Documentof TheWorldBank FOROFFICIALUSEONLY ReportNo: 35457-ET PROJECTAPPRAISALDOCUMENT ONA PROPOSEDCREDIT INTHEAMOUNT OFSDR37 MILLION (UStS54MILLIONEQUNALENT) TO THE FEDERAL,DEMOCRATICREPUBLICOF ETHIOPIA FORA RURALCAPACITYBUILDINGPROJECT May26,2006 EnvironmentandSociallySustainableDevelopmentDepartment EasternAhca AfricaRegion This documenthas a restricteddistributionandmaybe usedbyrecipientsonly intheperformance of their official duties. Itscontentsmaynot otherwisebedisclosedwithout WorldBankauthorization. CURRENCY EQUIVALENTS (Exchange Rate Effective - April 10, 2006) CurrencyUnit = Birr 8.65Birr = US$1 US$1.4614 = SDRl FISCALYEAR July 8 - July7 ABBREVIATIONSAND ACRONYMS AgTVET Agriculture Technical and Vocational Educationand Training ARF Agricultural ResearchFund ARTP Agricultural ResearchandTraining Project ASDF Advisory Service DevelopmentFund AU Alemaya University BOARD Bureauo f Agriculture and Rural Development BoFED Bureauo f Finance and Economic Development CAS Country Assistance Strategy CGIAR Consultative Group for InternationalAgricultural Research CIDA Canadian InternationalDevelopmentAgency DAs Development Agents EAR0 Ethiopian Agricultural ResearchOrganization ECEX Ethiopian Commodity Exchange EIAR Ethiopian Institute for Agricultural Research FA0 FoodandAgriculture Organization FARAH Financial Accounting Reportingand AuditingHandbook FASF Farmers' Advisory Service Fund FHH Female HeadedHousehold FTC Farmer Training Center FREG Farmer-Researcher-Extension Group FMR FinancialMonitoringReport FSC Federal Steering Committee GE Gender Equality GDP Gross Domestic Product GoE Government o f Ethiopia HIPC HighlyIndebtedPoor Country IA ImplementingAgency FAD International Fundfor Agricultural Development ILRI InternationalLivestock ResearchInstitute IPR Intellectual Property Right JICA Japanese International CooperationAgency LANlwAN LocalAreanetworkIWideAreaNetwork MHH Male Headed Household MoARD MinistryofAgriculture andRuralDevelopment MoFED MinistryofFinanceandEconomicDevelopment NARS National Agricultural Research System PASDEP Program for Accelerated and Sustained Development to EndPoverty PIM Project ImplementationManual PMU Project Management Unit RARF Regional Agricultural ResearchFund RARI Regional Agricultural ResearchInstitute RC Research Center RCBP Rural Capacity BuildingProject REFAC Research-Extension-FannerAdvisory Council RSC Regional Steering Committee SA Special Account S E Sector Investment Loan SDPRP Sustainable Developmentand Poverty ReductionProgram SMS Subject Matter Specialist TA Technical assistance TVET Technical andVocational Education and Training USAID United States Agency for InternationalDevelopment WAD Women's Affairs Department Vice President: Gobind T. Nankani Country Managermirector: Ishac Diwan Sector Manager: KarenBrooks Task Team Leader: David J. Nielson ETHIOPIA Rural CapacityBuildingProject CONTENTS Page A. STRATEGICCONTEXTAND RATIONALE ................................................................. 1 1. Country and sector issues.................................................................................................... 1 2. Rationale for Bank involvement ......................................................................................... 5 3. Higher levelobjectives to which the project contributes.................................................... 5 B . PROJECTDESCRIPTION ................................................................................................. 6 1. LendingInstrument............................................................................................................. 6 2. Project Development Objective andKey Indicators........................................................... 6 3. Project Components............................................................................................................ 7 4. Lessons Learned andReflected inthe Project Design...................................................... 19 5. Alternatives Considered.................................................................................................... 21 C IMPLEM~NTATION . ........................................................................................................ 21 1. Partnership Arrangements................................................................................................. 21 2. Institutional and ImplementationArrangements .............................................................. 22 3. Monitoring and Evaluation of OutcomesResults............................................................. 23 4. Sustainablllty..................................................................................................................... * . . 24 5. Critical Risks andpossible Controversial Aspects ........................................................... 25 6. Loadcredit conditions and covenants............................................................................... 27 7. Economic and financial analyses...................................................................................... 28 8. Technical........................................................................................................................... 29 9. Fiduciary ........................................................................................................................... 30 10. SociaVGender................................................................................................................ 31 11. Environment.................................................................................................................. 33 12. SafeguardPolicies......................................................................................................... 33 13. Policy Exceptions andReadiness.................................................................................. 33 Annex 1: Countryand Sector or ProgramBackground ......................................................... 34 Annex 2: Major RelatedProjectsFinancedby the Bankandlor other Agencies .................37 Bank-financed ........................................................................................................................... 37 Annex 3: Results Framework and Monitoring ........................................................................ 38 Annex 4: Detailed Project Description ...................................................................................... 52 Annex 5: Project Costs............................................................................................................... 84 Annex 6: Implementation Arrangements ................................................................................. 85 Annex 8: Procurement ................................................................................................................ 97 Annex 9: Economic and FinancialAnalysis ........................................................................... 101 Annex 10: Safeguard Policy Issues .......................................................................................... 109 Annex 11: Project Preparation and Supervision ................................................................... 114 Annex 12: Documents in the Project File ............................................................................... 115 Annex 13: Statement of Loans and Credits ............................................................................ 116 Annex 14: Country at a Glance ............................................................................................... 117 Annex 15: MAPIBRD33405 ................................................................................................... 119 ETHIOPIA RURALCAPACITY BUILDINGPROJECT PROJECTAPPRAISAL DOCUMENT AFRICA AFTS2 Date: May 24,2006 Team Leader: DavidJ. Nielson Country Director: Ishac Diwan Sectors: Agricultural extensionandresearch Sector ManagerlDirector: KarenMcconnell (EIO%);Vocational training (20%) Brooks Themes: Other rural development (P) Project ID: PO79275 Environmentalscreeningcategory: Partial Assessment LendingInstrument: Specific InvestmentLoan [ ]Loan [XI Credit [ ]Grant [ ]Guarantee [ ]Other: For LoanslCreditslOthers: Total Bank financing (US$m.): 54.00 B O ~ O W E ~ ~ C ~ I E N T 0.00 0.00 0.00 INTERNATIONALDEVELOPMENT 18.00 36.00 54.00 INTERNATIONALDEVELOPMENT AGENCY (CIDA) Total: 22.00 49.00 71.00 Borrower: FEDERALDEMOCRATIC REPUBLIC OFETHIOPIA Addis Ababa Ethiopia ResponsibleAgency: MinistryofAgricultureandRuralDevelopment Addis Ababa Ethiopia Estimateddisbursements(Bank N/US$m) TY 07 08 09 10 11 12 h u a l 24.60 12.40 6.40 5.80 4.80 0.00 hmulative 24.60 37.00 43.40 49.20 54.00 54.00 Project description [one-sentence summary of each c o m ~ o n e nRe$ PAD B.3.a, Technical ~ Annex 4 Component 1- Agriculture Technical Vocational Education andTraining (TVET) Capacity Building: This component would assist the Government to develop a longterm planfor the colleges that would positionthemto serve the changing needs of an increasingly market- and private sector drivensector. Component 2 - Agricultural Extension Services: The goal ofthe Agricultural Extension component would beto improve the effectiveness o fthis agricultural extension programas it scalesup, particularlywith regardto its capacity to respondto the expressedneeds o f farmers (especially market-oriented farmers) to enhance women's participation and gender equality (GE) mainstreaming inall aspects of the extension system and to support the emergence o fnon-public sector agricultural services as an additional feature o f extensip services inEthiopia. Component 3 -Agricultural Research: The core objective of the agricultural research component would be to facilitate institutional strengthening of the NARSby enhancing the participation ofkeystakeholders inpriority setting, resource allocation and implementation and wherepossible funding, to re-enforce NARS capacity andmakeit more efficient and effective in generatinganddisseminating client-demanded and market-oriented technologies and information. Component 4 -ImprovingInformationand CommunicationSystems within MoARD: The ICT capacitybuildingcomponent would strengthen MoARD's capacity to coordinate, monitor and evaluateinitiatives inthe agricultural sector bybuildingE T capacity at federal, regional, woreda andFTC levels. Component 5 - Development of Agricultural Market Institutions: This component would support analytical work gearedtowardunderstandingand developingpractical solutions for market constraints, It would also support the development of an Ethiopian Agricultural Commodity Exchange, Finally, it would supportstrengtheninganddevelopment of sanitary and phytosanitary standards andthe institutions needed to utilize them. Component 6 - Project Management: This component would support the establishment of a Project Management Unit (PMU) underthe direction o fFederal and Regional Steering Committees. Which safeguardpolicies are triggered, ifany? .Re$ PAD D.6, TechnicalAnnex 10 Environmental Assessment (OPIBPIGP 4.01) InvoluntaryResettlement (OPIBPI 4.12) Significant, non-standard conditions, if any, for: Re$ PAD C.7 Boardpresentation: None Loanlcredit effectiveness: (a) The Recipient has established a financial managementsystem for the Project satisfactory to the Association. (b) The Project Implementation Manual has been adopted by the Minister of MoARD satisfactory to the Association. (c) The PMUhasbeen establishedwith terms o freference, facilities andcore staffing acceptableto the Association, consisting of, inter alia, project coordinator, research- extension-farmer linkages coordinator, communications andtraining specialist, gender specialist, financial management specialist, procurement specialist, and monitoringand evaluation specialist. Covenants applicable to project implementation: None A. STRATEGICCONTEXTAND RATIONALE 1. Countryandsector issues 1. Ethiopia i s one of the most populous countries in Sub-SaharanAfrica and also one of the poorest. At US$130, Ethiopia's per capita GNI i s significantly less than the Sub-Sahara African average. Although the country has abundant resources and good potential for development, poverty i s pandemic and often linked to environmental and natural resource degradation, Approximately 44 percent of people fell below the basic needs poverty line in the last comprehensive national survey (1999/00), though a forthcoming new survey i s expectedto show a significant decline inpoverty. 2. Over the last decade, the Govemment of Ethiopia (GoE) has been implementinga reform program aimed at poverty reduction through rapid economic growth and macroeconomic stability. The program was making good headway inpoverty reduction in the 199Os, but was interrupted by the conflict with Eritrea inthe last decade. GoE resumed its efforts following the conclusion o f the conflict by developing the Sustainable Development and Poverty Reduction Program (SDPRP) in 2002. Despite numerous shocks, such as the drought in 2002-2003, implementation o f the SDPRP has resulted in important recent gains, especially on human development indicators, transport, the investment climate, small town development, andthe fight against food insecurity. Pro-poor spending as a share of the budget has risen from 28% in 1999/2000 to 57% in 2004105. The forthcoming World Bank Country Economic Memorandum 2006 (CEM) on Growth and Governance finds that important progress has been achieved in the past decade, largely driven by improved institutions, including at the regional and local levels, which have been able to deliver a scaling-up o f services and infrastructure, 3. GoE is nearing completion o f an ambitious new poverty reduction strategy, called the Plan for Accelerated and SustainedDevelopment to EndPoverty (PASDEP). Buildingon an analysis o f the inputs requiredto reach the MDGs, PASDEP will aim to accelerate the progress achieved in the first strategy. The five year program centers around eight priority themes: (i) commercialization o f agriculture and promoting much more rapid non-farm private sector growth; (ii)geographical differentiation; (iii)population; (iv) gender; (v) infrastructure- especially roads, energy, and irrigation; (vi) risk management and vulnerability; (vii) scaling up service delivery to reach the MDGs; and (viii) employnent. Cutting across these themes i s an important emphasis on good governance, with plans to strengthen the civil service, accelerate local empowerment, and increasetransparency and accountability. 4. After the country's first openly contested elections were held in May 2005, political tensions within the country have become stronger and more open. Heightened risks on the governance front have become apparent, with concerns that the political tensions have the potential to adversely impact economic governance and the larger development agenda. For its part, the Govemment has re-affirmedat the highest levels its continued commitment to poverty- reduction andbroad-basedgrowthbenefitingall Ethiopians. 5. In light of the above, the proposed Interim Country Assistance Strategy (ICAS), which will be discussed by the Board on May 25, 2006, aims to support Govemment in further strengthening its institution building and governance reform agenda, as part o f a coordinated multi-donor effort. The ICAS underlines the important role o f governance in fostering development of the private sector, enabling improved service delivery by local governments, and underpinningan expansion of critical economic infrastructure. Elements o f the ICAS include 1 support for: meritocratic civil service; public financial management; provision of basic services ina fair and accountable way; promotionof free enterprise; improved agricultural productivity; anddevelopment ofinfrastructure. 6. Agriculture contributes about 40 percent oftotal GDP andwithin agriculture, 64 percent of value addedcomes from crops, 23 percent from livestock, and 13 percent from forestry. Exports (coffee, livestock products, chat, oilseeds, pulses and horticulture) represent about 10 percent o f agriculture GDP. Agricultural growth has averaged 2.6 percent over the period 1994195 to 2004105 with a wide variation around trend due to rainfall. Growth has largely been driven by expansion in land area; even so, area cultivated per family (and food productionper family) has been declining over the longer term. Agricultural growth has not been highenough to allow it to play the leading role in national development and poverty reduction envisaged under the government's agriculture-led industrialization strategy. Since the 2002103 drought, growth inthe sector has rebounded, and has averaged about 10 percent per year, led by rapid growth in exports, especially livestock products, oilseeds, pulses, andhorticulture. 7. For much of the 1990s the Government's support to agricultural growth was predicated on the assumption that the critical constraint lay on the supply side, andthat a centralized roll out of technological packages combining fertilizer, seed, and instructions on how to use them would break through the supply constraint and lead to sustained growth. The extension service was fully mobilized to implement the roll-out, including the distributionof inputs and collection of credit at the endo fthe season. 8. The implementation of the program allowed food production to grow modestly, but participants in the program did not become more fully enfranchised decision makers because they had few options other than to apply the packages as delivered. Although women farmers contribute about 60 percent of agricultural labour in Ethiopia', women have very low access to agriculture extension services.* The role o f the state in provision o f credit crowded out private agents in input and output markets. Thus a focus on the available technological solutions to supply constraints clarified the need for generating more efficient and sustainable 'baskets' of technological options and a stronger focus on the demand side through rural markets and improving the decision-making skills and responsibilities o f producers. The Government is now placing an emphasis on assisting producers to be successful decision makers, to improve incentives to market and invest, and to protect investments by reducing the economic loss associated with unmanaged risks and periodic adverse events, such as drought. The need for such a change in course is widely understood and embraced by many, and the activities supported underthis operation represent a modest and cautious step on a new path. 9. A major factor that has to date not received concerted attention inthe agricultural sector is that o f HIVIAIDS. Ethiopia is one o f the most seriously affected countries in the world (MoH, 2004). The impact o f AIDS is evident in rural areas with increases in labour shortages, female headedhouseholds and AIDS orphans, all o f which put pressure on community safety nets and contribute to increasedpoverty. The most infectedof Ethiopia's people are young women in the 15-24 year old age group. Agriculture programs that strengthen resistance and resilience to 'World Bank, 2004, Ethiopia'sStrategic Country Gender Assessment, WashingtonDC: The World Bank. Estimatedat 9% by2001AgricultureSurveyData. 2 HIVlATDS and avoid increasing the risk of infection need to be im~lernented.~ Mainstreaming HIVlAIDSprogramming into agriculture programming is necessaryto assist inimplementingthe multi-sector HIVlAIDS responsedown to the kebele leveL4 10, The Government's Strategy. Ethiopia's draft Program for Accelerated and Sustained Development to EndPoverty (PASDEP), now beingfinalized, emphasizesrural development led by agricultural growth, improved governance and decentralization of delivery of services, and the reduction o f vulnerability. Relative to the previous poverty reduction strategy, PASDEP places much greater emphasis on commercialization of agriculture, diversification of production and exports, and private sector investment in order to help farmers to move beyond subsistence farming to small-scale market oriented agriculture. Under PASDEP, these objectives would be pursuedthrough a range of policies and instrumentsincluding: (i) modernization of the research and extension systems and making them more demand-driven while providing complementary training through the Technical and Vocational Education and Training (TVET) program to build capacity to deliver services to farmers and increasing access to women farmers5; (ii) enhancing competition and increasing efficiency inagricultural input and output markets; (iii) strengthening the rural credit system; (iv) improving irrigation and water management; (v) increasing land tenure security; (vi) creating a conducive investment climate for commercial agriculture; and (vii) reducing the vulnerability of families livinginregions prone to drought. 11. As part of its commitment to an agriculture-led growth strategy, and as part of a broader Education and Training Policy, the Government o fEthiopiahas initiateda substantial investment toward improving the productivity o f its rural people. This investment in the development o f agriculturally-oriented human capital was launched through the establishment of 25 junior college-level residential agriculturally oriented Technical Vocational Education and Training (TVET) programs. These agricultural vocational schools form part of a more general TVET thrust o f the government that is aimed at participants in other sectors as well, In addition to training students in a wide variety o f agricultural specialties, the Agricultural TVET program is being usedto retool and expand Ethiopia's Agricultural Extensionprogram, especially to meets the needs o f a more market-oriented and diversified agriculture. Ina second stage o f expansion now beinglaunched, the TVET program will provide a range o f training options for entrants into a growing private agribusiness sector. TVET colleges will also put measuresinplace to increase the number of female trainees and female instructors. 12. This formal training is the first step of an ambitious scaling-up and intensification of the extension program. The offices o f field extension workers (known in Ethiopia as Development Agents - or DAs), are beingupgraded physically and transformed into FarmerTraining Centers (FTCs)-community-level office and meeting buildingsto house the DAs and to serve as places for farmers and communities to gain access to a wide variety o f technical and business skills for agriculture and rural enterprises. The number o f DAs will increase from 15,000 in2002 to some 66,000 by 2007. Three DAs (one each for crops, livestock, and natural resources) are being stationed at each FTC, an increase from one DA per office as has been the case in the past, In addition to expanding the scale o f the service, the scope of services offered i s also being Drimie, S & Tafesse, G.2005, RENEWALEthiopia Background Paper: HIHAIDS, Food and NutritionSecurity, IFPRI. Dr.Aberra, StateMinister for Agriculture Development, closingremarks for Joint FAO-MoARDWorkshop on HIViAIDS for Senior Staff o f MoARD, December 17,2005. The PASDEP states that agriculture extension services will be delivered to all 2.6 million FHHand30% o fall married women farmers inMHH. 3 increased. A much wider range o f technical packages than were available in the past i s being developed in order that DAs would have a portfolio of technologies and associated information available for transfer to farmers - and in this way, would be able to better match recommendations with local agro-ecological and socio-economic conditions. 13. The expansion of the extension program is only partially complete. Around half of the plannedFTCshavebeenconstructedwith the balance to be completed duringthe next two years - and even where completed, most facilities are quite rudimentary. Most of the original 15,000 DAsand ofthe 51,000 newDAsare inthe process ofbeingtrained -or haverecently completed training. Budget limitations have constrained the provision o f furniture, equipment, and other supplies neededto makeFTCs operational. 14. Infrastructure development and capacity building for the Ethiopia National Agricultural Research System (NARS) are currently supported by the Agricultural Research and Training Project (ARTP) which is financed bythe World Bankandthe International Fundfor Agricultural development (IFAD); the project has been effective since February, 1999. A request for an extension o f the ARTP implementationperiodhas recently been submitted bythe Government to the Bank andthe project is presentlyexpectedto be completed by December 31,2006. 15, Inaddition to the successful establishment of new Research Centers (RCs) in six of Ethiopia's more marginal agro-ecological zones, ARTP has made good progress inrehabilitating and upgrading of existing laboratory and field facilities at the EthiopianInstitute o f Agricultural Research (EIAR), the Regional Agricultural Research Institutes (RARIs), RCs and at Alemaya Agricultural University (AU). There has also been substantial impact o f the human resource development (HRD) program: by the completion o f ARTP about 350 MScs, 160 PhDs, approximately 200 short-term trainees who participated in overseas training programs, and several thousand short-term trainees who benefited from local trainingprograms, will have been successfully supported through ARTP. 16. Significant progress was made in improving the coordination o f the NARS. In order to make research more client-oriented and demand-driven there has been an intensive effort to develop institutional mechanisms for closer research-extension-farmerlclient linkages and collaboration in order to establish more effective working relationships with farmers and agri- businesses in setting research priorities, working on collaborative on-farm research and in assessingthe relevance and impact of researchresults. ARTP also enabledthe establishment o f a competitive national "Agricultural Research Fund" (ARF); two rounds o f "Calls" have been successfully completed. ARTP has enabled research institutes to accelerate identification and development o f a wide range of agricultural technologies and know-how adapted to the different agro-ecologies. 17. However, the task o f effectively preparing the Ethiopia NARS for its wide-ranging mandate i s far from completed. Lessons learned under ARTP clearly indicate that although a good basis has been created for acceleratedtechnology generation, dissemination and adoption, to achieve and sustainthis will require continued andintensifiedsupport. There i s anurgentneed to fixther re-enforce research institutions and make arrangements for closer coordination, greater client participation in setting research priorities, implementation and funding, pluralism in service provision and much closer farmer-extension-research linkages and collaboration in addressing gender equality issues. Buildingcomplementary capacity inthe extension system and private agri-businesswill be critical to scaling up the localized successes achieved under ARTP, 4 and especially inmarginal andremoter areas. Finally, buildingon ARTP support, it is important for Ethiopia to enhance its capacity in new frontier areas o f research such as bio-technology in order to capitalize on opportunities for international collaboration in addressing important productivity constraints a 2. Rationale for Bank involvement 18. Theproposedproject is one element ina fhll array ofinterventions supportingrural growth inEthiopia. Severalnew operationsbyIFAD,JICA, andUSAIDwillhelpregionalgovernments and line ministries identify major impedimentsto development of rural markets, and reduce or remove these barriers. A Bank-supported Financial Capacity Building project will also design and implement measures to reduce market risks (e.g., weather index insurance and warehouse receipt systems). ARTP has substantially increasedthe capacity o fthe research system, although there i s an important unfinished agenda. Another proposed operation, the Sustainable Land Management Project, would assist inthe implementation o f landcertification systems to enhance land tenure security, as well as support capacity building in sustainable land management practices on a watershed basis. The proposed Irrigationand Drainage Project would support the development o f several large irrigation systems to service 20,000 hectares. As the farmers on those hectares would depend on the agricultural extension system, there i s scope for synergies between the two projects. Three operations (the Food Security Project, the Pastoral Community Development Project and the Emergency Drought Recovery Project) take resources through local governments directly to poor communities to address their priorities for improved food security and livelihoods in food insecure and drought prone areas, emphasizing the building of household assets and community infrastructure. Other projects in the portfolio support decentralization and delivery o f health and education services, and construction o f local infrastructure. The present project fits into this overall effort of assistance by emphasizing provisiono f the humancapital and services neededfor improvedproductivity and the generation of sustainableincomes inrural areas. 19. The Government is strongly committed to the project as is reflected inits overall strategy (see the discussion o f the PASDEP above), its strategy for the agricultural sector, and the rapid increase in public hnding in recent years for agricultural extension and TVET colleges. The initial proposal for this project was prepared by the Government and it has already expanded these programs usingits own budgetary resources. The Bank is uniquely placedto bringto bear its wide experience with capacity buildingprograms of this type in other parts o f the world and will also act as a catalyst to bring in other development partners for greater synergy and coherence. 3. Higher level objectives to which the project contributes 20. The proposed project would support several goals of the interim CAS o f enhancing pro- poor growth through private sector development (particularly in agriculture); enhancing human development outcomes by improving governance through decentralization o f public services; increasing agricultural productivity, and reducing vulnerability. It would contribute directly toward achieving pro-poor growth by improving the profitability o f small farms and related agri- business firms. It would support generation o f agricultural technology needed for accelerated productivity growth. Finally, it would enhancehumandevelopment outcomes bybuildinghuman capital inthe agricultural sector, both in the public and private sectors. This would be done in several ways. First, the project would provide vocational training for people intending to work 5 as professionals in the agricultural service programs or in agri-business. Secondly, it would provide agricultural training and services for farmers. Thirdly, the project would continue support for advancedtrainingprograms for agricultural scientists and educators, startedunder the ongoing ARTP. The project would further decentralize agricultural training and farm advisory services to regional and local levels, thus makingthem more responsive to f m e r s ' needs. The project would also help to reduce the vulnerability of the rural poor by providing them information about new technologies and techniques with which to reduce variability in income, while at the same time helpingthem to increase the average levels o f their farm income. Gender equality andHIVlAIDS issues would also betaken into account and addressedwithin eacho f the project's components. 21. The objectives andinterventions of the project are critical to achieving the broader aims of the PASDEP. Neither the design o f the interventions, however, nor their implementation is straightforward, since these objectives have been part o f Ethiopia's development agenda for the last two decades and improvement has been slow. The proposed project would strengthen the base of human capital and service provision needed for rural growth and will do so with local governments and rural communities as full partnersinthe process. The project would also assist inexploringoptions for theprocessofreorientationofthe extensionservicepresently underway. Each of these elementso fthe project is important inachieving core goals o fthe interimCAS. B. PROJECTDESCRIPTION 1. LendingInstrument 22. The focus on specific investments in vocational training, reorientation o f the extension services, and further development o f farmer-responsive agricultural researchprograms make a S L the most appropriate instrument. 2. ProjectDevelopmentObjectiveandKey Indicators 23. The objective o f the Project is to assist Ethiopia to strengthen agricultural services and systems for improved agricultural productivity, make them more responsive to clients' needs, andenhancethe capacity o f producers to become aware of andto adopt economically viable and environmentally sustainable technologies and practices. This would be achieved through: (i) modernized TVET colleges which are more responsive to the changing needs of a demand- driven and market-driven agricultural sector; (ii) building capacity inthe agricultural extension system while piloting new initiatives to introduce demand-driven and participatorymechanisms; (iii)strengthenedagriculturalresearchsystemwithimprovedinstitutionalandhumancapacity a to generate and disseminate client-demanded and market-oriented technologies; (iv) development o f agricultural market institutions; and (v) the integration o f gender equality, HIV/AIDSandenvironment issues. Indicatorsfor measuring progress inachievingthe project development objective would include: 0 Percent o f clients farmers who believe that they have gained useful knowledge or other long-lasting benefits due to provisiono fresearchandlor advisory services providedunder RCBP; 0 Percent o f farm households with increased income due to adoption o f technologies and practices attributable to project intervention intargeted woredas; 6 0 Area (inha) on which technologies or practices attributable to project activities havebeen adopted; 0 Volume of trade in agricultural commodities through the Ethiopian Agricultural CommodityExchange. These indicators (inmore detail) and others for measuring intermediate outcomes associatedwith specific components are presented inAnnex 3. 3. Project Components Component 1:Agriculture Technical Vocational Education and Training (TVET) (US$6.3 million) 24. The Agriculture TVET colleges were established to train Ethiopia's DAs (15,000 existing staff and 50,000 new recruits) to become more effective in their work with farmers, Now that the training o f DAs is nearly complete, only a few o f the colleges will be needed to meet fbture training needs for DAs. To meet this ongoing need, some o f the AgTVET colleges will continue to offer training for DAs, while the others will likely be transformed or retooled to provide other types of training. 25. This component would assist the Government and the AgTVET colleges to: (i) develop a strategic plan for the future of the AgTVET colleges and provide technical assistance for the implementation of the plan; (ii)strengthen the capacity o f those colleges under the federal M o m ; and (iii) the transformation o f AgTVET colleges into training institutions with support new mandates identified in the strategic plan referred to above. The Government's TVET program plays a central role inhuman resources development for middle level professionals in the extension system and inthe hture will increasingly serve the needs for vocational education o f the private sector. This component would assist the Government to develop a long term plan for the colleges that would positionthem to serve the changing needs o f an increasingly market- and private sector driven sector. RCBP would also finance capacity buildingand institutional development for TVET colleges and TVET departments to facilitate greater participatory, innovative, learning culture at TVET colleges; development o f strategies for cost sharing and diversification o f sources o f revenue within the TVET system; certification o f instructors and curricula; creation of market-based TVET programs; gender mainstreaming; addressing HIV AIDS in agricultural programming; promoting environmentally sustainable agricultural technologies, andperformance-basedmonitoring and evaluation. 26. Sub-Component 1.1: Development of a Strategic Plan for AgTVET Colleges (US$0.5 million). The first sub-component would finance studies and technical assistance as inputs into the development of a long term national strategic plan for the future o f the AgTVET colleges. It would also support the colleges themselves in developing their own long term strategic plans, integrating crosscutting issues of gender equality, HIVlAIDS and environment as well as overall management (autonomy, cost recovery). This would include assessing the immediate and hture training needs of the sector and determiningthe number and configurationo f AgTVET colleges that would be needed to meet these needs. It would also include determiningthe institutional configurations for the colleges which would make them most responsive to the needs o f the sector - including governance arrangements; source o f finances; relationship to the general TVET colleges, the universities, and other educational and training programs and institutions; 7 and responsivenessto market forces and industry stakeholders. This sub-component would be coordinated and monitored by the PMU and implemented by the MoARD through the use of staff and consultants. Assistance to develop the long term strategy would be completed within the first year o f the RCBP. Other studies and technical assistance as defined in the long term strategy will be delivered infollowing years. 27. Sub-component 1.2: Agriculture TVET Capacity Building Grants (US$5.8 million). This sub-component would support investments inbuildingthe capacity ofthe AgTVET colleges -both those that will continue to provide training for DAs, and those that will take on new roles. Correspondingly, two types o f grants would be provided: institutional strengthening grants and development innovationgrants. i.InstitutionalStrendheningGrants(US$1.5million)InthefirstyearoftheprojectUS$1.5 million would be divided among four (4) agricultural TVET colleges (Alage, Ardaita, Agarfa, and Bekoji) to address a portion o f their incremental investment needs. The grants would be provided in response to proposals preparedby the colleges themselves and would be used to fill critical gaps in demonstration and laboratory equipment, teaching materials, library resources, transportation facilities, library and dining room resources and programs to address gender equality issues. The grants would be in addition to federallregional contributions based on enrolment, cost-sharing arrangements andother revenue (e.g. demonstration farms), Eligible civilworks under the grant would not exceed 25% of the individual grant to colleges. The grants would be provided inthe first year of the project through a single -tranche disbursement to each college upon submission to the PMUofthe approved proposal. ii.Development InnovationGrants(US$4.3 million).The objective ofthe Development Innovation Grants (DIG) is to build capacity o f selected Agriculture TVET colleges in new traininglprogramming areas based on the Long Term Strategic Plan. Activities to assist colleges to move to a second stage o f development by broadening the student clientele in the non-public sector through specialized programs in commodities or disciplines (e.g,, processing, marketing) and extension approaches (e.g. participatory planning, gender equality integration, etc) would be supported. Proposals for the DIG will include plans to address gender equality issues such as recruitment of female students, instructors and staff; services for female students and integration o f gender issues in courses. The DIG would be demand-driven, providing funding to proposals originating with the institutions. Eligible expenses would include course development, graduate training o f instructors, short term training, training materials, text books, teaching equipment, demonstration equipment, civil works (not more than 25% o f individual grants), study tours to visit practical applications of new areas o f specialization, short-term apprenticeships, transportation, meetings, workshops and field days, technical assistance, staff exchanges, visiting teachers, development and implementation o f gender equality and HIVlAIDS action plans, and institutional linkageslpartnerships. Grants would be available fiom year two to five of the project for selected colleges based on proposals for the implementation o f the Long Term Strategic Plan developed in year one. The PMU would coordinate the administration, implementation and disbursement o f the grants in close collaboration with MoARD and other stakeholders. 