (División de Planificación y Estrategia Institucional ) DSVA Directorate of Plant and Animal Health (Dirección de Sanidad Vegetal y Animal) EPS Executive Project Summary GOES Government of El Salvador GOPA Agrarian Political Options Group (Grupo de Opciones de Política Agraria) ICR Implementation Completion Report IDB Inter-American Development Bank IICA Inter-American Institute for Cooperation in Agriculture INAZUCAR Sugar Cane Institute (Instituto del Azúcar) IRR Internal Rate of Return IRA Supply Regulation Institute (Instituto Regulador de Abastecimientos) ISIC Salvadorian Coffee Research Institute (Instituto Salvadoreño de Investigación del Café) LA Loan Agreement MAG Ministry of Agriculture and Livestock (Ministerio de Agricultura y Ganadería) M&E Monitoring and Evaluation NGOs Non-Governmental Organizations NPV Net Present Value OAS Organization of American States OCP Project Coordination Office (Oficina Coordinadora de Proyectos ) OED Operations Evaluation Department PAU Project Administration Unit P/DO Project Development Objective/ Development Objective PPF Project Preparation Facility PRISA Agricultural Sector Reform and Investment Project (Programa de Reforma e Inversión Sectorial Agropecuaria) R&E Research and Extension RUTA Regional Unit for Technical Assistance SAL Structural Adjustment Loan SAR Staff Appraisal Report TA Technical Assistance T&V Training and Visit UNDP United Nations Development Program USAID United States Agency for International Development Vice President: David de Ferranti Country Manager/Director: Jane Armitage Sector Manager/Director: John Redwood Task Team Leader/Task Manager: Norman B. Piccioni EL SALVADOR AGRICULTURAL SECTOR REFORM AND INVESTMENT PROJECT CONTENTS Page No. 1. Project Data 1 2. Principal Performance Ratings 1 3. Assessment of Development Objective and Design, and of Quality at Entry 2 4. Achievement of Objective and Outputs 9 5. Major Factors Affecting Implementation and Outcome 22 6. Sustainability 24 7. Bank and Borrower Performance 26 8. Lessons Learned 29 9. Partner Comments 31 10. Additional Information 31 Annex 1. Key Performance Indicators/Log Frame Matrix 33 Annex 2. Project Costs and Financing 34 Annex 3. Economic Costs and Benefits 36 Annex 4. Bank Inputs 48 Annex 5. Ratings for Achievement of Objectives/Outputs of Components 51 Annex 6. Ratings of Bank and Borrower Performance 52 Annex 7. List of Supporting Documents 53 Annex 8. Borrower's ICR 53 Project ID: P007167 Project Name: AGRICULTURAL SECTOR REFORM AND INVESTMENT PROJECT Team Leader: Norman Bentley Piccioni TL Unit: LCSER ICR Type: Core ICR Report Date: September 4, 2003 1. Project Data Name: AGRICULTURAL SECTOR REFORM AND L/C/TF Number: CPL-35760; SCL-3576A; INVESTMENT PROJECT SCPD-3576S Country/Department: EL SALVADOR Region: Latin America and Caribbean Region Sector/subsector: Agricultural extension and research (77%); Central government administration (23%) Theme: Regulation and competition policy (P); Small and medium enterprise support (P); Rural services and infrastructure (P); Rural policies and institutions (S) KEY DATES Original Revised/Actual PCD: 11/14/1990 Effective: 04/21/1994 Appraisal: 10/21/1991 MTR: 10/01/1996 Approval: 03/18/1993 Closing: 12/31/1999 01/31/2003 Borrower/Implementing Agency: GOVERNMENT OF EL SALVADOR/MINISTRY OF AGRICULTURE AND LIVESTOCK (MAG) Other Partners: STAFF Current At Appraisal Vice President: David de Ferranti S. Shahid Husain Country Director: Jane Armitage Edilberto Segura Sector Manager: Mark E. Cackler Michael Baxter Team Leader at ICR: Norman B. Piccioni Cora Shaw ICR Primary Author: Samuel Taffesse and Norman Piccioni with contribution from Gabriel Keynan and Richard Castillo. 2. Principal Performance Ratings (HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HL=Highly Likely, L=Likely, UN=Unlikely, HUN=Highly Unlikely, HU=Highly Unsatisfactory, H=High, SU=Substantial, M=Modest, N=Negligible) Outcome: S Sustainability: HL Institutional Development Impact: SU Bank Performance: S Borrower Performance: S QAG (if available) ICR Quality at Entry: S Project at Risk at Any Time: 3. Assessment of Development Objective and Design, and of Quality at Entry 3.1 Original Objective: Main conclusion: El Salvador’s agricultural sector has come a long way in a relatively short time. At the end of the civil war, when this project was launched, small and medium farmers’ main concerns were land security and subsistence production. Today, many of these farmers have greatly increased their yields of basic grains. Some are moving toward high value crops and further enhancements of productivity. The project succeeded in raising the income level of both farmers covered by the project and the non-participating farmers in the Technical Assistance program. The two main institutions in the agricultural sector (MAG and CENTA) have been modernized, policy and institutional obstacles to the efficient operation of the sector have been removed, and improvements have been made in the way that agricultural services are delivered, notably research and extension. These accomplishments were priorities for this project. Their achievement is even more remarkable given the onset of successive natural disasters, including Hurricane Mitch, two earthquakes, recurrent droughts, economic shocks – including a steep decline in the price of El Salvador’s major agricultural export, coffee, and a recession in its major trading partner, the United States. Despite genuine progress, the project was also marked by impediments that suggest the need for revision. These are discussed below. 3.1 Original Objective Country and Sectoral Context: 3.1.1 In the 1960s and 1970s El Salvador enjoyed two decades of real economic growth, stable prices, and export expansion. All this came to a grinding halt in 1979 with the eruption of the civil war. The war, coupled with the deterioration of the external economic environment, exacerbated the economic slowdown. As a result, GDP fell by 13 percent in 1980-82. The steep fall in the world price of coffee (which accounted for 29 percent of the agricultural sector value added) had a major impact on the performance of the sector. From the early 1980s and until 1989, the economy lingered at a lower level of equilibrium; average annual growth was 1.6 percent. 3.1.2 The Government of El Salvador (GOES) took several adjustment measures to eliminate distortions in the economy. The administration of President Alfredo Cristiani, which assumed office in 1989, introduced a comprehensive economic stabilization and structural adjustment program. This effort was designed to create a more market-oriented and private sector-led economy, capable of rapid sustained growth, while seeking to eliminate poverty. The administration also concluded a peace accord in January 1992. The administration then initiated economic reform. For the agricultural sector, these reforms sought to eliminate all domestic price controls on basic grains, abolish parastatal agricultural marketing companies, and divest their assets. In the agricultural sector, a comprehensive structural adjustment program was undertaken, with the support of a World Bank Structural Adjustment Loan (SAL, Loan No. 3293-ES). This program led to a number of achievements. All domestic price controls on basic grains were eliminated. The monopoly power of the parastatal agricultural marketing companies was abolished, and divestiture of these companies assets was begun. The agricultural sector responded well to these initiatives. Stimulated by the elimination of price -2- distortions and good weather, agriculture led the economy’s rebound in 1990. The sector grew by 7.4 percent and exports of non-traditional agricultural products grew by over one-third. A Multisectoral Global Credit Program was initiated, financed by the Inter-American Development Bank (IDB) through a SAL. This effort further addressed the negative effects of fiscal and trade policies on agricultural exports and imports, and sought the expansion of the private sector role in marketing of agricultural commodities. These programs, coupled with the economic stabilization and adjustment program adapted by the GOES, sought to accelerate growth and sustainability in the agricultural sector, improve the capacity of sectoral institutions to execute public investment, provide essential support services, and accelerate the pace of 1 technological change. The Agricultural Sector Reform & Investment Project (PRISA) was part of the comprehensive plan of the GOES to improve the performance of the economy. 3.1.3 The institutional setup at the time that PRISA was launched was deficient. The institution responsible for the agricultural sector, the Ministry of Agriculture and Livestock (Ministerio de Agricultura y Ganadería, or MAG) was cumbersome and bureaucratic. The principal crops research institution, the National Agricultural Technology Center (Centro Nacional de Tecnología Agropecuaria y Forestal, or CENTA), which was responsible for agricultural extension until 1979 was also inefficient. Some 80 to 95 percent of its annual budget was allocated to salaries. Out of an estimated 700 staff members, 125 were technicians who had no doctorates. The ratio of technical to non-technical staff was 1:5.6. 3.1.4 For agricultural extension, the General Directorate for Rural Development (Dirección General de Desarrollo Rural, or DGDR) was responsible for Technical Assistance (TA) to crop producers and for general rural development services. The Livestock Development Center (Centro de Desarrollo Ganadero, or CDG) was responsible for livestock research and extension, and animal health control. The other two parastatals operating in the sector were the Salvadorian Coffee Research Institute (ISIC) and the Sugar 2 Cane Institute (Instituto del Azúcar, INAZUCAR). 3.1.5 The extension system was wrought with problems. In the early 1990s, the extension service in El Salvador faced several problems. A study carried out by MAG and the Inter-American Institute for Cooperation in Agriculture (IICA), with advice and assistance from the Bank, the IDB, and other Latin American countries, cited the following concerns. Links with research were weak. In both extension and research, priorities were established that did not sufficiently meet the needs of small and medium-size producers. The provision of agricultural services was inefficient because extension service and staff were charged with excessive extraneous functions, such as general agricultural data collection and other related functions. Staff were insufficiently trained, and had little opportunity to update their skills while in service. 3.1.6 The research system also exhibited its own generic weaknesses. These included inadequate research methodologies; lack of funds; insufficient attention to the needs of small and medium-size producers; excessive expenditures on salaries and insufficient funding for operating costs; over-centralization; separate and uncoordinated crop and livestock research; and insufficiently trained staff, who had little opportunity to update their skills. 3.1.7 Public investment in agricultural research was deemed appropriate and profitable. The Back-to-Office (BTO) of December 21, 1990, stated that in the case of El Salvador, agricultural research is profitable and public investment is justifiable. The justification for public agricultural research was made on the basis of three factors. First were information costs. By their very nature, some research products are public goods. Private agents, therefore, might well be reluctant to undertake certain types of research, since -3- they could not capture all the benefits. Research that was especially needed, and might not be undertaken by the private sector, included breeding of crop varieties, crop management, economic research, and natural resource management. 3.1.8 Second was risk perception. Private agents perceived risks as being greater than the government and consequently the private sector might not invest at optimal levels. Third was a need to conduct research specifically with the aim of alleviating poverty. It was believed that private agents assign no benefits to poverty alleviation and therefore investments must be undertaken by the public sector. 3.1.9 In addition to raising the level of investment in agricultural research, it was deemed necessary to deal with the barriers to efficient use of investment. Four main barriers were identified: weak organization in the research community, undefined priorities, lack of linkage between research and extension, and inefficiencies in the research/extension systems. 3.1.10 To address these institutional weaknesses, the government proposed several measures. The proposals by GOES included: making CENTA an autonomous institution; merging research and extension, crop and livestock activities in both sectors to reap economies of scale and reduce inefficiency; and creating five agro-ecological zones research centers. The Bank suggested organizing CENTA according to five groups of products and two support services (and according to discipline). The groups were basic grains (rice, maize, sorghum, beans); oilseeds and fibers; livestock; fruits and vegetables; and forestry. The two supportive services were communications and research services (soils, food, chemistry, biometrics, computing). 3.1.11 Several strategic choices were made. First, a single public research and extension institution was chosen. The project opted not to separate extension and research systems into different institutions and not to have independent systems for irrigation agriculture and rain fed agriculture. However, in areas where irrigation agriculture expanded a strategic choice was made to increase emphasis of the research and extension system in helping the newly developed irrigations systems but not to establish a separate institution. 3.1.12 Second, the government gave priority to food crops. The project was conceived as the civil war in El Salvador was winding down. The government wanted to focus its priorities on food crops to avoid 3 political unrest due to either higher food prices or low production and low income for small farmers. Accordingly, CENTA’s main areas of research were chosen to be maize, sorghum, rice, beans, fruits, and vegetables. 3.1.13 Third, extension was given a higher priority than reasearch. In the short-run, it was decided to focus primarily on extension, while research would play a secondary, although still important, role. This was justified by the findings that the technical level of production was lower compared to earlier periods. In the long-term, emphasis was expected to be placed on adapting imported agro-technologies. This again gave greater weight to extension. It was also argued that due to the small size of the country, basic research 4 would have a smaller role and nearly all research was expected to be adaptive. 3.1.14 Thus strengthening extension became the primary focus. In order to improve the efficiency of an extension system, several steps were planned: to provide more resources; to eliminate extraneous tasks from the mandate of extension staff; to better define the client group for extension by targeting small producers; and to train staff. -4- Original Objective: 3.1.15 According to the Loan Agreement (LA), the objectives of the project were to strengthen El Salvador’s agricultural sector; accelerate the generation of more productive and environmentally sustainable agricultural technology; and contribute to productivity improvements of small and medium farmers. 3.2 Revised Objective: 3.2.1 Four effective amendments were added to the loan. One of these (the second) never became effective and was canceled. None of the loan’s amendments changed the objectives of the project. However, the Project Status Report (PSR) sequence number 26 wrongly stated that there was a change in the project objective. 3.3 Original Components: The project had two major components: reform and institutional development of MAG and CENTA; and development of agricultural research and extension. 3.3.1 Component 1. Reform and Institutional Development of MAG and CENTA (US$16.7 million): This component was designed to help MAG perform its revised roles in sector policy, regulation, and evaluation; CENTA would execute the research and extension component; and MAG and CENTA would modernize their management and streamline staff to implement their new role and focus their activity on supporting small and medium-size producers. The component, which included an institutional development 5 plan, was based on the implementation of four subcomponents. (i) Institutional strategy and planning (US$2.9 million): The key changes expected were to make CENTA an autonomous agency and to enact a new organic law for MAG to define the Ministry’s new functional responsibilities and institutional structure. (ii) Human resource management (US$7.2 million): This subcomponent was planned to assist the Division of Institutional Planning and Strategy (DIPEI) in implementing MAG's Staff Rationalization Plan and in making the transition from the existing staffing to the required staffing and skills mix. The plan included actions for rationalizing MAG and CENTA's structures; implementing voluntary staff retirement incentives; conducting preliminary performance evaluations; fitting staff into the new pay and grade structure through competitive recruitment; and establishing a human resources management system. Preparation of the plan was supported by Project Preparation Facility (PPF) fund and Japanese grant proceeds, in coordination with UNDP-financed first phase implementation of the Management Development Program. This subcomponent was also expected to assist MAG in finalizing the privatization or elimination of the Supply Regulation Institute (Instituto Regulador de Abastecimientos – IRA) and those support services that can best be provided by the private sector. MAG requested bids for the sale of 10 of the 16 IRA plants during the preparation of this project. (iii) Management information systems and procedures (US$1.8 million), to streamlining administrative procedures; and (iv) Construction of MAG headquarters (US$4.3 million). -5- 3.3.2 Component 2. Agricultural Research and Extension (US$39.8 million): This component was the major component of the project (70.4 percent of total project cost) and the area in which changes and improvement at the farm level were expected. The component was designed to strengthen applied research and extension, with priority to be given to small and medium-size farmers. The component had eight specific objectives. First, was to reorient research and extension services to small and medium farmers. Second, was to create a unified national crop and livestock research and extension system. Third, was to make the research and extension system more efficient by giving it autonomy and administrative flexibility. Fourth, was to give priority in research and extension to natural resource conservation as well as to basic grains, livestock, fibers and oilseeds produced by small farmers. Research and extension for export crops would be left to the private sector and to bilateral financing. Fifth, was to reorganize research from a disciplinary approach to a commodity approach. Sixth, was to focus extension on specific objectives at the farm level. To this end, a modified Training and Visit (T&V) extension methodology would be introduced. Seventh, was to stop functions extraneous to research and extension, such as general rural development, seed certification, and commercial seed production. Eighth, was to include alternative sources of finance. Given the smaller farmer clientele, and lack of cost-recovery, this last activity was aimed to include the NGOs. 3.3.3 Component 2 had three subcomponents. (i) Agricultural research (US$11.9 million): Under this subcomponent, the project planned to support research in five areas: basic grains (maize, beans, rice, sorghum, and wheat); livestock and forages; fruits and vegetables; fibers and oilseeds; and natural resources. The first four research priorities were chosen because those commodities were most important for the small and medium farmers who were planned to be CENTA’s clients. Natural resources research was selected as a priority because little information existed about problems in the area and because of the negative effect of natural resource degradation on small and medium farmers. (ii) Agricultural extension (US$17.1 million): This subcomponent included steps to decentralize and reorganize the system around a modified T&V methodology. The extension system was planned to operate with a priority on maize, beans, rice, and sorghum, as these were the principal crops of the target farmers. Livestock extension was scheduled to be added in the second year of project implementation. Extension agents were expected to follow the T&V methodology or work according to a regular schedule of farm visits to producer groups. It was believed that this approach would permit field staff to better provide technical recommendations, monitor progress, and establish a predictable visit pattern. The new set-up was expected to provide regular training to extension agents. This training was to include assistance from subject matter specialists in the research staff, to improve links and synergies between extension and research. (iii) Support services for agricultural research and extension (US$10.8 million): This subcomponent was planned to provide support services required for the basic research and extension activities. This included rehabilitation of CENTA headquarters, the acquisition of vehicles and equipment, and the provision of TA and training. In addition, the subcomponent was to support financing for incremental costs---mostly operating costs---on a declining scale. 3.4 Revised Components: 6 3.4.1 Through its amendments, the Loan Agreement revised the number of components under the project. The First Amendment (dated August 16, 1994) added a third component to the project: Improvement of -6- Land Registry and Cadastre Service. The Second Amendment (June 30, 1998) added another component: 7 Rural Financial Market Development. The Third Amendment, dated February 24, 1999, annulled the Second Amendment. The Rural Financial Market Development was canceled without effect, since it was not approved by the Salvadoran Legislative Assembly. The Third Amendment replaced the Rural Financial Market component with a Hurricane Mitch Emergency Program for the Rural Sector. As part of the Fourth Amendment of April 3, 2001, rehabilitation in the aftermath of two major earthquakes of January and February 2001 was added into the emergency program, without limitation to the rural sector. 3.5 Quality at Entry: Satisfactory 3.5.1 The project was an integral part of the Government of El Salvador’s plan to improve the economic performance of the country. In 1989, the GOES adopted an Economic and Social Development Plan for 1989--1994, which had two fundamental objectives. The first was to create the conditions needed for strong sustainable growth through economic stabilization and liberalization. The second was to raise the welfare 8 and standard of living of the population, especially of those who live in extreme poverty. 