Report No. PID8313 Project Name Uganda-National Agricultural Advisory (@) Services Program Region Africa Regional Office Sector Agricultural Extension; AG - Agency Reform Project ID UGPE44695 Borrower(s) GOVERNMENT OF UGANDA Implementing Agency Address MINISTRY OF AGRICULTURE, ANIMAL INDUSTRIES, AND FISHERIES PO Box 102, Entebbe, Uganda Contact Person: Mr. Silim Nahdy, NAADS Secretariat Tel: (256 41) 34 54 52 Email: ascimO4@infocom.co.ug Environment Category B Date PID Prepared November 9, 2000 Projected Appraisal Date September 11, 2000 Projected Board Date February 15, 2001 1. Country and Sector Background Agriculture in Uganda has grown steadily (over 4% per annum) for over ten years. The recent growth has accompanied a profound re-orientation of the public sector's role in the agricultural economy. This re-orientation included significant liberalization of the agricultural economy and complementary institutional reforms which down-sized, privatized, and decentralized public agricultural institutions. While the recent growth provides momentum for rural development in Uganda, it builds from a very low base. Real agricultural GDP in the early 1990s had yet to re-attain the level achieved in 1970. The real incomes of rural people today are still well below their 1970s levels. The main sources of agricultural growth over the past ten years - expansion of area under cultivation, and a substantial improvement of incentives for farmers to produce - have largely been played out as sources of sustained growth. While area expansion will continue for some time, land is becoming scarcer and expansion will not be able to keep pace with population growth in rural areas. Even if it could, the growth impact of expansion would diminish over time as it is primarily marginal and remote lands which are available for exploitation. Consequently, area expansion by itself will not even be sufficient to maintain rural per capita incomes at their present levels. The other source of recent growth in the sector, improvement in the incentive regime, came from the liberalization of the economy. Further gains can still be made through improving the functioning of agricultural commodity markets and reducing marketing margins. While such gains will help to create a growth-nurturing environment, they will be of a one-shot" nature. They will not provide a sustained impetus for continuous growth in the sector. The Need for Higher Productivity and Higher-Valued Products. As area expansion and further gains in the incentive regime are unlikely to support sustained growth in the future, Uganda must look to other sources of growth for the agricultural sector if rural development is to continue. The two possible sources for growth are, on the one hand, increases in the productivity of land and labor, and on the other hand, a shift in production patterns from low-value staples to higher value commodities. Past growth occurred without the support of either. Since the sixties, land and labor productivities have both suffered secular decline while production patterns have exhibited a structural shift towards relatively low-valued food crops. There is great scope for improvement on both counts. With agriculture being the principle economic activity in rural areas, it is here that the Government's strategy for the revitalization of rural development is anchored. The first pillar of the strategy, increasing agricultural productivity, focuses on transforming Uganda's "low-input / low-output" agriculture into a modern science-based agriculture capable of sustaining growth in the sector and raising the incomes of farm families. At the level of the farm, this would require better access to improved technologies and to modern inputs. It would also require increases in farmer know-how. The second broad pillar of the strategy focuses upon helping production patterns to shift from low-value staples to higher-valued commodities. Here, Uganda has an important factor in its favor - the long tradition on farms in many parts of the country to produce at least small amounts of coffee for market. The strategy would be one of seeking to build upon and expand this tradition of partial market-orientation. The strategy would seek ways to help farmers to produce a variety of products, some of them of higher value for commercialization in order to be able to increase their household incomes. Some of the measures necessary to pursue this strategy are similar or complementary to those required to raise productivity. At the level of the farm, they would include acquiring the knowledge of how to produce and to market higher-value crops, greater access to the required inputs, and better access to reliable outlets for such products. The public sector has a role to play in creating the conditions under which these transformations can occur at the level of the farm. This is recognized in the Government's Statement to the December 1998 Consultative Group Meeting entitled: Towards a Sector Wide Approach: Developing a Framework for the Modernization of Agriculture in Uganda and finalized in the March 2000 Plan for Modernization of Agriculture: Eradicating Poverty in Uganda which calls for public sector investments and programs in a number of areas including the following: (a) agricultural research and extension; (b) the establishment and maintenance of a regulatory and policy environment in which markets and distribution chains for modern inputs (including credit, fertilizer, seeds, equipment, etc) and for farm products can develop more fully; (c) improved rural and agricultural education; (d) the establishment of clearer property rights to land in order to encourage investment and efficient use of natural resources; and,(e) development of infrastructure such as rural roads which will be needed for growth in the marketing of both inputs and outputs. A Focus on the Relevance of Agricultural Research and Extension. While public sector support is needed for a variety of activities if agricultural growth is to be achieved, as indicated above, Uganda's Plan for the Modernization of Agriculture (henceforth PMA) assigns first priority to agricultural extension and research. Further, focus is placed on achieving greater relevance in both the research and extension programs. The analysis underlying the PMA suggests that the low productivity observed in Ugandan agriculture