8 Component2: AgriculturalExtension(US$29.0 million) 28. The Government i s rapidly scaling up the public agricultural extension program from some 15,000 Development Agents (DAs) in the field to over 50,000 - each equipped with more training than inthe past. DAs are based at Farmer Training Centers (FTCs), constructed at the sub-district (kebele) level but still not fblly operational as they are yet to be fully furnishingand equipped to meet a basic standard. The goal of the Agricultural Extension Component would be to improve the effectiveness o f this agricultural extension program as it scales up, particularly with regard to its capacity to respond to the expressed needs of farmers (especially market- oriented farmers) to enhance women's participation and GE mainstreaming in all aspects of the extension system and to support the emergence o f non-public sector agricultural services as an additional feature of extension services in Ethiopia, This would be achieved through five sub- components focused on improving the supply and demand for agricultural services at various levels within the system. 29. Sub-Component 2.1: CapacityBuildingfor the SubjectMatter Specialist Functionat Woreda, Regional and Federal levels of the Agricultural Extension System (US$3.7 million). This sub-component would be overseen by MoARD's Agricultural Extension Department and would support measures to maintain and improve the effectiveness o f the woreda, regional, and federal agricultural extension officers and subject matter specialists including the woredas women's affairs offices to providetechnical support to DAs.Itwould also support investments inactivities and facilities neededto improve the quality and effectiveness of agricultural extension officers, professionals inrelevant line departments o f MoARD, BOARDS, and woreda agricultural offices, especially in areas such as marketing and business skills, sustainable land management, pest management, post harvest loss management, and irrigated agriculture, gender equality mainstreaming and participatory approaches. More specifically, this sub-component would support: i.CapacitybuildingattheregionalandworedalevelWS$l.4million):Technicalassistance andtraining for SMSs andWomen's Affairs regional andworedaprofessional staff(from the 100 woreda's targetedby RCBP) would improve administrative capacity, keep them abreast o f developments intheir fields o f expertise, or upgrade them innew areas; would equip them with gender equality mainstreaming skills; and provide transportation facilities, communication equipment and materials, Capacity will be built to ensure effective interaction with clients inthe system. ii.University and graduate school level training (uS$1.6 million) for selected staff, particularly female staff including PhDs and MScs in agricultural disciplines at foreign and Ethiopian universities - approximately 23 PhDs at foreign universities, 100MScs at Ethiopian universities, and 200 BScs at Ethiopian universities. PhDs could also be provided by local universities if the relevant training is available. PhD and MSc level training would be focused mainly on areas where capacity gaps exist, such as inthe areas of irrigation, agronomy, spices, fruits, vegetable production, veterinary science, artificial insemination, agricultural economics andagri-business planning. iii.Exchangeofexperiences,mutuallearningandknowledgemanaFement(US$0.7million) through activities such as national and regional workshops, national and international exposure visits, development o f extension-relevant content and materials, participation in international conferences and study tours. Efforts will be made to enable women benefit 9 from this with a conscious decision to involve all qualifiedwomen. GE, HNIAIDS, and environment will be considered as crosscutting themes for all the study tours and experience sharing forums. 30. Sub-component 2.2: Capacity Building for Farmer Training Centers (FTCs) (US$15.4 million). This sub-componentwould support the development o f some 2,500 FTCs in 100 selected woredas into community-owned and -managed local hubs for agricultural development activities to serve as models to be replicated as further fbndingbecomes available. Itwould support: (i) training o f DAs in approaches to promote farmers' orientation to markets, mechanisms to foster women's participation inlocal development with the aim o f reaching 30% o f married female farmers in addition to the 2.6 million female headed households and to integrate GE concerns inthe extension system, best practices for sustainable local development includingenvironmental impact assessment, anduse of ICT andlor mass media for extension; (ii) gradually buildingthe capacity of the kebele authorities to self-reliantly manage FTCs and their activities; and (iii) furnishing (e.g., desks, benches, shelves, filing cabinets, tables, black boards) provisiono f selectedequipment (e,g. farm tools, demonstration materials), training and reference materials (e.g. manuals, guidelines, technical leaflets), ICT (e.g. internet access, telephone, radio, and computer), andmeans o f transport (bicycles, mules), These capacity building efforts would be carefully scrutinized for their cost-effectiveness and sustainability, to facilitate scaling up o f relevant models to all woredas as additional resources become available. Participating woredas would be distributed across all regions o f the country (regional allocations would be determined on the basis o f the federal formula) and within regions would be chosenby regional BOARDS on the basis o fthe following criteria: * CompletedFTC buildingand assignmento fthree qualified DAs; Access to basic infiastructure: water and access roads; Agro-ecology representation; a Commitment to focusing programmatic activities toward the needs o fwomen; Farming systems representation (rainfed subsistence farming in food insecure and high potentialareas, commercial oriented farming, irrigationbasedfarming, pastoralism). 31. Sub-component 2.3: Institutional Innovation and M&E in Agricultural Advisory Services (US7.4 million). While the existing extension system has made significant progress inexpanding its geographical coverage, it remains almost exclusively within the public domain, which is supply driven and based on limited technology packages in three distinct fields o f specialization (crop production, livestock husbandryand natural resource management) without sufficient attention to complementarity between these fields. It therefore provides the farmer with limited and often inappropriate choices. Effectiveness in service delivery would be enhancedby (i) empowering farmers both male and female farmers - to guide service delivery; (ii)greaterselectionofserviceprovidersforfarmerstochoosefrom; (iii) a planning service delivery more directly with framers and integrating plans with regional and national initiatives; and (iv) learning from local experiences as well as new developments elsewhere to offer a varietyoftechnology options. 32. The sub-component would support the design, launch, and implementation of innovative programs designed to provide experience with alternative institutional arrangements. The new programs would feature: further decentralization o f responsibility for program decisions from the woreda level to farmer groups, communities, or FTCs; increased participationby farmers in programming, M&E, and priority setting; increased pluralism in service delivery to draw in the 10 skills and ideas from a variety o f service providers; the development o f advisory service programs adapted to the needs of specific circumstances and demands emanating from local agro-ecological conditions and market opportunities and the development o f mechanisms to reach marriedwomen farmers. Priority wouldbe givento those developed with the participation o fwomen and or to those initiatives designedto address GE issues. These innovations would be implemented in 100FTCs located in20 woredas (on average, 5 FTCs per woreda) within eacho f the country's regions. FTCs eligible to participate in these programs would be selected by RegionalBOARDS according to the following criteria: * Ago-ecology representation; 9 Farming systems representation (rainfed subsistence farming in food insecure and high potentialareas, commercial oriented farming, irrigationbasedfarming, pastoralism); * Availability o f infrastructure: power, telephone connectivity, rural finance institutions; * Proximityto woreda capital. 33, Programs supportedunder this sub-component would bethe following: i. Farmers'AdvisoryServiceFund(FASF)WS$2.5million). TheFASFwouldsupportthe development o f the demand side o f the agricultural extension system by providing annual grants of up to US$5,000 per participating FTC for the purpose of buyingthe services o f agricultural advisors on topics jointly chosenby the farmers and their DAs as well as for developing proposals to this effect. Advisors could be sourced from the public extension system, universities or outside the public sector. Woreda Offices o f Agriculture would review and ensure that the content of proposals follow criteria set in the Project Implementation Manual. Funds would be transferred from the PMU to the regions annually for this purpose and disbursed from the regions to participating woredas annually ina single tranche where the woreda would use them to purchase the services o f agricultural service providers as directed inthe plan from eachparticipatingFTC. Inthe longer term, andbuildingon the lessonslearned from initial implementation o fthe FASF, the sub-component would also support activities to develop and implement mechanisms under which farmers and communities (Le., kebele administrations) in a few kebeles would assume increased responsibility for their own FTC. This would include selecting members of an FTC managing board with a minimum of 30% participation of women; receiving, managing, and reporting on the budget for the FTC; planning activities for the DAs at the FTC andrelatedmonitoringo fprogram implementation. ii,Advisory Service Development Fund(ASDF) (US$2.5 million). The ASDF would support the development o f the supply side o f Ethiopia's agricultural extension system to promote (i) participatory planning in delivery o f services, (ii) pluralism in provision o f services, (iii) the availability o f a variety o f technology and management options and (iv) improved technical quality o f services. The ASDF would finance training and TA for DAs and other non-public sector agricultural advisors. This would include training in participatory planning and gender equity facilitation, TA to assist in development o f community plans, orientation for woreda decision-makers on various guidelines regarding participatory approaches (e.g., MOARD's community based participatory watershed development guidelines), TA and focused training at the woreda level for effective integration of community plans with nationallregional initiatives, TA and focused training for woreda extension officers to undertake regqlar assessment o f on- going local innovations, TA and focused training for woreda extension officers to 11 undertake environmental screeningo fprojectslprograms, and to explore relevant research findings to develop a menu of technologies according to the needs of their localities, technical training for public and non-public sector service providers and development o f manuals on topical issues identifiedas important byparticipants inthe agricultural sector (farmers both men and women, DAs, agri-business, researchers, local government, the federal MoARD, andother stakeholders), Exampleso f such training include crop rotation for managing noxious weeds, post harvest loss reduction techniques, different physical and biological landmanagementpractices, agronomy of highvalue crops, introductiono f new fodder crops, etc. Funds would be transferred in single annual tranches from the PMU to the regions on the basis of annual plans from the regions. The participating regions would utilize the funds to purchasethe training, TA, and other services necessary to implementthe activities o fthe ASDF. iii.DesignoftheAgriculturalExtensionSystemandCapacityBuildinginMonitoringand Evaluation (US$2.4 million). A third element of the institutional innovations sub- component would focus on the re-design o f the Agriculture Extension based on learning from evaluations o f the ongoing programs and examples in other countries; and the development of a results-basedmonitoringandevaluation system. Design o f Agriculture Extension System (US$1.9 million): This element o f the institutional innovations sub-component would support the design o f the agricultural extension system including: (i) a participatory evaluation o f the existing programs and system; and review o f agriculture extension models from other countries that are responsive to local needs and integrate gender equality, HIVlAIDS and environment as cross-cutting issues; (ii) recommendations for the design o f the Agriculture Extension System including institutional arrangements within a decentralized program needed to improve the effectiveness o f the program and the development o f a plan for implementation; and (iii) a results-basedmonitoring and evaluation process for the new agricultural extension system. This would primarily involve TA, much o f it sourced internationally (with a budget o fup to US$0.5 million). Capacity Building in Monitoring and Evaluation: M&E would include support for a review o f the effectiveness o f the ongoing agriculture extension programs and the development o f a results-based M&E system for the agricultural extension program that integrates gender equality, HIVlAIDS and environment as cross-cutting issues. M&E activities would also include support to build the capacity o f all relevant national stakeholders (including MoARD, BOARD,Woreda Agricultural Office, FTCs, NGOs, and researchers) to systematically monitor and evaluate outcomes and impacts of agricultural advisory services and agricultural development activities including their gender equality and HIVIAIDS impacts, through: (i)a national expert workshop on methods for impact evaluation o f agricultural advisory services; (ii) for developing a TA framework including key indicators, data collection instruments, etc for analyzing the impact o f agricultural advisory services in selected woredas; (iii) workshops at national and regional levels to build awareness of the benefits o f GE responsive results-based M&E; and (iv) humanresource development inthe form of different types of training at all levels involved in M&E o f advisory services and agricultural development. Gender equality, HIVlAIDS and environment will be treated as issues cutting across all o f these initiatives. Efforts would be made to develop an M&E system that captures the impact o f gender equality on the extension system in general and the strategy to be developed in particular. To ensure greater transparency and accountability o f funds for advisory services, regular evaluations would be contracted out to independent entities: 12 participatory qualitative impact assessment would be conducted by qualified NGOs and quantitative impact assessments by International Agricultural ResearchCenters or similar organizations. Both types of assessments would be conducted inclose collaboration with national researchinstitutes or universities. 34. Sub-component 2.4: Research-Extension-Farmer Linkages (US$2.5 million). The sub-component would support the expansion and evolution o f the existing E M developed program under which its researchers work closely with extension service providers groups o f farmers (with a conscious effort to involve a minimum o f 30% women) to identify practical research questions of interest to male and female farmers; plan and carry out corresponding researchactivities infarmers' fields; evaluatethe results; discuss results andvalidate plans with a broader range o f stakeholders in fora named Research-Extension-Farmer Advisory Councils (REFACS). RCBP would continue to support the ongoing program (picking up from the World Bank funded ARTP project) as well as covering the costs associated with its expansion and institutional evolution, Interms of expansion, it would finance the costs associatedwith tripling of the number o f such research programs in the field from working with some 160 farmer- researcher-extension groups - or FREGS - (approximately 2,830 male and female farmers) to working with up to some 250 FREGs (approximately 4,500 male and female farmers). Most new FREGS would be establishedaround FTCs more distant from the researchcenters currently participating in the program and around new research centers including research centers associatedwith EIAR, RARIs, universities andinternational researchinstitutions such as ILRI. 35. Interms of the institutional evolution of the program, this sub-component would support shifting responsibility, administrative authority, and hnding for this program from the research system (EIAR) to the system of REFACs established at various levels. This would require further developing the REFAC structures and capacities at each level (zonal, regional, and federal) - including the establishment of secretariats capable o f administering the program. O f the US$2.5 million available under this sub-component, 80% would support researchprograms o f the FmGs for on-farm adaptive research, establishment o f foundation technologies, and development o f technology multiplication mechanisms and the remaining 20% would support the strengthening the REFAC structure through institutional development and capacity building which would include the GE mainstreaming capacity of REFAC members. Operating costs associatedwith REFAC meetings wouldbe supported by Government contributions. Component 3: Agricultural Research (US$22.3 million) 36, The core objective of the agricultural research component would be to facilitate institutional strengthening o f the NARS by enhancing the participation o f key stakeholders in priority setting, resource allocation and implementation and where possible funding, to re- enforce NARS capacity and make it more efficient and effective ingenerating and disseminating client-demanded and market-oriented technologies and information. To achieve this, the project would provide for HRD, technical assistance, infrastructure, equipment, supplies, transport, and communications. 37. Basic Principles. Guidingprinciples for design andimplementation o f agricultural research services are: (i) responsiveness to the needs and circumstances of end-users (farmerslagri- business), taking account o f gender equality and HNlAIDS-related issues; (ii) adherence to the principle o f subsidiarity, with responsibility and control over resources to the appropriate levels 13 (local, regional national); (iii) participation o f many service providers (research, extension, universities, the private sector); (iv) incorporation o f sustainability criteria (fiscal, economic, social, gender equality, HIVlAIDS and environment) in priority setting and M&E of public investments; (vi) use of improved management and information systems inplanning and M&E; and(vii) introductionofcost sharingarrangements. 38. The sub-componentswouldprovide for: i.Sub-component3.1 NARS Institutional Innovation (US$4.3 million).-With the emergence o f the Regional Agricultural ResearchInstitutes (RARIs) and related shifts in institutional responsibilities for agricultural research, attention is focused increasingly on the mechanisms for coordination and integration of the various elements o f the National Agricultural Research System (NARS) and on the determinants o f the allocation of resources to these institutions. In particular, the respective mandates o f E M , o f the R A R I s and o f the universities and their respective roles (as well as that o f the MoARD) intheNARShavebeenthe subject ofagreat dealofdiscussion. There havebeenrecent government initiatives to strengthen the coordination and collaboration among various components o f the NARS and studies to this effect are underway. This sub-component would provide US$1million to support the process o f discussion o f these issues through financing technical assistance, study tours, participatory workshops. The sub-component would also finance the costs involved in any eventual institutional innovations that might emerge from the process o f discussion. This would primarily involve TA and participatory workshops. .* 11. RCBP would facilitate strengthening o f the national agricultural research management, coordination and M &E systems to make sure there is cost effective, demand driven and result oriented NARS. The project will also enhances better coordination of research in the entire system and closer involvement o f stakeholders (with special attention to women's participation) inpriority setting andresourcedallocation. 111 * * .Therefore, duringthe initial implementation phase o f RCBP before the Mid-termReview (MTR), E M , the RARIs, other key stakeholders such as M o m and the Bank would engage in a review o f current institutional arrangements for management, coordination and M&E for the NARS through participatory workshops (sometimes facilitated by professional facilitators), studies, and study tours inorder to define and agree on a set o f desirable N U S characteristics and operating procedures, and where needed, the design o f more effective and client-driven institutional arrangements. At the time o f the MTR, the NARS stakeholders would present a plan for enhanced NARS governance and management reflecting buy-in by a broad range o f concerned stakeholders including public research institutions, the universities, farmers' organizations, women groups, NGOslCBOs andprivate firms involvedinagricultural research. iv, Inaddition, the sub-component would also buildon ARTP experience by establishing an expanded and transparent National Agricultural Research Fund (NARF) for agricultural research. A NARJ! with a tentative financing of US$2.0 million would make it possible for a wide variety o f institutions with research capabilities to compete for public support and better serve farmers and other clients, and to mobilize incremental financial or "in- kind"resources. NARFwould be governedby stakeholders and have several "windows" such as support for specific R&D proposals for high value enterprises, sustainable 14 livelihood systems indisadvantagedareas, research at the "frontiers" o f science (e.g. bio- technology), PhD and MSc University thesis research, to the hiring o f contractual services from Centers of Excellence including the Consultative Group for International Agricultural Researchandlor the purchasing ofpatented technologies from abroad. RCBP would (on a declining basis) finance the grants, including NARF operating costs (for details see Annex 4). Four RARIs would also be invited to introduce stakeholder- controlled "Regional ARFs" (RARFs) funded at with a combined amount o f US$1,3 million to contract capacity in or outside a particular region for the solution o f local problems. 39. Sub-Component 3.2 NARS Capacity Building (US$18.0 million). This sub-component would buildon ARTP by reinforcingNARS capacity for generation, dissemination and adoption of new economically viable and risk-acceptable technologies through human resource development, improved communications, equipment, transport and infrastructure rehabilitation6. Special training needs also exist innew areas such as socio-economics and marketing, studies o f gender inagriculture, agricultural bio-technology, non-traditional commercial crops, food safety, stress physiology, post-harvest technology, range ecology and management, animal breeding, soil and water conservation. These requirements would be addressed by facilitating access to short-term and post-graduate local and (limited) overseas training for agricultural scientists; support staffwould also betrained, 40. Reducing income vulnerability for farmers and herders in low potential areas i s an important Government priority and special support would therefore be provided to RCs in such areas through financing back-stopping and "twinning" arrangementswith EIAR Lead Centers or other Centers o f Excellence at home or abroad. Adequate incentives are required to attract and maintainresearch and support staff to many o f these RCs where the work is difficult and health and schooling provisions poor. Inorder to ensure continuity o f programs, this sub-component would help provide hardship allowances, school fees and priority opportunities for staff attendanceat conferences andworkshops with priority for women. 41. Another area the Government is committed to addressing is crosscutting issues o f GE, HIVIAIDS and environment. RCBP will ensure increased involvement o f women as both researchers and informants of research. Efforts will be made to increase the number of female researchers (currently < 5%) in recruitment, training and retention o f researchers. Gender equality issues will be addressed in the research system with a focus on enhancing women's involvement in a) setting research agenda, b) feeding to research as informants, c) testing and trial o f findings andd) as targets o f dissemination o fresearchresults. 42. RCBP would also provide targeted support to development o f biotechnology capacity. Current (ARTP-supported) bio-technology programs mostly aim at applying alternative technologies to accelerate genetic improvement. RCBP support would buildon this byhelpingto ensure design and implementation o f appropriate regulations and bio-safety arrangements, and enhance capacity in dealing with IPRs through providing TA, study tours and workshops. Similarly, RCBPwould also facilitate the currently ongoingprocesso fdevelopment ofanational bio-technology strategy and help strengthen program coordination. RCBP would finance HFKD, TA, equipment for an existingcentral laboratory, supplies andmaterials. Inprinciple, therewouldbenoprovisionfor new civil works for researchunder RCBP 15 Component 4: Improving Information and Communication Systems within MoARD (US$3.0 million) 43. Ethiopia has a large, complex institutionalstructure supporting the agricultural sector and its various actors - managers, decision-makers and actors at federal, regional, woreda and FTC levels - currently have only limited communication amongst themselves and incomplete knowledge o f the impact of poverty alleviation, food security and agricultural and rural development interventions on the lives o f fanners. Better access to and use o f information is required to better respond to fanner needs and improve institutional effectiveness. The ICT capacity building component would strengthen MoARD's capacity to coordinate, monitor and evaluate initiatives in the agricultural sector by building ICT capacity at federal, regional, woreda and FTC levels. RCBP would assist MoARD indeveloping a system for collecting and analyzing data from the FTC level and provide the necessary ICT equipment, networking services, andtraining for its implementation. 44. Inparticular, the component would finance: (i) initialassessment to identifythe scope an o f the system and design its structure; (ii)database development and maintenance; (iii) LANNVANinstallationand construction to connect woreda, zonal, regional, and federal levels; (iv) computer and network equipment; (v) software; and (vi) training programs on sex- disaggregated data collection and compilation, basic and advanced computing, client server database management, web page design and maintenance, and network and administration and maintenance. 45. The information system would be expected to include a focus on collecting sex- disaggregateddata on agricultural production, marketing, and resources fi-om the FTC level, The component would provide support to the 100 woredas selected to participate inthe Agricultural Extension component, 46. A number of initiatives are underway to support improved connectivity and information flows such as IPMS, Woreda Net, SchoolNet and AgriNet and the on-going data collection that i s the mandate o f the Central Statistics Authority. A key principle underlyingRCBP support for ICT capacity buildingwould be complementarity with existing programs and initiatives so as to avoidduplicationor development of incompatible information systems. Component5: Developmentof AgriculturalMarket Institutions(US$7.0 million) 47. Agricultural markets in Ethiopia have been underdeveloped. They have often lacked transparency, liquidity, competition, integration internally, integration with world markets, price risk management mechanisms, accessibility, price discovery mechanisms, quality standards, contract enforcement mechanisms, and other problems. These constraints have resulted in inefficiencies, market failure, and large transactions costs in agriculture that have held back growth inthe sector and have exacerbatedincome disparity since the poorest farmers have been those least able to operate effectively in the environment o f weak market institutions. This component would support analytical work geared toward understandingand developing practical solutions for the above constraints. It would also support the development o f an Ethiopian Agricultural Commodity Exchange. Finally, it would support strengthening and development of sanitary andphytosanitary standardsandthe institutionsneededto utilize them. 16 Sub-Component 5.1 Development o f an Ethiopian Agricultural Commodity Exchange and Market Policy Support (US$4.0 million). The lead role for implementation o f this sub- component would bethe AgricultureMarketingand InputsSector StateMinistry. i. AgriculturalInputsandOutputsMarketPolicySupport.Thiswouldsupportanalytical work on Ethiopia's agricultural input and output markets. This work would be geared toward producing recommendations on: domestic agricultural policy; trade policy for agricultural inputs and outputs; physical and institutional infrastructure for agricultural markets; and long-term strategy for public sector support to agricultural market development. Under this sub-component, the RCBP would finance: (i) TA for studies and for workshops; (ii)the costs of workshops; (iii); tours; and (iv) short-term study training events. In all these activities, measures will be taken to enhance women's participation early on so that they will be able to equitably benefit from the results o f marketdevelopment. ii. EthiopianAgriculture Commodity Exchange (ECEX). This would support planning, start-up and launching of the ECEX to cover a select group o f commodities. The exchange would be a forum for voluntary trade o f agricultural commodities such as teff, chickpeas, wheat, maize, beans, and oilseeds. RCBP would finance: (i)TA for the development of plans and the initial steps o f implementation; (ii) equipment (office, warehouse, and other as needed for the operation of the exchange facilities themselves) needed to make the Ethiopian Agricultural Commodity Exchange operational ;and (iii) expenses involved in consultation through workshops, training events, and seminars on the plans for an exchange. Initiatives inthese areas will ensure participationof women at different levels. 48. Sub-Component 5.2 Sanitary and Phytosanitary Standards (US$3.0 million). Exports in livestock and high value crops are providing an important source o f growth for the agriculture sector and require a well fbnctioning regulatory system to meet international sanitary and phytosanitary standards. At the same time, increasing flows of animals and plant products across borders may increase exposure to disease and pose a threat to domestic production. Increasing attention is being given to issues related to enhancing product quality and managing food safety and agricultural health risks. This sub-component would buildM o m ' s capacity to address these issues by providing targeted support to improve quality control and quarantine services within its Animal Health and Crop Protection Departments. In particular, the sub- component would support needs assessment to identify highpriority areas where gaps insanitary and phytosanitary standards and institutions limit growth and present health risks and provide technical assistance, equipment, and facilities in response to the findings of the needs assessment. 49. Investments would be inthe following areas: i,AnimalHealth:Strengtheningoflivestockquarantinestationsandinspectionservices through the provision o f laboratory and test equipment; technical assistance in developing virology response possibly indeveloping foot andmouth disease vaccine; establishment o f food quality testing units within existing regional laboratories and strengtheningo fregional laboratories with lab equipment and consumables. 17 ii.Phvtosanitary: Training to meet international standards in areas such as plant quarantine and inspection procedures, pest risk analysis and pesticide residual analysis; provision o f laboratory and equipment for inspection stations; and technical assistance to review and help design a phytosanitary system and procedures relating to plant exports; andrecommend an institutional structure for federally and regionally owned inspection stations. Component6: ProjectManagement(US$3.4 million) 50. This component would support the establishment of a Project Management Unit (PMU) under the direction of Federal and Regional Steering Committees. The PMU would be established at the federal level and FocalPersonswould be hiredto coordinate implementation o f RCBP activities at regional and Ethiopian Institute o f Agricultural Research (EIAR) levels. Institutionally, the PMU would be situated within the Ministry o f Agriculture and Rural Development (MoARD) andreport to the StateMinister for Agriculture Development. The PMU would be staffed by: (i) Project Coordinator; (ii) Specialist; (iii) M&E Financial Management Specialist; (iv) Procurement Specialist; (v) Extension-Research-Fanner Linkage Specialist; (vi) Communication and Training Specialist; (vii) Gender Equality Specialist; and various support staff. 51. At the regionaland EIARlevels, a total o f nine FocalPersonswould be hiredto coordinate implementation and facilitation o f the project. In addition, the project would hire a Financial Management Officer, withprocurement facilitation experience, to the finance department o f each Regional Bureau o f Agriculture andRural Development (BOARD)to ensure proper management o f the fiduciary and related reporting requirements o f the project. The Regional Focal Persons will report to the Agricultural and Rural Development Bureau head and the PMU Project Coordinator. The Focal Person at EIAR would report to the Director General o f EIAR and the Project Coordinator located in the PMU. While the management and implementation responsibility o f the project is the duty o f the BoARD, the Regional Focal Person's role would be to support beneficiary departments, AgTVET colleges and FTCs to efficiently utilize project resources as per the implementation guidelines. Similarly, the Focal Person in E M would facilitate implementation o f the project at EIAR and Regional Agricultural Research Institutes (RARIs) levels. Inaddition to avoiding the creation ofparallel structure at the regional level, this arrangement would ensureownership and accountability with regard to effective implementation o f the project, Roles and responsibilities o f the Regional and EIAR Focal Persons would be outlined in the PLM. The staff o f the PMU, RegionallEIAR Focal Persons and Financial Management Officers would be competitively contracted from the market and the costs associated with equipping, hmishing, and operating the PMU would be supported under the project. 52, The PMU would play a central role in implementation of some components and play a coordinating and supervisory role in implementation o f others depending on the institutional structure. The PMUwould be responsible for the overallmanagement o f the RCBP includingthe planning, budgeting, financial management, reporting, procurement, communication, monitoring andevaluation, andinteractionwith IDA andCIDA. To effectivelydeliver these responsibilities, the PMU should be staffed by competent professionals hired on competitive basis from the market. Details with regard to duties and responsibilities o f the P M U would be outlined in the Project Implementation Manual. However, to ensure efficient deliberations o f its duties and responsibilities, the PMUshould be established as an autonomous entity with clear reporting and 18 communication mandate. Moreover, the PMUwould be heldaccountable to the management and implementation facilitation o f the project at all levels. Guidance and strategic direction with regard to project implementation would be given by the State Minister o f MoARD and the Federal and Regional Project Steering Committees. 