3.5.2 In line with the GOES overall plan, MAG’s program to achieve growth and sustainability consisted of reducing government intervention through privatization of marketing parastatals; improving sector investment programming and execution capacity; and providing support services to small and medium farmers to accelerate adoption of a more productive and sustainable technology. 3.5.3 To ensure smooth start-up of project implementation, GOES undertook several background studies and passed several decrees during project preparation. As early as 1990, the Government sponsored several studies to assess the agricultural sector and to define future policies, strategies, and public sector intervention. It then adopted several decrees to reorient MAG’s activity. These included Ministerial Decree No. 912, which promulgated a system of operating rules for MAG. A review of all units’ functions, responsibilities, and workloads was effected, to link functional objectives with micro-organizational design and planning, and to define the required staffing and skills mix. Ministerial Orders No. 2 to 9 (October 14, 1992) adopted MAG’s new divisional structure. Screening of staff was done earlier, in the preparation stage of the project. Determining actual organization structure, staffing, and skill mix was completed before project effectiveness and proposals were prepared for all other phases. By Ministerial Order No. 1 (October 7, 1992), MAG transferred seed certification functions to the Directorate of Plant and Animal Health (DSVA). 3.5.4 The project was a result of a comprehensive approach and partnership in the development of the agricultural sector. USAID made available complementary financing for privatization of grain marketing and sugar strategy studies and public sector efficiency studies for the reform and indemnization of retiring staff. Coordination with IDB on all policy discussions and preparation activities proceeded smoothly, including agreement on the need for upfront conditionality, apportionment of the loan, and joint scheduling of all missions. A clear division of subsector activity was made with IDB, to remove obstacles to the implementation of MAG’s overall program for modernizing the agricultural sector. The Bank also extensively involved its staff from the Regional Unit for Technical Assistance (RUTA). 3.5.5 Lessons from other projects were considered. The project preparation took into account experiences of other projects in the agriculture sector financed by other donors, including USAID and IDB. The project 9 also benefited from several studies on the sector. Analysis to identify the major agricultural commodities in El Salvador was carried out and identified four basic crops: maize, beans, rice, and sorghum. -7- 3.5.6 Several conditions were included in negotiations, effectiveness, and disbursement. As a condition of project appraisal, the Bank requested a detailed program for the merging of livestock research and extension system within the new CENTA after its re-organization. The government was expected to prepare staff and budget allocations between research and extension by region for the life of the project. 3.5.7 The Bank also requested a specification of relations to all related projects that were specially funded, such as the USAID-funded small-scale irrigation project. It was believed that these other projects would affect research priorities and the budget allocation of the resources to be funded by the proposed loan. It was agreed that if projects lay outside the scope of government priorities for public research and extension, then the project was expected to receive an assurance that these projects would not interfere with the implementation of priorities under the project. 3.5.8 During negotiations, the Government agreed to carry out action plans to make seed certification independent of CENTA by 1993 and to eliminate commercial seed production by CENTA by 1994. Agreement was also reached to use implementation and impact indicators as a basis of the annual and mid-term review. As part of the effectiveness conditions, an agreement between MAG and CENTA was required, reflecting the responsibilities of each of these organization. Evidence of initiation of implementation of MAG’s staff rationalization plan was also required. Disbursement conditions were related to CENTA’s adoption of the staff rationalization plan and MAG and CENTA’s adoption of new internal rules of transportation services. 3.5.9 Potential risks in project implementation were identified. These risks included the inherent ones of operating in a country suffering from civil strife and the sustained ability of GOES to carry out its stated agenda for institutional reform. Specific project-related risks were also identified, notably those arising from the sector’s implementation weakness and lack of familiarity with Bank procedures. The Staff Appraisal Report (SAR) aimed to make the last two factors endogenous: that is, to address them directly through the project through capacity-building and training. In the area of research and extension (R&E), the SAR identified several risks facing the project: lack of Government commitment; inadequacy and unsustainability of funding; inability to set priorities; poor management; and weak research-extension links. To deal with these risks, the Bank secured the government’s budgetary commitment, as well as legislative approval of the CENTA law, which brought both extension and research under CENTA. 3.5.10 The project also identified weaknesses in project implementation. It highlighted the risk of poor disbursement, based on the experience of IDB’s project loan for CENTA that had been completed in 1990. Although the design did not address this specific issue, it recognized operational risks in general. These were planned to be addressed through the creation of a Project Administration Unit (PAU) that would facilitate Bank procedures for procurement, disbursement, audit, and reporting. 3.5.11 There were some weakness in the project design. Project implementation arrangements were later found to be detrimental to efficient execution of the project. Poverty reduction and its diagnosis were absent in the SAR. Moreover, the project could have been better designed as two inter-related and successive projects, the first dealing with institutional reforms and field tests of proposed innovations (or a technical assistance project), and the second with more extensive sector investments (see sections 7.1 and 8.3.) -8- 4. Achievement of Objective and Outputs 4.1 Outcome/achievement of objective: Project Outcome: Satisfactory 4.1.1 The overall outcome of the project objective is rated as satisfactory. The project was implemented under harsh economic conditions, characterized by severe deterioration of terms of trade and the collapse of coffee prices. The economic slowdown that started in 1996 was further compounded by the havoc brought by Hurricane Mitch in 1998. This was especially the case for the rural areas and the agricultural infrastructures, including rural roads (critical in the marketing of agricultural produce) and irrigation infrastructures. In 2000, a large portion of the country suffered from drought. (Other minor localized droughts affected pockets of the country in earlier years of the project period as well). Two major earthquakes in January and February 2001, as well as thousands of aftershocks, were estimated to have caused an economic loss $US1.6 billion: more than 10 percent of GNP, and more than half the national government’s annual budget. These earthquakes further destroyed agricultural infrastructures and production systems that were at an early stage of recovery from Hurricane Mitch. 4.1.2 Despite the negative circumstances under which PRISA was implemented, the project demonstrated its resilience. Overall in El Salvador, “poverty fell from 60 percent of the total in 1991 to about 41 percent 10 in 1999,” according to a report by the Bank’s OED assessment. Among the Bank’s contributions toward 11 this achievement, OED specifically identified the agricultural reform and land titling projects. 4.1.3 During the life of the project, the Ministry of Agriculture assumed it new role by privatizing several parastatal organs under its control. The Ministry has transformed itself into a modern organization able to formulate policy, generate and disseminate information, improve the legal frameworks under which the agricultural sector operates, and remove barriers in the development of competitive agriculture. A revolutionary efficiency is observed in the provision of some services. In the areas of export certification and import permission, for example, before PRISA, it took one week to receive a certificate or permit. It 12 now takes only 15 minutes. 4.1.4 The Ministry has also taken advantage of the development in information technology and its application to the agricultural sector. The Ministry website provides daily agricultural products prices and historical information going back 20 years. Such information is especially helpful to the rural poor. According to the Bank’s Agricultural and Rural Development study, the lag of rural areas in access to information, compared to urban areas, has “jeopardize[d] the ability of rural people to realize their full 13 potential and improve their social, economic, and environmental conditions.” The provision of information by MAG is an attempt to help the rural poor improve their living standard. 4.1.5 MAG, through PRISA, was a pioneer in efforts to liberalize the agricultural economy and develop a market-led economy. Today, El Salvador is one of the freest economies in the world and the freest in Latin 14 America. This achievement bodes well for the outcome of the project. 4.1.6 At the farm level, the project has led to improvement in agricultural productivity of small and medium producers. Not only has the project directly benefited 63,000 small and medium agricultural producers, but it also has also been instrumental in the observed improvement in agricultural productivity across all regions of the country. The achievement in productivity has helped reduce the impact of the natural disasters, since small farmers were in a better position, in terms of available food grains, to cope with the immediate impact of natural disasters. In fact, the quick rebound of the agricultural sector stands as a -9- testimony to its resilience to external shocks. 4.1.7 The growth of agricultural productivity in El Salvador compares favorably with neighboring countries, as can be seen from table 1 (extracted from the Bank’s database). During the same period, the growth rate of coffee stagnated and cotton practically disappeared. Thus one of the achievements of this project was that in basic grains---a priority area for PRISA---El Salvadorian agriculture was able to attain a high growth rate. Table 1. Cereal Yields for Selected Central American Countries (kg per ha) Country 1994 2000 Growth in % (1994/2000) El Salvador 1609.6 1936.0 20.3 Nicaragua 1725.2 1841.7 6.8 Honduras 1310.8 1263.8 -3.6 Guatemala 1893.8 1750.3 -7.6 Source: World Bank, Statistical Information Management & Analysis. 4.1.8 With the change in the government policy for the agricultural sector, the composition, type, and players in research, extension, and other service provision has diversified. NGOs, the private sector, universities, and others have increased their involvement in the sector. This diversification of sources of services was also made possible through this project: first, through changes in policy; second, through training provided to these institutions in enhancing their capacity; and third, through privatization of parastral organizations. Before PRISA, the number of non-public institutions involved in extension and research was negligible and the area was totally dominated by the government. Today, it is difficult to estimate the number of organizations operating in the field. There are around 25 NGOs that have national coverage working in the field of extension. Numerous other NGOs focus on a specific region or localities. Without undermining the achievements of the project, it has to be noted that there is still a deficit in specialized institutions in extension and/or research. 4.1.9 The efficiency of agriculture has improved, not only in terms of yields per hectare, but also in the use and application of better and scientific know-how in agriculture production. Traditional methods of farming generally had accelerated the deterioration of land productivity by promoting soil erosion, through farming methods such as burn-and-slash agriculture and deforestation. By contrast, new methods of farming are taking root using micro forestation, dikes and other soil erosion protection measures, advanced harvest techniques, and safe management of pesticides. These new methods have contributed to the sustainable management of farms in El Salvador in general, and in the project area in particular. 4.1.10 The experience in El Salvador seems to validate the general consensus that “successful investments in agricultural R&E increase total income, improve income distribution, and reduce income variability” 15 (see annex 3 for an analysis of project economic costs and benefits). In 2000, gross income of farmers who benefited directly from the project from harvest of basic grains alone increased by 175 percent from its 1995 level. The land titling component of this project is believed to have been instrumental in reducing the widening of income distribution. Income was on an upward trajectory during early years of project implementation except in 1999, in the aftermath of Hurricane Mitch. 4.1.11 Relevance: During the preparation of the project, the Government was committed to modernize and liberalize the agricultural sector from excessive intervention that historically had characterized the sector. The government chose to focus its support on the public goods aspect of agricultural support services and to eliminate the public sector monopoly in the provision of services. Successive governments of El - 10 - Salvador have committed themselves to strengthening the modernization of the state and the liberalization of the economy. In this context, the project was and still is relevant to the agricultural sector of El Salvador. 4.1.12 In the face of an increasingly globalized market and given the fact that El Salvador has one of the world’s freest economies, it is imperative that both research and extension services continue to improve the productivity of agricultural producers. This is especially important for poor small and medium farmers, who are vulnerable to external competition. From the perspective of supporting small-and-medium farmers, the project activities were and still are relevant. Achievement by Objectives: According to the Loan Agreement (LA), the project had three specific objectives. Objective 1. To strengthen the Borrower's agricultural sector: Satisfactory 4.1.13 The strengthening of the agricultural sector involved modernizing the two main institutions (MAG and CENTA), removing policy and institutional obstacles for the efficient operation of the sector, and improving the way services are delivered. As described above, El Salvador’s agriculture sector has been successfully modernized as a result of this project. The reformed MAG has limited its activities to reflect the market-led development policy of the government. MAG has become a facilitator of agricultural development, and has limited its regulatory role to such aspects as certification of products and licensing of imports. CENTA is providing the necessary public-good service to the agricultural sector. CENTA’s activities have been limited to helping small and medium farmers. The institution has successfully disengaged from providing research activities and extension service to commercial farms, which can finance the provision of such services themselves. To overcome the problems in coordinating extension and research, the two tasks were brought together under the restructured CENTA. Certification of seeds was taken out of CENTA and commercial production of seeds was left to the private sector. These steps opened the way for the private sector, universities, and NGOs to become involved in both research and extension services. 4.1.14 If strength is also measured by adaptability to changing circumstances, both MAG and CENTA have demonstrated their agility by moving to new activities. As information technology opened the possibility of information provision and reduced its cost, MAG has adjusted itself fairly quickly to the provision of these services through web pages and other means. As the country achieved good results in basic-grain productivity, both MAG and CENTA shifted their priorities in policy, research, and extension services toward high value products. At the local level, a successful capacity building initiative was undertaken in which a neighborhood producers group (CVP, Círculo Vecinal de Productores) was trained to manage nurseries micro-irrigation systems, pest management, improved farming techniques, micro-forestation and soil erosion control, and improved farming techniques. 4.1.15 The strengthening of the agricultural sector also came about through the Land Registry Project, which started as a component of this project. In the region where this component was piloted, farmers’ secure tenure of land was improved. This contributed to the improvement of land, especially where micro-forestation and erosion control was undertaken. The resilience and the strength of the agricultural sector was also demonstrated by its quick rebound from the disasters brought about by Hurricane Mitch, two earthquakes, and recurrent droughts. 4.1.16 Two indicators were chosen by the Staff Appraisal Report as measure of the impact of this project - 11 - objective: (i) Of 27 strategy actions to be completed, 26---that is, 96 percent----were completed. (ii) Of the 20 agencies slated to operate in National Reconstruction Plan areas, 21---105 percent of the target---actually operated. Objective 2. To accelerate the generation of more productive and environmentally sustainable agricultural technology: Satisfactory 4.1.17 The project gave priority to crops produced by small and medium-size farmers. Thus the main focus of the project were basic grains. In grain production, the project was able to generate and validate five hybrids and one variety of maize, four varieties of beans, two varieties of rice, three varieties of sorghum for grain, and one variety for forage. With the change in the focus of CENTA toward high value crops, technical guidelines for at least ten crops were prepared and published, and are being used by farmers. A technical guideline on irrigation has also been produced. In animal production, various economically viable technologies were developed. In fruits and vegetables production, integrated pest management was introduced in sweet chili production, and three promising strains of onion were identified. In the field of agro-industrial crops, four varieties of sesame were developed and made available. In natural resources management, various technologies were developed, including the planting of small-scale reforestation plots, the use of advanced soil conservation technologies, and the establishment and management of "protein banks" for animal use. An additional, 18 technical guidelines were published, and CENTA prepared a catalogue of agro-techniques available in the 1994--2000 period. Objective 3. To contribute to productivity improvements of small and medium farmers: Satisfactory 4.1.18 One of the main outcomes expected of this project was the enhancement of agricultural productivity through the introduction of improved varieties of seeds and production methods. A total of 63,000 small and medium producers directly benefited from the project and adopted improved agricultural technologies. The number of farmers directly covered recently dropped to 53,000 with the changes in MAG policies and CENTA’s focus. With the new focus, CENTA has opted to work closely with selected farmers in all representative areas, where the potential for receptivity is higher and the multiplier effect is expected to be greater. 4.1.19 To see results on the ground after the project had ended, the ICR mission visited representative farms of both small and medium farmers. In a representative small farm, CENTA had introduced a drip micro-irrigation system based on a technology that does not require the input of power. The small farmers that the mission visited are now aiming to diversify their production, harvest at least twice a year, and improve their access to market. The same is true of medium-farmers that were visited by the mission. The only difference is that they are investing their own money in irrigation infrastructure to support their effort in the production of high value products. Extension agents visit these farmers once a week and on an on-call basis. The system has introduced demand-driven service provision. 4.1.20 In terms of capacity building, communities have developed their capacity in managing nurseries of improved variety of high-value produce, such as vegetables and tomatoes, and also in managing their producers’ organizations. The project impact has extended beyond farmers who are directly attended by CENTA to include other beneficiaries through the demonstration effect. Earlier supervisions and the ICR mission visited farmers who do not receive direct Technical Assistance from CENTA but were able to adopt the same advice and technology made available to project beneficiaries. A comparable impact on production and yields was observed in the fields of non-participating farmers. In addition, farmers are - 12 - practicing environmentally sustainable farming techniques such as abandoning slash-and-burn agriculture, implementing soil conservation and erosion control methods, and planting trees. 4.2 Outputs by components: Component 1. Reform and Institutional Development of MAG and CENTA: Satisfactory 4.2.1 As a result of this component, the project supported MAG and CENTA in modernizing and aligning their activities in line with the new government policy. 4.2.2 Modernization of MAG. The component assisted MAG in seven main ways. First, it helped implement the definition of a new organic law for MAG. This not only clarified the role of the reformed MAG, but also supported the implementation of the revised role of MAG in formulating agricultural sector policy and regulating important activities and evaluation of the sector. Second, it supported the codification of MAG’s new functional responsibilities and institutional structure. Third, it implemented MAG's Staff Rationalization Plan to allow a smoother transition to the required staffing and skills mix. Fourth, it implemented information management system to streamline administrative procedures. Fifth, it supported construction of MAG’s headquarters and its equipment with modern office equipment. Sixth, the component supported the drafting of several pieces of legislation and various regulations – this was aimed at supporting the transition of the institution; at carrying out its necessary adjustments in accordance with the new sector’s legal framework; at ensuring the sustainability of the reforms; and at guarding against sliding back to the old order. Seventh, the component supported the training of staff in different disciplines, including information systems, management, strategic planning, and legal matters. The overall impact of these activities was an improved agricultural sector management through MAG and its transformation and modernization. This facilitated the implementation of the new role of the Ministry. 