today is not the consequence of a lack of research activity, -2 - nor of a lack of extension activity. In fact, well-established institutions are reasonably active in both research and extension. Rather, the low productivity of Ugandan farmers can be traced to a lack of adequate interface between research and extension, on the one hand, and farmers on the other. Correspondingly, at present, farmers' needs do not sufficiently drive the orientation of research and extension efforts (causing lack of relevance), while the know-how and the technologies which are produced by the system, even when relevant, are not widely taken up by farmers (suggesting lack of effectiveness in the transfer of technologies). Based on this analysis, the emphasis of Uganda's strategy is being placed upon improving the relevance as well as the effectiveness of the process of technology generation and transfer, i.e. of the agricultural research and extension programs. This means redoubling efforts in the extension area, but now under institutional arrangements which have been transformed to ensure that extension would become more directly responsive to farmers' needs. It also suggests maintaining the program of investments in agricultural research, but as in extension, now under a set of institutional arrangements transformed so as to improve the responsiveness of agricultural research activities to the needs of extensionists and of the farmers they serve. The Government's vision as outlined in the PMA is for a more relevant and responsive extension program which would be achieved through a redesign of the public extension program according to the following guiding principles: n focusing the content of both programs on enhancing intensification and productivity of small-holder agriculture;n increasingly, bringing research closer to (and even into) farmers fields;n making linkages between farmers, extensionists, and researchers more demand driven;n further decentralization of responsibilities for extension to the level of the sub-counties;n contracting out field extension, technical-backstopping, and training of extensionists;f allowing for a plurality of providers and methodologies at the field level; and n learning from, and building on, successful experiences. The vision which emerges from the PMA, as described above, is widely shared among the various stakeholders including government officials, farmers, NGOs and civil society, and the community of donors. This vision and its accompanying guiding principles for agricultural research and extension are also consistent with the those advocated in the recent FAO/World Bank publication entitled Agricultural Knowledge and Information Systems for Rural Development, Strategic Vision and Guiding Principles (FAO and World Bank, Rome 2000). 2. Objectives The overall development objective of the program would be to assist poor men and women farmers to become aware of, and to be able to adopt, improved technology and management practices in their farming enterprises so as to enhance their productive efficiency, their economic welfare, and the sustainability of their farming operations. 3. Rationale for Bank's Involvement World Bank support has been instrumental in the development of NAADS in several respects: (1) synthesis of the experience to date with agricultural services and rural development in Uganda; (2) development of guiding principles for agricultural advisory services in Uganda based upon the Ugandan situation and international experience; and (3) coordination of an effort to encourage all interested donors to harmonize their support -3 - to agricultural services in Uganda through agreeing to common support to NAADS. 4. Description The project would finance five components: (1) Advisory and Information Services to Farmers; (2) Technology Development and Linkages with Markets; (3) Quality Assurance - Regulations and Technical Auditing of Service Providers; (4) Private Sector Institutional Development; and, (5) Program Management and Monitoring. A brief description of each component is found directly below while a more detailed description of each of the components is contained in Annex 2.Component 1 - Advisory and Information Services to Farmers. This component would support initiatives by men and women farmers, working together in groups with their Sub-county government, to contract agricultural advisory services. Matching grants would be channeled from the national level of Government through the districts for farmers (through farmers' fora and their local governments) to use in financing such contracts. Services which would be contracted under this mechanism would include Program Orientation and Group Mobilization for farmers, Participatory Planning, Farm Advisory Services, and Information and Communications.Component 2 - Technology Development and Linkages with Markets. This component would foster strong linkages among farmers, advisers, and researchers and between farmers and markets by making funding for technical support available to farmers and their farm advisors. Funds would be available at the District level with which to contract the services of researchers and others with relevant expertise to work with farmers and farm advisors in farmers' fields on specific technology, market development and adaptation. The following areas will be supported: On-Farm Technology Development and Market Linkage Development and District/National Priority Projects and Training Events.Component 3 - Quality Assurance - Regulations and Technical Auditing of Service Providers. Under this component, the NAADS Board and Secretariat would set standards and provide a regulatory framework for service providers, by setting and enforcing standards for qualification and performance, and developing a model contract. Specific activities to be funded include Standard Setting and Regulation of Service Providers and Technical Auditing of Service ProvidersComponent 4 - Private Sector Institutional Development. This component would establish a program to assist firms and other institutions to become eligible for award of contracts to provide services to farmers, within the NAADS program. Specific activities to be funded include Local Service Provider Development and National Representative Organizations/Institutions Support. In addition, the programme will provide a comprehensive package