53. Federal and Regional Steering Committees: RCBP steering committees would be established at Federal and Regional levels to ensure effective implementation of the project. The steering committees would consist o f senior government officials from concerned offices and other stakeholders, The Federal Steering Committee would be chaired by the State Minster o fthe MoARD for Agriculture Sector. The Project Coordinator would serve as secretariat o f the Federal Steering Committee. While providing overall guidance on the management and implementationprocesses o f the project, the Federal Steering Committee would also be expected to monitor outcomes and results of the project. At the regional level, regions would establish Regional Steering Committees (RSCs). The RSC would be chaired by Head of the BOARDand RCBP Regional Focal Persons would serve as secretariats o f the respective RSCs. Heads o f concerned departments, Regional Research Institutes, ATVETs and Donor/NGOs with similar operations would constitute the RSCs. 4. LessonsLearned and Reflectedin the Project Design 54. Lessons in Vocational Training. World Bank support to Vocational Training in Agriculture has not been very widespread, and lessons to be learned are consequently limited. However, lessons from other vocational training programs indicate that success o f these programs is more likely when the provision of training services i s open to various types o f service providers and is not limited to the public sector. A second general lesson is that assignment o f responsibilities according to the subsidiarity principle is important and suggests the need for decentralized (regional or lower) administration of vocational schools. A further lesson is that vocational training i s more likely to be effective and sustainable if there is an element o f cost-sharing between national and local governments and also by the student. Another characteristic of TVET programs which is often determinate o f their success i s the extent to which they are responsive to demand, and to the changing needs of society. Too often, TVET programs have graduated students whose skills are not employable. Built inmechanisms to ensure the relevance o f the curriculum and the responsiveness to demand are essential to the value o f the program over time. Finally, consistency of the TVET program with general education system standards i s quite important for quality control as well as for ensuring the flexibility o ftalented andmotivatedgraduatesto be able to enter higher education institutions. 55. Lessons in Agricultural Extension. A review o f the Bank's involvement in agricultural extension projects reveals several lessons with regard to successful extension projects. The effectiveness o f most extension programs i s particularly tied to the responsiveness o f program design to the specific needs o f the client. Thus, a single extension model cannot be designed for global application, and the participation o f local professionals and beneficiaries throughout the project planningand implementation stages is o f critical importance. 56. A further general characteristic of successful extension programs i s that a responsive trainingprogram has been established for the staff o f the extension system. Such programs have proven to be o f fundamental importance inproviding extension staffwith the skills necessaryfor their jobs and to maintain their awareness o f the development o f new technologies. The proposedproject explicitly addressesthis need through its training component. 19 57. Flexibility to meet the needs of a heterogeneous population of beneficiaries has often been difficult to achieve when the provision of extension services has been limited to one delivery mechanism. For this reason, consideration will be given inproject design to making it possible for local government and farmers to, on a pilot basis, contract for the delivery of agricultural advisory services from any qualified institution or entity. This will permit flexibility in the types of delivery mechanisms which might be employed and will encourage the development o fprivate serviceproviders inrural areas. 58. Financial sustainability has frequently been a problem inpast extension projects, as has the government`s ability to cover recurrent costs of a typical extension system, even during the life o f the project. An important issue which will be analyzed inthis regard is the economic and fiscal feasibility o f the proposed scale o f the extension service (65,000 extension agents). The nature o f the co-financing matrix and arrangements for the gradual introduction o f cost-sharing underthe proposedproject will also beconsideredwiththese issues inmind. 59. Inanumber ofpastprojects, appropriate technologies havenotbeenavailable for transfer to beneficiaries. This problem has been closely tied to the lack of systematic linkages between clients of agricultural services, agricultural extension and the agricultural research community. Inaddressingthis issue, the government's proposalsuggests the identificationanddevelopment of technology packages for distribution by the extension agents in close consultation between these different actors and with significant on-farm testing and verification. This is one approach to the concern. However, others will also be considered as the "package delivery" approach can be useful, but on its ownhas oftenprovento be limitedineffectiveness. 60. Ethiopia's adoption o fthe FTC model i sjust underway andthere will be a need for "learn by doing" as well as for incorporating into the Ethiopian context the applicable aspects o f the more general lessons cited above. The extension component o f the proposed RCBP will support evaluation of the FTC-based programs and design o f its institutional evolution in response to lessonslearned and gathering experience. 61. Lessons in Agricultural Research. The Bank's experience in supporting agricultural research has been recently summarized7. With regard to future investments, a greater effort in promoting pluralistic systems is advocated; this will involvethe enhancement of the participation of the full range o f stakeholders in the research process, including universities, private firms, NGOs and fanners organizations themselves performing certain types of research. This includes the development and implementation of science and development policies that permit and encourage import o f free technology available through spill-ins from abroad, Pluralistic systems increasingly separate decisions on financing public good research from implementing it and producing new technology. They also strongly encourage partnerships allowing for specialization, exploiting institutional comparative advantage and reducing costs; competitive grants beingone mechanism to achieve this. 62. The Bank's past experience underlines the importance of strengtheningthe demand side for research products and the need to empower different categories o f farmers to influence the priorities, finding, execution and, importantly, the evaluation of research programs. Although on the one hand, much applied and strategic research is characterized by considerable economies ``Agricultural Investment Source Book on GoodPractices", Byerlee et al, World Bank, 2003 inprint. 20 o f size and`scope that would argue against decentralization, it i s now realized that effective adaptive research must be executedon-farm andindispersedlocations throughdecentralized and participatory approaches. Changing research priorities of Bank-assisted programs in many developing countries provide for improvedpoverty targeting recognizing the different strategies for different types of farmers and focus more than before on aspects related to the commercialization of agriculture such as post-harvest technologies, product quality, food safety and diversification into value-added production and non-traditional exports which often offer potential for major increasesinrural employment and incomes. It i s increasingly recognized that future productivity increases must come from a more knowledge-intensive agriculture that uses existing land and water resources more efficiently and sustainably. Wider environmental awareness brings urgency to broader issues related to the use o f land, water, forests and biodiversity; pesticide safety and residue minimization; livestock waste management; water quality preservation and watershedprotection, 63. There have been serious problems of sustainability with public research organizations suffering in financial crises frequently leading to minimal operating budgets and erosion o f salaries and incentives. Long-term sustainability demands the "right-sizing" o f research organizations to fit the available resource envelopes, using additional funds, including from the private sector for operating costs, and to pay scientists competitive salaries. It also demands monitoring andtrackingthe results andimpact o fresearchactivities over time. 5. AlternativesConsidered 64. Because of the desired linkages between agricultural advisory services, agricultural vocational training, and agricultural research activities, and because ongoing World Bank support for agricultural research is due to end by year-end 2006, it was decided to include a component to this project dedicated to support agricultural research. 65. The Government's proposal calls for a rapid expansion o f the agricultural extension program as well as an institutional transformation to further decentralize the program and to make it more demand driven. Institutional reforms would also be made in the agricultural research and agricultural TVET programs. These institutionaltransformations will take time to design and to implement. Consideration was given to delaying IDA support for the program until these transformations were more completely designed and ready for implementation. However, given Government's commitment to expand the extension program quickly, an evolutionary approach has been proposed. Under this evolutionary approach, IDA support would be made available for the ongoing continued support for capacity building (TVET and Research) and for pilotingnew approachesto extension. C. IMPLEME~TATION 1. PartnershipArrangements 66. The project does not yet have formal partnership arrangements but anticipates substantial collaboration with the CIDA program. CIDA has expressed a strong desire to provide technical assistance where needed and to harmonize an ongoing CIDNILRI program on agricultural productivity and marketing, CIDA plans to provide US$17 million in joint financing o f the Government's Rural Capacity Program. A number o f other donors are involved in small scale projects in training, extension, and applied research and have expressed interest inparticipating 21 inimplementationthrough technical assistanceanddialogue. Co-financingis likelyto increaseif donors see project successes. 2. InstitutionalandImplementationArrangements 67. Implementationofthe RuralCapacity BuildingProject will be managedandadministered by a Project Management Unit (PMU). The PMU will be situated within the Ministry of Agriculture and Rural Development under the State Minister for Agricultural Production. MoARD will take responsibility to ensure that the regions disperse funds and implement required project activities. A number agencies (mostly public, but also private under the competitive grants) would be involved inthe execution of program activities with the support o f the PMU. Executingagencies would include: For the Agricultural TVET Component: (i)MoARD through its Department of Agricultural Extension and Agricultural TVET; (ii)federal TVETs; (iii)regional BoARDs and other regional stafe and (iv) regional TVETs under the BoARDs; For the Agricultural Extension Component: (i)MoARD through its Department o f Agricultural Extension and Agricultural TVET; (ii) regionallzonal and woreda BoARDs; (iii) (iv)communitylevelfarmers' groupsandkebeleassociations;and(v) other DAs; entities selectedand contracted under competitive grants; For the Agricultural ResearchComponent: (i) and its federal researchcenters; (ii) EIAR regional agricultural research institutes and their regional research centers under the BoARDs; and (iii) entities selectedand contracted under competitive grants; other For the Improving Ccormectivity w/in MoARD Component: MoARD through its PlanningDepartmentandDataProcessingTeam; For the Development o f Agricultural Market Institutions Component: MoARD through its Warehouse Receipt and Inventory Office within the Agricultural Marketing & Inputs Sector State Ministry, Plant Protection and Animal Health Departments within the Agricultural Development Sector State Ministry; For the Project Management Component: (i) P M U in the MoARD; (ii) PMU's the the Ag Research Focal Person at E m , (iii) PMU's Regional Focal Persons at the the BoARDs ineach o f the nine regions; and (iv) other entities selected and contracted under competitive grants; and For the follow-up o f the implementation o f crosscutting issues (GE, HIVlAIDS and environment) concerned departments and offices such as the WAD o f MOARD will be involvedandprovide backstopping. 68. Flow of Funds: Funds transferred to regions for project activities will be counted as additional funding on top o f federal contributions to the regions, and therefore will be not be offset in the Government's formula for allocating regional funds, External funding for RCBP would be deposited into a Special Account at the National Bank o f Ethiopia accessible by the PMU. Project accounts would be established for E M , and for each o f the eight main regions, Program Agreements would be established between the MoARD and EIAR; the BoARD o f each of the eight mainRegions; the BoARD o f woredas participatinginRCBP; any kebele councils or f m e r groups receivingresponsibilities and fundingunder RCBP. 69. Replenishment of Funds: Special accounts established inthe National Bank of Ethiopia by MoFED to receive donor contributions, including IDA funds, will act as revolving funds. Once funds are transferred to the Birr Account, or direct expenditures are made for approved 22 contracts for earmarked activities, replenishmentswill only be made when necessaryexpenditure reports are received from the federal andregional beneficiaries (through MoARD). The financial reportingformats for federal andregionalbureauswill bepresentedinthe PIM, These forms will be applicable for all project funds, donors as well as government funds. Inaddition, donors will need to receive at least monthly replenishment requests. 3. Monitoring and Evaluation of OutcomeslResults 70. The results-based monitoring and evaluation system o f the RCBP would enable project management to undertake corrective action and derive lessons-learned for scaling-up o f successful agricultural service approaches. It would provide all stakeholders with a better understanding o f failure or success o f different interventions. The results-based M&E system would facilitate information and data exchange at federal MoARD and decentralized BoARD levels and increase accountability and transparency o f project interventions. Implementing a results-based GE responsive M&E system for the RCBP and gaining broad support for the approach would help to gradually mainstream a strengthened M&E system into the broader agricultural service sector. 71. The Monitoring and Evaluation Specialist (M&E Specialist) o f the Project Management Unit (PMU) would have the overall responsibility of coordinating all M&E activities conducted as part o f the RCBP. The M&E Specialist would develop: (i) the detailed project results framework and logical framework; and (ii) efficient and effective M&E plan capable o f an continuous observation, data collection and analysis, communication and reporting, and data and informationstorage. 72. The M&E Specialist would compile infomation, data, and reports from different levels. Helshe would conduct quality checks, provide feedback to hisker decentralized counterparts, , ensurethe collection of sex disaggregateddata and analyze data to compute the status o f selected indicators. The institutionalset-up o fthe M&E Systemwould follow closely the institutional set- up for flow of funds and reporting, The system's set-up would vary slightly depending on the specific component or subcomponent. The M&E Specialist would have to ensure effective and efficient flow o f information from and to hisher counterparts at all levels, including Regional/ Research Focal Persons, federal and regional TVETs, EIAR, Regional BoARDs, Woreda BoARDs, and DAs. The M&E Specialist would have to coordinate the collection o f gender- disaggregatedbaseline data and follow-up data collectionto ensure an appropriate tracking o f all indicators over time. 73. In addition, the M&E Specialist would also coordinate all activities related to capacity building o f all relevant national stakeholders (including MoARD staff, BoARD staff, DAs, NGOs, and researchers) for GE responsive results-based M&E and impact assessment for agricultural advisory services, including the integration o f cross-cutting issues &e., gender equality, HIVlAIDS, environment). Capacity building would be based on: (i) a national expert workshop on methods for impact evaluation o f agricultural advisory services, (ii) a forum for developing a framework for analyzing the impact o f agricultural advisory services in selected Woredas, (iii) workshops at national and regional levels to build awareness for the benefits o f GEresponsive results-basedM&E, and(iv) humanresourcedevelopment inthe form ofdifferent types o f training at all levels involved in M&E o f advisory services and agricultural development. GE and HIVlAIDS issues will be mainstreamed in all o f these activities. To ensure greater transparency and accountability o f funds for advisory services, MTR and other 23 specific evaluations would be contracted out to independent entities: participatory qualitative impact assessmentwould be conducted by qualified NGOs and quantitative impact assessments by International Agricultural Research Centers or similar organizations. Both types of assessments would be conducted in close collaboration with national research institutes or universities 4. Sustainability 74. The sustainability o f the RCBP is closely related to its fiscal implications. A detailed fiscal analysis was conducted as part o f the economic analysis during project appraisal. The analysis assessed: (i) fiscal implications o f sustaining the activities which have been initiated under the the project; and (ii) fiscal implications o f scaling-up project investments and activities, the particularly with regard.to increasing the numbers o f Farmer Training Centers (FTCs). Current public expenditures on agricultural research, extension, and education were compared with: (i) the projected demands on public expenditures for sustaining project activities after the completion o f RCBP; and with (ii) projected demands on public expenditures for scaling-up the the initiated reforms under the project. Public expenditures on agricultural research and extension are currently about US$30 million eachper year. An additional US$30 millioni s being spent annually on the agricultural TVET program. Together, these expenditures total roughly US$90 million per year - this amount represents around 40% o f the public sector budget for agriculture and an annual investmento f roughlyUS$lO per f m and4% o f agricultural GDP. In terms o f share o f agricultural GDP, these are relatively high figures, especially compared to averages for Africa. The total project costs are estimated to amount to about US$71 million over 5 years. Public expenditures would have to increase inreal terms by 16 percent annually in 2011 and beyond after the end of the project to sustain the investments and activities initiated by RCBP. Sensitivity analysis demonstrates that the up-scaling o f the FTCs i s likely to be a profitable investment however, the fiscal analysis clearly shows the significant implications o f scaling-up the FTCs on the public expendituresfor extension. The MoARD would also have to think carefullyhow to selectthe locations ofthe FTCsmost strategically andwhich areas canbe reachedper FTC. 75. Institutional sustainability also significantly depends on the extent to which decision- makingpower is transferred to decentralized implementation units. Inorder to mitigate this risk the project will (i) provide TA to kebele administration and other decentralized units to build capacity and assume ownership at these levels; (ii) promote competitive funding mechanisms (such as the competitive research grants and the Rural Innovation Fund) to empower decentralized stakeholdersto access resourcesfor research and extension activities basedon their needs; and(iii) buildregionalandlocal capacity inparticipatoryplanningandM&E.Institutional sustainability is also affected by the degree o f commitment and openness o f key stakeholders (policy-makers, researchers, extension agents) to introduce, sustain, and scale-up innovative research and extension approaches. The project will introduce these innovative approaches on a modest scale, systematically monitor the impacts o f these approaches, and raise awareness o f these impacts at all levels. 24 5. Critical Risks and possibleControversialAspects Potential Risks and Mitigation I RiskMitigationFactors tiskRating Risks vith Mitigation Toproject development objective Capacity to implement the A strongPMUhasbeen M project, particularlythe developedto provide innovation sub-component within implementation support within extension, is weak and could the structure o f MoARD and substantially slow project B O A R D S , implementation. The success ofthe project Theproject will provide TA to M significantly depends on the kebele administration and other extent to which decision-making decentralized units to build power is transferred to capacity and assume ownership at decentralized implementation these levels. Competitive funding units. mechanisms, such as the competitive researchgrant and the FarmerAdvisory Service Fund,willbeusedto provide resourcesdirectly to regionaland local stakeholders. Inaddition, the project will buildregional and localcapacity inparticipatory planning and GEresponsive M&E. Lack o f access to markets and New andparallelinitiatives to H credit for inputs could slow improve access to bothwill help farmers' adoption o f new to ease this constraint. Further, technologies. the project will support the development o f farmers' marketing capacity through FTCs and farmer groups. Part o fthe mandate for DAswill be to help farmers to become more attractive clients for lenders. Lack of commitment and Initially, innovativeapproaches H openness ofkey stakeholders will beimplemented onmodest (policy-makers, researchers, scale. Systematic M&Etogether extension agents) may impedethe with acommunication strategy successfulimplementation o f will help to make impact visible. innovative researchand extension Theproject places major approaches. emphasison capacity building, knowledge sharingand awareness 25 campaigns at all levels. The Government may scaleback The design accountsfor this risk M project activities andreforms bykeepingdimensions ofthis initiatedunder the project due to project relativelymodest and the financial constraints. design flexible. Close M&E will helpto identifyandscale-up successfulcost-effective approaches. Capacity constraints could cause ThePMUwill beresponsible to M delays infinancial reporting and monitor this closely andto build audits. the capacity o fregional offices to beable to complywith all reporting and audit requirements on a timelybasis. Local Governments could face Bankfinanced capacity building S capacity difficulties inbeingable projects, PSCAP, and the to manage, fund andsupport their upcoming PBS should contribute administrative staff andin toward the mitigation o fthis risk. supporting the salarieso fnew agricultural scientists and extensionists . Therolewhich extensionagents Decentralization o f authority over M have (untilnow) playedinthe extensionists andtheir work retail end ofthe distributionchain programsto kebele level for fertilizer and seedpackages organizations o f farmers may (andinthe collectionendofthe help to instillgreatertrust in associatedcredit to farmers) has extensionists. Further, moving compromised their relationship away from a package-based with farmers. Gaining full approachwill also contribute acceptanceo f extension agents as toward improved relationships objective farm advisors and as between extensionists and partners with farmers will likely farmers. Successful experience in not happenovernight. Ethiopiawith participatory extension approacheswhere communities are the primary decision makers are reflected in the project design. Weak research-extension-farmer The ARTP introduced M linkages could impedethe successfully innovative successfulimplementation o f institutionalapproaches to demand-driven service overcome these constraints (such approaches. as Farmer ResearchExtension Groups andREFACs). The 26 RCBP will buildonthese approaches and further strengthen the linkages among scientists, researchers, and farmers. Riskratings: HighRisk (H)-greater than 75 percentprobabilitythat the outcornelresult will not be achieved; SubstantialRisk(S)-probability o f 50 - 75 percent that the outcornelresult will not be achieved; Modest Risk (M)-probability o f 25 - 50 percent that the outcomelresult will not be achieved; Low or NegligibleRisk (Ncprobability of less than 25 percent that the outcornelresult will not be achieved, 6. Loanlcredit conditions and covenants 76. Conditions o fEffectiveness would include: The GoE has established a financial management system for the project satisfactory to IDA, The Project Implementation Manual (PIM) has been adoptedby the Minister of MoARD satisfactory to IDA. The P M U has been established with terms o f reference, facilities and core staffing acceptable to the Association, consisting of, inter alia, Project Coordinator; Research- Extension-Farmer Linkages Coordinator; Communications and Training Specialist, Gender Specialist; Financial Management Specialist; Procurement Specialist, and Monitoring andEvaluation Specialist. 77. Other Covenants would include: Fundstransferred to regions for project activities will be countedas additional lndingon top o f federal contributions to the regions, and therefore will be not be offset inthe Government's formula for allocating regional finds; Program Agreements would be established between the MoARD and E m , the BoARD o f each o f the Regions; the BoARD o f woredas participating in RCBP; any kebele councils or farmer groups receiving responsibilities and funding under RCBP; and each universityparticipating inthe program; The Borrower shall maintain a financial management system and prepare project financial statements in accordance with the Ethiopian government accounting policies andproceduresandInternational Standards; The Borrower shall submit audited project financial statements no later than six months after the close of each fiscal year; TheBorrowerwill submit FMRs45 days after the endof each six months; TheBorrowerwill also submit additional financialreports as requiredbythe Bank. 27 APPRAISAL SUMMARY 7. Economicand financialanalyses 78. The investments proposed under the RCBP would be expected to result in substantial positive economic returns (as elaborated below). The fiscal implications o f the investment plan would also be substantial (also elaborated below) - but these would be more than offset by the expected economic payoffs in terms of improved farm incomes for a broad spectrum o f Ethiopia's farm families. The fiscal commitments needed to maintainthe activities supportedby RCBP beyond the life of the project would represent an increase o f roughly 16% from current expenditure levels on these programs - a figure well within the GoE's strategic plans for increasing investment inthis area. 79. An ex-ante economic and financial analysis of the RCBP is presented in h e x 9. This includes: (i) a briefsummary o f general issues for economic analysis o f agricultural researchand extension projects; (ii) a brief review of returns to past investments in agricultural research and extension projects worldwide with particular emphasis on Sub-Saharan Africa and Ethiopia; (iii) an overview o f the economic importance of agricultural production in Ethiopia; (iv) an estimation o f the potential Internal Rate of Return (IRR) and Net Present Value (NPV) for the proposed investment; and (v) a fiscal analysis focusing on the implications on public expenditures to sustain and scale-up investments and activities initiated under the project (see Annex 9 for details). 80, Following World Bank guidelines, a full economic analysis o f the whole project was not attempted, since a large share o f resources inthe project i s allocated to institutional development. However, the support o f the extension system in terms o f capacity building for FTCs and the promotion o f innovative institutional and operational extension models, can be expected to be translated directly into increased adoption o f improved technologies in targeted woredas and kebeles. Cost estimates indicate that with an amount o f US$20 million about 2,000 FTCs could be supported as part of the capacity building sub-component covering an area of about 1.2 million hectares. The analysis aims at estimating the incremental benefit per hectare required to pay for the costs of the investment into 2,000 FTCs. Results indicate that benefits per hectare would have to increase by US$4 to reach an Internal Rate o f Return (IRR) o f 13 percent. Household surveydata show that adoption o f improvedtechnologies on five major crops (wheat, maize, teff, barley, sorghum) can leadto an incremental benefit of US$10 per ha. Assuming that this incremental benefit o f US$10 per ha could be realized on the agricultural land o f the four regions an IRR o f 34% could be reached. Incremental benefits per hectare o f US$4 and US$10 would be equivalent to an increase o f 1.3 percent o f AgGDP per hectare and 3.3 percent o f AgGDP per hectare respectively. These figures indicate that the project investments in some 2,000 FTCsare likelyto be economically justified. 81. An analysis o f the total costs o f the RCBP indicates that a productivity gain of only 0.06 percent o f the Ethiopian AgGDP would lead to an IRR o f 14 percent. The analysis includes the annual costs of the project, including institutional development and assumes a time lag for the initiation o f benefits o f 4 years with maximum benefits (i.e. 0.06 percent o f AgGDP) after 8 years after project start. 82. Maintaining the investments activities initiated under RCBP would have significant fiscal impacts. The fiscal analysis aims at assessing: (i)the fiscal implications o f sustaining the activities which have been initiated under the project; and (ii) fiscal implications o f scaling- the upproject investmentsand activities, particularlywithregardto increasing the numbersofFTCs. Crrent public expenditures for agricultural research, extension, and education are compared with 28 the projected demands on public expendituresfor sustaining project activities after completion of the RCBP. Annual public expenditures for agricultural research, extension, and education would have to increase inreal terms by 16 percent from their current levels in2011and beyond in order to sustain the investments and activities initiated by RCBP. This increase would correspond to an increased expenditure of US$7.5 million per year. In total the public expenditures for agricultural research, extension, and education would amount to about 2.5 percent o fthe total government budget in2002. 83. The second part of the fiscal analysis assesses the profitability of scaling-up the Farmer Training Centers (FTCs) and the projected demands on public expenditures. The current plan of the MoARD suggests a total number of 18,000 FTCs. In order to pay for the costs o f this investment it is estimated that at a minimum an incremental benefit per hectare o f US$15 is needed, which would be equivalent to an increase ofthe AgGDP per ha of 5 percent. While these productivity increases are achievable, the GoE should also take into account the fiscal implications while up-scaling the FTCs. I t is estimated that the public expenditures required during the first three years would amount to US$126 million per year. In the following years US$83 million would be required annually to cover the recurrent costs. While the up-scaling o f FTCs i s likely to be a profitable investment, the fiscal analysis clearly indicates that the demand on public expenditures will be significant. The MoARD would have to think carehlly how to select the locations o fthe FTCs most strategically and which area can be reachedper FTC. 8. Technical 84, Principles guiding project preparation were the need to create a more efficient, responsive and demand driven agricultural research and extension system. As a result, the project's technical design focused on the following key elements: 85. Gradual decentralization and greater autonomy in management of FTCs, TVETs, R A R I s . Inorder to ensure the effectiveness as well as relevance o f the TVET and extension and researchprograms, the project will support institutionalreforms designed to place responsibility for these programs at the most decentralized levels possible - likely at the Regional level in the case o f TVET and at the kebele (village) level in the case o f agricultural extension; responsibilities for research would be divided between several levels including the federal and regional levels. Further,the project will support the development o f mechanisms through which to open up opportunities to provide training, researchand extension services to actorsbeyondthe public sector - including the Universities, NGOs, the private sector, and others with appropriate capacity. 86. Integrating research, extension and training agendas and creating a greater client focus. Innovative thinking about vocational training complements innovative thinking about agricultural research and extension, and the project will support strengthened linkages between these three. The Government seeks to strengthen agricultural extension and define the role of agents as advisors to clients rather than as purveyors o f instructions and packages dictated by higher authorities. The project will assist in redefining roles and obligations of existing extension agents, makingthem more responsive to clients. The Government intends to improve the impact of agricultural researchby increasing the involvement o fmale and female farmers and other clients in decisions on research priorities and the allocation o f human and financial resources. The project will also support development o f the technological content o f the advice that extension agents and other contracted providers can offer, to assist the Ministry inits stated 29 purpose to expand the scope of the expert advice and respond to a wider array o f needs and circumstances. 87. Embedding demand-driven mechanisms in institutional structures. To increase the responsivenesso f agricultural institutions the project will support development of demand-driven interfaces within research, extension andtraining institutions. The project will provide funds and development of mechanisms through which farmers and DAs can influence the prioritization of research activities andthrough which they can draw their activities into local demonstration plots and farmers' fields. TVET colleges will use client feedback to improve quality and relevance o f programs. This would include development o f Advisory Boards of agri-businesses representatives and prior graduates for regular reviews o f curriculum and program performance. The project will also invest in the development o f the capacity o f cooperatives to take responsibility for FTCs and other agricultural advisory service programs, to take on commercial roles in some agri-business activities, and to participate effectively as representatives o f farmers inagricultural markettransactions. 88. Cross-cutting issues: To increase the participationof women inTVETs, research and as clients and experts in the agriculture extension system, the project has included targets and processes that address gender equality issues. The project has also given emphasis to addressing HIVlAIDS issues in agriculture programming by assessing the increased risk o f infection through project activities and by.promoting activities that address the impact of AIDS. The project will ensure that environment issues are addressedwithin eachcomponent. 9. Fiduciary 89. The recently completed Joint budget and Aid review (JBAR) and the Fiduciary Assessment (FA) show that Ethiopia has made significant progress in strengthening public financial management in recent years. The country's discipline in executing budget and compliance with existing government regulations i s the major strength in implementing this project. I A s are expected to closely follow the budgetary discipline and regular governmental reportingmechanism for project activities. 90. The task team has conducted an assessment o f the adequacy o f project financial management system o f the proposed Rural Capacity BuildingProject. The assessment, basedon guidelines issued by the Financial Management Sector Board, has concluded that the project meets minimum Bank financial management requirements, as stipulated inBPlOP 10.02. Inthe task team's opinion, the project will have in place an adequate project financial management system that can provide, with reasonable assurance, accurate and timely information on the status o f the project inthe reporting format agreed with the project and as requiredby the Bank by effectiveness. 91. The current governmental accounting system will be adopted for recording, reportingand auditing o f the project's financial transactions. The major risks for project implementation include i)Numerous project implementation units (Us) with relatively low FM capacity are involved and ii)Most o f the U s are new to implement Bank-financed projects and therefore are not familiar with Bank FMrequirements and disbursement procedures. To mitigate these risks, the following should be provided prior to effectiveness: a) Additional staff with the right combination of educational background and work experience should be recruited for all PMUs to be established in MoARD and BOARDSand additional staff should be assigned for all I A s that are understaffed; b) Well designed and focused training should be provided to all staff 30 involved inthe project; and c) A set of short and concise FMguidelines should be prepared and made available to all finance staff, who will be involvedinthe project, 92. Based on the nature and design o f the project, Financial Monitoring Reports (FMRs) will be submitted to the Bank on a semi-annual basis, and include financial, procurement and physical progress reports. Ministry of Agriculture and Rural Development (MoARD) will collect, compile and prepare FMRs for the project and will be responsible for the final submission o f the FMRsto the Bank for review and comment with 45 days after the end o f each six months. 93. Funding sources for the project include the World Bank loan and a CIDA grant. Bank loan proceeds will flow from the Bank to the special account to be established at the National Bank of Ethiopia and will be managed by MoARD. Each o f the other implementing agencies will open a separate local currency account to deposit money and effect payments related with the project Bank loan will be signed between the Bank and the Government o f Ethiopia through its MoFED, and Bank loan proceeds will be grant to all project participants at the federal, regional and woreda level and have no 'offset effect' on general purpose transfers. It should be noted that the Bank and CIDA financing complement the Government's financing o f about $90 milliodyear (not reflected in the financing plan) for Government -led reforms and related interventions in agricultural research, training, and advisory services. The cost sharing plan is consistent with the Country Financing Parametersapproved inFebruary2006. 94. In terms o f disbursement technique, the project will be disbursing based-on on special account advance, direct payment and special commitment. The project will not use quarterly un- audited financial report baseddisbursement. 