4.2.3 As a result of this component, MAG successfully addressed the misalignment of its staff. The project improved the ratio of technical to non-technical staff from 1:2 before the project to 1:1.2 in 2002. The percentage of salary expenditure to total ordinary expenditure was reduced from its extraordinarily high level of 93 percent before the project began to its current level of 36 percent. The SAR predicted that a total staff of 1,486 would be needed to implement MAG’s new prerogatives effectively. By 2002, MAG was able to reduce its staff to 1,224---about two-thirds (62 percent) of the level in 1993----without compromising delivery of its services. This component also supported the privatization, outsourcing, or disposal of at least six enterprises for which the private sector was believed to have a comparative advantage in the delivery of the services. 4.2.4 The dynamism created in MAG is demonstrated through its application of a new information system. MAG is enthusiastically working to introduce a revolutionary change in the way in which farmers operate and the agriculture sector works (see 4.2.5 below). These steps will help the development of functioning 16 and more efficient markets supported by a continuous flow of information. MAG provides current marketing data on the four major regions of the country and also offers information on supply and demand in the different markets. The Ministry web site (www.mag.gob.sv) provides information and covers important topics such as orientation of the agricultural sector, current and historical market information, statistics on agriculture, rules and regulations governing the operation of the sector, animal hygiene and health, and land tenure security. 4.2.5 MAG has completed a study, financed by PRISA, to explore ways that farmers could have access to an interactive information system. A farmer could input information on soil type and other local factors about his land and the type and amount of seed and fertilizer he is planning to use. Given some assumptions, the system would be able to provide him with information about the most - 13 - productive/profitable activity for his land, and the level of output he could expect. The user would be able to consider several alternatives (in crops, fertilizer, irrigation, and so on) until he arrived at the best option, given his budget and other constraints. 4.2.6 A shift in institutional culture has also taken place within MAG. There is a now a realization among MAG staff that public employment does not come with a life-long guarantee---regardless of productiveness or relevance of the position, as was the case before the project. PRISA was expected to redress the misalignment in the ratio of technical to non-technical staff in agricultural sector institutions. This misalignment was a legacy of the civil war, which reduced economic activity and thus employment opportunity. During the civil war, the public sector became an employer of last resort, more driven by political considerations than real needs or qualification. With the help of PRISA, MAG led all other public sector institutions in modernization of the state and rationalization of staff. 4.2.7 To help improve agricultural policy, MAG established a unit (GOPA, or Grupo de Opciones de Política Agraria) that was instrumental in preparing and carefully prioritizing and sequencing reforms that support the institutional transformation of MAG. The unit produced more than 14 studies, including ones on agricultural policy and strategy, draft legislative decrees, and associated regulations. The different policy and legal drafts were successfully promulgated into laws. The current Minister of MAG is interested in continuing the reforms. The impact attributable to the activities of GOPA include the orderly conduct of divestiture of public enterprises, improvement of land security, and effective consolidation of rural debt. 4.2.8 Modernization of CENTA: CENTA was restructured as an autonomous institution responsible for both research and extension. These steps helped better coordinate research and extension services and jointly gave priority to small and medium farmers. The ratio of technical to non-technical personnel was reduced from 2:3 in 1993 to 2:1 in 2002, a little less than the SAR’s target of 2.5 technical to 1 non-technical staff. The staff was also realigned in keeping with the new structure based, mainly, on crop production. In 2002, some 618 staff were employed by CENTA, 46 percent of the SAR target of 1,341 staff. According to CENTA competition with the proliferating institutions in the sector has affected its capacity of retaining staff. The ratio of salaries to total ordinary costs fell from 93 percent in 1993 to 88 percent in 2002, but has not quite achieved the target of 70 percent. Like MAG, CENTA has also deployed an information system---although it is not as revolutionary as MAG’s. CENTA’s system is expected to be the window for information provision, training, and databases for different manuals. This component also financed training of staff domestically and abroad. 4.2.9 The achievement of this component would have been rated as highly satisfactory if not for the reluctance by CENTA to internalize and implement the reform expected from it. Due to frequent and unwarranted changes in the management of this institution, reforms were neither implemented at the pace nor in the depth agreed upon during project preparation and negotiations. Component 2. Agricultural Research and Extension: Marginally Satisfactory 4.2.10 This component has achieved most of its goals. However, these achievements were not necessarily attributable exclusively to PRISA, but rather to a cumulative effect of the involvement of PRISA and other 17 donors in the sector. Nevertheless, it was through PRISA that institutional changes and adjustment of priorities were carried out within CENTA. 4.2.11 Research: The project executed 725 subprojects of research. These included 367 (or 51 percent) in - 14 - basic grains, 169 (23 percent) in fruits and vegetables, 77 (or 11 percent) in animal production, 66 (9 percent) in agro-industrial products, and 46 (6 percent) in natural resources. The composition reflected the priorities the government attached to the different commodities, given the importance of each of these products in the total production of small and medium farmers. 4.2.12 To coordinate the different activities of research and extension undertaken by CENTA and other NGOs, 24 agreements were signed with national and international NGOs and organizations involved in such efforts. Four networks were established to formalize the relationship. The aim of these coordination arrangements was to reduce duplication, to learn from one another about each organization’s comparative advantage in specific localities, and to support the dissemination of CENTA’s research results. The new policy in the agricultural sector and the provision of training by CENTA created the opportunity for other institutions to increase their participation (both in number and scope) in research and dissemination of results. The project also financed the purchase of equipment for the production of basic grains and other construction works. 4.2.13 Extension: The main change was the re-orientation of the methodology to a modified Training and Visit (T&V) system. During preparation, it was believed that existing productive technologies could be introduced to farmers without further research, but with a reform in the extension services. The government piloted the re-oriented extension methodology and found the initial experience satisfactory. Thus it was decided to extend the change to cover the whole country through 76 extension agencies. As part of this component, PRISA helped make the delivery of extension services more systematic. A program of farm visits by extension agents was implemented, regularly once a week, and supplemented by additional plot visits on demand. Frequent and programmed field demonstrations were conducted. A mechanism was established by which farmers could participate in choosing their priorities and indicate their preferences. A unique and innovative computer-based farm management system was introduced at the field level. All these achievements were taken to redress the weaknesses observed before PRISA was launched, and were expected to help improve the productivity of El Salvadorian agriculture. 4.2.14 The project mid-term evaluation introduced new recommendations to this sub-component. Taking these into consideration, CENTA, through PRISA, implemented a set of pilot activities. The most noteworthy one aimed to help farmers market their produce, through the involvement of all potential partners; including input suppliers, processors, marketers, and farmers’ associations. The traditional service coverage of technology generation and transfer was extended to the full chain of agro-productive and agro-industrial activities. This pilot was carried out in one region, the Alto Lempa. It generated a value-added of US$450,000 for an investment of US$50,000. This pilot helped demonstrate to MAG for the need to support farmers processing and marketing. This type of support is now included in MAG’s strategic support to farmers. 4.2.15 Research and extension component: The economic analysis for this component shows a profitable rate of return (see annex 3). Although this component was expected to be the major activity of the project, accounting for 70.4 percent of total estimated costs during appraisal, only 41 percent of the appraisal estimate earmarked for executing this component was utilized. This was due in part to the readiness of other donors to finance needed activities in the agricultural sector. It was also due to the somewhat optimistic targets in the original component. 4.2.16 Throughout the project, there were other implementation hurdles, as well. The cooperation between MAG’s Project Coordination Office (OCP) and CENTA’s management was less than ideal. This made it difficult to use allocated funds in a timely way. The allocation of counterpart funding was less than expected, impeding more efficient use of loan proceeds. There were frequent and unwarranted changes in - 15 - CENTA’s directors and management. These contributed to frequent changes in CENTA’s priorities, and consequently in loss of focus, which required time to bring implementation back on course. 4.2.17 During the preparation of this ICR, a Bank mission had an opportunity to discuss these matters with some of CENTA’s ex-directors. What came out clearly was how much the priorities of the various ex-directors of CENTA differed not only among themselves but also with the objectives of PRISA. When other sources of finance were available to CENTA and when MAG did not enforce project priorities (due to frequent changes in MAG’s ministerial position ), CENTA was reluctant to follow the Bank’s advice and operational procedures. This was especially the case because it was CENTA’s first experience working with the Bank. Moreover, the slower-than-anticipated internal re-organization of CENTA has contributed to the slow start in the implementation of this component. This afflicted the project throughout the implementation of this component. 4.2.18 A post-T&V study carried out by the World Bank identified key points for an effective extension 18 service. Long-term financing is needed to cover operational costs. A supportive policy environment with stable funding for extension should be in place. Macroeconomic policies must be favorable and agricultural markets and services must be adequate. A range of public, private, and voluntary organizations should be available to provide diverse services. Organizational and management systems must be tailored to the country’s specific situation, with the flexibility to respond to changing sector needs. The appropriate methodologies and technologies to respond are needed. Farmers should participate in planning, implementing, and evaluating programs. Evaluated by this set of criteria, the extension service functioning in El Salvador today is an effective system. 4.2.19 Thus the rating for this subcomponent took into account the project’s achievements in fulfilling these criteria for an effective T&V system as well as the improvements observed in modernizing the underlying institutional arrangements---the main hurdle in improving the efficiency and effectiveness of research and extension system. The project successfully implemented reform foreseen during preparation. Most of the physical targets in research and extension have been met. In the light of the smaller-than-expected amount of resources invested (both by the Bank and by GOES) the achievement of this component is rated marginally satisfactory. 4.2.20 Due to slow disbursement to this component, the initial appraisal estimate was revised and reduced by US$12.3 million. However, by the closing of the project, activities financed by PRISA stood at US$15 million: slightly more than half (55 percent) the revised estimate. The Bank was aware of this under-investment and shifted the resources to implementing two new components. Component 3. Improvement of Land Registry & Cadastre Service: Highly Satisfactory 4.2.21 The SAR mentioned the importance and the need to complete land reform to improve the overall performance of the agricultural sector. Through a later amendment to the Loan Agreement, this component was added. This component had three main aims. First, was an updating of the cadastral and area-based land registry activities in the Department of Sonsonate. Second, was to support land registry activities in about 100,00 ha in the Department of Sonsonate. Third, was to back a study of the legal and institutional requirements to combine national registry and cadastre information into single records within Ministry of Justice. The component was implemented by the National Registry Center (Centro Nacional de Registros, or CNR) of the Ministry of Justice. 4.2.22 The amendment also specified a list of indicators expected as an output of this component (see table - 16 - 2 below). Almost all the activities planned by this component were fully implemented. The main impact of this component, in the Department of Sonsonate, included an enhanced legal security in land holdings; improved efficiency in the provision of services, especially certification of registry; improved security in the registry system; and a more rapid resolution of land-related disputes. The project computerized the registry and cadastre operation in the region. This was later replicated for the whole country, for both rural and urban areas. The impact of this component was found to be satisfactory, and a project to cover the whole country was approved by the Bank (Ln. 3982-ES) in March 1996. 4.2.23 An interesting aspect of the implementation of this component that bodes well for its sustainability is that it provided all the counterpart funds from its own coffer, through collection of user-fees from its services. In addition, the government expects and the project unit is also confident that the loan will be paid back from the user-fees. Table 2. Implementation and Impact Indicator of Component 3 Targeted during preparation Actual result 16 municipalities with updated land registry 16 municipalities updated their land registry 1 institutional study completed 1 study was completed Department of registry office established A new office of department of registry was established 16 municipal registry stations established Except for the municipality of Sonsonate, it was determined that the other municipalities are small to bring in returns Monitoring and evaluation (M&E) system An M&E system was designed and established. established 4.2.24 This component was estimated to cost US$5.7 million. However, the amendment did not explicitly state the level of counterpart fund or the sources. While the project made full use of the initial estimate made by the amendment, the National Registry Center (CNR), from its source of user-fees, was able to contribute an additional US$1.4 million. Thus before the component grew to a full-fledged project, a total of US$7.1 million was spent in implementing this component. Component 4. Hurricane Mitch and Earthquakes Emergency Works: Highly Satisfactory 4.2.25 The achievement of this component is rated highly satisfactory for several reasons. It had a direct and positive impact on farmers and the rural population. The sector was able to recover relatively quickly because of quick interventions to rehabilitate the sector’s infrastructure. The strategic choice was made to include mitigation measures, in addition to rehabilitation and reconstruction works. Without this component, the impact of Mitch would have lingered for a longer period. This point was underscored by different stakeholders during meetings conducted with the ICR mission and consultation done as part of the preparation of Borrower’s final report. 4.2.26 Through two amendments to the Loan Agreement, the project provided a vehicle for the GOES to address the reconstruction of agricultural infrastructure damaged by Hurricane Mitch and the earthquakes. In the final phase of the project, the project activities mainly focused on the execution of this component. Tasks accomplished through this component included the following (for more detail, see annex 1): (i) 26,095 animals were treated as part of activities to control or prevent animal and plant disease; - 17 - (ii) 30,648 families benefited from restocking of animal and plant varieties in areas affected by Hurricane Mitch; (iii) 19 small irrigation rehabilitation works were carried out; (iv) 38.4 kms of drainage and flood control construction works were completed; (v) Fishing gear and equipment for 600 small (artisanal) fisheries were rehabilitated; (vi) One million fish hatches were distributed as part of an effort to restock small-scale fishponds. 4.2.27 With the inclusion of urban centers as eligible categories for financing, the Fourth Amendment included the following activities, as part of this component: (i) Rehabilitation and/or reconstruction of MAG and CENTA's damaged buildings (this was fully implemented, and in addition, 6 CENTA field offices and 13 extension agencies were rehabilitated); (ii) Rehabilitation, reconstruction, and/or construction of the rural productive infrastructure for community use (7 sub-projects were implemented to repair small irrigation schemes, which benefited 858 families; 21 communal agro-productive activities were executed, which benefited more than 27,000 people in rural areas). 4.2.28 The amendment of the loan to carry out these emergency works was instrumental in the agricultural sector’s quick recuperation from the devastation brought by natural disasters. In the rehabilitation in the aftermath of Mitch, some 80,000 families are estimated to have benefited. In earthquake rehabilitation work, some 27,000 to 30,000 families are believed to have benefited directly. The main beneficiaries (an estimated 100,752 people) were farmers and rural dwellers. The re-opening of rural roads and bridges, and the construction of dikes and flood protection structures, are believed to have benefited a large number of the population indirectly. These works also improved access to agricultural and livestock production areas. During the ICR mission, it was observed that the construction of dikes and flood controlling structures have brought a large portion of land under agriculture which had been abandoned earlier because of it vulnerability to floods. As a result, farmers of those lands have seen the value of their property increase substantially. 4.3 Net Present Value/Economic rate of return: 4.3.1 The SAR did not attempt to calculate an economic rate of return for either the whole project or the individual components. The ex post economic and financial evaluation of the project as a whole encountered several problems. The main impact of the project – institutional reform – was not amenable to such analysis. There were several other financers in the agriculture sector, which made it difficult to separate the individual impact of each financer. The information available was not reliable and adequate to conduct a countrywide representative analysis. There was an observed shift in production pattern of farmers from basic grains to high value crops. This change was not systematically captured by the monitoring and evaluation activities of the project. 4.3.2 Given these bottlenecks, attempts were made to carry out a separate economic analysis for the Research and Extension (R&E) component. Again, there was no acceptable complete set of information to conduct such an analysis at national level. Therefore, a representative area was chosen in which the loan proceeds financed the implementation of the R&E component. Here again, the analysis was reduced to covering only basic grains, for which a reasonable amount of information was available. - 18 - 4.3.3 This more limited approach did not quantify several benefits: (i) Gains from other types of crops. Typically, these were fruits and vegetables and agro-industrial products, whose total production has increased significantly. (For instance, in Region I alone between 1999 and 2002, production of chili increased by 166 percent in volume, and cucumber 19 production increased 747 percent); (ii) Environmental benefits; micro-forestation and wood availability and time reduced in the collection of wood for home energy use; (iii) Increased capacity of farmers; (iv) Reduced erosion; (v) Demonstration effect of the use of improved seeds and new technology and its propagation to non-participating farmers; (vi) The cultural shift observed, as expressed in the enhanced confidence of farmers in setting priorities and stating their preferences and in some cases the willingness to pay for extension services; (vii) Improved food security, nutrition, and health, as a result of increased production and product diversification; and (viii) Increased involvement of farmers’ children in schools. 4.3.4 Obviously, the exclusion of the above factors greatly underestimates the impact of the project. With this caveat, the internal economic rate of return at project closing for the R&E is estimated to range between 6 and 16 percent under different set of assumptions. Details of the calculation, the methodology followed, and the basic assumptions used are presented in annex 3. 4.4 Financial rate of return: 4.4.1 In the face of the difficulties this project encountered in implementation (natural disasters and other hurdles) and even though the overall areas dedicated to basic grains decreased, the project succeeded in raising the income level of both types of farmers: those covered by the project and the non-participating farmers in the Technical Assistance program. The average farm size dedicated to basic grains was reduced by 19 percent in 2000, compared to its 1995 level, but gross income from basic grain alone increased by 175 percent for the same period. This achievement, in spite of a fall in prices during the same period, demonstrates that the boost in income might mainly be attributable to improvements in productivity and marketing. In 1997 alone, just before the occurrence of Hurricane Mitch and after only three years of project implementation, income increased by 279 percent. Moreover, the beneficiaries revealed a high degree of satisfaction with the R&E activity, as described in the survey results in annex 3. 