of benefits, including training, which will enable the transition of employment status of existing public sector extensionists to employment in the private sector. Component 5 - Program Management and Monitoring. This component will establish and support institutional entities at both the National and District levels of Government, which shall co-ordinate and administer the program. At National level, this will include establishment and maintenance of the NAADS board and executive. At Local Government levels, district and sub-county NAADS co-ordinators will be supported to facilitate bottom-up planning process of the program, liaise with other stakeholders to provide consultation and dialogue. It will support the facilitation, co-ordination, financial management and reporting, financial auditing of the programs financial flows, and oversight of service contracts. In addition, a Management Information - 4 - System will be established for monitoring the program, as well as baseline surveys and data gathering procedures for impact evaluation. Specific activities to be funded include the expenses related to establishing and operating the NAADS Board and Executive, planning - design, institution, oversight and assistance with the planning processes, Training and Capacity Building for NAADS staff, and Management Information System and Impact Evaluation. 5. Financing Total ( US$m) IDA 45 BORROWING AGENCY 9.12 INTERNATIONAL FUND FOR AGRICULTURAL DEVELOPMENT 17.5 LOCAL GOVTS. (PROV., DISTRICT, CITY) OF BORROWING COUNTRY 10.8 BILATERAL AGENCIES (UNIDENTIFIED) 23.34 FARMER ORGANIZATIONS 2.16 Total Project Cost 107.92 6. Implementation MAAIF will have overall national responsibility for the program, with oversight by MFPED, while Sub-county and District Local Councils and Administrations will be responsible for support and supervision at their levels. Primary responsibility at grassroots will be vested in the farmer groups that will be the prime clients of the advisory services -- and their elected Farmer Forums at Sub-county, District and National level. The NAADS Board will be constituted and charged with the role of advising and giving guidance on program policy and strategy issues and facilitating, supervising and supporting the NAADS Executive. The NAADS Board will answer to the Permanent Secretary, MAAIF. In addition to their oversight duties, Board members will from time to time be given specific additional tasks to address program issues, assist in promotion and troubleshoot problems. The Board will be comprised of the following representatives: eight representatives of farmers and Farmer Forums; two representatives of agro-industry; one representative of the Local Government Authorities Association; one representative each from MAAIF, MFPED and NARO; and the one representative of the NGO/academic sector. The Board will elect a Chairperson from among its members and will meet not more often than twice per year. The program Director will be the Secretary to the Board. The NAADS Secretariat will report to the Board and will be responsible for the implementation of the program. The Secretariat will have a relatively small core staff (initially under 10 professionals) which would include a Program Director; a Financial Controller; a Planning Manager; an Agriculture and Extension Manager; several Program Supervisors; and a Community Development Manager. The members of the Secretariat will hold the responsibility for planning, direction, support and management of operations in their respective field of competence. They will be given a wide measure of discretion and authority. They will be competitively recruited on the open market and will be given fixed term contracts. Since the majority of decisions and functions in routine management will be the remit of the appropriate Farmer Forum, Sub-county and District personnel, the major task of the Secretariat members will be in overall planning, technical guiding and oversight of operations; and - 5- performing a catalytic and promotional function in advancing program coverage and impact. The Secretariat will meet formally at least monthly and will have authority to co-opt such others of the management staff or external advisers into its meetings as needed. During initial stages of the Program, a group of additional contracted staff (perhaps four to five professionals) would be needed to help initiate the program in Districts and Sub-counties as they enter the Program. Local Governments at District and Sub-county level would be responsible for most local administrative and regulatory aspects and support requirements for NAADS. Where new functions are to be carried out, these will be added to the appropriate organs of the local authority. Parish, Sub-county and District Councils will, at their respective levels, be responsible for policy, assessment of effectiveness and general oversight of the NAADS, and voting counterpart financial contributions. In each participating District, the program will finance contracting by the District of a NAADS Co-ordinator. The Co-ordinator will be responsible for ensuring the smooth operation of NAADS program and integration of NAADS into the District Annual Work Plan and Budget. At Sub-county level the program will finance the incremental operating costs of a staff member to be assigned as Sub-county NAADS Co-ordinator.Farmers institutions will be the cardinal element of the program and their effectiveness will be the principal determinant of NAADS and PMA success. The purpose of formation of these farmers groups is to create institutions for farmer empowerment. Their main forms and roles will be as follows: n Farmer Groups will be the nuclear, grass roots NAADS institutions and NAADS will set certain minimum requirements and conditions for recognizing groups.n Farmer Fora will be the main institutional structures for increasing participation of farmers. Initially, where they do not already exist, they will be formed by an open and transparent elective process among farmers groups and associations, at Sub-county, District and National levels; formation and support of the Fora will be initiated and fostered by NAADS, utilizing both local Community Development staff from the Sub-county and District, Change Agents and specialist service providers as professional advisers as appropriate. Farmers' Fora will have a generic set