10. SociaVGender 95. Consultations with stakeholders during the preparation o f the ESMF highlighted the following social issues: acute poverty, high level of debt, feeling o f powerlessness and inability to change or improve their own situation, effects o f HIVIAIDS, food insecurity, ethnic tensions, insecurity of land tenure, gender inequality, lack of access to capital to engage in micro- enterprise, lack o f social services, and lack o f technical knowledge such as farming techniques to increaseproductivity. 96. Whde the project is not expected to address all social issues, project interventions are designed to increase participation and empower local communities. FTCs will provide training and extension services in a participatory and demand driven basis. Ownership andlor managemento f FTCs will be transferred gradually to kebele administrations, a development that i s expected to increase the extent to which FTC services to farmers are demand driven. In addition, through iterative planningprocesses, FTCs and farmers will be assistedby the project to use participatory rural appraisal techniques for local community consultations. This would ensure that project interventions facilitate communities to identify their own problems and solutions, prioritize those solutions and then develop plans for content and delivery o f service packages, andset indicators for success. 97. The institutional arrangements focus onparticipationandsocial inclusion, informationand training, monitoring and evaluation. For example, the ESMF identifiedvulnerable groups among the poor, especially those at risk o f exclusion, for participation in training and decision making andfor monitoring. 31 98. The RCBP will give special attention to enhancing gender equality (GE) throughout the extension andresearch system payingparticular attention to: b Increasing the percentage of female students completing the TVET program (to 30% at the end o f the 5 years) through affirmative action measures; b Raising the numberlpercentage of female instructors in TVETS through proactive recruitment; b Integrating GE concerns and appropriate training materials in each and every course and introducing a course entirely focused on GE issues to create male and female extension workers equipped with GE mainstreaming skills to meet the extension needs of men and women; b Including GE mainstreaming skills inskill gap and training needs assessment at all levels of the extension system and intraininglmentoring activities to fill gaps; b Devising innovative ways o f reaching women farmers in MHHs to meet the PASDEP target of30%; b Institutionalizing measures to get more women into extension system (recruitment, working conditions, career opport~itieslscholarships,etc.); b Appointing and building capacity o f GE focal persons and woreda Women's Affairs Offices (to advise and follow-up implementation); b Developing (adapting) a variety of GE integrated communication awareness materials, traininglleamingmaterials, guidelinesandmanual; b Identifying, developing guidelines for and addressing gender equality issues relevant to researchsuch as women's involvement: P insettingresearchagenda; > as informants; P inparticipatory innovationadaptation, Le., testingandtrials offindings; P at the dissemination ofresearchresults, etc. e Ensuring adequate representation of women in REFACs and provide training to enable them actively participate; raise GEawarenesso f all REFAC members; e Developing indicators for tracking changes in gender equality issues at outcome, output andactivity levels, collectingsex disaggregateddata and assessinggender equality within project impact assessments. 99. The Gender Equality Specialist at the PMU will coordinate and monitor the gender equality aspects of the project; however, the actual work and implementation o f gender mainstreaminghas to be taken upby all actors at different levels. The GE focalpoints will bethe linkto the PMUGenderEqualitySpecialist. 100. It is well accepted that HIVIAIDS is not only a health issue, but an important development issue that needs to be addressed ifprograms are to be successful. The project will assess and address HIVIAIDS issues within each component as a cross-cutting issue. The project will assist in implementing the multi-sector response in rural areas within agriculture programming inTVETs, extension services, FTCs andresearch. 101. Resettlement. The Bank's operational policy on resettlement (OP 4.12) has been triggeredbecauseRCBP financing for FTCs and TVET colleges may result inalteration of land use and could conceivably result in a change in livelihoods or incomes, This is not anticipated underthe project as itwill only support onlyrehabilitationandminor construction ofcivilworks, but a resettlement policy framework (RPF) has been designed to address any potential 32 involuntary resettlement due to the activities o f the project and applies to all components under the project, whether or not they are directly fundedinwhole or inpart bythe Bank. 11.Environment 102. The main environmental concerns facing agriculture inEthiopia are those associatedwith: (i) degradationduetonutrientlossasaresult,ofsoilerosionandexhaustion,overgrazing, land river bank degradation and deforestation; (ii) scarcity o f water sources; (iii) of wetlands and loss other water ecosystems; and (iv) water pollution. 103. The project would be expected to contribute to positive environmental outcomes through its focus on demand driven research and extension services, which will offer farming communities the opportunity to design their own training and extension service packages to mitigate some of their local and specific environmental concerns, and through adoption o f an Environment and Social Management Framework (ESMF). The ESMF will promote greater awareness o f environmental issues through mainstreaming environmental concerns at the point where extension agents receive their training (i.e. TVET colleges), ensuring that training will be responsive to the specific critical needs o f the farmers, which may vary ftom woreda to woreda, and through practical demonstrations on how to mitigate environmental concerns at the FTC level. 12. Safeguard Policies Safeguard Policies Triggered by the Project Yes No EnvironmentalAssessment (OPIBPIGP 4.01) EX1 E l NaturalHabitats (OPIBP 4.04) 11 [XI PestManagement (OP 4.09) [I [XI CulturalProperty (OPN 11.03, beingrevised as OP 4.11) [ ] [XI Involuntary Resettlement (OPA3P 4.12) [XI E l Indigenous Peoples (OD 4.20, beingrevised as OP 4.10) [I [XI Forests (OPIBP 4.36) [I [XI Safety o fDams (OPIBP 4.37) [ I [XI Projects inDisputedAreas (OPIBPIGP 7.60)* [ I [XI Projects on International Waterways (OPIBPIGP 7.50) [ I [XI 13. Policy Exceptions and Readiness 104, The project requires no exceptions from Bank polices. Readiness criteria is likely to include the following: Fiduciary (financial managementandprocurement) arrangementsinplace; Disclosure requirementsmet; and Results assessment arrangements completed: M&E institutional obligations spelled out; M&E capacity issues addressed; indicators specified; TORSfor baseline studies drafied. * By supporting theproposedproject, the Bank does not intend toprejudice the3nal determ~nationof theparties' claims on the disputed areas 33 Annex 1:Country andSector or ProgramBackground ETHIOPIA: RuralCapacityBuildingProject Agriculture contributes about 40 percent o f total GDP andwithinagriculture, 64 percent o fvalue added comes from crops, 23 percent from livestock, and 13 percent from forestry. Exports (coffee, livestock products, chat, oilseeds, pulses and horticulture) represent about 10 percent o f agriculture GDP. Agricultural growth has averaged 2.6 percent over the period 1994195 to 20041'05 with a wide variation around trend due to rainfall. Growth has largely been drivenby expansion in land area; even so area cultivated per family (and food productionper family) has been declining over the longer term. Agricultural growth has not been highenough to allow it to play the leading role in national development and poverty reduction envisaged under the govenunent's agriculture-led industrialization strategy. Since the 2002103 drought, growth inthe sector has rebounded, and has averaged about 10 percent per year, led by rapid growth in exports, especially livestock products, oilseeds, pulses, andhorticulture. For much o f the 1990s the Government's support to agricultural growth was predicated on the assumption that the critical constraint lay on the supply side, and that a centralized roll out o f technological packages combining fertilizer, seed, and instructions on how to use them would break through the supply constraint and lead to sustained growth. The extension service was hlly mobilized to implement the roll-out, including the distribution of inputs and collection of credit at the endo fthe season. The implementation of the program allowed food productionto grow modestly, but participants inthe program did not become more fully enfranchised decision makers because they had few options other than to apply the packages as delivered. The role o f the state inprovisiono f credit crowded out private agents in input and output markets. Thus a focus on the available technological solutions to supply constraints clarified the need for generating more efficient and sustainable `baskets' o f technological options and a stronger focus on the demand side through rural markets and improving the decision-making skills and responsibilities o f producers. The Government is now placing an emphasis on assisting producers to be successful decision makers, to improve incentives to market and invest, andto protect investments by reducing the economic loss associatedwith unmanagedrisks andperiodic adverse events, such as drought. The need for such a change in course is widely understood and embraced by many, and the activities supportedunder this operation represent a modest and cautious step on a new path. The Government's Strategy. Ethiopia's draft Program for Accelerated and Sustained Development to End Poverty (PASDEP) now being finalized, continues to emphasize rural development led by agricultural growth, improved governance and decentralization o f delivery of services, and the reduction o f vulnerability. Relative to the previous poverty reduction strategy, PASDEP places much greater emphasis on commercialization o f agriculture, diversification o f production and exports, and private sector investment inorder to help farmers to move beyond subsistence farming to small-scale market oriented agriculture. Under PASDEP, these objectives would be pursued through a range o f policies and instruments including: (i) modernization o f the research and extension systems and making them more demand-drivenwhile providing complementary training through the Technical and Vocational Education and Training (TVET) program to build capacity in the delivery o f agriculture extension services to farmers with a stated target o f reaching 2.6 million female headed households and 30% o f married women farrners in MHH within 5 years; (ii)enhancing 34 competitionand increasing efficiencyinagricultural input and output markets; (iii) strengthening the rural credit system; (iv) improving irrigation and water management; (v) increasing land tenure security; (vi) creating a conducive investment climate for commercial agriculture; and (vii) reducingthe vulnerabilityof families livinginregions prone to drought. As part of its commitment to an agriculture-led growth strategy, and as part of a broader Education and Training Policy, the Government of Ethiopiahas initiated a substantial investment toward improving the productivity of its rural people. This investment in the development of agriculturally-oriented human capital was launched through the establishment of 25 junior college-level residential agriculturally oriented Technical Vocational Education and Training (TVET) programs. These agricultural vocational schools form part of a more general TVET thrust of the government that i s aimed at participants in other sectors as well. Inaddition to training students in a wide variety of agricultural specialties, the Agricultural TVET program is being used to retool and expand Ethiopia's Agricultural Extension program, especially to meets the needs of a more market-oriented and diversifiedagriculture. Ina second stage of expansion now beinglaunched, the TVET program will provide a range of training options for entrants into a growingprivate agribusinesssector. This formal training is the first step of an ambitious scaling-up and intensification of the extension program. The offices of field extension workers, known as Development Agents (DAs) are being upgraded physically and transformed into Farmer Training Centers (FTCs)-- community-level office and meeting buildings to house the DAs and to serve as places for farmers and communities to gain access to a wide variety o f technical and business skills for rural enterprises. The number of DAs will increase from 15,000 in 2002 to some 66,000 by 2009. Three DAs (one each for crops, livestock, and natural resources) are being stationed at each FTC, an increase from one DA per office as has beenthe case inthe past. Up to 6,000 DAs specializing in Animal Health and 6,000 in Cooperatives will also be trained to provide assistance to FTCs. In addition to expanding the scale o f the service, the scope of services offered is also being increased. A much wider range o f technical packages than were available in the past is being developed in order that DAs would have a portfolio of technologies and associatedinformation available for transfer to farmers -and inthis way, would be able to better matchrecommendations with local ago-ecological andsocio-economic conditions. The expansion of the extension program is only partially complete. Around half of the planned FTCs have been constructed with the balance to be completed during the next two years - and even where completed, most facilities are quite rudimentary. Most o f the original 15,000 DAs and of the 40,000 new DAs are in the process of being trained - or have recently completed training. Budget limitations have constrained the provision o f furniture, equipment, and other suppliesneededto operationalize most FTCs. Infrastructure development and capacity buildingfor the EthiopiaNationalAgricultural Research System (NARS) are currently supported by the Agricultural Research and Training Project (ARTP) which is financed by the World Bank and the International Fund for Agricultural development (IFAD); the project has been effective since February, 1999, A request for an extension of the ARTP implementation period has recently been submittedbythe Government to the Bank andthe project is presently expectedto be completed byDecember 31,2006. Inaddition to the successful establishment ofnew Research Centers (RCs) insix of Ethiopia's more marginal ago-ecological zones, ARTP has made good progress in rehabilitating and 35 upgrading o f existing laboratory and field facilities at the Ethiopian Institute o f Agricultural Research (Em), the Regional Agricultural Research Institutes (RARIs) RCs and at Alemaya Agricultural University (AU). There has also been substantial impact o f the human resource development (HRD) program: by the completion o f ARTP about 350 MScs, 160 PhDs, approximately 200 short-term trainees who participated in overseas training programs, and several thousand short-term trainees who benefitedfrom local training programs, will have been successfully supportedthrough ARTP. Significant progress was made in improving the coordination of the NARS. In order to make research more client-oriented and demand-driven there has been an intensive effort to develop institutional mechanisms for closer research-extension-farmerlclient linkages and collaboration in order to establish more effective working relationships with farmers and agri-businesses in setting research priorities, working on collaborative on-farm research and in assessing the relevance and impact o f researchresults. ARTP also enabled the establishment of a competitive national Agricultural Research Fund (ARF); two rounds o f Calls have been successfully completed. ARTP has enabledresearchinstitutes to accelerate identification and development o f a wide range o f agricultural technologies andknow-how adaptedto the different agro-ecologies. However, the task o f effectively preparing the Ethiopia NARS for its wide-ranging mandate is far from completed. Lessonslearnedunder ARTP clearly indicate that although a good basis has been created for accelerated technology generation, dissemination and adoption, to achieve and sustain this will require continued and intensified support. There i s an urgent need to further re- enforce research institutions and make arrangements for closer coordination, greater client participation in setting research priorities, implementation and funding, pluralism in service provision and much closer farmer-extension-research linkages and collaboration. Building complementary capacity in the extension system and private agri-business will be critical to scaling up the localized successes achieved under ARTP, and especially inmarginal and remoter areas. Finally, building on ARTP support, it i s important for Ethiopia to enhance its capacity in new frontier areas of research such as bio-technology inorder to capitalize on opportunities for international collaboration inaddressingimportant productivity constraints. 36 Annex 2: Major RelatedProjectsFinancedby the Bank andor other Agencies ETHIOPIA: Rural CapacityBuildingProject Z i t o r Issue Project .atest Supervision [PSR) Ratings Bank-financed p icts only) Bank-financed P Food Securitvl Food Security Project I VulnerabilitvlCDD Emergency Drought Recovery Project I Productive Safety Nets I Pastoral Community Development Project I Amicultural Research Agricultural Researchand Training Project i Rural Energy Energy Access Project 3 Civil Society Public Service Capacity BuildingProject (under prep) Emuowerment, Protection ofBasic Services 5 Decentralization Land and Sustainable LandManagement (under prep) Water Management Irrigationand DrainageProject(under prep) Other Development Agencies CIDA EU IFAD FA0 USAID DFID GTZ 37 Annex 3: ResultsFrameworkand Monitoring ETHIOPIA: RuralCapacityBuildingProject ResultsFramework PDO OutcomeIndicators Use of OutcomeInformation The objective o fthe Project is to % o fclients (Le. D Help to assess the assist Ethiopia to strengthen farmers) who believe that they outcomes and impacts o f the agricultural services and systems have gained useful knowledge or project and indicate ifchanges for improved agricultural other long-lasting benefits (e.g. inproject designare necessary. productivity, make them more through changes inmanagement Help determine if responsive to clients' needs, and practices) due to provision o f technology and practices enhance the capacity of research andor advisory services generated and disseminated producers to become aware o f under RCBP (% o fpositive meet real needs o f farmers and and to adopt economically viable responsesand ratings; producers. andenvironmentally sustainable disaggregated by householdtype, Provide technologies andpractices. sex; and wealth group) informationwhether the clients % o f farm are satisfied with the provision households with increased o f agricultural services. income due to adoption o f Help technologies andpractices determineiassess ifcomponent attributable to project outcomes are successfully intervention intargeted Woredas translated into desired (incomparisonto households not outcomes at PDO level or affected by project intervention; whether disconnect exists. inaverage for allhouseholds; in 0 Sex disaggregated average for households per indicators will provide targeted area; inaverage for informationon whether or not female-headed households; female farmers are benefiting different wealth classes) from andparticipating in Area (inha) on TVET, extension, and research. which technologies or practices have been adopted attributable to project activities (total; total per project area; female-headed households) D Volume o ftrade in agricultural commodities through the EthiopianCommodity Exchange OutcomeIndicators Use ofResultsMonitoring Component 1: AgricultureTechnical VocationalEducationand Training AgTVETcolleges are responsive D %o fclient 0 Indicates whether to the changing needs of a satisfaction with quality o f the 2"dphase o f the TVETs (in demand-driven and market- employees recruited fromTVET particular revised curricula) drivenagricultural sector colleges (agribusiness; other meets the expectation and private sector firms, BOARD needs o f the private sector. etc.) 0 TVET curricula 38 0 Number/% of couldbe revised accordingly. enrollment, retentionand 0 Sex disaggregated graduates from agriculture indicators provide information TVET colleges (disaggregated on progress to increase by sex) women's success at TVETs. e Number/% of females attending and graduating from TVET colleges e Number o f TVET colleges successfully implementing strategic plans based on assessment o fmarket demands for technical skills Component 2: Agricultural Extension The agricultural extension e %ofDAs(female Determines programs, both public and non- and male) satisfied with whether the extension approach public, improvedtheir mentoring and backstopping is demand-driven and whether effectiveness inresponding to the from "supervisor DAs" and farmers benefit from the newly expressedneeds of farmers Woreda BOARD implemented approaches. 0 % o f client e Indicates whether satisfaction with advisory service farmers satisfiedwith provision regarding inclusion in theadvisory than planning processes ("YO of before. positive responsesandratings; Indicates whether all households, female-headed the capacity buildingof households) aiming at participatory 0 Area (inha) on approaches have been which technologies or practices successfully translatedinto have been adopted attributable to practices, FASF (total; total per project Helps to area; by female-headed , households) -area needs to be understand which extension approacheslmodels are specified for each major working and which do not. technology Important lessons for scaling- 0 %/number o f upcanbe drawn. targeted Farmer Training Centers Indicates whether that are self-reliantly byKebele authorities sufficient capacity hasbeen builtor whether additional 0 New extension efforts are needed strategy formulated that incorporates pluralismand mechanisms to make the system demand-driven 0 Pilotedinstitutional innovations for advisory service provision accepted andscaled-up m e M o m (including all (Number o f FTCs). decentralized levels) and national research andregional institutes Number/% of have increased capacity to conduct results-based monitoring Woreda BOARDandRegional whichimplemented Indicates whether and qualitative participatory and the concept of results-based outcome-based GEresponsive quantitative evaluations of M&Ehasbeenaccepted at all agricultural advisory services M&Esystem (data collection, levels analysis, andreporting fulfill Determines requirements o fresults-based 39 I M&E) whether the `learning-by- B MoARD (in doing' approach for impact collaboration with PMU) evaluation has been implementedresults-based GE successfully completed. responsive M&E system (based on results framework) B quantitative and qualitative impact assessment conducted byNGOs and international centers o f excellence incollaboration with ResearchExtension Farmer national research institutes and Advisory Councils (REFACs) universities andFarmer Research Extension Groups (FREGs) are facilitating B Number o f increased interaction between technologies andpractices tested research staff, extension agents, and adapted by Farmer Research farmers, and other stakeholders Extension Groups (disaggregated D Helps to determine bytheir GEresponsiveness) whether REFACs and FREGs B Area (inha) on are appropriate institutional which technologies or practices mechanisms to improve the have been adopted attributable to interaction o f researcher, FREGactivities (total; totalper extensionagents, and farmers. project area; by female-headed Indicates whether households) -area needs to be FREGssuccessfully enable specified for each major farmers to test and adapt technology according to their needs and B Number/% o f conditions. stakeholders perceive that REFACs are influencing regional researchagenda (including representatives from EIAR,RARIs, MoARD, BOARD;farmers; stakeholders inandoutside REFACs disaggregatedby gender) Component3: AgriculturalResearch The National Agricultural B Effective M&Eand a Indicates whether Research Systemhas the gender-responsive agricultural EARIidentified priority areas institutional and human capacity research impact evaluation for research and whether the to efficiently generate and systems established at federal prioritizationtranslated into disseminate client-demanded and andregional levels (# o f RCs increased research activities in market-orientedtechnologies. implementing results-based these areas. M&Esystem) a Determines B Numbero fresearch whether human capacity has projects inidentified priority been strengthened inidentified areas completed at federal and priority areas. regional levels (total and e Indicates whether financed byNARF;number o f EIARis adequately fulfilling biotechnology projects; number its responsibility o f o fprojects related to marginal backstopping andproviding areas, number related to gender services to RARIs, sensitive issues) a Shows whether b Number o fpeer- nationallregionalresearch reviewed publications, research centers increasingly seek 40 I reports, conference papers in collaboration with international identified priority areas centers o f excellence and (including-publications in whether the competitive fundi s biotechnology andrelatedto an appropriate vehlcle to marginal areas) facilitate this collaboration 0 Satisfaction o f 0 Helps to determine RARIs with ifandinwhichareas corrective servicehackstopping provided action is needed. by EARI(%o fclient satisfaction measured as % o fpositive ratings) 0 Increased % o f expenditures allocated to new priorities (non-traditional commercial crops, food safety, range management, soil and water conservation) 0 Amount/% o f research expenditures inpriority areas allocatedthrough competitive funding mechanism 0 Number/% o f approvedresearch proposals (and budget value) which I involvedwomen indecision- makingroles, at center-based andregional REFACS 0 %o fkey research and technical staffpositions filled andretained at RARIsJRC inlowpotential andremote areas Component4: Improving Informationand Communicationsystems wlin MoARD The information flow between 0 Number o f FTCs, 0 Indicates the and within all levels o f the WAOs, and BOARDS usingthe effectiveness o fthe M I S agricultural and rural informationsystem regularly for system ingathering and development management two-way communication o f data transmitting information at system is timely and reliable and information various levels and its overall 0 % o fprogress usefulness to clients within reports submitted timely at Government. Poor performance various levels would indicate a need to invest infurther training or re-design o f the svstem. Component 5: Developmentof Agricultural Market Institutions Well functioning regulatory 0 Planfor launch o f 0 To determine if system to meet international SPS agricultural commodity investments intraining and inplace andCommodity exchange completed and equipment are translated into Exchange inplace to reduce implementation o fplan improvedperformance of the market transaction costs underway quality control and quarantine 0 Number o f system regionsiinspection posts applying quarantine procedures 41 0 % of client satisfaction (e.g, exporters) with sanitary andphytosanitary services for Ethopian plant and livestock exports Component 6: Project Management The P M U functions efficiently as 0 Overhead costs as 0 Evaluate a project administration and percentage of total project costs performance of the project coordination unit 0 Fundflow fiom coordination unit and PMUto determine ifcorrective EIAlUuniversitieslregional measures are needed. research institutes, TVET 0 Evaluate colleges, and BoARDlFTCs implementation o fa withoutsignificant delay decentralized andparticipatory M&Esystem. 0 Progress reports received at centralldecentralized 0 Evaluate level without significant delays efficiency o f resource use. 42 a e a B I e e e e e a e e e e 4 InstitutionalArrangementsfor MonitoringandEvaluationofthe RCBP The Monitoring and Evaluation Specialist (M&E Specialist) of the Project Management Unit (PMU) would have the overall responsibility of coordinating all M&E activities conducted as part o f the RCBP. This specialist would be the only M&E staff to be hired for the PMU. At the other levels, the M&E system of the project should make use of M&E specialists already appointed (e.g. M&E staff in the Planning and Extension Departments at the Regional and Woreda BOARD).Regional FocalPersons would have to have basic knowledge regardingM&E of agricultural research and extension projects. The PMU M&E Specialist would monitor the status and progress of project implementation based on the Logical Framework and Results Framework and M&E Plan. Based on the Results Framework, helshe would have to develop the detailed Logical Framework and assess the adequacy o f the proposed project inputs, activities, and outputs indelivering the desired project objectiveloutcomes inthe most efficient and effective way given the identifiedproject risks and assumptions. The M&E Specialist would have to develop an efficient and effective M&E Plan capable o f continuous observation, sex disaggregated data collection and analysis, communication and reporting, and data and information storage so that the different levels o f the project management can be well informed of current progress and any need to revise or modify the set objectives, strategies or schedule. The responsibility o f the M&E Specialist would therefore also include the coordination of sex disaggregatedbaseline and follow-up surveys. The M&E Plan is expected to actively involve targeted beneficiaries as much as possible. It has to clearly define responsibilities at different levels and how these different levels exchange information and data and how they interact. The M&E Specialist would also be responsible for developing clear and user-friendly qualitative and quantitative sex disaggregated data collection and reporting formats in collaboration with their counterparts at the different levels. To ensure greater transparency and accountability o f funds for advisory services, regular evaluations would be contracted out to independent entities: participatory qualitative impact assessment would be conducted by qualified NGOs and quantitative impact assessments by International Agricultural Research Centers or similar organizations. Both types o f assessments would be conducted in close collaboration with national researchinstitutes or universities. The M&E Specialist has to coordinate all activities relatedto capacity buildingfor results-based M&E and impact assessment for agricultural advisory services. This would include: (i) organizing and chairingthe workshop for impact evaluation o f agricultural advisory services; (ii) organizing the forum for developing a framework for analyzing impact o f agricultural advisory services in selected woredas; (iii)coordinating the implementation o f this framework; (iv) organizing the workshop on benefits o fresults-basedsex disaggregatedM&E; and(v) coordinate all activities relatedto human resource development for M&E. The M&E Specialist would also check the status and design o f the Management Information System (MIS) developed for the ARTP Project. Helshe would have to assess whether this MIS could be modified for the RCBP or whether a new MIS would have to be designed. A computerized MIS would provide management with appropriate information (from internal and external sources) for timely and effective decisions as they relate to project planning,monitoring, andmanagement. 49 \ The M&E Specialist would compile information, data, and reports from different levels. Helshe would conduct quality checks, provide feedback to hislher decentralized counterparts, and analyze data to compute the status o f selected indicators. The M&E Specialist would report directly to the PMUDirector. The institutionalset-up o f the M&E System would follow closely the institutional set-up for flow o f funds and reporting. The M&E set-up would vary slightly depending on the specific component or subcomponent. Inthe case of the agricultural advisory component (excluding TVETs), the PMU M&E Specialist would compile sex disaggregated reports, data and other information from the Regional Focal Persons, conduct data analysis and quality checks, and provide feedback to the Regional Focal Persons. Helshe would assess the general status and progress, identify problems and issues, and report these to the PMU Director (including the submission o f monthly, quarterly, and yearly progress reports). The M&E Specialist would be responsible for translating the information provided by the Regional Focal Personsinto sex disaggregatedindicators included inthe Logical Framework/Results Framework o f the Project, The Regional Focal Persons in turn would compile sex disaggregated data and reports from the Regional BoARD M&E Specialists in the eight regions, conduct a quality check, and submit the regional progress reports (monthly, quarterly, yearly) to the PMU M&E Specialist and keep hidher informed about all M&Erelated issues inthe regions. The Regional BOARDM&E Specialist would compile sex disaggregated data and reports from the Woreda BoARD M&E Specialists. Helshe would also carry out quality checks and submit progress reports to the Regional Focal Person, the Head o f the Regional BoARD, and the Head o f the Extension and TVET Department o f the MoARD. The Regional M&E Specialist would also perform analysis o f the regional data and ensure that they are translated into a user-friendlyway indicating the status and progress o f the selected indicators. Helshe would also be expected to play a leading role with regard to the quantitative and qualitative impact analysis, including (i) coordination of sex disaggregated data collection and data processing in the respective region, and (ii)data analysis; and (iii) close collaboration with all stakeholders involved in data collection, data processing, and data analysis in the respective region. The M&E Specialistsat the Woreda BoARD would have similar responsibilities as their counterparts at the regional level. They would compile reports, data, and information from the DAs, and submit progress reports to the Regional M&E Specialists and the Head o f the Woreda OoARD. With regard to evaluation, helshe would play a leading role concerning participatory impact assessment. This would include coordination of sex disaggregated data collection, data analysis, and preparation of reports with all stakeholders involved. Finally, the DAs would conduct some basic sex disaggregated data collection, data compilation, and report writing supported by their Mentor DAs. With regardto M&E, their emphasis would be on basic monitoring. They would submit theirreports, data, andinformationto the M&ESpecialists at Woreda level. Inthe case ofthe TVET sub-component, the PMUM&E Specialist would generally have similar responsibilities of overall coordination, analysis, and reporting as for the advisory services, With regardto the institutionalset-up, a differentiationwould have to bemadebetweenthe federal and the regional TVETs. Concerning the former, the federal TVET Managers (or a TVET staff appointed bythe federal TVET Managers) would report directly to the P M UM&E Specialist and the Head o f the Extension and TVET Department of the MoARD. This would include monthly, quarterly and yearly progress reports with particular emphasis on the selected indicators. Concerning the latter, the Managers o f the regional TVETs (or a TVET staff appointed by the 50 regional TVET Managers) would report to the regional focal persons, who inturnwould report to the PMUM&E Specialist andthe Heado fthe RegionalBOARD. With regard to the research, ICT, market institutions, animal health and phytosanitary components, the M&E Specialist at the PMU would again assume similar responsibilities as described above. However, the institutional set-up would differ slightly. For research, each research institute (including regional researchcenters, EIARresearchcenter) would report to the M&E Specialist at the PlanningDepartmentofEIARHeadquarters. Thiswould include monthly, quarterly, and annual progress reports with particular emphasis on the status of selected indicators. The M&E Specialist at E M Headquarters will compile these progress reports and data, conduct quality control, provides feedback to the different research institutes, and submit (monthly, quarterly, annually) progress reports to the PMtr M&E Specialist. A similar arrangement would apply to the M&E staff of M o m responsible for ICT, market institutions, animal health and phytosanitary. They would report on a monthly, quarterly and annual basis directly to the M&E Specialist who would thencompile reporting for the overallproject. 51 Annex 4: DetailedProjectDescription ETHIOPIA: RuralCapacityBuildiugProject Component 1: AgricultureTechnicalVocationalEducationandTraining(TVET) (US$6.3 million) Background. The Agriculture TVET Capacity Building component would assist the Government to increase the capacity o f agriculture TVET colleges to respond to and serve the changing needs o f a market-driven agricultural sector. The Government's agriculture TVET program plays a central role in human resources development for middle level professionals in the extension system and inthe future will increasingly serve the needs for vocational education o f the private sector. Capacity buildingo f middle-leveltechnical workers is an important factor inthe driveto enhanceproductivity, stimulate economic competitiveness, andraisepeopleout of poverty. Currently the most important group of middle level technical workers i s the DAs who link researchers and farmers, and carry out most of the grass-roots agricultural technical and managementwork with fanners, agricultural businesses, cooperatives andNGOs inrural areas. In2001 the Government launched an ambitious agriculture TVET Program to train DAs. The program has established 25 agricultural TVET colleges ineight regions o f the country. In2004, the first batch o f graduates (9,600 o f which 12% were women) were assigned to work as Development Agents (DAs) at kebele level at Farmer Training Centers (FTCc). The first phase o f the TVET program aims to train 66,000 DAs; three DAs (plant science, animal science and natural resource management) for each o f the 18,000 FTCs; 6,000 DAs specialized in cooperatives and 6,000 trained inveterinary services. The total enrolment of the last four years was about 55,000 (approx. 12%women). Low female enrolment andhigher than average attrition at TVETs is attributed to weak academic background, adverse social conditions, physical violence, a curriculum that does not adequately address gender issues and an extremely low number o f female instructors to provide support and serve as role models.' More than 1000 local instructors (2.7% women) are employed and about 50 expatriate instructors (approx. 