4.5 Institutional development impact: Substantial 4.5.1 The most important---and irreversible---outcome of this project was the impact on institutional development. Today, in MAG, El Salvador has a modern, well-focused institution, in place of a centralized and bureaucratic institution that intervened extensively in the operation of the sector and its markets. - 19 - PRISA successfully supported the implementation of the agricultural-related parts of the Government’s National Reconstruction Plan, through a prioritization of reforms and sequencing. The role of the Government in the sector has been reduced to provision of TA and services, coordination of agricultural-related support in the rural areas, and assisting farmers’ efforts in improving their agricultural practice. 4.5.2 Commensurate with its new reduced role, MAG has reduced the number of staff. The institution has also demonstrated its capability to adapt to changing circumstances, both at the national and international level. At the national level, there is a full understanding of the need to move to high value products and increase the value added of agricultural products at the farm level. The Bank mission visited a local nut processing and direct exporting agri-business facilitated by MAG and implemented with financial support from the European Union. Agri-business enterprises like this, as well as the marketing of agricultural products along the lines piloted by this project, improved income of farmers, created employment opportunity and most importantly produced confidence in farmers’ own ability to improve their living standard, if given the right support. Visits to farmers’ plots demonstrated their assertiveness in their choice and willingness to assume and share the cost of ventures that will increase the value added of their product and improve access of their product to market. 4.5.3 As mentioned, El Salvador is ranked as one of the freest economies in the world and the freest in 20 Latin America. MAG was a pioneer both in liberalizing the agricultural sector and modernizing the state. For all practical purposes, MAG neither controls pricing nor foreign trade of agricultural goods. Most government ministries relied on MAG’s advice in their efforts to liberalize their respective sectors and rationalize their staff. PRISA was instrumental in incrementally implementing a change in line with the market-led approach to agricultural sector growth. Although there were times when reforming MAG was not proceeding at the required pace, because of changes in government or ministers, MAG nevertheless met its goals and did not renege on the reforms. These changes are rooted in legal foundations. Moreover, the stated goal of successive governments has been to support a liberalized economy. These underpinnings give assurance that the achievements are irreversible. There is no reason to suspect that the Ministry will revert to the old system. 4.5.4 In the case of CENTA, PRISA was able to help set up and implement a functioning institutional arrangement for the provision of agricultural research and extension in El Salvador. The main achievement, in addition to turning CENTA into an autonomous organization, was the consolidation of research and extension activities under one umbrella. In most Latin American countries, research and extension fall under different institutions. Due to its relatively small size, it was believed that El Salvador did not need two separate institutions. Moreover, past experience had shown that it was difficult to harmonize tasks, set common priorities and coordinate provision of services when the two institutions were functioning separately and independently. El Salvador had experienced both types of arrangements during the pre-PRISA period. After extensive local consultations, and taking into account other countries’ experience, it was decided to combine the two activities. This new institutional arrangement is functioning well and has delivered the outcome expected of CENTA. In addition, discussions with MAG officials revealed that there is no intention of going back to the old arrangements and re-living the old problems. 4.5.5 At the local level, Neighborhood Producers Groups (Circulo Vecinal de Productores, or CVPs) have become assertive of their priorities and are participating actively in decisions related to provision of sevices. For instance, in some localities recently, the CVPs requested to change the frequency of field visits carried out by an extension agent from once a week to once every two weeks. This request was the result of self-appraisal of their need and the conclusion they reached on their own. Some have taken over the - 20 - management and production and dissemination of seeds, charging fees for such services. Others have requested changes in technical assistance toward high value crops, installation and management of micro-irrigation schemes and artisanal fisheries, or in general toward diversification of their agricultural products and further enhancements of productivity. This is a huge progress when compared with the period immediately after the civil war, when the need was for land tenure security and self-sufficiency in food production. As described above, the demonstration effect of managing their financial resources and nurseries---and above all, the belief that through their organization they can process their products for exporting directly to foreign market---testifies to the diversified impact this project had at local level. The confidence of farmers is also demonstrated in their demand for credit, in contrast to requests for subsidies during earlier times. 4.5.6 Today, there are diverse sets of institutions, both national and international, involved in agricultural research and provision of technical assistance. This not only provides alternatives to farmers; it has also introduced competition, which is believed to have been a catalyst for CENTA’s continual updating of priorities. Since research in El Salvador is almost totally adaptive, it did not escape CENTA’s attention that it does not have a monopoly of agricultural knowledge. Thus it reformed itself and limited its activities and roles to facilitator, regulator, and provider of information and supporting services. In this way, it positioned itself in a newly opened “market” for agricultural research, and carved out a niche for itself against competitors---NGOs and other institutions operating in the area. 4.5.7 Finally, as discussed, the information system established by this project has revolutionarized the way MAG operates and has qualitatively improved the institution’s vision about the way the sector should operate in the future. Using this information sytem, MAG has also started collecting fees for some of the information it provides, such as information on agricultural products prices. There has been a tangible difference both organizationally and in the rule-of-the-game, which was made posible through the support provided by PRISA. While other donors may have contributed to the research and extension activities, the Bank was intrumental in the institutional change achieved. 4.5.8 In summary, the following activities had an important institutional impact: (i) Realignment of human resources to fit the new role of the institutions; (ii) Conducting of studies on ways to transform the sector, in such areas as agro-business and the drafting of laws, that were instrumental in crafting new strategies for the sector and defining its role; (iii) Transformation of MAG’s role into a normative and service provider; (iv) Promotion and strengthening of producers group for receiving extension services and establishing their priorities and preferences; (v) Abolition of parastral organizations (vi) An increase in the role of the private sector and private investment ; (vii) The re-organization of CENTA as an autonomous institution; (viii) The emergence of private and other types of organizations in research and extension; and (ix) The adoption of information technology as the main tool for providing information. - 21 - 5. Major Factors Affecting Implementation and Outcome 5.1 Factors outside the control of government or implementing agency: 5.1.1 The single most important factor that had a major impact on this project was Hurricane Mitch, which had a devastating impact on the agriculture sector. Farm fields were washed out, floods inundated farmers’ dwellings, and most importantly agricultural infrastructure (such as irrigation canals) and supporting infrastructure (such as rural roads and bridges) were destroyed. Additional natural disasters that left their mark on the agricultural sector were droughts and the two major earthquakes in 2001. 5.1.2 The impact of emigration and transfer payments from relatives who live abroad has affected the level of efforts that farmers assign to their plots. It is estimated that one-fifth of the population lives outside the country, mainly in the United States. An interview by the Bank mission during a field visit is revealing in this respect. A farmer who used to participate in CENTA’s T&V program told the Bank that once he started receiving enough transfer payments from his son, who lives in the United States, he saw no reason why he should work hard to improve his agricultural system. As a result, he occasionally left his land fallow. There are several such cases wherein farmers become more dependent on remittances than income from agriculture, reducing farming activities to secondary importance. 5.1.3 In addition to major factors like these, to a small extent the unfamiliarity of MAG with Bank procedures may have contributed to the slow momentum observed in project execution. PRISA was the first Bank project executed by MAG. 5.2 Factors generally subject to government control: 5.2.1 The major factor that had a bearing on the implementation of this project was changes in ministers of MAG and directors of CENTA. During the life of the project, there were five changes in ministers in MAG and five changes in directors in CENTA. In addition to these changes, the priority and importance given to the agricultural sector changed more than once during project life. This proved to be especially disruptive initially, when the change in government occurred immediately after the project became effective. 5.2.2 The government could have also implemented the agreements reached during the various Bank missions. It should have enforced cooperation between CENTA and the OCP to make project implementation smoother and more effective. In spite of the Bank’s recurrent requests, no concrete measure was forthcoming from MAG in managing this relationship. This proved to be a serious impediment for implementing the project on the agreed-upon time schedule. In addition, more than a year elapsed between Board approval and effectiveness because of the government’s reluctance to fulfill agreed-upon effectiveness conditions. However, to be fair to the Borrower, the Bank could have reduced the number of effectiveness and disbursement conditions. On the other hand, this step could have extended the project preparation period, and possibly dissatisfied the Borrower, who by that time had decided to carry out a series of rapid interventions in the agricultural sector. 5.2.3 In addition, the government failed almost regularly to fulfill its commitment in the provision of timely and sufficient counterpart funding. This impeded the rate and speed at which disbursement out of the loan proceeds were made. 5.3 Factors generally subject to implementing agency control: 5.3.1 The concern about of lack of cooperation applies equally to the OCP and CENTA. However, as ex-directors of CENTA revealed in discussions with Bank mission, they had a separate set of priorities and goals that frequently differed from PRISA’s stated objectives. Also, the OCP did not have the legal tools - 22 - or mandate to enforce the project on CENTA. Although this has been the characteristic feature of the relationship for the good part of project implementation period, recently coordination has improved, due to efforts of the existing Minster of Agriculture and the Director of CENTA. 5.3.2 During most of the project life, OCP tried to handle all bidding process’ and documents in a centralized manner. However, it soon realized it could not handle every procedure and decentralized this process at the sub-projects level. To a large extent, the OCP staff was stable, so institutional memory was well maintained. 5.4 Costs and financing: 5.4.1 The financing of this project started in 1991. In May 1991, a Project Preparation Facility (PPF) for US$1.5 million was approved by the Bank to finance project preparation and initiation of training of local staff activities that could not be financed by other sources. In addition, the United National Development Program (UNDP) made available pre-financing and facilitated procurement and contracting processes, subject to reimbursement from PPF proceeds. The project also benefited from a Japanese Trust Fund grant (Yen 69,300,000). 5.4.2 Disbursement: The project finally disbursed almost all the proceeds from the loan (99.86 percent of the loan amount of US$40 million). The project was fraught with lags in disbursements. On several 21 occasions, the Bank expressed its concern about the low level of disbursement to the Government. The Bank revised disbursement estimates as early as 1995. Nevertheless, the Bank did not consider reducing the loan amount, for a variety of reasons, including GOES’ systematic renewal of its commitment to agreed-upon implementation schedule and plans. In the latter part of the project period, disbursement improved significantly, especially in the aftermath of Hurricane Mitch, and because of the active support of the Minister of Agriculture (who was Director of OCP for the good part of project implementation period). 5.4.3 Throughout the project implementation period, the total project cost that had been estimated during appraisal was maintained.. The recent estimate of actual project cost stood at US$48.53 million (86 percent of appraisal estimate). Since almost all the proceeds of the loan were disbursed, the remaining amount constitutes counterpart funding. Out of a commitment of US$16.5 million made by the government during appraisal, US$8.9 million (54 percent) was realized. Given the economic hardship and natural disasters that El Salvador experienced, this level of contribution is acceptable. In addition, the project lacked a mechanism to systematically account for the investment made by farmers in adapting new technologies and improving their farming method, especially the investments made in reconstruction activity, both in cash and in kind. It is evident from visits to project areas that farmers have made relatively large investments in their farms and land, including improvement in their dwellings. Therefore, although the government contribution was lower than anticipated, given the amount of investment made by farmers but unaccounted for by the project, the counterpart contribution was satisfactory. - 23 - Table 3. Cost by Components, Appraisal Estimate, Actual Estimate, and Ratings Component Appraisal Restructured Actual/Latest Actual/ Ratings estimate* estimate* estimate* Restructured (4th (%) amendment) Reform and Institutional 16.7 16.7 15.29 92 S Development Agricultural Research and 39.8 27.46 15.03 55 S Extension Improvement of Land Registry 5.74 7.16 125 HS & Cadastre Service Hurricane Mitch and 6.60 11.05 103 HS Earthquakes Emergency Works Total 56.50 56.50 48.53 86 * Cost figures are in US$ million. 6. Sustainability 6.1 Rationale for sustainability rating: Highly Likely 6.1.1 Institutional reforms carried as part of PRISA are already integrated into the functions of both CENTA and MAG. Thus the sustainability of the reforms seems highly likely. As a result of privatization and reforms, a conducive environment for private investment has been created. This has been further strengthened through land registry. Registration has enhanced the security of private property, propelling private investment to improve individual plots. The institutional changes are embodied in a legal foundation, which will contribute to sustainability. MAG also has internalized the system of out-sourcing for activities better performed by the private sector. A shift in organizational culture has taken root in the Ministry. Public employment is no longer viewed as coming with a life-long guarantee. This has improved the efficiency and accountability of the staff. Some of the services MAG provides are demand-driven, including import licensing, enhancing competitiveness, technological transfer, support in access to market, and provision of information on markets and prices. The demand-driven character of these services ensures that the gains will be sustainable. 6.1.2 The government passed a law that made CENTA autonomous institution. This has kept political interference in its operation at bay and has given it a mandate to set priorities based on government policies and assessment of developments in the agricultural sector. PRISA improved the capacity of the institution by deploying information system, training its staff, improving laboratories and libraries, and rehabilitating its main and regional offices. According to MAG’s report of October 2002, which spells out CENTA’s renewed vision (una visión renovada), operational strategy will be oriented to cater to different clients, 22 with strategy appropriate to each group’s needs. The document also states the changed priorities in El Salvador’s agriculture, which played a catalytic role in changing CENTA priorities. CENTA is moving toward a more decentralized, efficient, self-sufficient, and self-managed system. This new change testifies to the institutional dynamism created in CENTA to adapt to changing priorities and circumstances. 6.1.3 The number of players in R&E in El Salvador has diversified and increased. This has introduced competition and complimentarity among these institutions. In some regions, more than half (up to 54 percent) the producers who were benefiting from CENTA’s Technical Assistance were also receiving 23 services from other institutions. They not only compete for clients (farmers) but also for financing, which - 24 - forces each participating institution to carve out its own comparative advantage in the provision of these services. In some areas (such as running nurseries or processing goods for export), farmers have demonstrated their interest and readiness to undertake some of these activities. Farmers were also willing to invest in improving their individual plots, thanks to the introduction of new technologies that diversified their production and raised their productivity and income. As the income level of farmers increases, their ability to invest in new technology is expected to be enhanced, thus creating a dynamism in the system that will guarantee the sustainability of future changes. 6.1.4 From the technical perspective, agricultural research in El Salvador is almost exclusively adaptive. Thus research’s main purpose is adopting imported technology to the country’s condition after extensive field trials. Therefore, the technical soundness and sustainability of new adapted technologies in the case of El Salvador is a non-issue. Farmers are trained in technologies introduced to their farming system and these technologies are environmentally sound, practical, and not too sophisticated. Consider the case of the micro-drip irrigation system. This system is powered by a machine that weighs less than 10 kilos and uses water as an energy source. The system is fully operated and maintained by farmers. Technologies like this are not only appropriate; farmers have been trained to use them and have taken over the responsibility of carrying out the operation and maintenance. 6.1.5 Often sustainability is jeopardized because of lack of financing for activities that become operational after the project has closed. In the case of CENTA, both research and extension services are continuous and the institution has enough resources to continue its activities, both from the government and international donors. A Bank mission requested both MAG and CENTA to prepare a document that describes how the government plans to continue the operations started with PRISA. Both institutions prepared a document outlining active projects by financiers, as well as those in the pipeline. Review of the documents revealed that most of the activities started by the project would continue. 6.1.6 In rehabilitation and reconstruction work, the project unit entered into an agreement (convenio) with beneficiary communities to finance the future maintenance of the infrastructures rehabilitated and built as part of the reconstruction measure. In addition to this binding agreement, farmers have an incentive to maintain these works since some of rehabilitation works (such as the construction of dikes) has raised the value of their land. In other cases, such as irrigation canals, it is in the interest of farmers to ensure the maintenance and operation of their system over the longer term. This has been demonstrated not only by this project but with other Bank-financed projects in irrigation rehabilitations. 6.2 Transition arrangement to regular operations: 6.2.1 Both MAG and CENTA are responsible and have the mandate for modernizing, improving, and developing an efficient functioning agricultural sector, as well as supporting farmers. These activities are an integral part of their regular operations. Thus there is no need for special transitional arrangements. PRISA has supported both institutions in modernizing their offices, training their staff, and changing the rules of the game. Both institutions have the software and hardware deployed for fulfilling their mandate. In addition, the government has been able to provide both institutions with the necessary budget. Moreover, to a large extent these institutions are beneficiaries of international loans and donations. Therefore there is no need for new fiscal arrangements to continue the sustainability of operations. - 25 - 7. Bank and Borrower Performance Bank 7.1 Lending: Marginally Satisfactory 7.1.1 As described in section 3.5 above, the project preparation included other donors who were operating in the sector and carved out areas where each will be involved; considered lessons learned from previous projects financed by other donors; brought in international consultants to help the government in crafting a strategy for the sector; and set in motion preparatory works and insisted on some conditions for negotiations, effectiveness, and disbursement. The SAR also included impact indicators and output indicators. Given that the Logical Framework was not streamlined to project preparation during the preparation of this project, this was a commendable effort. 