of rights and responsibilities as participants in the program which may be amended to suit site-specific circumstances - these would include:- planning, costing and contracting services and monitoring and evaluation- determining resource allocations and priorities and performance evaluation service providers- review of local government plans for agricultural development- feed-back and feed-forward between Forums at different levels- at national level to furnish the farmer element of NAADS Board membership.Service Providers will be individuals, small groups of advisers, consultancy and professional companies, parastatal agencies, NGOs, academic institutions, or commercial companies. As the number of existing service providers is currently relatively small, the NAADS program itself would devote resources and attention to the development of the service provider sector, helping interested institutions, firms, and individuals to establish themselves as potential service providers under NAADS. The main role of these service providing agencies will be to arrange and perform the advisory, research and development services in response to the demands of farmers, Sub-counties, Districts and the NAADS Secretariat. Agricultural trading, input supply and produce marketing, storage, processing and manufacturing organizations will also be important contributors.Organograms for Staffing, Program Planning and Operations are attached as Annex 16. -6- 7. Sustainability At the outset (for the first five years of the Program), NAADS would have budgetary integrity in that it would be scaled at the level established within the Government's Medium Term Expenditure Framework (MTEF) and the PMA. The longer term sustainability of the program would be ensured by the gradual shifting of the burden of cost to user-farmers and local governments. 8. Lessons learned from past operations in the country/sector A review of the Bank's involvement in agricultural extension projects reveals several lessons with regard to successful extension projects. As a general principal, projects have not been successful when they have lacked a clear statement of goals and of the means to be employed in achieving the goals. The clear objective of this project would be to assist poor farmers in Uganda to become aware of, and to be able to adopt, improved technology and management practices in their farming enterprises so as to enhance their productive efficiency, their economic welfare, and the sustainability of their farming operations.The success of most extension programs is particularly tied to the responsiveness of program design to the specific needs of the client. Thus, a single extension model cannot be designed for global application, and the participation of local professionals and beneficiaries throughout the project planning and implementation stages is of critical importance. The decentralized, demand-driven nature of the proposed project is consistent with this lesson from experience. A further general characteristic of successful extension programs is that a responsive training program has been established for the staff of the extension system. A training program has been of fundamental importance in providing extension staff with the skills necessary for their jobs and to maintain their awareness of the development of new technologies. The proposed project explicitly addresses this need through its training component.Flexibility to meet the needs of a heterogenous population of beneficiaries has often been difficult to achieve when the delivery of extension services has been limited to one delivery mechanism. In that this project will make it possible for sub-counties and beneficiaries to contract any qualified institution or entity to deliver advisory services will permit great flexibility in the types of delivery mechanisms which might be employed. Financial sustainability has frequently been a problem in past extension projects, as has the government's ability to cover recurrent costs of a typical extension system, even during the life of the project. The nature of the cofinancing matrix adopted for the proposed project will address both of these issues. First, the financial burden will be shared among beneficiaries, sub-counties, districts, and the national government. Secondly, the relative share of the burden covered by each will gradually be shifted away from the national government toward beneficiaries and sub-counties. This arrangement will improve the likelihood that the proposed project will be sustainable.In a number of past projects, appropriate technologies have not been available for transfer to beneficiaries. This problem has been closely tied to the lack of systematic linkages between agricultural extension and the agricultural research community. The proposed project, through the use of subject matter specialists and the monthly meeting format, is expected to result in a close linkage and two-way feedback system between extension and research. With regard to the lack of available technologies, this is a problem which does not currently exist in Uganda. In fact, it is - 7- purported that a large backlog of available but as of yet unadopted technologies already exists. Further, in order to ensure the continued development of new agricultural technologies, an IDA-financed project to support and strengthen the agricultural research system in Uganda became effective earlier this year. 9. Program of Targeted Intervention (PTI) N 10. Environment Aspects (including any public consultation) Issues Consultations were held with government and non-government stakeholders between March and October, 2000. Their comments have been taken into account and incorporated in the EMP. In addition, a pest management plan was prepared as part of the environmental analysis and is available in the project files. 11. Contact Point: Task Manager David J. Nielson The World Bank 1818 H Street, NW Washington D.C. 20433 12. For information on other project related documents contact: The InfoShop The World Bank 1818 H Street, NW Washington, D.C. 20433 Telephone: (202) 458-5454 Fax: (202) 522-1500 Web: http:// www.worldbank.org/infoshop Note: This is information on an evolving project. Certain components may not be necessarily included in the final project. This PID processed by the InfoShop during the week ending November 10, 2000. - 8 -