2% women) are recruited from China, India andKenya. The objective of the agricultural TVETs is to ensure the labour market is provided with middle level skilled and motivated agricultural workers to meet the needs o f women and men farmers, agribusiness, government, cooperatives, rural communities, NGO's and other social groups who will be involved in agriculture. To achieve this, an efficient, cost-effective, sustainable and equitable training system based on market demand i s required. A new long-term agriculture TVET program is needed to guide the further development of both regional and federal TVET colleges. It is envisioned that selected TVET colleges would become autonomous in their internal administration and in designing and implementing its education and training program. Colleges would be managed by the democratic leadership o f a board, consisting o f members from the government, community, research institutions, fanner organizations and the private sector. Insome cases, TVET colleges may be transformed into broader educational institutions Every year more than50% o f female trainees drop out compared to less than 20% of male trainees. 52 offering courses of study outside the agriculture sector andthe Government anticipates a smaller fraction o f TVET colleges will beretainedwithin the sector. For those agriculture TVET colleges that are retained, it i s envisioned that both federal and regional TVET colleges would become autonomous in their internal administration and in designing and implementing its education and training program. Colleges would be managed by the democratic leadership o f a board, consisting o f members from the govement, community, researchinstitutions, farmer organizations and the private sector. Inaddition, it is beingdiscussedthat allTVETs (those underthe MinistryofEducationandthose under the Ministry of Agriculture) would join a national system for accrediting the quality o f course, and their instructors. Discussion is underway o f a new proclamation on TVET colleges that should be finalized by project implementation. This would provide the legal framework for college autonomy, cost recovery, and accreditation. Rationalefor RCBPSupport.To meet these new demands, selectedagriculture TVET colleges will need to develop long term plans for meeting new market demands in terms of skills and training quality. As part o f this, colleges would require library materials, internet access, text books, teaching materials, reference material, equipment and buildings, Demonstration farms in some TVETs are not developed while others have income-earning potential. A study is needed on how to manage demonstration farms and how best to integrate them with the teaching program. DAs (recent TVET graduates) working at FTCs report that the curriculum at agriculture TVETs needs to be more practical and less theoretical. Extension, research and curriculum development links need strengthening. Economics of new and improved farming systems and risk factors especially for resource-poor women and men fanners need to be included incourse work. Inorder for TVETs to support MoARD's targets of providing extension services to 2.6 million female-headed households and 30% o f married women farmers by the end o f the PASDEP, gender dimensions o f the TVET training will also require a major upgrading. RCBP would support mechanisms to increase women instructors up to 20% and increasewomen graduates up to 30% and initiatives in the productionof curriculum and training materials that address the empowerment o f women farmers as well as gaps ingender equality, particularly inaccess to and control over resources and assets. Basic Principlesfor the TVET Capacity BuildingProgram. The following basic principles would guide the institutionaldesign o f the TVET Program: (i) participatory, innovative, learning culture at TVET colleges that is responsive andrelevant to the needs o fwomen andmen farmers; (ii) sharing for TVETcollegestograduallydiversifytheirsourcesofrevenuefromtheir cost initial reliance on the Ministry of Agriculture I Regional contributions to their own sources o f income (tuition and accommodation fees, revenues fiom farms, to improve program sustainability and increase client market power); (iii) over time as capacity builds, greater autonomy for decisions on curriculum reforms, cost-sharing, instructor contracts, and use o f locally generated revenues; (iv) appropriate certification and re-certification o f instructors and curricula, which would require periodic in-service training; and (v) market-based orientation so These targets have been set based onthe Sub-Saharan average for women's participation which is 35%. 53 that TVET program and curriculum development reflect demands from the labor market. Practical training will also require strengtheningof partnerships with employers, bothpublic and private; (vi) gender mainstreaming and introduction o f mechanisms to increase women instructors and women trainees and initiatives in the production of curriculum and training materials that address the empowerment o f women farmers as well as gaps in gender equality, particularly in access to and control over resources and assets; (vii) addressing HIV AIDS in agricultural programming; and (viii) establishment o f performance-based monitoring and evaluation within TVET colleges including setting of sex disaggregatedperformance targets and building institutional capacity for monitoring and evaluation of own performance. Budget allocation formulas should reward performance indicators such as the percent o f students meeting minimum scores on competency tests, the percent finding relevant employment in six months, the percent o f entry cohort completing training and, the increase in women graduates and instructors. The Agriculture TechnicalVocational Education and Training Component. IDA support incooperationwithCIDA grantswould assistthe Governmentto increasecapacity ofagriculture TVET colleges to respondto and serve the changingneedsofthe agricultural sector Sub-component1.1: Developmentof a StrategicPlanfor TVETs (US$0.5 million) The first sub-component would finance studies and technical assistance as inputs into the development o f a long term strategic plan for the future o f the AgTVETs. The project, in cooperation with the Government, would support studies and technical assistance to federal and regional SMSs, Women's Affairs and TVET departments, in collaboration with TVET colleges inthe followingareas: i. AsuggestedinstitutionalstructureforAgTVETcollegeswhichwouldmakethemmost responsive to the needs o f the sector - including governance arrangements; source of finances; relationship to the general TVETs, the universities, and other educational and training programs and institutions; and responsiveness to market forces and industry stakeholders. This assessment would include a recommendation on how many colleges would remaincore AgTVET colleges and how many couldbe transformed into broader educational centers. As part of the strategic plan a training needs assessment would be undertaken based on an analysis o f the market for agricultural technical skills, paying particular attention to gender dimensions. The locally hired consultants would involve and build capacity o f key ministry and regional bureau staff, TVET colleges and other stakeholders (i.e. research institutes) in the methodology, data collection, analysis and recommendations on the immediate and future training needs. The assessment would be used to develop a long term strategic plan for the future o f Agricultural TVET colleges. The strategic planwill make recommendations on the development of college plans and policies, curricula, redesign demonstration farms, address gender equality, address HIVlAIDS issues and cost-effectiveness toward long-term sustainability. The long term strategic plan will identify other studies and technical assistance to be undertaken and deliveredinlater years ofthe project. The project would support networking meetings with participating college deans and vice-deans to provide federal and regional TVET Departments guidance on technical 54 backstopping innew areas. These meetingswould also beusedas a forum for knowledge sharing among the colleges, especially with respect to plans for the proposed second stage development o fthe colleges. ii. TechnicalassistancewouldbeprovidedtoTVETdepartments,SubjectMatterSpecialists (SMS), Women's Affairs and other key professional staff at federal, regional and zonal levels, as required, on areas such as: Development of strategic plans for eachparticipating college. Curriculum development for revising existing courses and developing new courses in areas such as participatory planning and organizing farmers, modern extension and communication methods, post harvest and marketing, standards and quality, business and farm management skills, and supply chains for higher value and non-traditional commodities; Trainingmaterials development for revisedcourses andnew courses inthe above areas; Results-based monitoring and evaluation that incorporates participatory methods in collecting sex disaggregateddata on the effectiveness andrelevance o f TVET programs, to assess the success o f graduates inmeetingthe needs of a changing labour market for technical skills inthe sector; Buildingcapacity of TVET boards andmanagementto prepare proposals for the TVET Capacity Building Fund to strengthen the quality and relevance of the programs, define institutional development plans and goals, and buildingthe effectiveness o f institutional management to develop cost-sharing arrangements, gender equality strategies and HIVlAIDS action plans. The development o f the Long Term Strategic Plan and other studies along with technical assistance will be managed through the PMUinconsultation with the Department o f Agriculture Extension andTVET of MoARD. Sub-component1.2: AgricultureTVET CapacityBuildingGrants (US$5.8 million) This sub-component would support investments in building the capacity o f the Agriculture TVET colleges. Two types of grants will beprovided, (1) Institutional Strengthening Grants and (2) Development InnovationGrants. i. Institutional Strengthening Grants (US$1.5 million): Institutional Strengthening Grants would be provided to the four (4) federally administered TVET colleges (Alage, Ardaita, Agorfa and Bekoji). The grants would be provided in response to proposal prepared bythe colleges themselves and would be usedto fill critical gaps in demonstration and laboratory equipment, transport facilities, reference materials and library and dining room resources. The Institutional Strengthening Grants will also support measures to increase women as instructors (e.g. active recruitment program), mechanisms to increase the enrolment o f female trainees, and services to increase retention rates for female students (e.g. tutoring, counseling, gender sensitization training for staff and students), These grants will be provided as the approved proposal of each college is submitted to the PMU. The grants would be in addition to federal/ regional contributions based on enrolment, cost-sharing arrangements and other revenue (e.g. demonstration farms). 55 At the beginning of the project US$1.5million would be divided among the four federal TVET colleges (Alage, Ardaita, Agorfa, and Bekoji) to address a portion o f their incremental investment needs. Allocations for each institution would be based on number o f students, proposals and baseline capacity strength (to be determined through a short baseline survey at the beginningo f the project). The PMU would coordinate a committee for the review o f college Institutional Strengthening Grant proposals in consultation with MoARD to recommend allocations for each of the four colleges and approve the transfer of grants to each college. By September2007 eachcollege would report back to the MoARDand P M U on the use o f funds and results achieved, Funds would flow directly to these colleges throughMoFED, monitored bythe PMU. 11* *. Development InnovationGrants WS$4.3 million): The objective o f the Development Innovation Grants (DIG) is to build capacity o f support selected Agriculture TVET colleges innew training/programming areas based on the Long Term Strategic Plan. Activities to assist colleges to move to a second stage o f development by broadening the student clientele in the private sector through specialized programs in commodities or disciplines (e.g., processing, marketing) and extension approaches (e.g. participatory planning, gender equality integration, etc) would be supported. Proposals for the DIG will include plans to address gender equality issues such as recruitment o f female students, instructors and staff; services for female students and integration of gender issues in courses. HIVIAIDS and environment cross-cutting issues will also be part of DIG proposals. Grants would be available in year two o f the project for selected colleges based on proposals for the implementation o f the LongTerm Strategic Planfor Agriculture TVETs developed inyear one. Eligible expenseswould include course development, graduate training o f instructors, short term training, training materials, text books, teaching equipment, demonstration equipment, civil works (not more than 25% o f grants), study tours to visit practical applications o fnew areas of specialization, short-term apprenticeships, transportation, meetings, workshops and field days, technical assistance, staff exchanges, visiting teachers, and institutional linkageslpartnerships. The following expenses will not be covered: civil works to construct new facilities (except those that relate to practical demonstration farms) andgraduate studies overseas. Approved proposals would be implementedon the basis o f contracts signed between the PMU and the respective TVET college. A significant portion o f the financial management, purchasing and implementation o f these proposals would be carried out withinthe TVET college, although largeprocurement would behandledbythe PMU. Component2: AgriculturalExtension(US$29.0 million) Over the past 4-5 years, the Government o f Ethiopia invested substantial resources in its public extension system. Twenty three thousand Development Agents (existing ones and new recruits) of three specializations (plant production, animal husbandry, natural resource management) and a number of additional extension agents specializing in cooperative development and animal health have received diploma level education at TVETs (see component 1) andhave beenposted 56 at the kebele level. Within the next two years, the total of trained and posted DAs should reach 55,000, which means that virtually everykebele would have a team o f three DAswith the above specializations and that there would be one agent for cooperative development and animal health available for every 3-4 Kebeles. Further, Farmer Training Centers (FTC), where the three DAs are based, have been constructed in7,400 Kebeles, usinggovernment and community resources, and it i s planned that the total number of FTCs would reach 18,000 within the next two years. The FTCs are envisaged to offer three-month basic training to male and female farmers, provide a broad range of demand-responsive extension and short training, and be sites for participatory research, innovation adaptation and demonstrations. They will also design innovative ways of providing such services to 30% of women farmers in male headed households in addition to female household heads. The longer run vision, is that the FTCs may develop into one-stop shops for a range of local services such as animal health, telecommunication, and even community health. The DAs at the FTCs are backstopped by a range o f supervisors and Subject Matter Specialists at the Woreda Offices o f Agriculture and Rural Development, which in turn are supported by a similar team at the Regional level. In some regions there i s an additional extension team at the Zonal level (between Woreda and Region). The system i s designed to operate ina decentralized manner; the way this is put into practice varies betweenregions. The goal o f the Agricultural Extension Component would be to improve the effectiveness o f this agricultural extension program as it scales up, particularly with regardto its capacity to respond to the expressed needs of male and female farmers (especially emerging market-oriented farmers) and to support the emergence o f non-public sector agricultural services as an additional feature o f extension services inEthiopia. This would be achieved by providing support for: (i) measures to enhance the technical and methodological backstopping capacity for DAs, as the government completes and consolidates the expansion o f the current program; (ii) buildingina cost-effective and sustainable way, the capacity o f selected FTCs in about 20 percent o f the woredas to enable them to become operational for multiple purposes; e.g., training, demonstration, adaptive research and source o f diverse informationthrough ICT or mass media, to serve as models to be replicated as further fknding becomes available; and (iii) activities designed to, on a limited scale, develop experience with institutional innovations and new operational systems featuring greater decentralization; more participation by farmers in financing, planning and evaluation; GE responsiveness, increased pluralism in service delivery; and increased responsiveness to demands emanating from local conditions and market opportunities. Iti s expectedthat these latter activities would influence the future evolution o fthe institutional framework for the overall extensionprogram, The following basic principles would guidethe strengthening o fthe agricultural extension: The complete separation between the Development Agents and the distribution of inputs (including, fertilizer, seeds, crossbred livestock, improved equipment, etc.) as well as the collection of payment for inputs (Le., credit); Further (ifonly gradual, and initially on a pilot basis), decentralization of responsibility andbudgetary resources for FTCs and DAs from the woreda to a lower level, possibly to the levelofthe kebele; -- ownership o f FTCswould beplaced at the local level; The development of the proposed FTCs into multi-purpose development centers which offer not only training, but also advisory services and a facility in which local farmer 57 associations could develop collective approaches to marketingand other farm and natural resource relatedissues of common interest; A commitment towards a GE responsive participatory, demand-driven, accountable and farmer-responsive extension system with a spirit of learning and innovation that satisfies men and women subsistence as well as commercial farmers' needs for information, advice, linkages, training andother services; A vision of FTCs as community-owned and -managed local hubs for agricultural development activities; A culture o ffostering gender equality andempowerment ofwomen at all levels; The understanding that commercialization and market-orientation o f farmers cannot be achieved simply by increasing yields through the use o f more external inputs, but needs to be based on carelk1 exploration of alternative productionand marketingopportunities, the possibility to try out new things on a small-scale, sound knowledge about the . economics o f potential innovations, awareness about farmers' risk-taking abilities, appreciation o fthe functioningofmarkets andvalue chains etc.; A more flexible approach to develop location-specific extension contents that employ a holistic view, take into account the whole livelihood system (household level, community level and outside linkages (e.g, markets)) as well as agro-ecological conditions, and that are growth-oriented and at the same time adaptedto different farmers' circumstances; The recognition that DAs and the public extension system are not ina position to answer all the questions of farmers and to acquire all the know-how that farmers need, and thus also need to understand themselves as facilitators, linkers and knowledgelinformation brokers. Buildingon the existing capacities, which differ between regions and even within regions, and on a range of approaches that are successfully employed in various places in Ethiopia, this component would enhance the ability of the agricultural extension system. to operate in a demand-driven and accountable way that satisfies men and women subsistence as well as commercial farmers' needs for information, advice, linkages, training andother services. Itwould also support the development o f approaches for achieving a sustainable and cost-effective system, Sub-component2.1:CapacityBuildingfor Woreda, Regional, and FederalDepartmentsof Agricultural Extension (US$3.7 million). This sub-component would support measures to maintain and improve the effectiveness o f the woreda, regional, and federal agricultural extension officers and subject matter specialists to provide technical support to DAs. It would also support investments in activities and facilities needed to improve the quality and effectiveness of these agricultural extension officers, especially in areas such as marketing and business skills, sustainable land management, pest management, post harvest loss management, and irrigated agriculture, GE mainstreaming skills and participatory approaches. More specifically, this sub-component would support the following: i. Investmentsinhumanresources,equipment,transportandupgradedfacilitiesneededat federal, regional, and woreda levels to provide effective backstopping at all levels in order to complete and consolidate the expansion o f the program nation-wide (US$1.4 million). This would include: (i)technical assistance from the federal level to support 58 the administrative capacities of the regional and woreda agricultural offices; (ii)in- service training for federal, regional, and woreda staff to keep them abreast of developments in their fields of expertise, or to upgrade them innew areas such as farm management, business skills, agricultural processing, marketing, product quality, GE mainstreaming, participatory planning, etc.; (iii)upgradingthe capacity of federal, regional, and woreda level professionals to be able to interact with clients within the system- i.e., transport, communication equipment and materials, etc.; ii.Universityandgraduateschoolleveltrainingforselected(particularlyfemale)staffofthe Agricultural Extension program (US$1.6 million) including: (i)some 30 PhDsin agricultural disciplines from foreign universities; (ii) 50 M.Sc.s in agricultural some extension or related agricultural disciplines from Ethiopianuniversities; iii.Exchange ofexperiences,mutuallearningandknowledgemanagementactivities (e.g. national and regional workshops, national and international exposure visits, development of extension-relevant content andmaterials, participation ininternational conferencesand study tours) (US$0.7 million), Efforts will be made to enable women benefit from this with a conscious decision to involve all qualified women, GE and HIVlAIDS will be considered as crosscutting themes for all the study tours and experience sharing forums. Sub-Component 2.2: Capacity Building for FTCs (US$15.4 million). This sub-component would support the development o f some 2,000 FTCs inselectedworedas into community-owned and -managed local hubs for agricultural development activities to serve as models to be replicated as funding from other sources becomes available. Similar to sub-component 1,support would focus on investments in professional competences and in key equipment and materials. These capacity building efforts would be carefblly scrutinized for their cost-effectiveness .and sustainability, to facilitate scaling up o f relevantmodels to all kebeles and woredas. Participating woredas would be distributed across all regions o f the country (regional allocations would be determinedon the basis of the federal formula) and within regions would be chosenby regional BOARDS thebasis ofthe followingcriteria: on Completed FTCbuildingand assignment o fthree qualified Das; Access to basic infrastructure: water and access roads; Agro-ecology representation; Farming systems representation (rainfed subsistence farming in food insecure and high potential areas, commercial oriented farming, irrigationbasedfarming, pastoralism). More specifically, the sub-component would support the following: i. In-servicetrainingofDAsinkeycompetenceareasnotcoveredintheirTVETtraining, such as participatory approaches and facilitation skills, approaches to promote farmers' orientation to markets, mechanisms to foster women's participation inlocal development with the aim o f reaching 30% of married female farmers in addition to the 2.6 million female headed households and to integrate GE concerns inthe extension system,, use of ICTs and mass media for extension, and other areas (e.g. those mentioned in sub- component 1). This training would be provided by regional and woreda level extension 59 staff; resource persons from external sources would also be contracted, particularly for new skills andmethodsnot well coveredby existing expertise; *. 11. The cost o f selected furnishing (furnishing (e.g., desks, benches, shelves, filing cabinets, tables, black boards) equipment (e.g. farm tools, demonstration materials), training and referencematerials (e.g. manuals, guidelines, technical leaflets), ICT (e.g. internet access, telephone, radio), and means o f transport (bicycles, mules) necessary for effective operation ofFTCslDAs; ... 111. Experience exchange and mutual learning activities that would enable DAs and farmers to learn from the experiences, successes and failures o f people in other places o f the country. Conscious efforts will be to enhance women's participation is such forums as well as keeping GE, HrVlAIDSand environment insuch forums as crosscutting themes. Sub-component 2.3: InstitutionalInnovation and M&E in Agricultural Advisory Services (US$7.4 million). While the existing extension system has made significant progress in expanding its geographical coverage, it remains almost exclusively within the public domain, which is supply driven and based on limited technology packages in three distinct fields of specialization (crop production, livestock husbandry and natural resource management) without sufficient attention to complementarity between these fields. It therefore provides the farmer with limited and often inappropriate choices. Effectiveness in service delivery would be enhanced by (i) empowering both female and male farmers - to guide service delivery, (ii)a greater selection o f service providers for farmers to choose from, (iii) planning service delivery more directly with framers and integrating plans with regional and national initiatives, (iv) learning from local experiences as well as new developments elsewhere to offer a variety o f technology options. This sub-component would support the design, launch, and implementation of two innovative programs designed to provide experience with alternative institutional arrangements in order to promote the above. The innovations will be implemented in 100 selected FTCs in20 woredas (on average in5 FTCs per woreda) located ineach o f the country's regions. FTCs will be selectedaccording to the following criteria: Agro-ecology representation; Farming systems representation (rainfed subsistence farming in food insecure and high potential Areas, commercial oriented farming, irrigationbasedfarming, pastoralism); Availability o finfrastructure: power, telephone connectivity, rural finance institutions; Proximity to woreda capital. Development and implementation o f activities under this sub-component would be led by the Regional Focal Persons in collaboration with the Department o f Extension in the Regional Bureaus o f Agriculture and Rural Development. Innovative programs supported under this sub- component would be delivered through the Farmers' Advisory Service Fund (FASF) and the Advisory Service Development Fund (ASDF). A third element o f the institutional innovations sub-component would focus on learning from evaluations o f the ongoing programs and the development of a strategic planfor the evolution o f the overall agricultural extensionprogram. 60 (i)TheFarmersAdvisoryServiceFund(FASF)(US$2.5 million) A Fanners' Advisory Service Fund(FASF) would support the development o f the demand side o f the agricultural extension system to support a program of small practical and focused agricultural service activities at the level of the FTC. The FASFbe structured so as to contrast with the mainstream agricultural extension program inthat it would feature: Further decentralization of responsibility for extension program decisions from the woreda level to f m e r groups at the kebele level, coordinated through the FTC; Increased participation by male and female farmers in programming, choice o f service provider, M&E, andpriority setting; Increased pluralism in service delivery, drawing inthe skills and ideas from a variety of service providers; and Increased responsiveness to demands emanating from local ago-ecological conditions and market opportunities - the development of advisory service activities deliberately tailored to the needs of, for example: small-scale farms entering the cut-flower industry; small-holder irrigation water users; groups o f small farms seeking to band together to store and market their products in a collective manner; groups of small fanns in watersheds suffering from severe soil erosion and soil nutrient depletion problems; and poultryproducers facing threatening epidemics. Inthis way, the FASFwould facilitate the development ofexperience with givingfarmers more responsibility for their own agricultural extension program. This would involve activities to prepare farmers to take on this responsibility and to developlimplement mechanisms to reach marriedwomen farmers. It would also involve the development and adoption of a mechanism through which to channel finds to local government and farmers to be used to pay for the agricultural advisory services that they have identified that they need. This would represent an investment inthe development o fthe demandside o fthe agricultural knowledge and information system. The FASF would also develop experience with approachescomplementary to or even alternative to exclusive reliance on a package-driven approach - inparticular it would develop mechanisms designed to cultivate and respond to critical thinking and problem identification by female and male farmers and DAs in the field, while giving fanners experience with seeking the services of advisors with the expertise they need. As such experiences accumulate, they would be expected to inform and influence fiture deliberations about the structural features o f the mainstream agricultural extension program. Programmatic Mechanism for FASF. The FASF would provide annual grants of up to US$5000per participating FTC for the purpose o f buyingthe services o f agricultural advisors to work with the farmers andtheir localDAs on topics jointly chosenby the farmers andtheir DAs as well as for developing proposals to this effect. Advisors could be sourced from the public extension system, universities or outside the public sector. Funds (to cover both the contracting of advisory services for FTCs and the overhead costs required at Regional, and Woreda level) 61 would be transferred in single annual tranches from the PMU to the Regional BoARD (divided among Regions according to the federal formula) for this purpose - and the appropriate amounts would be passed on fiom the Regional BoARD to participating woreda offices in single annual trqanches in accordance with plans prepared in participating FTCs in the respective woreda. Woreda Offices of Agriculture would review and ensure that the content o f proposals follow criteria set in the Project Implementation Manual The Woreda Offices o f Agriculture would furthermore contract agricultural advisors on behalf o f participating FTCs and would transfer funds to the service providers as provided inthe contract at the requestofthe FTC. Start-up TA would be provided from the PMUto assist the farmers o f each participating FTC to make initial plans and proposals in a GE responsive participatory manner for the use of the FASF. TA would also be providedto the Regional BOARDS to the relevant Woreda Offices and o f Agriculture to help them establish the administrative procedures required to implement the program andto do the necessaryM&E. PMUsupport for FASF. Development and implementation of activities under FASFwould be coordinated by the Agricultural Extension Officer inthe PMU at MoARD. The focal person for the PMU at the regional level together with a designated staff from the Extension Departmento f the Regional Bureau o f Agriculture and Rural Development would be responsible for the management o f the FASF as well as for the ASDF and the Research-Extension-FarmerLinkages activities under the Component. This team will be supported by the PMU and would have to be very proactive inengaging with FTCs about to enter the program-working with them to explain the program, to establish a farmer council at each FTC, and arranging for TA in participatory planninganddecision making. Some ofthis TA couldbe contracted. The overhead costs to the program associatedwith these roles are included inthe cost estimates presented below. During the first year o f the project, mechanisms for the FASF will be designed, participating FTCs selected and preparation activities completed. This preparation would include training and capacity building through a process o f GE responsive participatory opportunity identification, priority setting and planning. In year 2 o f the project, participating FTCs will work with the relevantWoreda Offices of Agriculture to contract agricultural advisory services to take on work programs inaccordance with the FTCs' plans. (ii)AdvisoryServiceDevelopmentFund(ASDF) (US$2.5 million) TheASDF would support the development o fthe supplyside o f Ethiopia's agricultural extension system. It would facilitate the professional development of DAs and would also develop the capacity o f other advisory service providers in academia, the private sector, and NGOs in areas critical to the farming sector - thus encouraging pluralism in service delivery, strengthening the agri-business sector, and taking advantage o f skills and knowledge beyond the confines o f the public agricultural extension system. It would also promote the delivery o f diverse options for technological innovation based on lessons drawn from local experience as well as new technological developments andbuildtechnical capacity on topical issues as determinedby local stakeholders. As ASDF would involve farmers and extension workers inthe selection o f topical issues, it would buildinresponsivenessto the practical needs o fthe sector. 