7.1.2 However, the Bank failed to internalize lessons learned from other projects implemented in the agricultural sector. Experience from IDB projects showed poor disbursement as a major risk facing projects in the agricultural sector. This became evident during the implementation of this project. Given the time taken to disburse the loan and considering that two new components were added to the project, the appraisal may have overestimated local needs and implementation capacity, and consequently, the loan amount and its implementation pace. In retrospect, in a country that lacks experience with Bank projects, the number of conditions put in place might have contributed to delays in effectiveness and later in disbursement. Lack of experience with Bank, coupled with the relative complexity of the project and the magnitude of its main component, might have contributed to the loss of interest by the borrower to work with the Bank. The impact indicators were output or process indicators and did not reflect the project’s overall impact. However, it must be said that the effort itself was courageous. 7.1.3 The project later successfully included the land registry component and also tried and failed to add a rural finance component. However, it is the conclusion of this ICR that the project should have been proceeded by a TA project---or at minimum, the size of the main component (the one dealing with CENTA) should have been reduced in size. Once a TA project has been implemented, the project could have been followed by a second full-fledged investment loan. That is to say, the Bank could have better sequenced its intervention in the sector. At the center of El Salvadorian agriculture there have been institutional impediments in modernizing and strengthening the sector, as well as a lack of clearly defined support operations and development objectives (see discussion, sections 3.1.1 to 3.1.12). Once institutional reforms had been carried out and staff had been trained (to create a critical mass that will be champions of the new methodology), the implementation of R&E could have been followed by an investment project. 7.1.4. The main weakness of the project was that while more than 70 percent of the project cost was earmarked to CENTA; implementation was coordinated and managed by OCP. This created a conflict and resulted in a lower level of implementation by CENTA. The project probably should have opted for two units. In fact, the absence of an accountable unit in CENTA for implementation of the project was one cause for the delay in commencement of the execution of the R&E component. The creation of an independent implementation unit for the land registry component and its successful implementation attest to this. 7.2 Supervision: Marginally Satisfactory 7.2.1 On balance the Bank supervision was systematic, creative, and problem solving. Supervision - 26 - missions added new indicators when amendments to the loan were made. The Bank missions were also instrumental in providing continuous implementation and long-term planning guidance, in training staff in Bank procedures, and in including new components that had an impact in improving the performance of the agriculture sector. The inclusion of two additional components and the extension of the closing date were instrumental in the full utilization of the loan proceeds. The Bank supervision also pushed for changes in priorities in R&E, especially to diversify products, since it was found difficult to improve the living condition of small farmers with farms dedicated only to basic grains (see Aide Memoire covering the January 25-28, 2000 mission). Supervision missions spent a good deal of time visiting farm areas and reviewing progress first-hand, discussing the progress of the project implementation with farmers, and gathering their perceptions. It was through the insistence of the Bank that extension agents started spending more time at farm levels than in CENTA offices and that CENTA improved its coordination with other institutions that are active in the provision of technical assistance to farmers. Missions were detailed enough that they identified inconsistencies in reporting of achievements and coverage of extension services (see Aide Memoire of April 6-15, 1999). The Bank supervision missions’ reports were detailed and highlighted problems in project execution and recommended solutions to improve project implementation. When project implementation was not proceeding as planned and it seemed that achievement of the Development Objective was being compromised, the Bank downgraded the respective ratings to unsatisfactory (see annex 4, ratings for 1997 and 1998). 7.2.2 However, there were some tangible weaknesses in supervision. Some supervision missions identified lack of credible and representative impact indicators; however, not enough follow-up was done to effect their change. In the face of poor disbursement and knowing that CENTA was tapping resources from other financers, the Bank supervision should have shown a resolve to restructure the project and reduce the loan amount. It took three extensions of the closing date and two additional components to disburse the loan amount. Also, the project suffered from lack of close management follow-up, which could have been instrumental in at least reducing the loan amount. 7.2.3 The preparation of this ICR considered and questioned whether the project development objectives (PDO) should have been revised to reflect the outputs from the land registry and emergency works components. However, close scrutiny revealed that in the final analysis, the outcome from these two additional components supported the effort to improve the productivity of farmers and strengthen El Salvador’s agriculture sector. Productivity was enhanced by agricultural infrastructure, in the case of emergency works, and land tenure security in the case of land registry, which gave farmers incentive to improve their plot and adopt environmentally sustainable farming techniques, such as micro-forestation. Thus it is the conclusion of this ICR that the additional components served the PDOs identified during appraisal well. 7.3 Overall Bank performance: Marginally Satisfactory 7.3.1 The Bank’s overall performance is rated marginally satisfactory. Bank management was aware of poor loan disbursement. The Bank should have given less weight to consideration of GOES’ internal difficulties and/or commitments, and should have more decisively considered revising the loan amount downward. Lack of continuity in Bank’s task management (there were five task managers during project life) might also have impacted the continuity of the project supervision team and mission members. 7.3.2 When the country was hit by successive natural disasters and quick disbursement was necessary to intervene immediately, especially to prevent and control animal diseases, the Bank eased its procurement - 27 - procedures. That was an appropriate and timely response, which helped the government respond quickly to the disaster and revitalize the agricultural sector. Borrower 7.4 Preparation: Satisfactory 7.4.1 GOES repeatedly demonstrated its commitment to modernizing the agricultural sector and improving the productivity of small and medium farms. It sponsored studies and sought international advice. The government passed laws and regulations that were supposed to guarantee the smooth start-up of the project. The government made a hard political decision and followed through with reducing the size of MAG’s staff. Discussion with the ex-Minister of MAG responsible for preparation of the project revealed the government’s eagerness and effort to look for a working formula to modernize and transform the agricultural sector. Thus the borrower’s performance in project preparation is assessed as satisfactory. 7.5 Government implementation performance: Marginally Satisfactory 7.5.1 The government’s implementation performance is mixed. The administration that prepared the project with a high level of commitment left office in the early stages of the implementation of the project. The incoming administration did not demonstrate that this project was a priority. Important time was lost in re-establishing the commitment of the Borrower. This reduced the pace of project execution. There were frequent changes in Ministers of MAG–--five changes, in all---which had a bearing on execution of project activities. 7.5.2 On the positive side, most of the laws and regulations proposed for reforming the sector were passed by the Congress. Amendments to the Loan Agreement were made in response to the government’s request. The Borrower’s request for an extension of the closing date was instrumental in the full disbursement of the Loan amount. It was through the government’s request that new components were added. The government played a major role in piloting the land registry component, from requesting assistance for implementing the component to passage of law and approval by the Legislative Assembly. It was also due to the government involvement in the sector that the small pilot land registry component was developed into a full sectoral loan to benefit the whole country. In addition, the government did a remarkable job in implementing the Hurricane Mitch and Earthquakes Emergency rehabilitation works component. Recently the government, in the person of the Minister of MAG, reaffirmed its commitment to the project. 7.5.3 However, the government reacted neither sufficiently nor decisively when the Bank expressed its concern about the poor coordination between the OCP and CENTA and the weak performance of loan disbursement, especially low level usage of funds earmarked for the R&E component. This situation was exacerbated by infusions of untimely and---at times, insufficient---counterpart funds. Also, the government was responsible for the frequent changes in the directors of CENTA, a fact that frequently disrupted implementation. 7.5.4 Thus on balance, the government implementation performance is rated marginally satisfactory. - 28 - 7.6 Implementing Agency: Satisfactory 7.6.1 The implementing agency, (the Project Coordination Office, or OCP), is a unit within MAG responsible for coordinating projects financed by international donors. PRISA is one of the projects for which this unit is responsible. This has been beneficial for PRISA, in that OCP was able to establish synergy among projects and use lessons learned in other projects. OCP implemented recommendations made to it by Bank missions and improved its capacity and understanding of Bank procedure within a relatively short period of time. OCP, for the most part, was a coordinator, since other components were executed outside MAG. However, with the inclusion of Hurricane Mitch and Earthquakes Emergency works, OCP directly executed this component and did an adequate job. It was also instrumental in seeking the amendment of the loan and the extension of the closing date of the project. There was a need for the project unit to adjust to new additions to the project, especially executing the Hurricane Mitch and Earthquakes Emergency works component. The unit familiarized itself to this new responsibility remarkably. The unit handled the coordination of the different components of the project, the preparation of reports and processing of contracts, and the coordination of Bank mission programs extremely well. 7.7 Overall Borrower performance: Satisfactory 7.7.1 The Borrower commitment to reform was unwavering. If there was any concern, it was only the speed at which the reforms were carried and their timing. This did not affect the final outcome of the modernization of the sector and thus the Borrower performance is rated satisfactory. 8. Lessons Learned The project yielded a number of lessons of relevance to future projects in El Salvador and elsewhere. 8.1 Institutional reforms are more successful when there is unwavering commitment from the government for a sustained period of time and reforms are done incrementally and in sequence. The success of reforms in El Salvador’s agricultural sector were, to a large extent, the result of commitment of consecutive administrations to liberalizing the economy. 8.2 Priorities in agricultural Research & Extension are dynamic. They change in response to local, national, and international conditions and requirements. Thus it is critical to have a system embodied in project design that will take these changes into consideration and adjust focus and priorities accordingly. Initially, the government correctly identified basic grains as priorities, given the need to ensure food self-sufficiency and support small farmers whose production was predominately in basic grains. This was particularly important because the project was implemented immediately after the end of the civil war. When circumstances changed, the project responded rightly---particularly when it was realized that improving the living standard of farmers through the production of basic grains was unattainable and most importantly, when farmers demonstrated their interest in diversifying their production to higher value crops. 8.3 In many cases, institutional reforms are better handled as a technical assistance activity or a stand-alone project separate from sectoral investments. PRISA was expected to implement institutional reforms and at the same time execute sectoral investment. This was a tall order for a small country that had no experience in Bank procedures and that was required to act with the readily availability mix of specialization. In this case, the project might have been better designed as two inter-related and successive - 29 - stages. The first would have mainly dealt with the implementation of institutional reforms and the initiation and field-testing of innovative interventions. The second stage would have mainly dealt with the implementation of investments in the agricultural sector. The two stages could have been planned to have an implementation period of eight to ten years. Implementing institutional reforms and investment programs simultaneously might impede sequencing of reforms, which should be at the heart of a lasting and sustainable institutional reform. 8.4 Due consideration should be given to other financers in the sector. In such circumstances, areas of intervention should be clearly defined, either geographically or by task. This could prevent overlap and avoid driving down standards. The presence of other financers independent of the Bank, who were acting in the same area but with less rigorous procedures in the allocation of funds and supervision over their disbursement, might have limited the full use of the loan. It may also have contributed to the demonstrated reluctance of some of CENTA’s directors to implement the project per agreed conditions, costs, and schedule. 8.5 When substantial lag in disbursement is observed, the Bank should not only revise disbursement estimates but should seriously consider reducing the loan amount. Although the Bank revised the disbursement estimate, it failed to consider, decisively, the cancellation of some portion of the loan. Such an action would have reduced the need for extension of the closing date and would have sent a strong signal to the Government of the Bank’s discontent with the momentum of project execution and the lingering period of implementation. 8.6 Project design should make a complete assessment of local capacity to implement project activities and process Bank requirements. Such an assessment will facilitate the provision of the training necessary to fill the gap in knowledge and ensure a smooth start to implementation. This project provided such training during preparation, financed by the Project Preparation Facility (PPF). This was instrumental in bringing the Project Coordination Office (OCP) up to speed and on par with Bank requirements. 8.7 Institutional arrangements in implementation are a key factor, and arguably the most important factor in determining the successful implementation of a project. In deciding upon such institutional arrangements, sufficient attention must be given to arrangements meant to facilitate the use of the loan by the main executing agency--- especially when an autonomous institution implements the component. The executing agency, which has the lion’s share of the project funding, should be more autonomous in the use of funds, or alternatively should be more intensively involved in the management of the project implementation unit. In the case of PRISA, the creation of an OCP Management Board, with the participation of CENTA’s manager, might have resolved the difficult issues of cooperation and coordination between the two units. 8.8 To guarantee the sustainability of construction and rehabilitation works, it is necessary to enter into a binding agreement with beneficiaries to finance the future maintenance of the works. 8.9 Training at all levels, especially to extension agents, should be a continuous process rather than a one-time goal and an end by itself. As the priorities and preferences change and as market conditions demand a different set of products and activities, it is imperative to provide the necessary tools to improve the competitiveness of farmers and the capacity of all functionaries in the agricultural sector. To meet these needs, training must be on-going. 8.10 Impact and output indicators should be revised as project implementation continues and as new activities are included in the project. The Bank was able to include new indicators as new components - 30 - were added to the project, but did not update original indicators. 9. Partner Comments (a) Borrower/implementing agency: Refer to Annex 8 for details. (b) Cofinanciers: There were no other cofinancers of this project. (c) Other partners (NGOs/private sector): No partners. 10. Additional Information ENDNOTES 1 For details, see IEPS, dated Nov. 14, 1990. 2 See Back-to-Office Report (BTO) of December 21, 1990. 3 From a discussion with Mr. Antonio Cabrales, Minster of MAG during the preparation of the project. 4 In fact, adaptive research also entails TA since it has to demonstrate to farmers and disseminate the adapted technology. 5 The subcomponents allocation does not add up to the total allocation for Component 2 because of physical and price contingencies. 6 Review of documents in the IRIS system indicate the existence of five amendments. However, only four of them became effective. 7 See Amendment dated June 30, 1998. 8 Final Executive Project Summary, August 7, 1991, p. 1. 9 The studies are listed in annex IX of the Staff Appraisal Report (SAR). 10 OED. 2002. “El Salvador: Country Assistance Evaluation.” Report No. 23626. 11 OED. 2002. 12 This refers to limited activities such as control of hygiene and does not imply that the Ministry is involved in control of agricultural foreign trade. 13 World Bank. 2002. “Rural Extension & Advisory Services: New Directions.” Rural Development Strategy Background Paper #9. Agriculture and Rural Development. page vi. 14 Gerald O’Driscoll, K. Holmes and M. Kirkpatrick. 2001. Index of Economic Freedom. Washington, Heritage Foundation. 15 The World Bank. 2000. “Ex-Ante Economic Analysis in AKIS Projects – Methods and Guidelines for Good Practice.” Rural Development Family, Agricultural Knowledge & Information System (AKIS) p. 4. 16 Economic theory gave an important consideration to the flow of information for the efficient functioning of competitive markets. See the literature on asymmetric information theory, for example. 17 This was not a co-financing arrangement. Different donors are operating in different parts of the country in financing the delivery of TA to farmers. Other international donors include GTZ, OAS, the Chinese mission, and the NGOs Green Project and PASOLAC. 18 World Bank. 2002.. Rural Extension and Advisory Services–New Directions. Agriculture and Rural Development. p.7. - 31 - 19 The source of this information is the consultant report contracted to review the two surveys and conduct a beneficiary survey. Procesamiento de Datos, Analisis y Redaccion del Informe Final al 2002. Informe Final. Febrero del 2003. OCP – MAG. 20 Driscoll and others. ibid. 2001. 21 For example, see letter of August 1995 written to the Government as a follow-up to the findings of the June 19-23, 1995 mission. 22 Ministerio de Agricultura y Ganadería, Centro Nacional de Tecnología Agropecuaria y Forestal. 2002. Lineamientos Técnicos y Operativos para la Transferencia de Tecnología – Una vision renovada. El Salvador. Octobre de 2002. 23 See Aide Memoire for the supervision segment of January 25-28, 2000. 24 Other regions received support from other entities, including GTZ (German Agency for Technical Cooperation), OAS (Organization of American States), the Chinese mission, and Green Project. 25 A manzana is equivalent to 0.7 hectares. 26 Production Cost Elasticity with respect to Production Yields, equal to one. 27 Production Cost Elasticity with respect to Production Yields, equal to (0.05) or (5 percent). 28 Namely, production cost versus yield elasticity equal to one. 29 Report is in the project files. - 32 - Annex 1. Key Performance Indicators/Log Frame Matrix Annex 1: Selected indicators Impact indicators Baseline SAR Actual Observation Estimate estimate Strategic action completed 27 26 Number of agencies improved in PRN areas 21 21 Ratio of MAG-technical personnel (1-10)/non-technicalno técnico (11-19) 1.0/1.0 1.0/1.2 Ratio of CENTA-technical personnel (1-10)/non-technicalno técnico (11-19) 2.5/1 2.0/1 MAG-salary/total ordinary budget 70 36 CENTA-salary/total ordinary budget 70 88 Manuals for better farming # of publications Basic grains 18 17 Livestock/Izalco 15 16 Fruits and vegetables/ San Andres 15 26 Agro-industrial cultivation/ San Andrés Santa Cruz Porrillo 15 13 Natural resources/Morazán 14 18 Change in productivity in extension areas Units Corn/San Andrés qq/mz 36 70 Tomatoes/SCP qq/mz 246 500 Ajonjolí/SCP qq/mz 14 22 Farms with agricultural systems No. parcelas 1472 3987 Prod. that included conservation of soil Ha. 730.41 18935 technique Evaluation and adjustment of norms, structures # of workshops 4 40 and procedures Output indicators Training # of people trained Strategic planning 180 275 Management 1260 2047 Legal 90 51 MAG staff # of People 1486 1224 CENTA staff 1341 618 Research Basic grains # of projects 354 * 367 * modified Animal production 124* 77 Fruits and vegetables 200* 164 Agro-industrial production 107* 66 Natural resources 71* 46 Extension Farmers per extension agent ratio 286* 202 Farmers receiving extension service number 63000* 53,000 reached as much as 83,000 in 1998 Female/Male extension agents ratio 1/7 1/6.7 Farmers network/ extension agent ratio 28 21 Female producers network/ male producers ratio 1/24 1/18 network - 33 - Annex 2. Project Costs and Financing Project Cost by Component (in US$ million equivalent) Appraisal Actual/Latest Percentage of Estimate Estimate Appraisal Component US$ million US$ million Reform and institutional development 16.70 15.29 92 Agricultural research and extension 39.80 15.03 38 Improvement of land registry & cadastre service 7.16 Hurricane Mitch and earthquakes emergency works 11.05 Total Project Costs 56.50 48.53 86 Total Financing Required 40.00 39.55 99 Total Baseline Cost 153.00 136.61 Total Project Costs 153.00 136.61 Total Financing Required 153.00 136.61 Project Costs by Procurement Arrangements (Appraisal Estimate) (US$ million equivalent) 1 Procurement Method Expenditure Category ICB 2 N.B.F. Total Cost NCB Other 1. Works 4.30 2.60 0.30 0.00 7.20 (3.90) (2.40) (0.30) (0.00) (6.60) 2. Goods 11.90 1.50 1.00 0.00 14.40 (10.70) (1.40) (0.90) (0.00) (13.00) 3. Services 0.00 0.00 14.40 0.00 14.40 (0.00) (0.00) (14.20) (0.00) (14.20) 4. Miscellaneous 0.00 0.00 13.70 6.80 20.50 (0.00) (0.00) (6.20) (0.00) (6.20) 5. Miscellaneous 0.00 0.00 0.00 0.00 0.00 (0.00) (0.00) (0.00) (0.00) (0.00) 6. Miscellaneous 0.00 0.00 0.00 0.00 0.00 (0.00) (0.00) (0.00) (0.00) (0.00) Total 16.20 4.10 29.40 6.80 56.50 (14.60) (3.80) (21.60) (0.00) (40.00) Project Costs by Procurement Arrangements (Actual/Latest Estimate) (US$ million equivalent) 1 Procurement Method Expenditure Category ICB 2 N.B.F. Total Cost NCB Other 1. Works 0.42 2.06 2.73 0.00 5.21 (5.23) (1.72) (2.93) (0.00) (9.88) 2. Goods 0.34 0.15 1.29 0.00 1.78 (0.31) (0.13) (1.15) (0.00) (1.60) 3. Services 0.00 0.00 41.92 0.00 41.92 (0.00) (0.00) (5.85) (0.00) (5.85) 4. Miscellaneous 0.00 0.00 0.00 0.00 0.00 - 34 - (0.00) (0.00) (0.00) (0.00) (0.00) 5. Miscellaneous 0.00 0.00 0.00 0.00 0.00 (0.00) (0.00) (0.00) (0.00) (0.00) 6. Miscellaneous 0.00 0.00 0.00 0.00 0.00 (0.00) (0.00) (0.00) (0.00) (0.00) Total 0.76 2.21 45.94 0.00 48.91 (5.54) (1.85) (9.93) (0.00) (17.32) This table is derived from SAP ICR Procurement summary report and does not fully reflect the disbursed Loan amount. SAP footnoted that (i) figures shown under columns ICB, NCB, and OTHER are financed by a Bank loan or credit; (ii) N.B.F. represent non-Bank financing amounts; and (iii) amounts in () are disbursed amounts. 