62 The ASDF would finance training and TA for DAs and other non-public sector agricultural advisors. This would include intensive training in participatory planning and gender equity facilitation and TA to assist indevelopment o f local levelplans, orientation for woreda decision- makers on various guidelines regarding participatory approaches (e.g., MoARD's community based participatory watershed development guidelines), T A and focused training at the woreda level for effective integration of community plans with nationab'regional initiatives, TA and focused training for woreda extension officers to undertake regular assessment o f on-going local innovations, and to explore relevant research findings to develop a menu o f technologies according to the needs of their localities, technical training for public and non-public sector service providers and development of manuals on topical issues identified as important by participants in the agricultural sector (farmers both men and women, DAs, agri-business, researchers, local government, the federal MoARD, and other stakeholders). Examples o f such training include crop rotation for managing noxious weeds, post harvest loss reduction techniques, different physical andbiological landmanagementpractices, agronomy o fhighvalue crops, and introduction o fnew fodder crops. The ASDF would contrast with the characteristics of the mainstream agricultural extension programinthat it would feature: Participatory GE responsiveplanninginthe delivery o f services; Increased pluralism in service delivery by providing training and capacity building to DAsas well as to other serviceproviders includingthose found inthe private sector (such as input supply dealers andtraders infarm products), academia, NGOs, and other sources oftechnical services; The offer of a wider variety of technology options based on lessons drawn from experiences on the ground as well as new technological developments passed down through the system; Intensification o f the training and capacity building provided to agricultural advisory service providers in selected topics of current interest to the industry- going beyond the general training received through the mainTVET preparation program, As a mechanism for channeling world-wide knowledge as well as policy guidelines into the advisory service system, the ASDF would complement the existing "package delivery system" by offering a way to bring topical technical support to DAs and other service providers in a manner more agile and responsive to the revealed needs of the sector. As such, experiences with ASDF would be expected to inform and influence future deliberations about the structural features o f the mainstream agricultural extensionprogram. Programmatic Mechanism for ASDF. The ASDF would finance the expenses related to a variety o f training activities (mostly short-term training - ranging from half-day to two weeks) for DAs and other agricultural service providers with priority for women. The ASDF would also finance TA assignments designed to carry training concepts into implementation and to learn from the experience o f implementation. Topics for the training and related TA assignments would be nominated by the Regional Focal Persons and selected by industry stakeholders - and in particular by male and female farmers as the case may be. Funds would be transferred in 63 single annual tranches from the PMU to the regions on the basis of annual plans from the regions. The participatingregions would utilize the funds to purchasethe training, TA, and other services necessaryto implementthe activities o f the ASDF. Training and TA activities would be implementedby service providers sourced from public or private sectors (TVET colleges, universities, MoARD, E M , ILRI, the private sector, etc.). Funds (to cover bothtraining andTA activities -including overhead costs for coordinators at the Regional level) would be transfen-ed from the PMU to the respective regions (divided among Regions according to the federal formula) for this purpose. Duringthe first year of RCBP, mechanisms for implementingthe ASDF would be designed and up to two training events would be organized ineachregion for a total of up to 100 participants each with a minimum o f 20% women representation. In addition, TA activities would begin duringthe first year ofimplementation. Duringthe second year and each subsequent year, up to ten training eventswould be supportedby ASDF per region. Development and implementation o f activities under ASDF would be coordinated by the Agricultural Extension Officer inthe PMUat MoARD. Participation in ASDF. Male and female DAs and other service providers (including researchers, agricultural input suppliers, agricultural traders, private sector agricultural advisors, agricultural extension staff from regional offices as well as from participating woredas ) operating inthe participating FTC areas would be eligible to participate intraining events under ASDF. Women's participation will be given due attention. TA services could be contracted from any service providerwith relevant skills and experience. PMUsupport for the ASDF. Development andimplementation of activities under ASDF would be coordinated by the Agricultural Extension Officer inthe PlMu at MoARD. As inthe case of the FASF discussed above, the focal person for the PMU at the regional level together with a designatedstaff from the Extension Department o f the Regional Bureau o f Agriculture andRural Development would be responsible for the management o f the ASDF. The team would where necessary rely on contracted T A to assist in the implementation o f the activities under the sub- component. The overhead costs to the program associated with these roles are included in the cost estimates presentedbelow. Building on the ASDF Experience. It is expected that a positive initial experience with the ASDF would lead to a scaling up o f the program after the life of the RCBP. The REFAC's would play an increasingly important role in coordinating this activity with the BOARDSand with M o minyears beyond the life ofRCBP. In the longer term, and building on the lessons learned from the two programs, the sub- component would also support activities and investments to develop and implement institutional and administrative mechanisms under which farmers and communities (i.e., kebele associations) in several selected kebeles inparticipating woredas would assume increased responsibility for their own FTC. This would include selecting members of a FTC managing board with a minimum of 30% women representation; receiving, managing, and reporting on the budget for 64 the FTC; planning activities for the DAs at the FTC and related monitoring of program implementation. jiii)DesignoftheAgriculturalExtensionSystemandCapacityBuilding:inMonitoringand Evaluation (US$2.4 million). A third element of the institutional innovations sub-component would focus on the re-design o f the agriculture extension system based on learning from evaluations o f the ongoing programs and examples inother countries; and the development o f a results-basedmonitoring andevaluation system. e Design of Agriculture Extension System: This element o f the institutional innovations sub-component would support the design o f the agricultural extension system including: (1) a participatory evaluation o f the existing programs and system; and review o f agriculture extension models from other countries that are responsive to local needs and integrate gender equality, HIVlAIDS and environment as cross-cutting issues (2) recommendations for the design o f the Agriculture Extension System including institutional arrangements within a decentralized program needed to improve the effectiveness o f the program and the development of a plan for implementation and (3) a results-based monitoring and evaluation process for the new agricultural extension system. This would primarily involve TA, much of it sourced internationally (with a budget o f up to US$0.5 million), e Monitoring and Evaluation (US$1.9 million): M&E would include support for a review o f the effectiveness of the ongoing agriculture extension programs and the development of a results-basedM&E system for the agricultural extension program that integrates gender equality, HIVlAIDS and environment as cross-cutting issues. M&E activities would also include support to build the capacity of all relevant national stakeholders (including MoARD, BOARD,Woreda Agricultural Office, FTCs, NGOs, and researchers) to systematically monitor and evaluate outcomes and impacts of agricultural advisory services and agricultural development activities including their gender equality and HIVlAIDS impacts, through (i)a national expert workshop on methods for impact evaluation o f agricultural advisory services, (ii)T A for developing a framework including key indicators, data collection instruments, etc for analyzing the impact o f agricultural advisory services inselectedworedas, (iii) workshops at national andregional levels to build awareness o f the benefits of GE responsive results-based M&E, and (iv) human resource development in the form o f different types o f training at all levels involved in M&E o f advisory services and agricultural development. Gender equality, HIVlAIDS and environment will be treated as issues cutting across all o f these initiatives. Efforts will be made to develop a M&E system that captures the impact of gender equality on the extension system ingeneral and the strategy to be developed inparticular. To ensure greater transparency and accountability o f hnds for advisory services, regular evaluations would be contracted out to independent entities: participatory qualitative impact assessment would be conducted by qualified NGOs and quantitative impact assessments by International Agricultural 65 Research Centers or similar organizations. Both types of assessments would be conducted inclose collaboration with national researchinstitutes or universities. More specifically, the sub-componentwould support: Workshop for Impact Evaluation of Agricultural Extension Services: This workshop would bring together international and national researcher with intensive experience in qualitative and quantitative impact analysis of agricultural extension services. It would include researchers from E M , IFPRIIISNAR, EEA, PANE, EDRI, Alemaya University, and Addis Ababa University. The workshop would discuss recent qualitative and quantitative approaches o f evaluating agricultural extension services within and outside Ethiopia. It would identify appropriate approaches to evaluate extension models supported by RCBP and develop a draft framework o f analyzing the impact o f agricultural extension services in selected Woredas in Ethiopia. A national or international M&E expert would participate to ensure that the framework for impact analysis would be harmonized with the specific structure and requirements o f a results-based M&E system of the RCBP. The draft framework would serve as a starting point for discussion with policy makers o f the MoARD and Regional BoARD. The workshop would also facilitate the exchange o f ideas and information and strengthen the linkages between national and international researcher involved in impact analysis of agricultural extension. The 3-day workshop would be organized and chaired by the M&E Specialist of the PMU. The workshop would include sessions on GE sensitive quantitative impact assessment, qualitative impact assessment, principles o f GE responsive results-based M&E, and developing a framework for impact analysis. Forum for Developing a Framework for Analyzing the Impact of Agricultural Extension Services in Selected Woredas in Ethiopia: This forum would directly build on the draft framework developed during the above workshop. The major objectives o f the forum would be to decide on a framework for analyzing the impact o f agricultural extension services in RCBP supported Woredas and to define roles and responsibilities for framework implementation. The fi-amework would be discussed and defined during a 5-day workshop organized by the P M U M&E Specialist and chaired by the PMU Director. Workshop participants would include researchers and the M&E expert who participated in the development o f the draft framework, NGOs with experience inqualitative and quantitative impact assessment, and staff from MoARD and regional B o r n including the WAD. The framework would comprise qualitative and quantitative analysis o f the performance o f service provision (e.g. responsiveness, timeliness, relevance, efficiency, effectiveness) and its influence and farm households' behavior and capacities (e.g. decision-making, adoption, changes o f practices) and ultimately impacts (productivity, income, distributional effects, empowerment). Afier agreement would have been reachedconcerning the design o f the framework duringthe workshop, the M&E specialist of the PMUwould organize and chair meetings with representatives of participatingresearch institutes, NGOs, and MoARD staff, and Regional BOARDstaff to define roles and responsibilities for framework implementation, e.g. data collection, data processing, data analysis, and reporting. As a basic principle, MoARD and BoARD staff and national researchers should play the leading role with strong support and advice from international research institutes and NGOs. This `learning-by-doing' approach would enable national stakeholders to strengthentheir capacity for 66 impact evaluation of agricultural extension services. It would be the role o f the P M U M&E Specialist to coordinate and ensure a soundimplementationofthe impact analysis framework. Workshop on Benefits of GE ResponsiveResults-BasedM&E:The current M&E system of the MoARD and the Regional and Woreda BoARD focuses on processes and implementation issues. Datacollection and analysis i s mainly limitedto inputs, activities, and immediate outputs. To facilitate the implementation o f the framework for impact analysis and the innovative M&E system for the RCBP, the subcomponent would support a 2-day workshop on GE responsive results-based M&E. The workshop would increase general awareness and understanding o f the benefits o f outcome and impact-focused M&E. `Champions of change' at the highest level o f the MoARD and BoARD are needed to ensure sustainability o f the implemented system and to exploit its benefits fklly. GE responsive results-based M&E would increase transparency and accountability o f the extension system, would enable the implementation o f demand-driven approaches and would increase the linkages between the MoARD and BoARD. The workshop would be organized by the M&E Specialist o f the PMU and chaired by the PMU Director. It would invite international consultants with intensive experience in GE responsive results-based M&E as primary presenters and high-level policy makers from the MoARD, Regional and Woreda BoARD. The workshop would include sessions on the general concept and principles of GEresponsive results-basedM&Eandcountry case studies where a GEresponsiveresults-based M&Esystemhasbeensuccessfully implemented. Human Resource Development for Monitoring and Evaluation: Staff o f the MoARD, the regional BoARD, the Woreda BoARD, and DAs lack basic skills for systematic M&E, particularly for sound impact evaluation. Depending on their roles and responsibilities in the M&E system these stakeholders would need to improve their capacity with regard to data collection, data processing, data analysis, andreporting. The project would support the following capacity buildingactivities at different levels: 0 Development Agents (DAs) and DA Mentors (formerly `DA Supervisor'): Short-term in-service training (2 months in the summer) on "Basic M&E" at selected TVETs. This trainingwould include modules on datacollection, dataprocessing, data analysis and reporting. The training will ensure GE mainstreaming to create capacity in GE data collection, analysis and reporting The training needs to be tailored to the specific reporting requirements at the Woreda BoARD and would focus on monitoring aspects o f the M&E system. Since teaching staff at TVETs currently lack the capacity to provide such training, experienced national or international consultants (from consulting firms, research institutes, universities) would be invited to initially providethe training inclose collaboration with TVET teaching staff, Planning Department Staff o f Woreda BoARD (including 1-2 staff members o f ExtensionDepartment): Short-term in-service training (2 months insummer) andpre- service training (1 semester) on "Basic GE Responsive Results-Based M&E" at Agricultural Universities, such as Alemaya University, Mekele University, Awasa University, Jimma University, Debub University, and Bahidar University. Interested universities would offer the pre-service training on a regular basis for recruited Woreda BoARD staff. The training would include modules on data collection, data processing, data analysis and reporting. The training would be more advanced than 67 the training at the DA level and would place particular emphasis on GE responsive participatory monitoring and evaluation. While the former modules would be taught by the similar pool of consultants as the "Basic M&E" for the DAs, the modules of GE responsive participatory M&E would require the involvement of experienced NGOs and research staff such as from PANE, Addis Ababa University, WFP MERET Program, FARMAfrica, CIAT, and others. The "Basic Results-Based M&E" course would also include a module onbasic computer skills for M&E. Planning Department Staff o f Regional BoARD (including 1-2 staff members of Extension Department): Short-term in-service training (repeatedly 2 month in summer per year) and pre-service training (2 semesters) in "Basic GE Responsive Results-Based M&E" and "Advanced GE Responsive Results-Based M&E" at Agricultural Universities, such as Alemaya University, Mekele University, Awasa University, Jimma University, Debub University, and Bahidar University. Discussions would be held with interested universities and Regional BoARD whether the pre-service training should be included in the B S c M S c curricula of the Agricultural Faculties or whether it would be offered on a regular basis for recruited Regional BoARD staff. The course "Basic GE Responsive Results-Based M&E" would include the same modules as for the Woreda BoARD Staff. The course "Advanced GE Rsponsive Results-Based M&E" would place particular emphasis on quantitative aspects o f impact analysis (e.g. survey design, descriptive statistics, basic econometrics) and on using GE responsive results-based M&E as a policy and management tool. Planning Department Staff o f Federal MoARD (including 1-2 members o f Extension Department): Short-term in-service training (repeatedly 2 month in summer per year) andpre-service training (2 semesters) in"Basic GEResponsive Results-Based M&E" and "Advanced GE Responsive Results-Based M&E" at selected Agricultural Universities. The coursed would consist of the same modules as outlined for the RegionalBoARD. Training of the Trainers: Some Universities are offering or have offered modules o n M&Efor agriculture andextension, includingMekeleUniversity, Awassa University, Alemaya University. While it would be important to build on existing capacity and experience, further strengthening of teaching staff would be needed in particular in GEresponsive results-based M&Eandquantitative impact assessment. Implementing new courses at universities and TVETs and strengthening existing courses in collaboration with international staff from universities and research centers (such as the CGIAR) would be part of the learning process of national teaching staff. The project would also support training of trainers in GE responsive results-based M&E and impact evaluation at universities, colleges, and research institutes abroad. Stipends for M S c P h D Thesis on Impact Assessments: The project would also provide stipends for MSclPhD thesis focusing on GE responsive qualitative and quantitative impact assessments of agricultural extension services to further strengthen long-term human capacity in Ethiopia. The studies would be conducted at national universities and research institutes but could include study visits to agricultural universities of neighboring countries. Impact evaluation would not be 68 limitedto the Ethiopian agricultural extension services but could include analysis of the extension systemof other developing countries. Sub-Component 2.4: Research-Extension-Farmer Linkages (US$2.5 million). Various formal and informal means of linking research extension and farmers have been tested in Ethiopia and play a vital role in ensuring that an adequate array o f economically viable and environmentally sound technologies and other innovations are developed and made available to the extension system for dissemination. ARTP has promoted the involvement o f a wide range o f stakeholders in setting the research agenda through Research Extension Farmer Advisory Councils (REFACs), and tri-partite collaboration in adaptive, farmer-participatory research through Research Extension Farmer Groups (REFGs), Implementation experience inboth areas, and inother types of research-extensionlinkage initiatives, have resulted in success stories and some disappointments, but REFACs and REFGs are generally viewed as useful. Problems related to effective coordination, ownership and sustainability as well as limited potential for scaling up pose a challenge to increasing the effectiveness o f the system. Various actors have proposed the need for a redefined mode o f working linkages between research extension and farmers to address such issues. In addition, the current extension system lacks a mechanism through which men and women farmers can find support in exploring new opportunities, which requires complex multi-stakeholder support that is beyond the immediate capacity o f the extension system and strong support for a multi-stakeholder research extension farmer linkage mechanism. This sub-component would support the expansion and refinement of current research-extension- farmer activities (as developed under ARTP) and promote their firm institutionalizationwithin the agricultural sector at federal, regional and zonal level. In particular the component would support the institutionalization and improved effectiveness o f REFACs in setting and implementingan impact-oriented research agenda by: (i) developing REFAC structures, further fbnctions and capacities at various levels including transferring responsibility over REFG resource allocations fiom research centers to REFACs; and (ii) expanding REFG adaptive research activities to a greater number o f REFGs. Funding would be divided between the two activities with 80% of funding directed toward REFG activities and 20% supporting the strengthening the REFAC institutionalstructure. REFAC transformation and strengthening: The project would allocate a budget for strengthening an effective coordination of REFACs at federal, regional and zonal levels and support institutionalizing the W F A C mechanism to ensure sustainability o f research extension farmer linkage initiatives. Inparticular, the sub-component would finance: Reviewing the REFAC and REFG experiences including studying similar arrangements in other countries and if necessary revising the concepts and modes of operation in accordancewith insightsgained". Re-definition o f the structure o f REFACs towards the establishment, at all levels o f government, o f a formal institutional structure (with a minimum o f 30% women loThis would include exploring how the REFACs canbe institutionalized and more closely linkedto the Regional Bureaus ofAgriculture and Rural Development and (especially for FREAC)to MoARD 69 representation) to promote farmer-extension-research linkages and the development o f specific roles andresponsibilities for associatedactors. Support to develop REFACs into institutions with greater influence insetting the research agenda at zonal, regional andfederal levels. Capacity building for REFACs and their executive committees or secretariats" through the provisiono f equipment andtraining o f staff. Capacity building to put the revised processes and modes o f operation into practice, particularly building GE mainstreaming skills with a focus on enhancing effective participation of women in a) setting research agenda, b) feeding to research as informants, c) testing and trial o f findings and d) as targets of dissemination of research results with the objective of facilitatingtechnology adaptation and adoption, and ensuring that researchers take into account and build upon, indigenous female and male farmers' knowledge12. Government would support the operating costs associated with REFAC meetings such as travel expenses andper diems. Expansion of REFG support: RCBP would continue to support the REFG initiatives establishedunderARTP with some degree o f expansion andthroughmore effective coordination and support mechanism from REFAC. The sub-component would finance: A farmer-extension-research grant fbnd to finance proposalslaction plans fi-om FERGs, which could include activities such as on farm adaptive researchtrials; making available foundation technologies by facilitating initial introduction o f purchased inputs or equipment on a cost-sharing basis; support to basic seed production and on-farm seed multiplication; and synthesizing adaptive crop, livestock and NRM research into an integrated systemat farm level (strengthening the farming systems approach). Coordination activities associated with FERG development and support, including the establishment ofnew FERGswith a minimumo f 30%representation o fwomen farmers. l1Anexecutive cormnittee and secretariat ofthe REFACs wouldbe establishedto undertake implementation responsibility for the REFAC. The executive committee would be drawn from the larger REFACand the secretariat would be comprisedo fdesignated focal points from within the extensionandresearch departments. l2 This would involve developing and supporting a core trainer team o f researchers and regional staff in participatory R&D approaches, on-the-hob training of research and extension staff, awareness raising and experience s h g . 70 Proposed new structure and functions of IIEFACs. Experience from ARTP showed that the REFAC mechanism was not adequately structured or institutionalized to ensure active participationo f all relevant stakeholders. The ownership and coordination o f the mechanism was primarily left to researchinstitutions, As a result, commitment and involvementby the extension system at all levels (particularly at the regional and federal level) was low, Limitedparticipation by the extension system and other stakeholders also limited, to a large degree, the potential scaling up o f successful on farm research activities implementedthrough the REFGs.Inpractice, the REFAC has not always played an active coordination and decision-making role, some REFACs were limitedto only occasional consultation meetings andinformation sharing. An important next step in further strengtheningREFACs would be to redefine its structure with clear and specific roles and responsibilities. The new structure should also make sure that the REFAC mechanism should inthe long runbe institutionalized inthe formal MoARD structure to effectively manage researchextension farmer linkages initiatives at a wider scale. Thenew REFAC structure would be locatedat the federal, regional andzonal levelandwould be housed in MoARD. The MoARD head would chair the REFAC and the assigned focal persons from either the research or extension would take responsibility for the secretariat and facilitation role together with the research extension farmer linkage specialist o f the PMU. The federal REFAC would have an advisory and decision-making role to approve the budget and action plans of the REFAC initiatives at various levels, The REFAC at all levels would have a wider participation o f various relevant stakeholders - male and female farmers, government research and extension systems, and non-state actors. This more inclusive structure would mainly facilitate the process o f exchanging ideas and views at an annual meeting or conference. However, this bigger group would be ineffective for specific coordination, monitoring and action planningo f the REFAC activities. Therefore, a smaller group drawn from the REFAC would be formed as `executive committee' for more regular coordination, review o f plans and implementation and budget approval processes for all research at the particular level. The executive committee couldmeet quarterlyor more frequently as required. The zonal REFAC would be an important and relevant structure for a more regular support and coordination o f research extension farmer linkage initiatives implemented through REFGs and other mechanisms promoted by different stakeholders, The zonal REFAC would receive, review and approve the plans f?om REFG and other actors. The zonal REFAC, through its executive committee, would allocate resources and approve financial disbursements. The zonal REFAC executive committee would also approve the project budget allocated for REFG activity implementation. The Zonal Agriculture and Rural Development office head would chair the zonal REFAC with support from the extension department and the relevant RC, possibly through a secretariat. Other stakeholders like the Woreda Rural Development office, universities found in the zone, NGOs, farmers and the private sector involved inthe research and extension activities would be represented in the zonal REFAC. The woreda representative in the zonal REFAC would be responsible for coordinating and supporting research extension farmer linkage initiatives includingthe REFGactivities at the woreda level. Insome cases, the zonal levelmaybeaninappropriate locationfor decision-making andresource all'ocation due to the lack o f formal zonal administrative units or limited zonal coverage by researchcenters, which would limit the effectiveness o f zonal units, Some regions may therefore 71 wish to locate the activities and functions described above at the regional rather than zonal level. This should be determinedbasedon the particular needs of the regions. The Federal and regional REFACs would also provide an overall policy and strategy guidelines. Theywould be charged with overseeingresearchextension farmer linkage activities andadvising REFACs on issues as they arise. The Federal and Regional REFAC would also be responsible for working on formal institutionalization of the RCBP REFAC mechanism into the government and other stakeholder's researchand extension structures. It would also facilitate and guide the scaling up o fthe project pilot REFAC and FERGinitiatives. Transition between ARTP and RCBP support to REFACs. The proposed new REFAC structure would, insome cases, represent substantial changes from current practice. It is expected that a transition period would be required before the new proposed structure would be fully operational. Support to REFACs through ARTP financing and usingthe current system would be expectedto endinJune 2007. Duringthe transition period, the PMUand Regional FocalPersons ofRCBP would play a strong role incoordinating and implementingthe programme, particularly indeliveringresources for the research extension farmer linkage grants to REFGs. Inthe long run, the REFACs would take onthese roles andit is expected the transition wouldbe completed around the time o fthe RCBP MTR. Flow of funds. Funds for REFAC strengtheningwould flow directly from the PMUto REFACs at the federal, regional and zonal levels based on submission of REFAC work plans. Grants would be awarded based on annual detailed activity proposals and budgets submittedby REFGs to the Zonal REFAC for review and approval. The PMU would then release funds to REFG through the Zonal REFAC. During the transition period funds would be released to REFGs directly from the PMU. The REiFAC would also support the REFG and other participatory adaptive research efforts o f other stakeholders such as the universities, NGOs and the private sector. Linkages with other sub-components of the advisory services component. The research extension fanner linkage activities would also be linked with other sub components o f the advisory services for a longer term scaling up and dissemination o f results through the extension system. Currently the project is not planning to support a broader scaling up of research extension farmer linkage initiatives. But establishing a linkage mechanism o f this component with the support andcapacity buildingfor FTCs and linkingtechnology testing througha special fund would establish a good ground for fbture scaling up of adaptive research initiatives. Therefore, the project would make a deliberate effort to link the FTC activities and the pilot innovation grants with REFAC and REFGinitiatives. For example, the adaptive researchand on- farmtrails bythe REFGcanbeusedas ademonstration for the farmer training sessionconducted at the FTC level. The FTCs or individuallgroup o f farmers can also identify their problems related to farmproductionandproductivity and demandcontract the support o f the REFG. 72 Component3: AgriculturalResearch(US$22.3 million) Ethiopiahas strong public agricultural researchinstitutions comprising the Ethiopian Institute o f Agricultural Research ( E M ) and Regional Agricultural Research Institutes (RARIs). EIAR recently evolved fiom the Ethiopian Agricultural Research Organization established in 1997, Duringthe last few years RARIs were set up insix regional states13; one more RARIis being established in Gambella. National and strategic research priorities are addressed by EIAR in collaboration with the RARIs while the RARIs take lead responsibility for applied and adaptive research intheir regions. Alemaya University (AU) plays an increasingly effective national role in human resource development (HRD) for agricultural research and development (R&D) through its graduate and post-graduate training programs, and also has significant research capacity14. Infrastructure and capacity building at EIAR Headquarters and its RCs, some o f the RARIResearchCenters (RCs), and AU are supportedbythe Agricultural ResearchandTraining Project (ARTP) financed by the World Bank and IFAD, effective since February, 1999 and i s expected to be completed by December 200615.ARTP financed the establishment o f new RCs in six of Ethiopia's more marginal agro-ecological zones and there has been good progress in rehabilitation and upgrading o f existing laboratory and field facilities at E M , and RARIRCs and at AU. There has also been substantial impact of the HRDprogram: by ARTP completion, about 350 MScs, 160 PhDs, approximately 200 short-term trainees who participated inoverseas training, and several thousand Short-term trainees who benefited fiom local training will have been supported through ARTP16. Although an important unfinished agenda remains, progress was made in improving NARS coordination through EIAR's program and project approach aimed at achieving core strategic priorities. To make research more client-oriented and demand-driven, improved mechanisms for closer research-extension-farmer (REF) linkages and collaboration have been developed. EIAR and the RARIs have established "Research-Extension Farmer Advisory Councils" (REFACs) at FederalI7, regional and zonal levels, and set up an extended network o f "Farmer Research Groups" (FREGs) closely involved in adaptive research. EIAR established a "Gender Focal Point" to enhance gender-sensitivity throughout the NARS (but gender equality remains a distant goal). The REFACs and FREGs have been instrumental in developing working relationships with farmers and agri-businesses in setting research priorities, implementing collaborative on- farm research and, jointly with clients, assessing the relevance and impact o f research. ARTP also enabled the establishment o f a competitive national Agricultural Research Fund (ARF). There have beentwo rounds o f "Research Calls", peer review andgrant awards; abroadrange o f research providers in addition to EIAR and RARIRCs such as the Universities, NGOs and the private sector, has demonstratedkeeninterest incompeting for ARF funds. l3Afar, Amhara, Oromia, SNNPR, Somali, and Tigray I4New post-graduate degree programs inagriculture have recently been started at Awassa, J i m and Mekele. Is The development objective o f ARTP is "to support the modernization and enhancement o f efficiency and effectiveness o f the Ethiopia NationalAgricultural Research System (NARS) and related higher education programs inthe generation ofecologically sound agricultural and livestock productiontechnology and inHRD,while making the system more responsive to farmers' technology needs and priorities". However, staff retention has become a serious issue for many RCs. The FederallevelREFAC (FREFAC) met only once (in2001); FREFAC is currently beingre-activated 73 Duringthe last few years there hasbeen an acceleratedidentificationanddevelopment of awide range o f agricultural technologies and know-how adapted to the different agro-ecologies. For example, between 2000 to 2005, 393 crop and forage technologies, 25 farm implements, 38 tree species, 18 soil and water management and conservation techniques and 86 livestock production technologies and feeding and managementpractices were released; many o f these are used on a significant scaleby farmers. Inaddition, technology importationresulted inthe release o f several crop varieties and tree species. Livestock breeding programs showed that crosses with exotic inheritance o f 50 to 62.5 % are best suitedfor smallholder dairy production. Rationale for RCBP Support. Compelling reasons for continued NARS assistance are: (i) without sustained support and capacity buildingof the NARS to efficiently identify, develop and deliver more productive and sustainable agricultural technologies for widespread adoption, the potential impact o f RCBP would be severely constrained; (ii) current NARS (public/ private the sector, NGOs) comprises multiple but rather loosely linked institutions, all involved in agricultural R&D and RCBP support is needed to help improve the interaction, integration, efficiency and effectiveness o f the entire system, in addition important challenges remain in terms of NARS client and stakeholder participation while the establishment o f the RAEUs and an emerging private sector demand a review o f institutional mandates, improved arrangements for NARS coordination andmore effective M&E; (iii) notwithstanding ARTP's HRDachievements, a lack of appropriately trained and experienced staff continues to be a crucial constraint to the performance ofthe NARS; (iv) inspite o fprogress under ARTP inREF linkages, an urgent need remains for more effective institutionalized mechanisms empowering clients' voices, both men and women, in setting local priorities and in impact M&E; (v) gender equality in the NARS remains a challenge; (vi) to make the financing of agricultural research more dependable and sustainable, there is a need for innovative funding mechanisms permitting mobilization from a broader variety o f sources; and, (vii) there are several areas o f research that received little support underARTP but that now are important for enhancing overall NARS capacity". Basic Principles. Guiding principles for design and implementation of agricultural research services are: (i)responsiveness to the needs and circumstances of end-users (farmerslagri- business), taking account o f gender equality and HIV/AIDS-related issues; (ii) adherence to the principle of subsidiarity, with responsibility and control over resources to the appropriate levels (local, regional national); (iii) participation of many service providers (research, extension, universities, the private sector); (iv) incorporation o f sustainability criteria (fiscal, economic, social, gender equality, HIVlAIDS and environment) in priority setting and M&E o f public investments; (vi) use of improved management and information systems inplanning and M&E; and, (vii) introduction ofcost sharingarrangements. The RCBP Agricultural ResearchComponent.The core goal o f RCBP financed agricultural research would support would be to facilitate institutional strengthening o f the NARS by enhancingthe participation o f key stakeholders and clients inpriority setting, resource allocation and implementation and where possible funding, and providing for HRD, technical assistance, infrastructure, equipment, supplies, transport, and communications to re-enforce NARS capacity and make it more efficient and effective in generating and disseminating client-demanded and '' Such as bio-technology, non-traditional commercial crops, bio-energy development, soil test-based fertilizer recommendations, sustainable natural resource use, including irrigation water management. 74 market-oriented technologies and information. Main sub-componentsto be financially supported are outlinedbelow. Sub-component3.1 NARSInstitutionalInnovationandStrengthening(US$4.3 million) NARS coordination and stakeholder involvement WS$l.O million). RCBP would facilitate strengthening o f the national agricultural research management, coordination and M &E systems to make sure there i s cost effective, demand driven and result oriented NARS. The project will also enhance better coordination of research in the entire system and closer involvement o f stakeholders (with special attention to women's participation) in priority setting andresource allocation, Therefore, during the initial implementation phase o f RCBP before the Mid-term Review (MTR), EIAR, the RARIs, universities, other key stakeholders such as MoARD and the Bank would engage in a review o f current institutional arrangements for management, coordination and M&E for the NARS throughparticipatory workshops (sometimes facilitated byprofessional facilitators), studies, and study tours in order to define and agree on a set of desirable NARS characteristics and operating procedures, and where needed, the design o f more effective and client-driven institutional arrangements. At the time o f the MTR, the NARS stakeholders would present a plan for enhanced NARS governance and management reflecting buy-in by a broad range o f concerned stakeholders including public research institutions, the universities, farmers' organizations, women groups, NGOslCBOsandprivate firms involved inagricultural research. Underthis sub-component RCBP would provide financing to: (i) facilitate development o f cost- effective mandates for institutions at national and regional levels; (ii)support the agreed institutionalarrangementsthrough TA, studytours, andthe operating costs for implementation o f the agreed institutional arrangements; (iii) national coordinated research programs in support strategic commodities andlor areas and sponsor networks to exchange research results across regions in order to support EIAR's mandate to facilitate access to knowledge and information available outside Ethiopia to all NARS partners and for the use or adaptation o f such know-how inside the country; and (iv) enhance impact evaluation o f improved production technologies, including through participatory beneficiary assessments to enable EIAR to play an increasingly important role in ensuring strengthened systems for M&E throughout the NARS, including monitoringachievementsinresearch. Competitive Funding (US$3.3 million). NARS assistance would be designed to support pluralism in the continuum o f technology identification, development, dissemination and funding. This would be done through enhancing participation of the entire range o f concerned and capable stakeholders in both the implementation and funding o f research and technology dissemination. One mechanism usedwould beto buildupon ARTP experience by establishing an expanded and transparent National Agricultural Research Fund (NARF) for agricultural research". NARF would make it possible for a wide variety o f institutions with research capabilities to compete for public support and better serve farmers and other clients, and to l 9Inorder to develop clear guidelines for theNARF, a criticalreview ofachievements and constraints encountered inthe current ARF would be organized. 