1/ Figures in parenthesis are the amounts to be financed by the Bank Loan. All costs include contingencies. 2/ Includes civil works and goods to be procured through national shopping, consulting services, services of contracted staff of the project management office, training, technical assistance services, and incremental operating costs related to (i) managing the project, and (ii) re-lending project funds to local government units. Project Financing by Component (in US$ million equivalent) Percentage of Appraisal Component Appraisal Estimate Actual/Latest Estimate Bank Govt. CoF. Bank Govt. CoF. Bank Govt. CoF. Reform and institutional 9.20 7.50 13.06 2.23 142.0 29.7 development Agricultural research and 30.80 9.00 10.03 5.00 32.6 55.6 extension Improvement of land 5.74 5.74 1.42 100.0 registry & cadastre service* Hurricane Mitch and 6.60 10.72 0.33 162.4 earthquakes emergeny works* TOTAL 40.00 16.50 39.55 8.98 98.9 54.4 * Both values found in the Appraisal Estimate column for the Bank are Restructure Estimates. - 35 - Annex 3. Economic Costs and Benefits Research and Extension Component Agricultural Sector Reform and Investment Program (PRISA) 1. Introduction 1.1 As part of the reconstruction plan after the civil war, the Government of El Salvador (GoES) embarked on reforming the agricultural sector to improve the productivity of small and medium farmers. The implementation period of the Agricultural Sector Reform and Investment Program (PRISA), undertaken as part of that effort, was almost ten years, counted the time from project effectiveness in April 1994. The Staff Appraisal Report (SAR) did not attempt to calculate the economic rate of return for the whole project or for the individual components. Thus no benchmark was available to compare planned and actual results. Nevertheless, an ex post quantitative impact evaluation exercise was conducted as part of the final evaluation of the project. This was aimed at evaluating the economic benefits of the project. However, some of the activities, such as institutional reform, were not amenable to quantifiable cost-benefit analysis. Furthermore, scarcity of information limited the scope of the evaluation. 1.2 Research and Extension (R&E) was GOES’ main instrument to support small and medium-sized farmers in improving their productivity and agricultural practices. R&E was the main component of PRISA, accounting for more than 70 percent of total project costs. Information on project R&E activities and impact were not readily available to carry out a conventional impact analysis. Given these limitations, different analyses were undertaken. The first analysis was based on cost-benefit information from project offices in Region I and occasional reports. The results did not adequately reflect the cost-benefit ratio for this type of project. The second analysis was based on data from three of the four regions of the country. The results were inconclusive because of limited and questionable information. The third analysis was based on information from the National Center for Agricultural Technology (Centro Nacional de Tecnología Agropecuaria, or CENTA). The results are presented in this annex. 1.3 The analysis was limited to Region I for three reasons. There was more and better quality information, in terms of such factors as production area, participating farmers, and prices. PRISA fully 24 financed the R&E component in this region. Results are likely to be representative across regions, since the same Training and Visit (T&V) methodology was utilized by the project in the various regions of the country. 2. Data Sources and Methodology 2.1 In terms of R&E expenditures, accounts and budget reports were thoroughly reviewed at CENTA headquarters and in Region I offices. From 1994 to 1997, CENTA compiled budget reports by region, and information on the cost allocated to R&E for Region I was readily available. However from 1998 onward, costs by region were no longer available. Therefore, cost estimates for Region I from 1998 to 2000 were based on historical trends. In general, 50 percent of CENTA’s budget was allocated to R&E activity, out of which about one-quarter (22 percent) was earmarked to Region I. However, CENTA executed 60 percent of planned annual budgets, on average. In terms of yields, production costs, and revenues, the main sources of information were CENTA documents and two surveys carried out in 1999 and 2002. Data validation workshops were carried out in four localities. CENTA reports from 1994 to 1998 included 25 production costs and revenues by crop per manzana. - 36 - However, the reported data did not properly reflect farmers’ tendency to combine crops within their plots. Information regarding farmers’ participation in Groups of Neighboring Producers (Círculos Vecinales de Productores, or CVP) was obtained through the data validation workshops (mentioned above). On average, there were 10 producers per CVP. 2.2 In recent years, farmers have increasingly shifted their activity to producing high value crops and agro-industrial crops. Mixed farming has become increasingly important with the collapse of coffee prices and the introduction of micro-irrigation schemes. However, reliability of available data limited the analysis to selected basic grains products: namely, corn, sorghum, beans, and rice. In this regard, it should be noted that while mixed farming and high value and agro-industrial crops may increase as a results of the dynamism created by the project, increasing the production of basic grains was the initial objective of the project. 2.3 The environmental impacts associated with improved soil management, micro-forestation and improved pest management were not accounted for in the analysis. In practical terms, it is difficult to measure externalities and fully capture economic, social, and environmental values associated with changes in technological capital, new farmers’ skills, soil fertility, and community empowerment (in terms of T&V programming and priority setting). 2.4 Based on available information, an R&E cost-benefit analysis was performed. Net Present Value (NPV) at 12 percent annual discount rate and Internal Rate of Return (IRR) were calculated for incremental net benefits from 1994 to 2000. The data limitations and analytical choices mentioned above allow only for a partial impact evaluation. Therefore, the results described below should not be interpreted as overall impact indicators of the project. 3. Aggregate Results 3.1 Tables 3.1 through 3.7 show the results of the cost-benefit analysis. Estimated incremental benefits are basically increased net revenues resulting from increased yields in basic grains production. Since baseline or benchmark data were not available, increased yields were estimated by comparing reported yields of beneficiary farmers in Region I with average yields at national level. Increased yields were not obtained from comparisons between producers with and without R&E services in the same region, since there is little information on farmers without R&E services. Furthermore, certain R&E activities, such as improving institutional R&E knowledge base and extension activities through mass media, benefit all farmers (that is, impacts cannot be separated). Estimated incremental costs are basically R&E investments financed by PRISA and R&E-related CENTA costs, namely salaries, operation expenses, and transfers. 3.2 Information regarding production cost increases was not available. Thus a sensitivity analysis was conducted to partially compensate for this limitation. Table 3.1 presents the base case scenario, where production costs are not affected by yield increases. Table 3.2 presents the most pessimistic scenario, 26 where production costs increase proportionally with yield increases. Tables 3.3 and 3.4 present the results of the sensitivity analysis. The NPV (1994 US$) and IRR of the base-case scenario are almost US$(190,000) and 6 percent, respectively. The pessimistic scenario would result in NPV of almost US$(5.2) million. Production cost increases at 50 percent and 25 percent of yield increases would also result in negative NPV and IRR (see table 3.4). However, production costs may decrease with yield increases if technology transfers were knowledge-intensive (as opposed to input-intensive). In this context, - 37 - if production costs decrease by 5 percent as a result of a 100 percent yield increase, NPV and IRR would 27 be almost US$62,400 and 14 percent, respectively (see table 3.4). If production cost decrease by 10 percent due to a one-fold yield increase, NPV and IRR would be almost US$313,000 and 25 percent. 3.3 Since this analysis included costs and benefits up to the year 2000, long-lasting effects of R&E services on production and revenues were not taken into account. To compensate for this, another sensitivity analysis was conducted. Tables 3.5 through 3.7 present the results of this sensitivity analysis. Based on the base case scenario described above, proportional gross revenue increases were calculated, equivalent to NPV of possible revenues generated during three additional years (see table 3.6). If the estimated 2000 gross revenue increase could be generated for another three years (equivalent to a 240 percent increase of 2000 revenue increase), the NPV and IRR would be US$3.1 million and 58 percent respectively. If 30 percent of the estimated 2000 gross revenue increase could be generated for another three years (equivalent to a 72 percent increase of 2000 revenue increase), the NPV and IRR would be almost US$807,000 and 31 percent respectively. If 10 percent of the estimated 2000 gross revenue increase could be generated for another three years (equivalent to a 24 percent increase of 2000 revenue increase), the NPV and IRR would be almost US$144,000 and 16 percent, respectively. 3.4 To complete the array of likely results, a mixed sensitivity analysis was conducted (see table 3.7). Based on a 25 percent production cost elasticity scenario (described above), proportional gross revenue increases were calculated, equivalent to NPV of possible revenues generated during three additional years (see table 3.7). In this scenario, if the estimated 2000 gross revenue increase could be generated for another three years (equivalent to a 240 percent increase of 2000 revenue increase), the NPV and IRR would be US$1.3 million and 28 percent, respectively. 3.5 In light of the results described above and the highest likelihood of occurrence, the NPV (in 1994 US$ and considering a 12 percent annual discount rate) of estimated costs and benefits range from US$(190,000) to US$14,000, whereas the IRR would range from 6 percent to 16 percent. 4. Results at the Farmer Level 4.1 In line with the incremental results described in previous section, average net benefit flows were estimated at the farm level. Cost born by GOES, such as R&E investments and CENTA costs, were not included in this analysis. Table 3.7 shows the results in the without-project situation, considering average yields and production costs at the national level (in line with paragraph 3.1). Table 3.9 shows the results in the with-project situation under the non-increasing production cost scenario. Table 3.10 shows the results 28 in the with-project situation under the most pessimistic scenario in terms of increasing production costs. 4.2 From 1994 to 2000, average farm area for basic grains production varied from 1.43 to 2.22 manzanas. Net benefits associated with grains production ranged from US$90 to US$990 per farmer or US$90 to US$530 per manzana in the without-project situation; US$220 to US$900 per farmer or US$150 to US$480 per manzana in the with-project situation under the non-increasing production cost scenario; and US$130 to US$920 per farmer, or US$90 to US$490 per manzana in the with-project situation under the increasing production cost scenario. The NPV (1994 US$) of net benefit flows was US$2,200 per farmer or US$1,280 per manzana in the without-project situation; US$2,480 per farmer (a US$280 increase) or US$1,440 per manzana (a US$160 increase) in the with-project situation under the non-increasing production cost scenario; and US$2,320 per farmer (a US$120 increase) or US$1,390 per manzana (a US$110 increase) in the with-project situation under the increasing production cost scenario. In any case, the net benefit increases at farmer level were positive but modest, ranging from US$20 to - 38 - US$40 per year in present value (1994 US$). 4.3 The revenue flows from 1998 to 1999 showed a downward trend. This was possibly due to the impact of Hurricane Mitch and the associated production damage, especially in beans and rice, a price decline in basic grains during 1999, and a shift toward high value crops at the expense of land dedicated to basic grains. Although the price rise in 2000 recovered some of the losses experienced before, it did not regain the 1997 revenue level. The 2000 revenue increase can also be explained by further productivity improvements in the face of falling land size dedicated to basic grains production. 4.4 Technologies with more evident results include agronomical management of basic grains, integrated pest management techniques, and improved post-harvest management of basic grains. In terms of agronomical management of basic grains, the use of improved seeds was especially relevant. Major seed varieties include corn (Maíz H-53, H-59, CENTA Pasaquina); beans (Frijol CENTA cuscatleco, DOR-582, DOR-585, Salvadoreño 1); sorghum (Sorgo RCV, CENTA Texistepeque, Soberano, CENTA S-2); and rice (Arroz CENTA A-6). In terms of integrated pest management, the most relevant techniques were demonstration of soil and foliage pests, capture of adults of a plague known as “gallina ciega,” safe management of pesticides, and use of improved seeds. 4.5 Other R&E activities with likely impact include: i) Integrated farm management techniques introduced by CENTA ii) Improved planting, post-harvest management and processing techniques iii) Introduction of improved seed and management in sesame production (SPA-137, SPA-81, CENTA-222R, CENTA-126NR) iv) Natural resource management techniques v) Improved management of tree plantations and nurseries, and vi) The use and maintenance of efficient wood-burning stoves. 4.6 Production and revenue increases, induced by R&E project activities, translated into improvement food security. This was evident during the crisis in the aftermath of Hurricane Mitch. Evaluation surveys indicated that as a result of income increases; farmers provided better nutrition and education to their families. 5. Beneficiaries’ Perceptions 5.1 As noted above, an independent exercise was conducted to assess beneficiaries’ perceptions and validate information from the two surveys carried out by CENTA. Four workshops were carried out for 29 this purpose. Results revealed a positive attitude toward the project. Among participating women, 85.7 percent in 1999 and 95 percent in 2002 had a positive opinion. Some 88.4 percent of participating men in 1999 and 84.6 percent in 2002 had a favorable opinion. The main factor contributing to increasing production and productivity was the application of new technologies, according to the 1999 survey, and the provision and diffusion of new knowledge, according to the 2002 survey. In terms of impact, beneficiaries in 1999 highlighted improved seeds (41.6 percent), quality of technical assistance (12.6 percent), and - 39 - application of new agricultural technology (12.3 percent). In terms of extension visits, 81 percent of both men and women considered them to be satisfactory. In the validation workshops, farmers expressed willingness to pay for the Technical Assistance they receive, as long as it reflects their preferences and priorities. In general, a very high percentage of beneficiaries stated that R&E has played a positive role in improving their productivity and modernizing their farm system. 6. Cross-Country Comparisons 6.1 Another approach to verifying the efficiency of the R&E system in El Salvador is by comparing results obtained with other countries during the same period. Table 1 (in section 4.1.5 of the main text) indicates that El Salvador outpaced other Central American countries in productivity gains in basic grains. El Salvador had a productivity increase of 20.3% in 2002, compared to 1994, while the next country, Nicaragua, had only a 6.8% increase. This is evidence of R&E effectiveness and thus an achievement of the component. 7. Final Remarks 7.1 The analysis did not consider all the benefits that accrued as a result of the implementation of the R&E component. Considering that only selected basic grains crops were included in the analysis, the result revealed that the component had a positive impact on income of participating farmers. Considered from the perspective of the total investment made for this component, it had a positive return, with a likely IRR from 6 percent to 16 percent. In addition to increasing the income of agricultural producers who participated in the program, the project was perceived to have improved the well-being of farmers’ families by enhancing food security, improving housing, opening educational opportunity, and improving health. In the immediate future, efforts should continue toward intensifying the technological transfer and diversifying products, with the aim of improving productivity and further enhancing the competitiveness of Salvadorian agriculture. - 40 - Table 3.1. Incremental Costs and Benefits - Non Increasing Production Cost Scenario Present Year Value (1994 US$) 1994 1995 1996 1997 1998 1999 2000 No. Farmers with R&E 13,860 14,739 17,815 17,898 17,862 18,714 13,928 Estimated Crop Area (Mz) 17,348 26,315 39,591 33,491 36,332 26,841 20,163 R&E Investment 1,134,048 533,105 381,079 307,461 56,386 81,422 48,742 63,432 CENTA Costs 3,308,167 0 1,013,363 1,186,164 998,411 601,585 830,065 573,963 Production Costs 0 0 0 0 0 0 0 0 Gross Revenues 4,253,975 0 1,127,768 3,915,956 (1,626,780) (1,126,083) 1,693,237 3,056,481 Aggregate Net Benefits (188,240) (533,105) (266,674) 2,422,332 (2,681,578) (1,809,090) 814,430 2,419,085 Net Benefits per Farmer (4) (38) (18) 136 (150) (101) 44 174 Net Benefits per Mz (1) (31) (10) 61 (80) (50) 30 120 Internal Rate of Return 6% Production Cost Increase 0% of Yield Increase Source: - Results of program activity from 1994 to 1998: Region 1 - West. - Financial programming of PRISA Research and Extension Component for Region 1, CDT-Izalco: 1995, 1996 and1997. - Financial programming by funding source: 1994 to 2000. - PRISA evaluation report of the Evaluation and Extension Component. - Budget and expenditure trends for the period 1994 –2003: CENTA budget area. - 41 - Table 3.2. Incremental Costs and Benefits - Increasing Production Cost Scenario Present Year Value (1994 US$) 1994 1995 1996 1997 1998 1999 2000 No. Farmers with R&E 13,860 14,739 17,815 17,898 17,862 18,714 13,928 Estimated Crop Area (Mz) 17,348 26,315 39,591 33,491 36,332 26,841 20,163 R&E Investment 1,134,048 533,105 381,079 307,461 56,386 81,422 48,742 63,432 CENTA Costs 3,308,167 0 1,013,363 1,186,164 998,411 601,585 830,065 573,963 Production Costs 5,012,579 0 983,867 3,215,830 (275,301) 620,903 1,709,703 1,980,185 Gross Revenues 4,253,975 0 1,127,768 3,915,956 (1,626,780) (1,126,083) 1,693,237 3,056,481 Aggregate Net Benefits (5,200,820) (533,105) (1,250,540) (793,498) (2,406,277) (2,429,993) (895,273) 438,900 Net Benefits per Farmer (306) (38) (85) (45) (134) (136) (48) 32 Net Benefits per Mz (170) (31) (48) (20) (72) (67) (33) 22 Internal Rate of Return Negative Production Cost Increase Equal to Yield Increase Source: - Results of program activity from 1994 to 1998: Region 1 West. - Financial programming of PRISA Research and Extension Component for Region 1, CDT-Izalco: 1995, 1996 and1997. - Financial programming by funding source: 1994 to 2000. - PRISA evaluation report of the Evaluation and Extension Component. - Budget and expenditure trends for the period 1994 –2003: CENTA budget area. - 42 - Table 3.3. Incremental Costs and Benefits - Increasing Production Cost Scenario - Sensitivity Analysis Present Value Year (1994 US$) 1994 1995 1996 1997 1998 1999 2000 No. Farmers with R&E 13,860 14,739 17,815 17,898 17,862 18,714 13,928 Estimated Crop Area (Mz) 17,348 26,315 39,591 33,491 36,332 26,841 20,163 R&E Investment 1,134,048 533,105 381,079 307,461 56,386 81,422 48,742 63,432 CENTA Costs 3,308,167 0 1,013,363 1,186,164 998,411 601,585 830,065 573,963 Production Costs 0 0 0 0 0 0 0 0 Gross Revenues 4,253,975 0 1,127,768 3,915,956 (1,626,780) (1,126,083) 1,693,237 3,056,481 Aggregate Net Benefits (188,240) (533,105) (266,674) 2,422,332 (2,681,578) (1,809,090) 814,430 2,419,085 Net Benefits per Farmer (4) (38) (18) 136 (150) (101) 44 174 Net Benefits per Mz (1) (31) (10) 61 (80) (50) 30 120 Internal Rate of Return 6% Production Cost Increase 0% of Yield Increase Table 3. 