75 mobilize incremental financial or "in-kind" resources2'. NARF would have several "windows" such as support for specific R&D proposals for high value enterprises, sustainable livelihood systems indisadvantaged areas, research at the "frontiers" o f science (e.g. bio-technology), PhD and MSc University thesis research2'. NARF, grants would be awarded by a Committee of stakeholders and clients, but may be modified after the MTR depending on the institutional arrangementsrecommended by the revie3w o fNARS coordination. Under RCBP, opportunities would also be created for "technology shortcuts" by helping the Ethiopian NARS access the global knowledge pool, acquire and if necessary pay for technologies with potential impact in Ethiopia inorder to adapt them to local circumstances, by strengthening communications and information access, providing greater opportunity for participation in international networks and supporting local verification and adaptation. This would be facilitated inpart by creating another special "window" within the NARF to facilitate the hiring o f contractual services by CGIAR Institutes and other Centers o f excellence, andor the purchasing o f "patented" technologies from abroad. To bringabout greater stakeholder participationat regional level, initially, four RARfs would be invited to introduce client-oriented researchmanagement approaches (e,g. through an adaptation of "CORDEMA22" or similar arrangements providing for greater client empowerment). This would include introducing the concept of stakeholder-controlled "Regional ARFs" ( W s ) to contract capacity in or outside a particular region for the solution o f local problems. Attempts would be made to identify local (public and private) sources of R&D support to be "matched" with RCBP financing. If successful, based on regional interest additional RARFs would be supported at other RARIs after the MTR. Sub-component 3.2: Re-enforcing NARS Capacity (US$lS.O~illion) Capitalizingon ARTP achievements. The RCBP research sub-component would buildon ARTP by reinforcing NARS capacity for generation, dissemination and adoption of new economically viable and risk-acceptable technologies through staff training, improved communications, equipment, transport, and infiastructure rehabilitati~n~~. Training agricultural R&D staff and continued HRD for capacity improvement across the Ethiopian NARS especially at RARIRCs in marginal areas remains an important prioritg4. Incremental training needs have been identified, especially in new areas such as socio-economics and marketing, agricultural bio- technology, non-traditional commercial crops, food safety, stress physiology, post-harvest technology, soil and water conservation, etc. Under RCBP, these requirements would be addressed by facilitating access to short-term and post-graduate local and (limited) overseas training for agricultural scientists and for support staff. Re-enforcement o fNARS capacity would 2oThe current nationalARF is directly linked to EIARfor management purposes and provides grants to all research providers who submit proposals that are technically approved through peer review and for w h c h grants have been awarded by the ARF Management Committee where EIARis strongly represented. Inthis way, NARFwould beusedto mainstreamUniversity researchintotheNARS. 22The "Client-Oriented Research andDevelopment Management Approach" towards greater stake-holder control in a plied agricultural researchwhich was developed inTanzania. "In principle, there would benoprovisionfor civil works for research under RCBP 24Originally, the RCBP design included a sub-component on strengthening national capacity for agricultural staff training at several Universities but due to budget limitations this was deleted. 76 also require complementing some of the ARTP-financed facilities at RCs such as furnishing new offices, and laboratories; buying laboratory supplies and spare parts; establishment andlor upgrading o f electricity, water and telephone systems; acquiring scientific literature including through better internet access; purchasing essential field, laboratory and communications equipment; and minor civil works, Reducingpeoples' vulnerability in low potential areas is an important Government priority and special support would therefore be provided. In addition to staff training at local and overseas universities described above, RCBP would provide support for technical assistance (local and foreign), and back-stopping programs (through EIAR institutes andlor other Centers of Excellence inEthiopia or abroad); provision would also be made for study tours to similar areas in Ethiopia or abroad. Special incentives are required to attract and maintain research and support staff to many of these RCs where the work is difficult and health and schooling provisions poor. Inorder to ensure continuity of programs, RCBP would help provide financing for incentive system for staff inremote areas including school fees, priority access to short-term training especially for support staff, and for attendance at relevant national and international workshops and conferences. The current EIAR and RARI bio-technology programs are primarily aimed at developing, adapting and applying alternative technologies to facilitate and accelerate conventional research to enhance genetic improvement and productivity o f crops, animals, beneficial microbes and trees. RCBP would provide support to develop an appropriate regulatory environment and adequate bio-safety arrangements; this would include supporting ongoing process of the development o f a national bio-technology strategy and enhancing capacity in dealing with intellectual property rights (IPR). Special provisions would be made to ensure appropriate involvement of Universities and to facilitate adequate coordination o f the entire program. RCBP funding would be applied to HRD, technical assistance, equipping central and regional laboratories, laboratory supplies and chemicals, the construction o f screen houses and furnishings. Total Costs and tentative allocation of available financing, The available financing for implementation of the RCBP research component i s estimated at about US$22.3 million and a basis for a tentative allocation between main expenditure items and between the key NARS institutions has been developed, Agreed amounts o f fbnding would be allocated as 441umpsums" to eachof the participating institution^^^. EnvisagedNARS Characteristics, Processes and Proceduresby MTR RCBP would support the discussion o f the evolution of Ethiopia's NARS, particularly as it relates to the relationships between, coordination mechanisms for, and mechanisms for determining resource allocations among the various agricultural research providers - including, inter alia, EIAR, MIS, universities, and the private sector. Among the issues to be addressed through this processo f discussion would be the following: *'I t was agreed to allocate 25% of the part o f the IDA Credit to E Mand the federal RCswith the remaining amount divided between the RARIs according to the existing Governmentblock grant ratios. 77 The characteristics of mechanismsfor coordination of the elements of the NARS, andthe steps which would be needed to establish such mechanisms and to make them operational; Mechanisms and institutional structures through which stakeholders and clients (both male and female) might best be empowered to be substantially involved in making decisions on research priorities resource allocations and budgets, including to give feedback on the quality o f agricultural research services at national, regional and RC level; Affirmative actions which might be taken to avail women researchers of opportunities in recruitment and training; Mechanisms for ensuring that gender equality issues are taken into account in priority settingfor researchprograms andespecially REFlinkages; The most appropriate division o fmandatesbetween EIAR, RARIs, and other elements o f the NARS as relates to specific focus areas for applied and adaptive research and also as relates to ownership o fthe various researchcenters inthe Regions; Mechanisms or structures to mainstream research capacity of the Agricultural Universities, especially PhD and MSc thesis research, into the NARS (among others through NARF) so as to provide incentives for studies to address recognized national andlor regional priorities and to incorporate the involvement o f RC scientists in implementation and supervision; Mechanisms or structures to result ineffective coordination among RARIs in addressing the issues and opportunities for research in areas where similar agro-ecological zones overlap inthe mandate areas o fthe different RARIs; The development and implementation of methodologies for socio-economic and gender equality analysis of new technology and for dissemination through strengthened client linkages including for extension support and on-farm verification, and to demonstrate technology impact; The development of procedures and mechanisms to handle efficiently (perhaps through collaborative, collective, or centralized means) functions not easily efficiently executed byindividualregional agricultural researchorganizations andlor RCs, including for bulky andlor high cost procurement, technology acquisition from abroad and facilitation of international cooperation; The identification and development of arrangements to ensure the sustainability of hding for priority national researchprojects either through dependablecore funding, on a contractualbasis through the NARF,or otherwise; The developmentof planning, budgetingandreportingchannels for the entire NARS,and efficient arrangements for timely fund flows from finance sources to the NARS constituent partners identifiedand agreed; Mechanisms for involving more stakeholders in the NARF Management Committee for awarding grants; The development o f and launching o fregional competitive funds. 78 Component 4: Improving Information and Communication Systems within MoARD (US$3.0 million) Ethiopia has a large, complex institutional structure supporting the agricultural sector and its various actors - managers, decision-makers and actors at federal, regional, woreda and FTC levels - currently have only limited communication amongst themselves and incomplete knowledge o f the impact of poverty alleviation, food security and agricultural and rural development interventions on the lives o f farmers, Better access to and use o f information is required to better respondto farmer needs and improve institutionaleffectiveness. RCBP would provide support to build the capacity o f public institutions to collect and analyze data through support for information systems development and ICT equipment. Inparticular, the component would finance: (i) initial assessment to identifythe scope o f the system and design an its structure; (ii)database development and maintenance; (iii)network installation and construction to connect woreda, zonal, regional, and federal levels; (iv) computer and network equipment; (VI software; and (vi) trainingprograms on data collectionand compilation, basic and advanced computing, client server database management, web page design andmaintenance, and network and administration and maintenance. The expected outcome of the component i s a functioning information system where information systematically flows between FTCs, BOARDSand MoARD and i s used in monitoring and evaluation at all levels. The information system would be expected to include a focus on collecting data on agricultural production, marketing, and resources from the FTC level. The component would provide support to the 100 woredas selectedto participate inthe Agricultural Extensioncomponent. Linkage with on-going initiatives in ICT. A key principle underlying RCBP support will be complementarity with existing programs, A number o f initiatives are underway to support improvedconnectivityandinformationflows such as: WoredaNet: The WoredaNet project under the Ministry o f Capacity Building seeks to connect over 660 Woredas (administrative districts) with their respective regional governments and the Federal government offices, The initial services delivered in this infrastructure would be e-mail and video conferencing capability that are expected to streamline communication among the various government institutions and thus helpmake the government more efficient and responsive. The near term goal for this project i s to identify "knowledge assets" in various areas including agriculture, health, trade and industry, education, etc., withthe potentialto be deliveredusingthis infrastructure. SchoolNet: The SchoolNet project i s a similar project o f ICT infrastructure that beams satellite based distance education to over 5700 high schools around the country. This project is already underway and programs are being broadcast to many o f the targeted high schools. This infrastructure creates an excellent opportunity to broadly disseminate knowledge to targeted groups with proximity to these infrastructures, AnriNet: The AgriNet project will link regional and national agricultural research institutes with the goal o f better and more efficient sharing o f available expertise and content as well as making communications among these institutions more efficient. 79 IPMS: The ClDA financed Improving Productivity and Market Success of Ethiopian Farmers project (IPMS Ethiopia) has an ICT component which seeks to develop processes andmechanisms for enhancedknowledge sharing systems inthe sector through support for the establishment of a National Agricultural Information Resource Centre (NARC), including the establishment of linkages among various stakeholder institutions (Ministrydepartments,national researchcenters, TVETs, andFTCs as well as support to the establishment Information and Communication Technology (ICT) networks and infrastructure to strengthen links between all stakeholders, with emphasis on TVETs, FTCs andPLSs. A key principle underlyingRCBP support for ICT capacity building would be complementarity with existing programmes andinitiatives so as to avoiddevelopment o fincompatible information systems. Implementation:Implementationofthe component willbe the responsibility ofthe Policy and Planning DepartmentofMoARD incoordination with the Informationand Communication specialist at the PMU. Component5: DevelopmentofAgriculturalMarket Institutions(US$7.0 million) Agricultural markets in Ethiopia have been underdeveloped. They have often lacked transparency, liquidity, competition, integration internally, integration with world markets, price risk management mechanisms, accessibility, price discovery mechanisms, quality standards, and contract enforcement mechanisms. These constraints have resulted in inefficiencies, market failure, and large transactions costs in agriculture that have heldback growth in the sector and have exacerbatedincome disparity since the poorest farmers havebeenthose least able to operate effectively in the environment o f weak market institutions. This component would support analytical work geared toward understanding and developing practical solutions for the above constraints. It would also support the development o f an Ethiopian Agricultural Commodity Exchange. Finally, it would support strengthening and development o f sanitary and phytosanitary standardsandthe institutions neededto utilize them. Sub-component 5.1 Development of an EthiopianAgricultural CommodityExchange and Market Policy Support (US$4.0 million). The lead role for implementation of this sub- component would be the Agriculture MarketingandInputs Sector State Ministry. i.AgriculturalInputsandOutputsMarketPolicySupportThiswouldsupport analytical work on Ethiopia's agricultural input and output markets. This work would be geared toward producing recommendations on: domestic agricultural policy; trade policy for agricultural inputs and outputs; physical and institutional infrastructure for agricultural markets; and long-term strategy for public sector support to agricultural market development . Under this sub-component, the RCBP would finance: (i) TA for studies and for workshops; (ii) costs of workshops; (iii); tours; and (iv) short-term the study training events. In all these activities, measures will be taken to enhance women's participation early on so that they will be able to equitably benefit from the results o f marketdevelopment. 80 ii.EthiopianAgricultureCommoditvExchange(ECEX) Thiscouldsupportplanning,start- up and launching of the ECEX to cover a select group of commodities. The exchange would be a forum for voluntary trade o f agricultural commodities such as teff, chickpeas, wheat, maize, beans, and oilseeds. RCBP would finance: (i) TA for the development of plansand the initialsteps of implementation; (ii) equipment (office, warehouse, and other as needed for the operation o f the exchange facilities themselves) needed to make the Ethiopian Agricultural Commodity Exchange operational; and (iii) expenses involved in consultation through workshops, training events, and seminars on the plans for an exchange. Initiativesinthese areas will ensure participation ofwomen at different levels. Sub-Component 5.2 Sanitary and Phytosanitary Standards (US$3.0 million). Exports in livestock and high value crops are providing an important source o f growth for the agriculture sector and require a well functioning regulatory system to meet international sanitary and phytosanitary standards. At the same time, increasing flows o f animals and plant products across borders may increase exposure to disease and pose a threat to domestic production. Increasing attention i s being given to issues related to enhancing product quality and managing food safety and agricultural health risks. This sub-component would build MoARD's capacity to address these issues by providing targeted support to improve quality control and quarantine services within its Animal Health and Crop Protection Departments. In particular, the sub-component would sipport needs assessment to identify high priority areas where gaps in sanitary and phytosanitary standards and institutions limit growth and present health risks and carrying out activities to provide technical assistance, equipment, and facilities inresponse to the findings of the needs assessment. Investments would be inthe following areas: iii, AnimalHealth: Strengtheningoflivestock quarantine stations andinspectionservices through the provisiono f laboratory and test equipment; technical assistanceindeveloping virology response possibly in developing foot and mouth disease vaccine; establishment of food quality testing units within existing regional laboratories and strengthening o f regional laboratorieswith lab equipment and consumables. iv. Phvtosanitary: Training to meet international standards in areas such as plant quarantine and inspection procedures, pest risk analysis and pesticide residual analysis; provision o f laboratory and equipment for inspection stations; and technical assistance to review and help design a phytosanitary system and procedures relating to plant exports; and recommend an institutional structure for federally and regionally owned inspection stations. Component 6: Project Management (US$3.4 million) The project would be managed by a Project Management Unit (PMU) under the direction o f Federal and Regional SteeringCommittees. PMU Functions: Project management units (PMUs) would be established at the federal and regional level to coordinate implementation o f RCBP activities. Institutionally, the PMUwould 81 be situated within the Ministry of Agriculture and Rural Development (MoARD) and report to the State Minister. The staff of the PMU would be contracted and the costs of equipping and operating the PMUwould be supportedunder RCBP. The PMU would play a more active role in coordinating implementation of some components andaless active roleinothers. Inparticular: TVET: The PMU would guide technical assistance for TVET coordination offices at federal and regional levels in collaboration with TVET colleges and would take primary responsibility for managing the capacity building grant fund for TVET colleges in consultation with grant committees. Extension: The PMUwould liaise with BOARDS who would take primary responsibility for identifyingandimplementingthe support for technical training andFTC development (sub-components 2.1 and 2.3), however, the P M U would take a more active coordinating role in implementation o f the innovation and research extension fanner linkages sub- components (sub-components2.3 and2.4). Research: E M , RARIs, and research centers would take on the primary responsibility for supervising and implementingmost RCBP supported activities in Research with the PMUprovidingoverallcoordination ofthe component. ICT and M&E: The PMUwould coordinate with MoARD indeveloping the ICT support and play an active role in project M&E and developing a management information system (MIS) for the extension system. PMU.The PMUwouldbestaffedby: (i) Coordinator; (ii) Specialist; (iii) Project M&E Financial Management Officer; (iv) Procurement Officer; (v) Extension-Research-Farmer linkage Specialist; (vi) Communication and Training Specialist; (vii) Gender Specialist; and various support staff, The PMUwould be responsible for the overall management of the RCBP including the planning, budgeting, financial management, reporting, procurement, communication, monitoringand evaluation, and interaction with IDA and CIDA. Regional Level, At the regional and EIAR levels, a total o f nine Regional Focal Persons would be hired to coordinate implementation and facilitation of the project. In addition, the project would hire Financial Management Officers with procurement facilitation experience to the finance department of eachRegional Bureau o f Agriculture andRuralDevelopment (BoARD) to ensure proper managemento fthe fiduciary and relatedreporting requirements o f the project. The Regional Focal Personswill report to the Agricultural and Rural Development BureauHead and the PMU Coordinator. The Focal Person at EIAR would report to the Director General o f EIAR and the PMU Coordinator. While the management and implementation responsibility o f the project i s the duty of the BoARD, the Regional Focal Person's role would be supporting beneficiary departments, Ag TVET colleges and FTCs to efficiently utilize project resources as per the implementation guidelines. Similarly, the Focal Person in EIAR would facilitate implementation o f the project at EIAR and Regional Agricultural Research Institutes (RARIs) levels. Inaddition to avoiding the creation o fparallel structure at regional level, this arrangement would ensure ownership and accountability with regard to effective implementation of the project. Roles andresponsibilities o f the Regional and EIARFocal Personswould be outlined in the PIM. The staff of the PMU, RegionaVEIAR Focal Persons and Financial Management 82 Officers would be competitively contracted from the market and the costs associated with equipping, furnishing, andoperatingthe PMUwouldbesupportedunder the project, Federal and Regional Steering Committees: RCBP steering committees would be established at Federal and Regional levels to ensure effective implementation o f the project. The steering committees would consist o f senior government officials from concerned offices and other stakeholders. The Federal Steering Committee would be chaired by the State Minster o f the MoARD for Agriculture Sector. The Project Coordinator would serve as secretariat o f the Federal Steering Committee. While providing overall guidance on the management and implementation processes o f the project, the Federal Steering Committee would also be expected to monitor outcomes and results of the project. At the regional level, regions would establish Regional Steering Committees (RSCs), The RSC would be chaired by Head o f the BOARDand RCBP Regional Focal Persons would serve as secretariats o f the respective RSCs. Heads o f concerned departments, Regional Research Institutes, ATVETs and DonorNGOs with similar operations would constitute the RSCs. The project will promote women's participation in steering committees; targets for women committee members will be set by the project and coordinated by the GenderEquality Specialist, 83 Annex 5: ProjectCosts ETHIOPIA: RuralCapacity BuildingProject Project CostByComponentandlor Activity Total US %million Component 1:Agricultural Technical Vocational 6.2 Education and Training Component 2: Agricultural ExtensionServices 26.5 Component 3: Agricultural Research 20.2 Component 4: Improving Information and 2.6 Communication Systems within M o m Component 5:Development of Agricultural Market 6.3 Insitutions Component 6: ProjectManagement 3.O Total Baseline Cost 64.8 Physical Contingencies 3.2 Price Contingencies 3.O TotalProject Costs 71.0 84 Annex 6: ImplementationArrangements ETHIOPIA: RuralCapacityBuildingProject 1. Managementof RCBP Implementation of the Rural Capacity BuildingProject will be managed and administered by a Project Management Unit (PMU). The PMUwill be situated within the Ministryo f Agriculture and RuralDevelopment under the State Minister for Agricultural Production. 2. ExecutingAgencies A number agencies (mostly public, but also private under the competitive grants) would be involved in the execution of program activities with the support o f the RCBP. Executing agencies would include: 0 For the Agricultural TVET Component: (i) MoARD through its Department of Agricultural Extension and Agricultural TVET; (ii) federal TVETs; (iii)regional BoARDs and other regional staff; and(iv) regional TVETs under the BoARDs; 0 For the Agricultural Extension Component: (i) MoARD through its Department of Agricultural Extension andAgricultural TVET; (ii) regionallzonal andworeda BoARDs; (iii) DAs; (iv) community level farmers' groups andkebele associations; and (v) other entities selectedand contracted undercompetitive grants; e For the Agricultural ResearchComponent: (i) EIARandits federal researchcenters; (ii) regional agricultural researchinstitutes andtheir regional researchcentersunder the BoARDs; and (iii) entities selectedandcontracted under competitive grants; other 0 For the ImprovingCcormectivitv wlin MoARD Component: MoARD through its Planning Department andDataProcessing Team; 0 For the Development o fAgricultural MarketInstitutions Component: MoARD through its Warehouse Receipt and Inventory Office within the Agricultural Marketing& InputsSector StateMinistry,Plant ProtectionandAnimal Health Departments within the AgriculturalDevelopment Sector StateMinistry; 0 For the Project Management Component: (i) PMUinthe MoARD; (ii) the the PMU's Ag ResearchFocalPerson at EIAR; (iii) PMU's RegionalFocalPersons the at the BoARDs ineacho fthe nine regions; and (iv) other entities selected and contracted under competitive grants; and 0 For the follow-up o fthe implementation o fcrosscutting issues (GE, HIVlAIDS and environment) concerned departments andoffices such as the WAD o fMoARD will be involvedandprovidebackstopping. 3. The ProjectManagementUnit (PMU) Institutionally, the PMU would be situated within the State Ministry o f Agricultural Development of MoARD. In addition, the PMU would also have Regional Focal Persons stationed inthe BOARDof each o f the eight regions and an Agricultural Research Focal Person stationed on the maincampus o fEIAR. 85 The PMU would be staffed by: (i) Coordinator; (ii) Specialist; (iii) Project M&E Financial Management Officer; (iv) Procurement Officer; (v) Extension-Research-Farmer linkage Specialist; (vi) Communication and Training Specialist; (vii) a Gender Equality Specialist; and various support staff. Eight Regional Focal Persons and financial officers would be hired to coordinate implementation within the regions. An Agricultural ResearchFocal Person stationed at EIARwill coordinate project activities relatedto research. ThePMUwould be responsible for the overallmanagement ofthe RCBP includingthe planning, budgeting, financial management, reporting, procurement, communication, monitoring and evaluation and interaction with World Bank and CIDA. These responsibilities would be detailed inthe Project ImplementationManual(PIM). The hiring and placement processes o f the PMU staff shall follow administrative procedures of the implementingagency, subject to review and acceptance o f the Bank.Terms and conditions o f the employment, including responsibilities, qualification, experience and related matters will be elaborated in the PIM for each position. Salaries and related benefits shall also be determined basedon the market rates and comparable institutions. Regional and ResearchFocal Persons: As most RCBP would be implementedat regional level, the Bureau o f Agriculture and Rural Development in each participating region would hire an experienced rural development professional as their Regional Focal Person. The Regional Focal Person would report to the Bureau Head and to the overall PMU Project Coordinator. Regional Focal Personswould proactively coordinate activities o f the project with the Regional Research Institute, Extension and Planning Departments o f the Bureau, ATVET Colleges, Farmer Training Centers (FTCs) and other stakeholders with similar operations in the region. Similarly, EIAR would also hire a RCBP Agricultural Research Focal Person to coordinate activities of the researchcomponent of the project by closely working with beneficiary Directorates o f EIAR and Regional Research Institutes. Helshe will report to the Director General of E M and to the overall PMU Project Coordinator. The roles and responsibilities o f the RegionalResearch Focal Personswill beelaboratedinthe PIM. Federal Steering Committee: RCBP steering committees would be established at federal and regional levels. The steering committees would consist o f senior govemment officials from concerned offices and other stakeholders as determinedby the PIM, Roles and responsibilities o f the steering committees would be elaborated inthe PIM. The Federal Steering Committee will be chaired by the State Minster o f the MoARD for Agriculture Sector. The P M U will serve as secretariat of the committee. While providing overall guidance on the management and implementation processes of the project, the Federal Steering Committee is also expected to monitor outcomes and results of the project. The FSC will meet every month for the first year o f the project and every quarter after that, when implementation o f the project i s streamlined at all levels. Regional Steering Committees (RSC): To ensure effective implementation o f the project at regional levels, beneficiaryregions will establish RSCs. The RSC will be chaired by Head o f the BOARD.The Regional FocalPersonswill serve as secretariatsofthe respective RSCs, Heads of 86 concerned departments, Regional Research Institutes, ATVETs and Donor/NGOs with similar operations would constitute the RSCs. Roles and responsibilities of the RSCs would be elaborated inthe PIM. 4. Flow of Funds External and GoE funding for RCBP would be deposited into a Special Account at the National Bank o f Ethiopia accessibleby the PAN. Project accounts would be established for E Mand for each of the eight main regions. Program Agreements would be established between the MoARD and: EIAR; the BoARD of each o f the Regions; the BoARD o f woredas participating in RCBP; any kebele councils or farmer groups receiving responsibilities and funding under RCBP. Detailed procedures governing the use of the Special Account and the use o f Program Accounts as well as drafts of the ProgramAgreements would be included inthe PIM. 87 Annex 7: Financial Management and Disbursement Arrangements ETHIOPIA: RuralCapacityBuildingProject FinancialManagement Introduction The objective o f project financial management assessment, undertaken based on guidelines issued by the FM Board, is to determine whether the implementing entities have acceptable financial management arrangements to ensure that (i)project funds are used only for the purposes intended in an efficient and economical way; (ii) preparation of accurate, reliable the andtimely periodic financial reports; and (iii) safeguardthe entities' assets. The FM assessment was performed duringMarch2004 andrevised inApril`2006. Country issues The recently completed Joint budget andAid review (JBAR) andthe Fiduciary Assessment (FA) show that Ethiopia has made significant progress in strengthening public financial management inrecent years. As part ofthe JBAR, the Bank, incollaboration with the JBS donors, conducted a Public Financial Management (PFM) status review using the PEFA framework. Out of the sixteen indictors covered under this review, fourteen o fthem cover the government's systems for public expenditureplanning, budgeting, and, reporting. The remainingtwo indicators are meant to assess donor performance. Ethiopia met 7 o f the fourteen indictors related to the planning, budgeting and reporting systems. Generally Ethiopia scores high in macroeconomic management, including aggregate fiscal discipline and minimizing fiscal risks. Satisfactory progress was also noted inbudgeting and accounting reform, though the adequacy and quality o f budgetreportingleavesroomfor improvement andremains akey concern. The FA, which was completed in early 2005, notes that considerable progress has been made in implementing FM reforms in both federal and regional level administrations. The areas of improvements include budget processes, internal controls and cash management. Also, some steps have been taken in reforming internal and external audits. Nevertheless, there are some weak areas that require attention. These include delays in financial reporting (both in-year and annual), inadequate capacity o f the auditors-general to discharge their responsibility; and weakness inlegislative scrutiny o f audited financial reports. Ethiopia's public financial management reforms have been managed by the Expenditure Management and Control sub-Program (EMCP) o f the government's civil services reform program. EMCP has developed a revised strategic planto implement the nine components of the sub-program Mobilization behind the EMCP (interms o f financial and human resources), as a key component of the Public Sector Capacity Building Program (PSCAP), is now be a priority area. Riskanalysis The project will be implemented by many ImplementingAgencies (Us) with varying degree o f capacities. For project financial management, the major risks lie in the following: i)Due to numerous IAs involved in project implementation, MoARDPMU as the final compiler and preparer o f project financial information, may not receive reports from other I A s on a timely basis for closing o f annual accounts o f the project as well as preparation and submission o f withdrawal applications; ii)FM capacity at various levels is rather weak, in particular at the 88 woreda and kebele level. As a result, additional staff with the right educational background and experience should be recruited for those I A s that are currently understaffed; Well designed and focused FMtraining should beprovidedby MoARDIPMUprior to effectiveness and at the initial implementation stage of the project for all FMlaccounting staff; Lastly, a set o f short and concise guidelines on accounting processing and reporting should be prepared and made available by MoARDIPMUto all staffinvolved inproject implementationprior to effectiveness. Summary risk assessmentof the project i s as follows: e) InternalAudit S Specific instruction will be given to the The Internal Audit Sections o f the I A s Internal Audit Sectionof each ofthe I A s maynot review the financial to include the project intheir annual work transactions of the project program f)ExternalAudit S Developing TOR for audit o f the project 89 ILow capacity inthe auditing - - Iand appointment o f auditors immediately profession. after effectiveness. g) Reporting and Monitoring S Standardized reporting format and Reporting from lower levels has been submission frequency shouldbe well found to be incomplete or not on a defined inthe FMguidelines to be timely basis. developed byMoARDPMUand communicated to all I A s prior to effectiveness. Overall Control Risk H StrengthsandWeaknesses The country's discipline in executing budget and compliance with existing government regulations is the major strength in implementing this project. For the IAs selected for assessment, there i s a good internal control system, includingregular post audits by the Internal Audit Departments o f each of the IAs; and Inspection Departments BoFEDs and MoFED. MoFED and its extension at the regional and woreda level have good track records o f dealing with funds flow. I A s are expected to closely follow the budgetary discipline and regular governmental reporting mechanism for project activities. Despite the above strengths, there are still the following weaknesses: Significant Weaknesses IResolutions a) Lack of trained manpower inthe area of IOffer competitive salary and develop careerplan financial management andhighstaffturnover. for civil servants. b) Theproject is to be implementedbyvast Strengthen monitoring andevaluation capacity at numberofU s . the federal, regional andworeda level and perform regular supervisions bythe Bank. c) Project audit may take time to complete as Agree with selected auditors on the audit timetable IAsspreadthrough out the country. well inadvance andensure that projectbooks are closed by MoFED immediately after the end o f each fiscal year, d) FMcapacity is weak at all levels. Focusedtraining program shouldbe offered by MoARDPMU to all FMstaff prior to effectiveness. e) Regular financial reports maynot be MoARDiPMUto design and standardize a set o f submitted from regions and woredas on timely simplified reporting package for all I A s involved, basis. to facilitate preparation, consolidation and submission o f project financial statements. Implementingentities Executing agencies at the federal level include MoARD, and EIAR through their different departments, Specifically these will include Planning and ProgrammingDepartment (PPD), Ag Extension and Technical andVocational Education & Training (TVET) DepartmentinMoARD; PPD of E M . New PMU will be established in MoARD to coordinate the overall 90 implementation of the project. The PMU will have an experienced and qualified Financial Management Specialist. At the regional level, BoARDs through their different departments, AgTVETs, Offices of Agriculture and Rural Development at the woreda level and kebele level FTCs will implement the project. A focal person and an experienced financial management officer will be hired in each BOARDto coordinate the project implementation at the regional level. Finance officers at the woreda and AgTVET college levels will keep the books of accounts for the project. MoARD PMU will be responsible for the transfer o f project funds and final compilation and submission o f regular financial reports and audited financial statements. I A s are required to submit regular financial reports