4. Incremental Costs and Benefits - Increasing Production Cost Scenario - Sensitivity Results Sensitivity Factor Sensitivity Levels NPV (1994US$) IRR (%) Per Aggregate Farmer Per Mz Production Cost Increase 50% of Weighted Yield Increase of Basic Grains (2,694,530) (155) (86) - Production Cost Increase 25% of Weighted Yield Increase of Basic Grains (1,441,385) (80) (44) - Production Cost Increase 0% of Weighted Yield Increase of Basic Grains (188,240) (4) (1) 6% Production Cost Increase (5%) of Weighted Yield Increase of Basic Grains 62,389 11 7 14% Production Cost Increase (10%) of Weighted Yield Increase of Basic Grains 313,018 26 15 25% - 43 - Table 3.5. Incremental Costs and Benefits - Sustained Benefit Increase Scenario - Sensitivity Analysis Present Value Year (1994 US$) 1994 1995 1996 1997 1998 1999 2000 No. Farmers with R&E 13,860 14,739 17,815 17,898 17,862 18,714 13,928 Estimated Crop Area (Mz) 17,348 26,315 39,591 33,491 36,332 26,841 20,163 R&E Investment 1,134,048 533,105 381,079 307,461 56,386 81,422 48,742 63,432 CENTA Costs 3,308,167 0 1,013,363 1,186,164 998,411 601,585 830,065 573,963 Production Costs 0 0 0 0 0 0 0 0 Gross Revenues 4,253,975 0 1,127,768 3,915,956 (1,626,780) (1,126,083) 1,693,237 3,056,481 Aggregate Net Benefits (188,240) (533,105) (266,674) 2,422,332 (2,681,578) (1,809,090) 814,430 2,419,085 Net Benefits per Farmer (4) (38) (18) 136 (150) (101) 44 174 Net Benefits per Mz (1) (31) (10) 61 (80) (50) 30 120 Internal Rate of Return 6% Production Cost Increase 0% of Yield Increase Gross Revenue Increase 0% of 2000 Revenues Table 3.6. Incremental Costs and Benefits - Non Increasing Production Cost & Sustained Benefit Increase Scenario - Sensitivity Results IRR Sensitivity Factor Sensitivity Levels NPV (1994US$) (%) Per Aggregate Farmer Per Mz Production Cost Increase 0% of Weighted Yield Increase of Basic Grains Gross Revenue Increase 0% of 2000 Revenues - 3 years at 0% (188,240) (4) (1) - Gross Revenue Increase 24% of 2000 Revenues - 3 years at 10% 143,583 20 15 16% Gross Revenue Increase 72% of 2000 Revenues - 3 years at 30% 807,229 67 48 31% Gross Revenue Increase 120% of 2000 Revenues - 3 years at 50% 1,470,876 115 81 41% Gross Revenue Increase 240% of 2000 Revenues - 3 years at 100% 3,129,992 234 163 58% - 44 - Table 3.7. Incremental Costs and Benefits - Non Increasing Production Cost & Sustained Benefit Increase Scenario - Sensitivity Results IRR Sensitivity Factor Sensitivity Levels NPV (1994US$) (%) Per Per Aggregate Farmer Mz Production Cost Increase 25% of Weighted Yield Increase of Basic Grains Gross Revenue Increase 0% of 2000 Revenues 0% (1,441,385) (80) (44) - Gross Revenue Increase 24% of 2000 Revenues 10% (1,163,306) (60) (30) (12%) Gross Revenue Increase 72% of 2000 Revenues 30% (607,148) (20) (2) 1% Gross Revenue Increase 120% of 2000 Revenues 50% (50,990) 20 25 11% Gross Revenue Increase 240% of 2000 Revenues 100% 1,339,406 120 94 28% Table 3.8. Without Project Situation - Aggregate Production Costs and Revenues Present Year Value (1994 US$) 1994 1995 1996 1997 1998 1999 2000 No. Farmers with R&E 13,860 14,739 17,815 17,898 17,862 18,714 13,928 Estimated Crop Area (Mz) 17,348 26,315 39,591 33,491 36,332 26,841 20,163 Production Costs 46,904,787 7,528,122 8,907,914 14,269,636 13,102,941 14,831,718 5,725,362 7,254,024 Gross Revenues 83,407,585 12,817,400 14,643,677 20,866,019 30,875,985 27,404,238 8,192,408 13,518,169 Aggregate Net Benefits 36,502,798 5,289,277.15 5,735,762.94 6,596,382.41 17,773,044.01 12,572,519.55 2,467,045.93 6,264,145.21 Net Benefits per Farmer 2,215 382 389 370 993 704 132 450 Net Benefits per Mz 1,285 305 218 167 531 346 92 311 Production Cost Change 1.00 1.00 1.00 1.00 1.00 1.00 1.00 Source: - Results of program activity from 1994 to 1998: Region 1 - West. - Financial programming of PRISA Research and Extension Component for Region 1, CDT-Izalco: 1995, 1996 and1997. - Financial programming by funding source: 1994 to 2000. - PRISA evaluation report of the Evaluation and Extension Component. - Budget and expenditure trends for the period 1994 –2003: CENTA budget area. - 45 - Table 3.9 With Project Situation - Aggregate Production Costs and Revenues - Non Increasing Production Cost Scenario Year Present Value (1994 US$) 1994 1995 1996 1997 1998 1999 2000 No. Farmers with R&E 13,860 14,739 17,815 17,898 17,862 18,714 13,928 Estimated Crop Area (Mz) 17,348 26,315 39,591 33,491 36,332 26,841 20,163 Production Costs 46,904,787 7,528,122 8,907,914 14,269,636 13,102,941 14,831,718 5,725,362 7,254,024 Gross Revenues 87,661,560 12,817,400 15,771,444 24,781,975 29,249,204 26,278,155 9,885,645 16,574,649 Aggregate Net Benefits 40,756,773 5,289,277.15 6,863,530.54 10,512,338.88 16,146,263.58 11,446,436.85 4,160,283.09 9,320,625.74 Net Benefits per Farmer 2,484 382 466 590 902 641 222 669 Net Benefits per Mz 1,442 305 261 266 482 315 155 462 Production Cost Change 1.00 1.00 1.00 1.00 1.00 1.00 1.00 Source: - Results of program activity from 1994 to 1998: Region 1 - West. - Financial programming of PRISA Research and Extension Component for Region 1, CDT-Izalco: 1995, 1996 and1997. - Financial programming by funding source: 1994 to 2000. - PRISA evaluation report of the Evaluation and Extension Component. - Budget and expenditure trends for the period 1994 –2003: CENTA budget area. - 46 - Table 3.10. With Project Situation - Aggregate Production Costs and Revenues – Increasing Production Cost Scenario Year Present 1994 1995 1996 1997 1998 1999 2000 Value (1994 US$) No. Farmers with 13,860 14,739 17,815 17,898 17,862 18,714 13,928 R&E Estimated Crop Area 17,348 26,315 35,591 33,491 36,332 26,841 20,163 (Mz) Production Costs 52,285,403 7,528,122 9,891,781 17,485,467 12,827,640 16,101,228 7,435,065 9,234,209 Gross Revenue 89,843,515 15,261,189 15,771,444 24,781,975 29,249,204 26,278,155 9,885,645 16,574,649 Aggregate Net 37,558,112 7,733,066.74 5,879,663.89 7,296,508.38 16,421,564.19 10,176,926.74 2,450,580.35 7,340,440.52 Benefits Net Benefits per 2,319 558 399 410 918 570 131 527 Farmer Net Benefits per Mz 1,389 446 223 184 490 280 91 364 Production Cost 1.21 1.11 1.23 0.98 1.09 1.30 1.27 Change Source: - Results of program activity from 1994 to 1998: Region 1 - West. - Financial programming of PRISA Research and Extension Component for Region 1, CDT-Izalco: 1995, 1996 and1997. - Financial programming by funding source: 1994 to 2000. - PRISA evaluation report of the Evaluation and Extension Component. - Budget and expenditure trends for the period 1994 –2003: CENTA budget area. - 47 - Annex 4. Bank Inputs (a) Missions: Stage of Project Cycle No. of Persons and Specialty Performance Rating (e.g. 2 Economists, 1 FMS, etc.) Implementation Development Month/Year Count Specialty Progress Objective Identification/Preparation 8/14/1990 1 AGRICULTURAL ECONOMIST (1) 8/31/1990 1 AGRICULTURAL ECONOMIST (1) 09/09/1990 10/19/1990 3 AGRICULTURAL ECONOMIST (1), R&E SPECIALIST (1), INSTITUTIONAL REFORM (1) 12/14/1990 5 AGRICULTURAL ECONOMIST (3), CONSULTANTS (2) 04/19/1991 7 AGRICULTURAL ECONOMIST (3), CONSULTANTS (4) 05/16/1991 2 AGRONOMIST (1), LAND SPECIALIST (1) 06/12/1991 2 AGRICULTURAL ECONOMIST (2) 07/19/1991 2 PUBLIC SECTOR MANAGEMENT SPECIALIST; A.M. DELBUE Appraisal/Negotiation 10/11/1991 7 AGRICULTURAL ECONOMIST (1), FAO/CP (1), CONSULTANTS (5) 02/14/1992 1 AGRICULTURAL ECONOMIST (1) / TM 05/18/1992 5 AGRICULTURAL ECONOMIST (4), CONSULTANT (1) 05/21/1992 1 ECONOMIST (1) 11/27/1992 1 CONSULTANT 01/15/1993 2 AGRICULTURAL ECONOMIST (1), PUBLIC SECTOR MANAGEMENT SPECIALIST (1) 05/26/1993 2 AGRICULTURAL ECONOMIST (1), CONSULTANT (1) 06/18/1993 2 AGRICULTURAL ECONOMIST (2) 07/01/1993 4 AGRICULTURAL ECONOMIST (1), LAND - 48 - SPECIALIST (1), SENIOR COUNCIL (1), CONSULTANT (1) Supervision 06/18/1993 2 ECONOMIST (1); 1 1 AGRICULTURIST (1) 12/04/1993 6 CONSULTANT (1); 1 1 ECONOMIST (1); SR. AGRICULTURIST (1); DISB.OFFICER (PROC.) (1); INST.DEV.SPEC. (1); PROGRAM ASSISTANT (1) 05/20/1994 5 CONSULTANT (3); S S ECONOMIST (1); SR. AGRICULTURIST (1) 10/28/1994 3 ECONOMIST (1); ARCHITECT S S (1); LAND SPECIALIST (1) 12/22/1994 4 ECONOMIST (1); S S AGRICULTURALIST (3) 03/10/1995 1 ECONOMIST (1) S S 07/26/1995 3 AGRICULTURALIST - FAO S S (1); GENDER SPECIALIST (1); DISBURSEMENT SPEC. (1) 12/03/1995 6 CONSULTANT - FINANCIAL S S (1); CONSULTANT - RESEARCH (1); SR. AGRICULTURALIST (1); CONSULTANT - EXTENSION (1); CONSULTANT -INST. DEV. (1); PROCUREMENT ASSISTANT (1) 12/03/1995 6 CONSULTANT - FINANCIAL S S (1); CONSULTANT - RESEARCH (1); SR. AGRICULTURALIST (1); CONSULTANT - EXTENSION (1); CONSULTANT - INST.DEV. (1); PROCUREMENT ASSISTANT (1) 12/03/1995 3 MISSION LEADER AND (1); S S CONSULTANT (1); SR. AGRICULTURIST (1) 10/11/1996 2 MISSION LEADER AND (1); S S SR. AGRICULTURIST (1) 12/13/1996 1 TASK MANAGER (1) S S 01/17/1996 1 TASK MANAGER (1) S S 11/28/1997 2 TASK MANAGER (1); U U MANAGEMENT CONSULTANT (1) 03/20/1998 4 CONSULTANT (1); U S - 49 - MANAGEMENT CONSULTANT (1); TASK MANAGER (1); TECHNOLOGY TRANSFER (1) 07/21/1998 1 CONSULTANT (1) U S 04/15/1999 1 TEAM LEADER (1) S S 02/15/2001 1 TASK TEAM LEADER (1) S S 03/22/2002 4 TTL/ AG. ECONOMIST (1); S S OPERATIONS ANALYST (1); TEAM ASSISTANT (1); CONSULTANT (1) 09/27/2002 4 AG. ECONOMIST/TM (1); S S OPERATIONS ANALYST (1); LANGUAGE PROGRAM ASS. (1); CONSULTANT (1) ICR 05/23/2003 1 OPERATIONS ANALYST S S (b) Staff: Stage of Project Cycle Actual/Latest Estimate No. Staff weeks US$ ('000) Identification/Preparation 60.5 137.2 Appraisal/Negotiation 94.7 256.8 Supervision 176.7* 814.9 ICR 8** 35 Total 339.9 1243.9 * Includes charges for lending activities as recent as FY2002; perhaps for the preparation of the land project. ** Estimate - 50 - Annex 5. Ratings for Achievement of Objectives/Outputs of Components (H=High, SU=Substantial, M=Modest, N=Negligible, NA=Not Applicable) Rating Macro policies H SU M N NA Sector Policies H SU M N NA Physical H SU M N NA Financial H SU M N NA Institutional Development H SU M N NA Environmental H SU M N NA Social Poverty Reduction H SU M N NA Gender H SU M N NA Other (Please specify) H SU M N NA Private sector development H SU M N NA Public sector management H SU M N NA Other (Please specify) H SU M N NA - 51 - Annex 6. Ratings of Bank and Borrower Performance (HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HU=Highly Unsatisfactory) 6.1 Bank performance Rating Lending HS S U HU Supervision HS S U HU Overall HS S U HU 6.2 Borrower performance Rating Preparation HS S U HU Government implementation performance HS S U HU Implementation agency performance HS S U HU Overall HS S U HU - 52 - Annex 7. List of Supporting Documents 1. CENTA. 2002. Memoria de Labores 2002. San Andrés, Febrero 2003. 2. CNR. 2002. Informe de Evaluación. Componente Mejoramiento de los Registros de Propiedad y Servicios de Catastro. Dec. 2002. 3. Informe Final de Consultoría. February 2003. 4. Lineamientos Técnicos y Operativos para la Transferencia de Tecnología. 5. Memoria del Proyecto de Consultoría para la Implementación del Programa Nacional de Extensión Dirigida a Objetivos. 6. OCP. 2002. Informe de evaluación periodo 1994-2002 del Programa de Reforma e Inversión Sectorial Agropecuaria -PRISA. 7. Several Aide Memoires and PSRs. 8. Several technical guides prepared by CENTA. 9. The World Bank. 1993. El Salvador: Agricultural Sector Reform and Investment Project Staff Appraisal Report. Report No. 10933-ES. 10. ----- 2001. Country Assistance Strategy. Report # 22932-ES 11. The World Bank. 2003. Rural Development Study. 1998. Report # 17686-ES. Annex 8. Borrower’s ICR I Objetivos del Programa (i) implementar su política del sector agropecuario y la parte de estrategias relacionadas con la agricultura en su Plan de Reconstrucción Nacional; (ii) fortalecer el sector agropecuario público a través de la reorganización y desarrollo institucional del MAG y CENTA; (iii) acelerar la generación de tecnología productiva ambientalmente sostenible a través de la investigación; (iv) contribuir a mejorar la productividad de pequeños y medianos productores agropecuarios proporcionándoles servicios de extensión agropecuaria; II. EVALUACIÓN DEL OBJETIVO, DISEÑO E IMPLEMENTACION 2.1 Consideraciones sobre el Objetivo de Desarrollo El Programa PRISA tenía el propósito de asistir al Gobierno de El Salvador en la implementación de la Política de Desarrollo Agrícola, impulsando actividades para la redefinición del papel del sector público agropecuario; convirtiéndolo en facilitador, regulador y proveedor de servicios para el pequeño y mediano productor, propiciando de esta manera las condiciones para el crecimiento del sector agropecuario. El objetivo de desarrollo no fue modificado en el período de ejecución del Programa, su diseño estaba orientado a la ejecución de acciones de apoyo a las principales políticas del sector agrícola dentro del Plan de Desarrollo Económico y Social 1989-1994 impulsado por el Gobierno y contribución al Programa de Reconstrucción Nacional (PRN). Durante la vida del Programa, el fortalecimiento de reformas institucionales han orientado las principales actividades del MAG, promoviendo las actividades del sector hacia una economía de mercado, cuyos resultados de largo plazo serían un Sistema de Innovación Tecnológica, eficiencia en la prestación de servicios y la recuperación del sector agrícola. - 53 - 2.2 Consideraciones sobre los Objetivo del Programa El diseño de los objetivos del Programa estaban directamente relacionados con la reorganización y desarrollo institucional del MAG y CENTA, la generación de tecnología productiva y la mejora de la productividad de pequeños y medianos productores agropecuarios, por medio de servicios de extensión y sustentados en dos componentes los que irían a ser ejecutados por el MAG y CENTA bajo la coordinación de la OCP. Durante la ejecución del PRISA se agregaron al diseño original dos componentes, con el objeto de apoyar las prioridades del Gobierno de El Salvador, originadas en el marco de los Acuerdos de Paz y para afrontar las consecuencias ocasionadas por desastres naturales, dichos componentes son: i) Mejoramiento de los Registros de Propiedad y Servicios de Catastro, y ii) Programa de Emergencia por el Huracán Mitch y Terremotos. El nivel de cumplimiento de los objetivos del Programa se considera satisfactorios, de acuerdo a los resultados obtenidos de cada uno de los componentes. 2.3 Consideraciones sobre el diseño y los supuestos de implementación El diseño original del Programa baso su implementación en la participación del MAG, CENTA y la OCP, para lo cual se plantearon indicadores de implementación, desempeño, revisiones anuales y de medio término y monitoreo de desempeño a través de misiones de supervisión, que garantizarán la efectiva ejecución del mismo. El diseño fue satisfactorio con relación a los objetivos, componentes e instituciones participantes, lo que permitió asimilar y manejar las modificaciones generadas por las nuevas prioridades que enfrento el GOES con bastante flexibilidad. III. REALIZACIÓN DE LOS OBJETIVOS Y COMPONENTES Los objetivos planteados en el Programa PRISA están relacionados a indicadores de monitoreo y de impacto con el fin de medir el avance o el grado de cumplimiento de los objetivos planteados; en este mismo sentido, tanto los objetivos y componentes originales como los que se agregaron en el Programa también disponen de sus indicadores, el impacto generado por el Programa a beneficiado al menos 416,041 personas, principalmente productores agropecuarios y usuarios de los servicios del MAG y en menor medida funcionarios públicos del Ministerio. 3.1 Impacto de los Objetivos del Programa El Programa en su diseño original planteó cuatro objetivos los cuales dentro del SAR se le atribuyen sus indicadores y su respectivo plazo de ejecución; para fines de medir su avance se ha tomado de referencia lo realizado en el indicador al final del periodo de ejecución y en otros la sumatoria de los años de ejecución del Programa, con base en este esquema se presentan los resultados siguientes: 3.1.1 Objetivo 1: Implementar la política del sector agropecuario y la parte de estrategias relacionadas con la agricultura en el Plan de Reconstrucción Nacional. Los indicadores para este objetivo están relacionados con: i) ejecución de Acciones Estratégicas en el sector agropecuario, y ii) Mejoramiento de Agencias de Extensión ubicadas en áreas del Plan de Reconstrucción Nacional (PRN). El nivel de cumplimiento alcanzado es de un 100.7 %; sin embargo, el Programa - 54 - rehabilitó un mayor número de agencias fuera del PRN, en vista de los problemas de propiedad de terreno o de la agencia (casa alquilada) encontrados. Considerándose en este sentido, un nivel de cumplimiento Satisfactorio, logrando realizar 26 medidas de política y estratégicas que mejoraron las condiciones del sector en áreas de fortalecimiento institucional, riego, crédito, comercialización, sanidad vegetal y animal, recursos naturales; y la atención a los pequeños y medianos productores con la rehabilitación de 21 agencias de extensión. 3.1.2 Objetivo 2: Fortalecer el sector público agropecuario a través de la reorganización y desarrollo institucional del MAG y CENTA. Este segundo objetivo contempla cuatro indicadores relacionados con: i) personal técnico/no técnico, y ii) salarios/presupuesto total ordinario, tanto para el MAG como para el CENTA. El nivel de cumplimiento alcanzado se considera Satisfactorio; a pesar de que el MAG y CENTA fueron influenciados por las medidas de modernización del Gobierno Central como el retiro voluntario, delimitación de funciones ministeriales, políticas y medidas de ahorro del sector público; se logró reducir el porcentaje de salarios en el presupuesto y mejora la relación entre el personal técnico y no técnico en el MAG y el CENTA, además los servicios de mantenimiento de equipos computación y automotriz se conceden a la empresa privada por medio de concursos públicos. 3.1.3 Objetivo 3: Acelerar la generación de tecnología productiva ambientalmente sostenible a través de la investigación La ejecución de este objetivo fue responsabilidad del CENTA por medio del subcomponente de Investigación, sus indicadores provienen de las recomendaciones técnicas generadas por cada uno de los programas de investigación: Granos básicos, Ganadería, Frutas y Hortalizas, Cultivos Agroindustriales y Recursos Naturales localizados en los Centros de Investigación en San Andrés, Izalco, Santa Cruz Porrillo y Morazán. El grado de cumplimiento del objetivo alcanzó un 117.9%, considerándolo Satisfactorio de acuerdo a los resultados obtenidos en la generación de 90 recomendaciones que ampliaron las oportunidades tecnológicas de los pequeños y medianos productores, principalmente en frutas, hortalizas y recursos naturales. 3.1.4 Objetivo 4: Contribuir a mejorar la productividad de pequeños y medianos productores agropecuarios proporcionándoles servicios de extensión agropecuaria. Los indicadores de este objetivo se orientaron a: i) medición de cambios de productividad para las categorías de Maíz/San Andrés, Ganado/Izalco, Tomates y Ajonjolí/Santa Cruz Porrillo con productividad por área, ii) número de parcelas en agricultores con sistemas de producción, y iii) área de los productores con técnicas de conservación de suelos. De los seis indicadores 5 de ellos superaron las metas, los que podrían sustentar una calificación de altamente satisfactorio; sin embargo, el sexto indicador alcanzó un nivel de cumplimiento del 78.6%, lo que hace que el objetivo en forma global alcance un nivel de avance del 171.6% y considerando su resultado como Satisfactorio, en vista de que los beneficiarios de la extensión mejoraron las productividades de los cultivos asistidos como maíz, tomate, ajonjolí, y áreas con técnicas de conservación de suelos. 3.2 Resultados de los Componentes del Programa Según los resultados obtenidos en todos los componentes y de acuerdo a los indicadores propuestos tanto en el SAR, como en las enmiendas al Convenio de Préstamo para los nuevos componentes, se tiene la siguiente evaluación: - 55 - 3.2.1 Componente Reforma y Desarrollo Institucional del MAG y CENTA El objetivo diseñado para el Componente fue “Contar con un Ministerio que disponga de la capacidad técnica y física necesaria para apoyar al sector agropecuario en el marco del modelo de desarrollo que impulsa el gobierno, con énfasis en la generalización del concepto de sostenibilidad de los recursos naturales”; sustentado en sus cuatro Sub-componentes y sus respectivos indicadores que medirían su avance; el desempeño global del Componente alcanzó un nivel de cumplimiento del 104.4% el cual se considera Satisfactorio; debido a que los cambios organizacionales ejecutados han influido en la conformación de un Ministerio de Agricultura y Ganadería fortalecido en su rol asesor y subsidiario del desarrollo agropecuario, mejorando su capacidad gerencial y de planificación estratégica para el cumplimiento y desarrollo de las funciones institucionales que le competen. Lo anterior se sustenta en los resultados de los subcomponentes, que a continuación se describen: 3.2.1.1 Sub-Componente: Planificación y Estrategia Institucional El subcomponente tenía la finalidad de fortalecer la capacidad del MAG para la planificación organizacional y el manejo del recurso humano, en este sentido sus indicadores estaban relacionados con: i) evaluación y reajuste de normas, estructuras y procedimientos, ii) nuevo marco legal del CENTA y el MAG, y iii) capacitación del personal en planificación estratégica, gerencia y aspectos legales; el desempeño global del Subcomponente alcanzo un nivel de cumplimiento del 238.9%, por lo tanto se considera Satisfactorio. Los principales resultados del Subcomponente son: i) Reglamento de la Organización Interna del MAG, ii) Manuales de Organización de las dependencias del MAG, iii) Planes Estratégicos del MAG y CENTA, iv) Ley de Creación y Reglamento del CENTA, v) Elaboración de los Manuales de Organización y Clasificación de Puestos del MAG y CENTA, vi) Fortalecimiento institucional del MAG por medio del mejoramiento del equipo y programas de computación, y vii) participación de 2,373 funcionarios en capacitación de planificación estratégica, gerencia y aspectos legales. 3.2.1.2 Sub-Componente: Administración de Recursos Humanos Este subcomponente se orientaba a la implementación de un Plan de Racionalización del Personal del MAG y CENTA, apoyando al MAG en la privatización de los activos del IRA, los indicadores eran: i) personal total que el MAG y CENTA deberían disponer a lo largo del período de ejecución del Programa y, ii) plantas del IRA privatizadas; en su desempeño global el SubComponente alcanzo un nivel de cumplimiento del 102.2 %, que se considera Satisfactorio. Los principales resultados son: i) diseño e implementación de políticas de administración y desarrollo de los recursos humanos, ii) diseño e implementación de una base de datos del recurso humano del MAG y CENTA, iii) Plan de capacitación y desarrollo gerencial del personal del MAG y CENTA en el que participaron 875 funcionarios. 3.2.1.3 Sub-Componente: Sistemas y Procedimientos de Información para la Administración Con este subcomponente se pretendía mejorar la generación y diseminación de información y los procedimientos administrativos del MAG y de CENTA, sus indicadores se relacionan con: i) estandarización de procedimientos, ii) desarrollo informático de sistemas de inventarios, bodega, manejo de vehículos, auditoria, correspondencia, archivo, administración financiera y desarrollo de recursos humanos, - 56 - iii) manuales de organización y iv) capacitación de personal. El desempeño global del SubComponente alcanzó un nivel de cumplimiento considerado Satisfactorio, porque se dispone de la capacidad para lograr la adopción y computarización completa de los sistemas y procedimientos, a pesar de los contratiempos y las deficiencias encontradas para lograr sus metas. Los principales resultados del subcomponente son: i) diseño de 6 sistemas administrativos del MAG: Correspondencia y Archivo, Control de Inventario de Activo Fijo, Transporte, Aprovisionamiento, Sistema de Información de Recursos Humanos y Sistemas de Auditoria y Control Interno, ii) capacitación de 511 funcionarios del MAG, y iii) implementación del Sistema de Información Geográfico. 3.2.1.4 Sub-Componente: Edificio Oficinas Centrales del MAG El Subcomponente se orientó a la construcción y equipamiento del edificio que albergaría las Oficinas Centrales del MAG, los indicadores alcanzaron un nivel de cumplimiento del 100%; lo que se considera altamente satisfactorio. Los principales resultados son: i) concentración de las oficinas que estaban dispersas, ii) mejoras de la comunicación y el trabajo de equipo interinstitucional, iii) cableado para la red de comunicación, y iv) racionalización de los gastos en servicios de telefonía, energía eléctrica, agua y otros. 3.2.1.5 Sub Componente Opciones de Política Agraria Este Subcomponente no estaba incluido en el diseño original del Programa, se incorporo a partir del año 1994 con el fin de Implementar los Objetivos y Estrategias que integran la Matriz de Política Agraria para impulsar el combate a la pobreza, y orientado a apoyar los Programas del Gobierno de El Salvador, especialmente de Reforma Agraria y los de transferencia de tierras producto de los Acuerdos de Paz. Para este subcomponente se establecieron 25 indicadores de monitoreo para los cuatro objetivos planteados en la Matriz de Política Agraria, el resultado global del nivel de cumplimiento alcanzado fue de un 96.9% el cual se considera Satisfactorio. Lo anterior se sustenta en los resultados de cada uno de los objetivos, que a continuación se describen: 3.2.1.5.1 Objetivo 1: Finalizar la adjudicación de inmuebles provenientes del Proceso de la Reforma Agraria; el cumplimiento de los Programas de Transferencia de Tierras de los Acuerdos de Paz; y disolución de las Instituciones creadas para tal fin. Este objetivo tenía planteado 9 indicadores relacionados con: i) entrega de escrituras de propiedad, ii) proyectos de parcelación, iii) mejoramiento del financiamiento rural, iv) elaboración de la política agraria, y v) cierre de instituciones agrarias. El nivel de cumplimiento alcanzado es de 83.1%; lo cual es un desempeño Satisfactorio; sin embargo, tres indicadores no se ejecutaron porque requerían de un grado de especialización que el Subcomponente no disponía y no se consideró como limitante en su diseño. Los principales resultados del objetivo son: i) entrega de 135,912 certificados y escrituras de propiedad, ii) ejecución de 270 proyectos de parcelación para facilitar la transferencia de tierras de las Asociaciones Cooperativas de la Reforma Agraria, y iii) cierre de la Financiera Nacional de Tierras Agrícolas (FINATA) y Banco de Tierras. 3.2.1.5.2 Objetivo 2: Garantizar la Seguridad Jurídica en la propiedad, posesión o tenencia de la tierra, que permita la inversión, su transferencia y contratación dentro del libre mercado. - 57 - Este objetivo contenía 7 indicadores de monitoreo relacionados con: i) uso y dominio de la tierra, ii) implementación del Código Agrario, y iii) ejecución del Proyecto de modernización del Registro y Catastro. El nivel de cumplimiento alcanzado se considera Satisfactorio, a pesar de su insuficiente avance, en vista de que cuatro indicadores no se ejecutaron porque la responsabilidad de su ejecución final estaba fuera de la influencia del MAG (Asamblea Legislativa y Ministerio de Justicia). Los resultados de este objetivo son: i) Anteproyecto de Decreto Legislativo para facilitar la venta y alquiler de las tierras de las Asociaciones Cooperativas de la Reforma Agraria, ii) Anteproyecto de Decreto Legislativo para disminuir la interferencia del Estado en las decisiones de las Asociaciones Cooperativas de la Reforma Agraria, y iii) elaboración del Código Agrario. 3.2.1.5.3 Objetivo 3: Consolidación y reestructuración de la Deuda Agraria. Este objetivo se relaciono con la implementación de opciones de reestructuración de la deuda agraria. El nivel de cumplimiento logrado es de 96.3%, y su evaluación se considera Satisfactoria. El resultado principal de este objetivo es la preparación de reestructuraciones de deuda en 256 asociaciones cooperativas y en 126,690 individuales. 3.2.1.5.4 Objetivo 4: Implantar un sistema eficiente de Financiamiento Rural Este objetivo se relacionó con el mejoramiento del sistema financiero rural. El nivel de cumplimiento alcanzado fue Insatisfactorio; sin embargo, 5 indicadores no fueron cumplidos porque eran competencia del Sistema Financiero (Ley de Bancos y Ley Orgánica de la Superintendencia del Sistema Financiero y el Decreto Legislativo No. 849 sobre Ley de Intermediarios Financieros no Bancarios), en el diseño del proyecto no se consideró esta situación. El resultado de este objetivo fue la elaboración del proyecto de Línea de Crédito para facilitar la compra de tierras a pequeños y medianos agricultores, que no fue aprobado por la instancia correspondiente. 3.2.2 Componente Investigación y Extensión Agropecuaria Este componente pretendía “Acelerar la generación de tecnología productiva ambientalmente sostenible, a través de la investigación; y contribuir a mejorar la productividad de pequeños y medianos productores agropecuarios, proporcionándoles servicios de extensión agropecuaria”; por lo que fue diseñado en tres Sub-componentes y de acuerdo a los indicadores de monitoreo que le competen presenta un desempeño global de cumplimiento considerado Satisfactorio, sustentado en los resultados de cada uno de los subcomponentes, que a continuación se describen: 3.2.2.1 Sub-Componente Investigación Agropecuaria El Subcomponente apoyaría la investigación en granos básicos, ganadería y forrajes, frutas y vegetales, fibras y semillas oleaginosas y recursos naturales. Los indicadores de este subcomponente se relacionan con: i) proyectos de investigación por rubros, y ii) número de personal técnico contratado por Centro y Programa de Investigación; el nivel de cumplimiento alcanzado fue de 80.1%, presentando un resultado Satisfactorio. Los resultados en el subcomponente son: i) liberación de 14 materiales genéticos en granos básicos, ii) - 58 - generación de tecnologías de alimentación y manejo animal, iii) manejo integrado de plagas de chile y repollo, iv) identificación de materiales de cebolla, v) liberación de variedades de ajonjolí, vi) desarrollo de tecnologías en recursos naturales, vii) elaboración de 18 guías técnicas, y viii) catálogo de la oferta tecnológica generada por CENTA. 3.2.2.2 Sub-Componente Extensión Agropecuaria Este Subcomponente tenía el propósito de cambiar los métodos individuales de extensión a un sistema de capacitación y visitas, capacitación de extensionistas y productores y lograr una mejor coordinación con ONG’s. Los indicadores se relacionan con: i) introducción de las agencias a las fases del Programa, ii) número de extensionistas contratados, iii) las relaciones entre mujeres/extensionistas, agricultores enlace/extensionistas, agricultoras enlace/agricultores enlace, agricultores/extensionistas, y iv) número de agricultores recibiendo extensión; el desempeño de este subcomponente se califica como Satisfactorio. Los principales resultados del subcomponente son: i) atención a 63,000 pequeños y medianos productores de los cuales el 14% fueron mujeres, ii) mejor coordinación entre CENTA, ONG’s y organizaciones de productores, iii) 22 funcionarios con maestría en investigación y extensión, iv) equipamiento de agencias con 77 vehículos y 327 motocicletas, v) rehabilitación de 21 agencias de extensión, y vi) capacitación de 100 técnicos de ONG’s, 278 extensionistas y 13,792 productores en temas de tecnología agrícola, conservación de suelos y manejo de recursos naturales. 3.2.2.3 Sub-Componente Servicios de Apoyo para la Investigación y Extensión Con este Subcomponente se pretendía realizar mejoras que facilitaran las actividades de investigación y extensión a desarrollar por el CENTA por medio servicios de apoyo, el indicador establecido fue mes consultor. El nivel de cumplimiento alcanzado refleja una evaluación Insatisfactoria; sin embargo, como parte de este subcomponente se ejecutaron actividades que elevan su desempeño a Satisfactorio. Los resultados del subcomponente son: i) rehabilitación del Edificio Administrativo, el Techado del Edificio de la Biblioteca y los Laboratorios de CENTA, ii) participación del personal técnico y administrativo en 23 eventos de capacitación, y iii) equipamiento computacional del laboratorio y oficinas del CENTA. 3.2.3 Componente Mejoramiento de los Registros de Propiedad y Servicios de Catastro Este componente fue incorporado al Programa PRISA en el año 1994 mediante una Enmienda al Convenio de Préstamo, y se establecieron 8 resultados relacionados con: i) modernización de los servicios públicos del registro de la propiedad inmobiliaria y del catastro, ii) organización institucional para el mantenimiento del nuevo sistema, iii) operación de un sistema Registral-Catastral automatizado, y iv) depuración y actualización del registro y el catastro en el Departamento de Sonsonate. El nivel de cumplimiento logrado por el Componente fue de 91.4%, el desempeño se considera Satisfactorio por los resultados y logros obtenidos en cada uno de los objetivos, que a continuación se describen: 3.2.3.1 Objetivo 1: Modernizar los servicios públicos relacionados con el registro de la propiedad inmobiliaria y del catastro. Los indicadores de este objetivo se relacionan con: i) operación de un sistema Registral-Catastral (alfanumérico y gráfico) automatizado, ii) una organización institucional para el mantenimiento del nuevo sistema Registral-Catastral, y iii) Modificar leyes y/o formular anteproyectos de ley para viabilizar la depuración catastral y la creación del nuevo sistema Registral-Catastral. El grado de cumplimiento de este - 59 - objetivo se estima en un 91.6%, por ello se considera Satisfactorio su resultado. Los principales logros de este objetivo fueron: i) Diseñar e implementar un sistema de registro y catastro, ii) diseñar e implementar la organización institucional para el nuevo sistema, y iii) elaboración de anteproyectos de ley para facilitar la depuración registral-catastral. 3.2.3.2 Objetivo 2: Depurar y actualizar el registro y el catastro en el Departamento de Sonsonate. Los indicadores de este objetivo se relacionan con: i) una base de datos con las inscripciones de propiedad inmobiliaria vigentes, y sus gravámenes que las afectan, y su relación con el número de mapa/parcela, ii) información fotogramétrica y de campo de las parcelas, y iii) Asesorar tenedores de tierra con problemas regístrales. El grado de cumplimiento de este objetivo se estima en un 92.0%, por lo cual se considera Satisfactorio. Los principales resultados logrados son: i) nuevo sistema automatizado de registro y catastro operando en la Oficina de Registro de Sonsonate, y replicado en la mayoría de oficinas de registro del país, ii) levantamiento de información de tierras del Departamento de Sonsonate, iii) identificación de 114,785 parcelas, de las cuales 53,013 eran urbanas (46.2%) y 61,772 eran rurales (53.8%). 3.2.4 Componente Programa de Emergencia por el Huracán Mitch y Terremotos El Componente Mitch y Terremotos fue incorporado al Programa PRISA en el año de 1999, por medio de una Enmienda al Contrato de Préstamo, como consecuencia de los estragos causados por la Tormenta Tropical Mitch en el país a finales de 1998; posteriormente se amplió por los Terremotos del 2001, requiriendo para ello otra Enmienda al Contrato. El propósito principal del componente era contribuir en la mitigación y rehabilitación de los daños ocasionados por los desastres, estableciendo 28 indicadores de monitoreo relacionados con: i) dotación de insumos, bienes y servicios para la reactivación productiva de parcelas, ii) prevención de enfermedades del ganado, y iii) rehabilitación y construcción de infraestructura pública y agro-productiva dañada. El nivel de cumplimiento del Componente fue de un 138.6% y tomando en cuenta los resultados obtenidos en beneficio de 100,752 productores agropecuarios y pobladores rurales, se considera que alcanzó un grado Bastante Satisfactorio. Lo anterior se sustenta en los resultados de cada uno de los Subcomponentes, que a continuación se describen: 3.2.4.1 Sub Componente Tormenta Tropical Mitch Para este Subcomponente se establecieron 20 indicadores de seguimiento, orientados a: i) repoblación de variedades de animales y plantas, ii) vigilancia y control fitozoosanitario, iii) rehabilitación de equipo e infraestructura pesquera artesanal, iv) dotación de insumos y servicios agrícolas, y v) rehabilitación de infraestructura de riego, drenaje y control de inundaciones. El nivel de cumplimiento de este componente fue de un 157.4%, considerado Bastante Satisfactorio por los resultados y beneficios alcanzados. Es importante mencionar que, el indicador de “Vigilancia epidemiológica y control fitozoosanitario en zonas mayormente afectadas” no fue ejecutado porque requería ejecutar procedimientos que sobrepasaban el período de ejecución establecido. Los principales resultados del Subcomponente son: i) entrega de insumos, animales y plantas a 30,648 familias, ii) implementación de medidas de prevención y control de enfermedades en 26,095 animales, iii) - 60 - repoblación de 15 cuerpos de agua y 2 reservorios con un millón de alevines en beneficio de 25 comunidades pesqueras artesanales y aproximadamente 2,500 habitantes, iv) rehabilitación de aperos y equipos de pesca a 600 pescadores artesanales marinos y continentales, v) entrega de insumos agrícolas a 20,535 agricultores, vi) rehabilitación de caminos y drenajes en el Distrito de Riego y Avenamiento Lempa-Acahuapa, favoreciendo a 1,026 agricultores, vii) rehabilitación de 19 pequeñas obras de riego, en beneficio de 2,010 productores, y viii) ejecución de 38.4 kms. de obras de drenaje y control de inundaciones en la Zona del Bajo Lempa. 3.2.4.2 Sub Componente Terremotos Año 2001 Para este Subcomponente se establecieron 11 indicadores en temas relacionados con: i) rehabilitación de infraestructura y equipo dañado, ii) elaboración de diseños de ingeniería, y iii) capacitación y asistencia técnica de productores afectados. El nivel de cumplimiento logrado por el Subcomponente fue de 93.8%, por lo que el desempeño alcanzado es Satisfactorio por los resultados y beneficios obtenidos. Los principales resultados obtenidos en este Subcomponente son: i) rehabilitación de 6 instalaciones del CENTA, ii) rehabilitación de 13 agencias de extensión, iii) reparación de las Oficinas Centrales del MAG, iv) reparación de 7 pequeños proyectos de riego en favor de 858 familias, y v) ejecución de 21 proyectos agro-productivos comunales en beneficio de 27,301 personas del área rural. IV. FACTORES QUE INCIDIERON EN LA IMPLEMENTACIÓN DEL PROGRAMA Y LOS EFECTOS ALCANZADOS 4.1 Factores Incidentes en la Implementación del Programa Existen muchos factores que incidieron en pro o en contra durante la implementación del Programa, entre los cuales se destacan: i). El apoyo político brindado por las altas autoridades como la provisión de los recursos al PRISA y el Programa de Modernización bajo SAL I como una expresión de reforma del Órgano Ejecutivo impulsando iniciativas de reforma a nivel horizontal. ii). Los módulos del Componente REFORMAG: “Privatización de Servicios Internos” y el de “Concertación de planes y programas de investigación y extensión del CENTA (CPP)”, no se desarrollaron debido a los cambios constantes de la Dirección Ejecutiva del CENTA; lo cual generó baja prioridad de este resultado. iii). Los continuos cambios de titulares del Ministerio de Agricultura y Ganadería, provocaron sustituciones en la Dirección del CENTA y el cambio de prioridades institucionales, lo que limito mantener la continuidad de algunas actividades en la ejecución Programa. iv). El comportamiento impredecible del clima fue un factor limitante, el huracán Mitch fue sin duda uno de los factores que afectó los trabajos de investigación; así como, los Terremotos del 2001, que además obligó a designar recursos que estaban contemplados para otras actividades relevantes del Programa. v). La no asignación oportuna de los recursos de contrapartida afectó la ejecución de obras y la adquisición de equipos contemplados en los distintos Componentes. vi). Las respuestas positivas de los diferentes organismos gubernamentales y no gubernamentales con los - 61 - cuales se ha coordinado esfuerzos posibilitó alcanzar niveles de ejecución satisfactorios en los diferentes Componentes. vii). Un elemento importante con el Componente del Mitch y Terremotos, fue la coordinación efectiva del trabajo con las instituciones ejecutoras del MAG, en cuanto a la distribución de tareas; flexibilización de algunos procedimientos y montos de licitación por parte del Banco, con lo que se logro el propósito de agilizar los procesos de licitación y contratación de bienes y servicios. viii). Algunas limitantes para la ejecución de las actividades del Componente Mitch y Terremotos fueron: retraso en la aprobación del presupuesto adicional solicitado para el inicio de su ejecución, y la no disponibilidad oportuna de la documentación de soporte o los diseños de ingeniería en el caso de algunas obras agro-productivas lo que no permitió ejecutar todos los proyectos programados. ix) El Componente Mejoramiento de los Registros de Propiedad y Servicios de Catastro enfrentó un deficiente trabajo de la Empresa contratada, durante la ejecución de las actividades de campo; lo cual desfasó la programación de actividades del componente. 4.2 Efectos derivados de la implementación del Programa i). Adecuación de la organización institucional y funcional del MAG a las necesidades de desarrollo del sector agropecuario y forestal a pesar de la resistencia natural al cambio en la organización. El Proyecto ha impactado en lo físico, tecnológico, organizacional y en la agilidad en procedimientos administrativos y técnicos. ii). Mejoramiento en la imagen del MAG en vista de la modernidad de las instalaciones, por haber reunido físicamente todas las dependencias centralizadas, mejorado el servicio a los usuarios y la agilidad en los procedimientos. iii). Liberación de materiales genéticos y tecnologías que han contribuido a mejorar la productividad y el manejo de cultivos, en ciertos casos se logro en granos básicos rendimientos superiores al 50% sobre el promedio nacional, significa que el productor dispone de una mayor capacidad para manejar su finca y aplicar nuevas tecnologías. iv). El cierre de las instituciones involucradas en el quehacer agrario, ha generado un ahorro en el gasto público, y con la agilización en los procesos de la transferencia de tierras, se ha dado seguridad jurídica en su propiedad y tenencia a los beneficiarios de la Reforma Agraria y P.T.T. en el marco de los Acuerdos de Paz; con el pago de la Deuda Agraria los beneficiarios de los programas de Transferencia de Tierra se han convertido en legítimos dueños de la tierra que poseen. v). Con la implementación del Subcomponente Mitch se disminuyó la proliferación de focos de enfermedades, por medio de la ejecución de medidas fitozoosanitarias y de prevención en áreas afectadas. vi). Protección de zonas y control de inundaciones en la zona del Bajo Lempa en beneficio de 32 comunidades rurales e incorporación al riego de 2,130 manzanas con potencial de cultivo de melón, sandía, plátanos, pastos, caña de azúcar, arroz, hortalizas, sorgo forrajero, maíz y frijoles. vii). Rehabilitación de infraestructura agroproductiva en beneficio de 27,301 personas asociadas en cooperativas de productores y ADESCOS, contribuyendo a la facilitación del transporte de insumos, comercialización de productos agropecuarios y la generación de mayores ingresos en zonas afectadas por - 62 - los terremotos. viii). Con la ejecución del Subcomponente Terremotos se desarrollo una coordinación efectiva entre la OCP, organizaciones gubernamentales y organizaciones beneficiarias de los proyectos de rehabilitación de infraestructura agroproductiva. ix) Las experiencias adquiridas con el Componente Mejoramiento de los Registros de Propiedad y Servicios de Catastro, han servido de base para orientar la ejecución de los trabajos de levantamiento de información de tierras del Plan Nacional de Modernización del Registro Inmobiliario y del Catastro. V. EVALUACIÓN DEL DESEMPEÑO DEL PRESTATARIO, CON ÉNFASIS EN LAS LECCIONES APRENDIDAS 1. La participación del GOES en el diseño del Programa fue satisfactorio porque ello permitió que el Programa fuese estructurado en consenso y considerando las capacidades de ejecución tanto del Banco como del Gobierno; sin embargo, para el componente de Opciones de Política Agraria el tema relativo al financiamiento rural no se lograron completar los propósitos, debido a que dentro del diseño original no se considero el papel de la Superintendencia del Sistema Financiero, para apoyar las actividades correspondientes que permitieran alcanzar las metas planteadas. 2. El manejo del Programa por parte del GOES y de la institución Ejecutora se mantuvo estable durante su período de ejecución, a pesar de los cambios de funcionarios ocurridos en el CENTA, la OCP y en el MAG; la experiencia y capacidad ganada por la OCP en la implementación de otros proyectos contribuyó a la obtención de los resultados satisfactorios en el Programa. 3. Durante los primeros tres años de ejecución del Programa, las contribuciones de la contrapartida fueron cumplidas de acuerdo a su diseño, sin embargo debido a las prioridades y políticas del Gobierno en algunos casos no se dispuso oportunamente del “pari–passu”, lo que afectó y retrasó la programación establecida por el Programa. 4. La ejecución del Componente Mitch y Terremotos alcanzó un desempeño muy satisfactorio, es de considerar que los elementos importantes que contribuyeron fueron: la coordinación interinstitucional entre la OCP y las instituciones del MAG participantes, la flexibilización de procedimientos y requisitos por parte del Banco Mundial para la ejecución de las actividades programadas en el Componente. 5. Las recomendaciones dadas por las diferentes Misiones de Supervisión no fueron completamente atendidas por parte del GOES, sea por cuestiones de procedimiento o por limitaciones presupuestarias, las cuales de haberse cumplido oportuna y eficientemente el nivel de cumplimiento sería mayor. 6. Las tareas de reacomodo organizativo del CNR, como resultado de la unión de tres instituciones, y la no-existencia de un marco jurídico que regulara el nuevo sistema registral, no permitieron que el Componente de Mejoramiento de los Registros de Propiedad y Servicios de Catastro cumpliera oportunamente y lograr mayores resultados. VI. EVALUACIÓN DEL DESEMPEÑO DEL BANCO, CON ÉNFASIS EN LAS LECCIONES APRENDIDAS 1. Las Misiones de Supervisión del Banco que se realizaron con periodicidad dejaron las recomendaciones necesarias para mejorar la implementación del Programa, las que si se hubieran implementado - 63 - oportunamente el avance del programa sería mayor a lo reportado. Sin embargo, algunas recomendaciones que no fueron implementadas afectaban por sus implicaciones leyes, normas y procedimientos vigentes. 2. La contribución del BM en el diseño del Programa y los Componentes fue determinante ya que el establecimiento de los subcomponentes y las unidades responsables de su ejecución se establecieron en forma consensuada y coordinada, lo que permitió claridad en la estructura operativa, de coordinación y seguimiento en los diferentes niveles como GOES/Banco Mundial; OCP/Componentes. 3. La conciencia por parte del Banco en el sentido de permitir la modificación del diseño original del Programa fue un elemento valioso para introducir las enmiendas y adicionar las nuevas actividades de las nuevas prioridades y/o medidas de políticas establecidas por el GOES. 4. La flexibilización de los procedimientos y requerimientos del Banco para la ejecución del Componente Mitch y Terremotos en vista de la prioridad y urgencia que implicaba, fue un factor que permitió lograr los buenos niveles de desempeño complementado por la eficiencia del personal del MAG involucrado en este Componente. - 64 - - 65 -