to MoARDPMU for consolidation and onward transmission of reports to donors and government. Funds flow For each donor, one Special Account (SA) in US$ will be opened at the National Bank o f Ethiopia and will be managedby MoARDPMU. Inaddition, MoARD will open a Birr account into which both funds from the SAs will be deposited. The Bank loan proceeds will flow from the Bank to the SA and then to the Birr account based on project progress and disbursement forecast. From the pooled birr account, money will be transferred to EIAR and BoARDs based on approved annual work plans and budget. For AgTVETs, money will be transferred from the pooled Birr account on the basis of approved proposals and agreements to be entered into between MoARDPlMU and each of the Ag TVETs. Transfer o f funds to woredas and community-based organizations will bebasedon approved annual work plans and budgets. Transfer o f funds to EIAR and BoARDs will be made on quarterly basis. For AgTVETs, transfer o f h d s will be made basedon agreementsto be enteredbetween MoARDPMU and each o fthe AgTVETs. EIAR and BoARDs will open separate Birr accounts for the project. EIAR and BoARDs, then transfer money to research centers, woredas and AgTVETs. Each of the other IAs will open separate Birr accounts for the project. Reportingof expenditures will follow the reverse of the funds flow. Woredas will submit regular expenditures report to the BoARDs and the BOARDS will consolidate all the expenditures reports from woredas and submit the same to MoARDPMU. MoARDPMU will consolidate all expenditures r'eports from all I A s and submit consolidated reports to the concerned offices o fthe government and the Bank. 91 The flow of fundsis indicatedbelow. Special Special Account Account (USD)-NBE (USD)-NBE BoARDs EIAR AgTVET colleges Woredas FederalRegional 1 Community-based Organizations Staffing Adequate project FWaccounting staff with educational background and work experience commensurate with the work they are expected to perform i s one o f the factors critical to successful implementation o f project financial management, Based on discussions with and observations of finance departments o f I A s selected for assessment, it appears that additional qualified staff need to be recruited for all levels in order to adequately discharge FM responsibilities. The recent Public FinancialManagement Assessment reports also confirmedthe shortage of skilled manpower at all levels. Inaddition, well designed and focused FM training should be provided by MoARDlPMU prior to effectiveness to all staff involved in project financial management to update their skills as well as ensure good understanding o f Bank's FM requirements anddisbursementprocedures. The P M U and each o f the regional BoARDs will hire one Financial Management Officer with adequate experience and educational background. The Financial Management Officers will report to the respective Regional Focal Person. The other I A s will assign Finance Officers, who will record and report the financial transactions of the project, in their respective agencies. If there are shortages o f Finance Officers intheir agencies, they should recruit additional staff with adequate experienceand educational background. It is understood that the woreda finance offices andthe finance sections of EIAR, FederaLXegional ResearchCenters andAgTVETs will handle the financial transactions o fthe project. To strengthen financial management capacity o f the project, it is very critical to prepare a set of concise guidelines on how the proceeds o f the project will be disbursed, recorded, reported and 92 audited. It will be the responsibility of MoARDlPMU to prepare the guidelines. The guidelines should be prepared andmade available before effectivenessto all I A s staff. Budgetingand planning Each IA i s required to prepare work plan accompaniedwith related budget for eachbudget year and send it to the next higher-level for review, approval and consolidation. MoARDlPMUwill prepare a consolidate budget and submit the same to concerned body for approval. Fund transfers by MoARDlPMUwill bebasedon approved work planandbudget. Accountingpoliciesandprocedures Since July 2002, the government has initiatedan accountingreform at the federal level as well as in regions and introduced a double entry/modified cash basis of accounting. The federal line ministries and some of the regions have been using a computerized Budget, Disbursement and Accounting System (BDA). The remaining regions are still using manual accounting system with single entry bookkeeping. The mainelements of the accounting reform are the adoption of (i)revisedandcomprehensive a chart o f accounts consistent with the reformed budget classification; (ii) a system o f ledgers accommodating all types of accounts (including transfers, assets, liabilities and fund balance in addition to revenues and expenditures); (iii) entry book-keeping (thus, self-balancing set double of accounts); (iv) a system of control ofbudgetary commitments (recording commitments as well as actual payments); (v) modified cash basis transaction accounting; and (vi) revised monthly report formats to accommodate double-entry book-keeping and commitment control and allow bettercashcontrol. The computerized BDA system enables public bodies to produce financial reports much more easily. However, accounting and financial reporting are still performed manually in some jurisdictions, Massive capacity building efforts would be required in order to accelerate the rollout of the BDA system, including support for clearing accounts backlog, equipment and customization o f software, and training o fstaff, etc. The new chart o f accounts would satisfy project's needs o f financial transaction recording and preparation o f required financial reports. MoARD, however, still needs to prepare a set o f concise guidelines on transactions coding and results reporting, mainly due to (i) Not all o f the regions are using the same chart o f accounts and accounting system; (ii) new chart o f The accounts do not include account codes for activities o f the proposed project; and (iii) Specific reporting formats for the project remainto be clearly defined, Original supporting documents will be kept at the I A s originating the financial transactions. A separate book will be also kept by each IA to record project financial transactions. The lowest level to keep supporting documents is the woreda finance offices. If there are financial transactions by kebels or communities, all the supporting documents should be kept at the woreda level for external audit and bank reviews. INTERNAL AUDIT Each o f the I A s has an internal audit department, which performs post audits on financial transactions of the entity. The internal audit departments o f each o f the I A s will include the project intheir work plan and will review the financial transactions o f the project. MoFED has recently issued an internal audit manual and provided training to internal auditors. The reports o f 93 the auditors on project specific findings will be reported both to the heads o f the IAs and the PMUs at all levels. Internal control comprises the entire system o f control, financial or otherwise, established by management inorder to (a) carry out the project activities inan orderly and efficient manner, (b) ensure adherence to policies and procedures; and (c) safeguard and the assets o f the project and secure as far as possible the completenessandaccuracy o fthe financial and other records. The project is expected to design and install internal control systems which will help the managemento f the project inachieving the project objectives inan orderly and efficient manner. Since the project will not have an internal audit section, the control systems to be designed should compensate for the non-existence of the internal audit. Thus, the main focus o f the internal control is placed on the following: 0 Segregation o fduties; 0 Physical control o f assets; 0 Authorization and approval; 0 Clear channels o fcommand; 0 Arithmetic and accounting accuracy; 0 Integrityandperformance of staffat all levels; e Supervision. External Audit According to the Ethiopian Constitution, the Office o f Federal Auditor General (OFAG) is responsible for audit o f financial transactions o f federal government and subsidies to the regions. Each o fthe regions has regional auditor general responsible for audits o f financial transactions in the region. The OFAG delegates its responsibility mostly to the Audit Services Corporations, a government owned audit firm, and in some cases to private audit firms to carry out audit of projects funded by international donors. For the proposed project, OFAG will assign an external auditor acceptableto the Bank. According to the Bank's audit policy, external auditors are expected to issue a single audit opinion on the consolidated project financial statements. Due to the nature o f the project, audit reports should be submitted to the Bank within six months after the end o f each fiscal year, which ends on July 7 o f eachyear. Reporting and Monitoring The PMUwill establish adequate accounting andreportingsystems, which will produce accurate and reliable information regarding project resources and expenditures, The systems should provide reliable records and reports on all assets and liabilities and financial transactions of the project, and sufficient financial information for managing and monitoring activities. The accounting and reporting systems will among other things, include the preparation of financial management guidelines, design of good internal control systems, and appointment o f qualified personnel at eachlevel o fproject implementingagencies. The guidelines will, inter alia, include: 0 Flow o f funds; 0 Accounting policies to be followed; 0 Accounting systems; 0 Chart of accounts; 94 0 Reportingmechanisms; 0 Budgetingprocess; e Auditing arrangements; 0 Staffingrequirements, The guidelines should specifically mention how documents at regional, woreda and kebele /community committee levels will bemaintained and consolidated with PMU. The flow o f hnds and flow o f reporting should be mentioned in simple, but clear language, The guidelines should containthe formats to be usedby eachimplementingagency andthe frequency o f reporting. The PMU at federal level will be responsible for preparing consolidated quarterly and annual reports. The regions, woredas offices will keep records o f all financial transactions o f their respective units. Regular financial reports should be sent to the PMU, including the sources and uses o f funds and statements o f expenditures. All the documents at the regions and woreda will be kept in their respective units and be available to the Bank staff during supervision missions and to the external auditors duringtheir annual audits. Each FTC,kebelelcommunity committee will maintain a simple accounting book, which shows the amount o f money received and the expenditures made. All the supporting documents from the kebelelcommunity should be submitted to the woreda along with regular financial reports. The financial management guidelines will describe all the systems o f recording, filing and recordingall project related financial transactions. The PMU will produce quarterly FinancialMonitoring Reports (FMRs) and submit the same to IDA 45 days after the end of each six months. The FMRs will include financial, physical progress and procurement information. At a minimum, the financial reports must include the sources and uses of funds, expenditures by main expenditure classifications, beginning and ending cash balances and other supporting schedules, The formats o f the FMRs were agreed duringnegotiations, No later than November 30 o f each year, the P M Uwill submit to the Project Steering Committee with a copy to IDA, the proposed Annual Work Program and Financial Report. The report format will detail activities, associated unit costs and an implementation timetable. It will also include monitorable progress indicators for each proposed activity. In addition, the P M U will submit semi-annual progress reports to the Project Steering Committee and Planning and Programming Department o f M o m showing budgeted and actual expenditures, source of funds used, statement of progress achieved on the basis of the agreed upon indicators and the objectives and financial reports for the forthcoming six months. Action Plan Action to be taken Expected Responsibility completion date 1 Preparation o f financial management system for the project describing the flow o f funds, accounting, reporting and Before effectiveness Recipient auditing arrangementssatisfactory to World Bank. 2 I1Selection of staff at the PMU 1Before effectiveness 1 Recipient 3 Appointment of Finance Officers at all the regions implementing the project Before effectiveness Recipient 4 Opening ofbank accounts at the national andregional levels Before effectiveness Recipient Supervisionplan Considering the nature of the project, the Bank's supervision mission should be as regular as possible. Each year, there should be at least two main supervision missions and another two interim supervision missions bythe country office staff and PMUat federal level. Disbursementarrangements The closing date o f the IDA credit will be October 31,201 1. The proposedIDA credit ofUS$54 million will be disbursed against the categories as shown in Schedule 2 of the Financing Agreement. Disbursements will be made in accordance with procedures and polices outline in the Bank's Disbursement Handbook. There are two ways to disburse funds from the Bank. The first one uses advance to a Special Account (SA), direct payment and special commitments. The second one uses quarterly un- audited financial reports as a base for disbursement. The project will follow the first method at the beginning. If the borrower is interested in following the second method, it is possible to switchto it after a full assessment hasbeenmadebythe Bank. StatementofExpenditures Disbursements for all expenditures would be against full documentation, except for items o f expenditures for: (a) goods contracts or purchase orders costing less than the equivalent of US$150,000; (b) civil works contracts costing less than US$150,000 equivalent; (c) consultant service contracts for individual contracts below US$50,000 and contracts for firms below US$lOO,OOO equivalent; and (d) local training costs which would be based on statements of expenditures (SOEs). Supporting documentation for SOEs should be kept at a suitable location andreadily accessiblefor IDAreview at any time. SpecialAccount To facilitate disbursements,a Special Account inU S dollars would be establishedinthe National Bank o f Ethiopia. The authorized allocation o f the SA will be US$5 million. The SA will be replenishedonthe basis claims for eligible expenditures receivedbyIDA. Counterpartfunds While the Government o f Ethiopia will not provide direct counterpart funding for this project, IDA and CIDA financing for this project will complement ongoing expenditures by the Government (on the order o f U S 9 0 milliodyear (not reflected in the financing plan for this project)) for Government-led reforms and related interventions inagricultural research, training, and advisory services. The cost sharing plan is consistent with the Country Financing Parametersapproved inFebruary 2006. 96 Annex 8: Procurement ETHIOPIA: RuralCapacityBuildingProject A) General Procurement for the proposed project would be carried out inaccordance with the World Bank's "Guidelines: Procurement Under IBRD Loans and IDA Credits" dated May 2004; and "Guidelines: Selection and Employment of Consultants by World Bank Borrowers" dated May 2004, and the provisions stipulated inthe Legal Agreement, The general descriptions o f various items under different expenditure category are describedbelow. For each contract to be financed bythe Loadcredit, the differentprocurement methods or consultant selection methods, the need for prequalification, estimated costs, prior review requirements, and time frame are agreed between the Borrower andthe Bankproject team inthe Procurement Plan. The Procurement Plan will be updated at least annually or as requiredto reflect the actual project implementation needs andimprovements ininstitutional capacity. Procurement of Works:Works procured under this project, would include buildingrehabilitation and small value construction works in Agriculture Technical and Vocational Education and Training (AgTVET) colleges. The procurement will be done usingthe Bank's Standard Bidding Documents (SBD)for all ICB andNational SBD agreedwith or satisfactory to the Bank. Procurement of Goods: Goods procured under this project would include: Vehicles, Laboratory Equipment, farm Equipment, ICT and communication equipment, office equipment, Furniture, books andjournals. The procurement will be done using Bank's SBD for all ICB and National SBD agreedwith or satisfactory to the Bank. Consulting services and Training: Consultant services shall include: development o f strategic plans for AgTVETs, training needs assessment, Technical assistance and training, and design and supervision of works. Selection of consultants shall be carried out using Banks' standard RF'P. In general, large consulting assignments estimated to cost more than $100,000 will be awarded under "Quality and Cost Based Selection (QCBS). For assignments o f a routine nature, for which well-established practices and standards exist such as financial audits, the Least Cost Selection (LCS) method may be usedinaccordance with the provisions of paragraphs 3.6 o f the Consultant Guidelines.For tasks that meet requirements set forth inparagraph 3.9 to 3.12 o f the Consultant Guidelines, consultant services may with the Bank`s prior agreement be procured on single source basis. Consulting firms for services estimated to cost less than $100,000 may be selected using the consultant's qualifications method. Individual consultants will be selected on the basis o f their qualifications inaccordanceparagraph 5.2 to 5.4 o fthe consultant guidelines. Short lists o f consultants for services estimated to cost less than $ 200,000 equivalent per contract may be composed entirely o f national consultants in accordance with the provisions o f paragraph 2.7 o fthe Consultant Guidelines. Operational Costs: Operating costs would consist of items such as operation and maintenance costs for equipment, communication charges, transportation costs and travel allowances to regularly carry out field supervision, office supplies, fie1 and other consumables. The operation costs financed by the project would be procured usingthe implementingagency's administrative procedureswhich were reviewed and found acceptable to the Bank. 97 Institutional strengthening and Development Innovation Grants: The project will finance sub-projects under Sub-component 1.2 on a demand-driven basis. Sub-projects will be subject to review and approval ofwritten proposals submittedto the relevant approving panel. The types of activities eligible under these sub-projects are described inthe Project Implementation Manual, Each proposal will include a budget and Procurement Plan, MoARDlPMU will follow the procedures in the Procurement Procedure Manual. A simplified bidding document preparedby the PMUreviewed andacceptableby IDA could beused for sub-projects. For a sub-project grant above US$50,000.00 a procurement plan should be submitted for Banks' prior review and approval. B. Assessment of the agency's cwacitv to impZementprocurement The country Procurement Assessment Report (CPAR) done in 1998 and 2002 has identified procurement capacity as one o f the major weakness inpublic sector procurement. The GOE has taken measures to rectify the weaknesses noted in CPAR and a new procurement law was enactedinJanuary 2005 and i s applicable on federal government offices. Subsequently, Standard BiddingDocuments were preparedandissuedbythe government to beusedfor all procurements financed by the federal government budget. As of March 2006 two regional states adopted the law and arebeingenforced. The remaining regional states are expectedto adopt the law. The PMUto be establishedunder MoARD will be responsible for the procurement activities o f the project. A qualified procurement specialist will be assignedor employed on a full time basis for the PMU. An assessment o f the capacity of the MoARD to implement procurement actions for the project has been carried out by the Country Procurement staff on April 26, 2006. The assessment reviewed the organizational structure for implementingthe project and the interaction between on going WB financed project's and the Ministry's relevant central unit - Procurement and Property AdministrationDepartment. Most o f the issues/ risks concerning the procurement component for implementation o f the project have been identified and include; i)the procurement staff o f the Ministry do not have adequate experience in works procurement and consultancy services; ii)there are delays in evaluation o f bids and contract processing; iii)tender committee members have been assigned from different department o f the Ministry and replacement intheir absence i s impossible unless the missing member named his delegate, due to this reason bid opening dates had been postponed for two packages in one years time, without proper deadline extension; iv) projects procurement unit are not mandated to process their procurements without passing through the central procurement unit. The corrective measures which have been agreed are: i)E m p l o ~ e n t / A s s i ~ e notf Procurement Specialist specifically for the PMU; ii)Provision o f training to procurement staff and tender committee members as required; iii)Orientation to Management and other staff on procurement Implementation arrangement; iv) Development o f a Procurement Manual which includes, the procurement procedures, the SBDs to be used for eachprocurement method, as well as model contracts for works and goods procured. The manual among others would include the following sections to facilitate procurement activities o f the project; i)defining the working relationship b/n PMU procurement unit and the Ministry's Procurement and Property Administration Department, ii)organization and setup of tender committee members specific to 98 the project, iii)decision making process and authorized level for the P M U director and other higher levelofficial(s) to sign contracts. The overall project risk for procurement is high. C, Procurement Plan The Borrower, at appraisal, developed a Procurement Plan for project implementation which provides the basis for the procurement methods. This plan has been agreed between the Borrower and the Project Team on May 2, 2008 and is available at MoARD Procurement and Property Administration Department. It will also be available inthe Project's database and in the Bank's external website. The Procurement Planwillbe updatedinagreementwiththe Project Team annually or as required to reflect the actual project implementation needs and improvements ininstitutionalcapacity. D. Frequency of ProcurementSupervision In addition to the prior review supervision to be carried out from Bank offices, the capacity assessment of the ImplementingAgency has recommended two supervision missions to visit the field to carry out post review ofprocurement actions. 99 Attachment 1 Details of the Procurement Arrangement involving international competition. contracting: 1 2 3 4 5 6 7 8 9 Ref. No. Contract Estim Procurem P-Q Domestic Review Expected C o m m (Description) ated ent Preference by Bid-Opening ents cost; Method (yeslno) Bank Date 000' (Prior I I Post) RCBPlOOll Procurement of 495.3 I I I 1 1 I ICB I No Yes Prior 27-0ct-06 ICB12006 Vehicles RCBP10021 Procurement o f 308 ICB No Prior 27-Oct-06 12-Dec-06 ~ Yes Prior 17-Dec-06 I Biotechnology I I (b)ICB Contracts estimated to cost aboveUS$15( 100.00per contract andi 1direct contrac will be subject to prior reviewbythe Bank. 2. Consulting Services. Lents. 3 4 5 6 7 Estimated Selection Review Expected Comments cost Method by Bank Proposals I (Prior I Submissio 000' Post) n 200 QCBS rehabilitationworks of RCBPlQC Training needs 300' QCBS Prior 6-Feb-07 BS10021CS assessment (b)Consultancy services estimatedto cost above US$lOO,OOO.OO per contract and Single Source selection of consultants (firms) will be subject to prior review by the Bank. (c) Short lists composed entirely of national consultants: Short lists of consultants for services, estimated to cost less thanUS$200,000.00 equivalentper contract, may be composed entirely o f national consultants inaccordancewith the provisions o fparagraph 2.7 o f the Consultant Guidelines. 100 Annex 9: EconomicandFinancialAnalysis ETHIOPIA: RuralCapacityBuildingProject 1. Introduction The economic analysis o f the RCBP follows recommendations for good practices inthe World Bank and i s based on experiences with similar projects in other regions. The analysis i s structured as follows: (i) a brief summary o f general issues for economic analysis o f agriculturalresearch and extension projects; (ii) a brief review o f returns to past investments in agricultural research and extension projects worldwide with particular emphasis on Sub-Saharan Africa and Ethiopia; (iii)an overview o f the economic importance o f agricultural production in Ethiopia; (iv) an estimation of the potential Internal Rate of Return (IRR) and Net PresentValue (NPV) for the proposedinvestment; and (v) a fiscal analysis focusing on the implications on public expenditures to sustain and scale-up investments and activities initiated under the project. 2. Economicand FinancialAnalysis of Agricultural ResearchandExtensionProjects The Good Practice Notes "Ex-Ante Economic Analysis in AKIS Projects - Methods and Guidelines" (Horstkotte-Wesseler et al., 2000) and "Monitoring and Evaluation for World Bank Agricultural Research and Extension Projects" (Rajalahti et al., 2005) review issues to be considered for economic analysis of agricultural research and extension (R&E) projects funded by the World Bank. The particular challenges to conduct an economic analysis of agricultural R&E projects include: (i)the natural uncertainty of research outcomes and technology adoption and difficulties in establishing timetables for technology development and dissemination; (ii) the difficulties of capturing the diverse objectives o f R&E projects, such as poverty reduction, natural resource conservation, food security, export promotion, economic growth, and reduction of social conflicts; (iii) the problems related to cause-and-effect attribution of impact due to diverse external factors (e.g. rural credit institutions, input supply systems, product marketing systems; macro-economic policies), which are outside of direct project control; and (iv) the lack o f reliable national data and lack o f awareness and capacity required for conducting an economic analysis. The good practice notes emphasize that the calculation o f a single summary measure should not be the major objective o f the economic analysis o f R&E projects because it i s usually subject to a wide range o f assumptions. Rather the mainstreaming o f economic analysis into a process o f evaluating costs and benefits for more efficient resource allocation within the R&E system should be the priority. Therefore, general support and capacity building within the national research and extension system should be undertaken to conduct on-going economic analysis for effective evaluation, priority setting and impact assessment. A large share of resources in R&E projects is allocated to institutional development. Hence, economic analysis of a whole project is not very useful and may not be warranted. Economic analysis of individual investments within the project may be more appropriate. The recommended model for evaluation i s the economic surplus method (or a simplification thereof). The exact model type should be determined by the activities to be financed, projectedanalytical capacity, and data availability. 3. Returnsto PastInvestmentsinAgricultural ResearchandExtensionProjects Many ex post economic analyses have shown highrates o f return to investments in agricultural R&E. The most comprehensive review o f literature was conducted by Alston et al. ("A Meta-Analysis o f Rates of Return to Agricultural R&D', 1999). The study reviewed 294 studies (including extension) reporting 1,858 estimates of returns on investments in agricultural research and development. After eliminating extremes, the report found that the remaining 1,760 estimates indicated an average return o f 73 percent per year. These results confirm the conventional view that returns on investmentsinagricultural research and development are relatively high. Returns averaged 88 percent on investments in research alone, 79 percent on extension alone, and 45 percent on R&E combined. The report argues that the lower estimates 101 for R&E combined might be because the corresponding studies captured more of the total costs o f the technology innovation process. No evidence was found o f declining rates of return in recent years and little consistent difference among regions. However, the estimated rates o f return tended to be lower in Africa (average return o f 50%) and West Asia-North Africa (average return o f 44%) than in Latin America and the Caribbean (average return of 53%) or particularly Asia (average return o f 78%). The average return indeveloped countries was estimatedto be 98% and indeveloping countries 60%. Rates of returns were similar across all research categories except for natural resource research where lower rates o f returnwere mainly due to the longer production cycle. Thirtle et al. (2003) used a causal chain model based on 108 observations for 48 developing countries to estimate rates o f return (RoR) to agncultural researchand development and the impact o f investments in R&D on poverty reduction. For the African countries, the average RoR is 22%. At the country level Ethiopia achieved the highest RoR inAfrica with 58%, followed by Morocco (57%) andUganda (50%). There i s no reason to expect that economic returns in Ethiopia would be substantially below the high levels reported consistently in most analyses, The productivity of agricultural producers in Ethiopia i s currently extremely low. Therefore, it can be expected that returns to technology development and transfer will be significantly highinEthiopia. 4. Economic Importanceof AgriculturalProductioninEthiopiaz6 The agricultural sector is o f significant importance for the Ethiopian economy. Its performance matters immensely for poverty reduction and growth, both directly as well as indirectly through its potential for strong pro-poor growth linkages. The country presents one of the most important rural development challenges globally. Among the poorest countries inthe world, the agncultural sector accounts for 40% of national GDP, 90% of exports, 85% o f employment, and 90% of the poor. Among the rural population, the main source o f income for 87% of the households is subsistenceagnculture which is almost entirely rainfed, Within agriculture, 64% o f value added comes from crops, 23% from livestock, and 13% from forestry. Exports (where coffee dominates with 66% o f value, followed by hides and skins and chat) represent less than 10 % o f agriculture GDP, Of the aggregate cropped area, 73% is devoted to cereals, another 20% to pulses, oilseeds and other annual crops, and less than 7% to permanent (mostly cash) crops. Ethiopia has the second largest livestock population in Africa, but the contribution o f livestock to the agricultural economy i s largely hidden. Draughtpower, milk and meat are produced and consumed on farm, a small proportionenters rural markets, and some is exported. Camels, goats, sheep and other small stock are the mainstay o f livelihoods for families in semi arid areas. F m income levels are low and highly variable, subject to periodic climatic shocks. The primary asset to cushion weather shocks is livestock (72% o fhouseholds own cattle) but the ownership o f other physical assets is extremely low. Agriculture value added has grown only 1.4 percent per year since 1993 with output and price increases contributing equally to this growth. Indeed, agriculture only contributed 0.3 percentage points on average to total GDP growth over the period 1993-2003. Consequently, over the past decade, 1995-2004, per capita agricultural GDP and per capita grain production have continuedtheir long term decline, at -1.79% and -0.59%, respectively. As a result consumers have yet to benefit from lower food prices that would be stimulated by increasedagriculturalproductivity. Over the past decade, almost all increased productionis explainedby area expansion, while bothland and labor productivity in agriculture have declined. Cereal yields have generally stagnated. As a result, land productivity at 1.15 tiha o f cereals is low and labor productivity i s very low (agricultural value addedper agriculturalworker of $144 vs. $329 for Sub-SaharanAfrica). The overall assessmentis that despite a decade of focus on agriculture andsignificant expenditures onthe sector, Ethiopian agriculture remains stubbornly low-input, low-value and subsistence oriented, and subject to frequent climatic shocks. Given this performance, a simple scaling up o fpast approaches i s not 26 This section is basedonthe draft chapter "Agriculture andRural Development for Pro-Poor Growth The Challenge andthe Opportunity" for the Ethiopia Country Economic Memorandum, 2006. 102 likely to produce acceptable growth and poverty reduction targets consistent with achieving the MDGs. Accordingly, the new Sustainable Development and Poverty Reduction Paper (PASDEP) indicates a shift in strategy toward market driven diversification and commercialization and increasing exports. Under PASDEP, these objectives would be pursued through a range o f policies and instruments, including the modernization o f the research and extension system and making it more demand-driven while providing complementary investments inthe human capital of farmers through the WET program. 5. EstimatedIRRfor Investments inAgriculturalResearchandExtensionunder RCBP The Good Practice Note "Ex-Ante Economic Analysis in AKIS Projects - Methods and Guidelines" (Horstkotte-Wesseler et al., 2000) recommends that during project preparationeconomic analysis should focus on (i)retrospective technology adoption and impact studies to demonstrate that the current technology system has been productive in some areas; and (ii) prospective technology case studies to demonstrate that R&E investments can produce substantial economic benefits. Due to lack o f data the former i s mainly based on the review of international impact studies (see section 3). However, the analysis by Thirtle et al. (2003) indicates that the RoR for research in Ethiopia are estimated to be the highest in SSA. A large share ofresources of the RCBP is allocated to institutional and infrastructure development o f the agricultural research and extension system. As mentionedabove, estimation of single summary measures, such as IRRor NPV, for the whole project is not very useful inthese cases andmay not be warranted. Ex- ante quantification of the economic benefits of certain project components, such as institutional and infi-astructural development o f the Regional Agricultural Research Institutes (RARIs) and Research Centers (RCs), is difficult, ifnot impossible. This i s mainly due to the long-run nature of the reforms, and difficulties in linking cause and effect. Therefore, the calculation o f economic measures for individual components within the project may be more appropriate. The activities under the extension component are more directly linked to quantifiable economic benefits than other project investments. 5.I Economic analysisfor RCBP extension investments The support o f the extension system in terms o f capacity building for FTCs (including the backstopping support for development agents) and the promotion o f innovative institutional and operational extension models, can be expected to be translated directly into increased adoption o f improved technologies inthe targeted woredas and kebeles. The analysis aims at estimating the incremental benefit per ha required to pay for the costs o f the extension component. Cost estimates indicate that with an amount o f US$20 million about 2,000 FTCs could be supported as part o f the capacity building subcomponent. If 18,000 FTCs would be made operational as part of the Government program, inaverage 2,000 FTCswould have the responsibility to cover an area o f about 1.2 million ha. Furthermore it is assumed that due to the support o f the FTCs, benefits will spread with a one year time-lag and a rate o f 17% per year reaching benefits on the entire area after year 6 (see Table 1). Based on these assumptions, the required incremental benefits per ha can be calculated to cover the costs of this investment into 2,000 FTCs. Results indicate that benefits would have to increaseby US$4 per ha to reach an IRRo f 13%. Household survey data" show that adoption of improved technologies on five major crops (wheat, maize, teff, barley, sorghum) can leadto an incrementalbenefit o fUS$lO per ha. Assuming that this incremental benefit of US$lO per ha could be realized on the agricultural land o f the four regions an IRR o f 34% could be reached. This figure is comparable to the levels of IRRreported for past investments into R&E both inEthiopia and internationally. However, this estimate can be considered as conservative, because it focuses on productivity increases o f major crops only. The project will have a broader focus covering all aspectso f apcultural development, including livestock, processing, and improvingthe access to markets. Hence, required increases in AgGDP to pay for the costs o f extension investments would be a more appropriate indicator for the likelihood o f the profitability o f the investment. AgGDP inthe four regions i s estimated to reach US$300 per ha. Incrementalbenefits o f US$4 and US$lO would be equivalent to an 27 The Central Statistics Authority (CSA) carried out 5 nation-wide household surveys between 1997-2001. 103 increase o f 1.3% o f AgGDPlha and 3.3% o f AgGDPlha respectively. These figures indicate that the project investments insome 2,000 FTCs are likely to be economicallyjustified. 1. TABLE 1:PROFITABILITYOFRCBP EXTENSIONINVESTMENTS Incremental Area I Total benefit I costs I Netbenefit 11 5.2Economic analysisfor totalproject Inaddition to the estimation of IRRrequired to cover the costs of specific project investments, a useful exercise i s also to compute the overall productivity gain required to pay the total cost o f the project. An analysis o f total costs under the RCBP indicates that a productivity gain o f 0.6 percent of the AgGDP would lead to an IRR o f 14 percent. The analysis includes the annual costs of the project, including institutional development, and assumes a time lag for initiation of benefits of 4 years with maximum benefits (i.e., 0.6% of AgGDP) after 8 years after project start. This is very small in relation to the expected productivity gains from agricultural research and extension that have been documented inmany countries o fbetween 0.5 and 1.5 percent per year. 6. Fiscal Analysis of the RCBP Due to the importance and potential o f the agricultural sector for economic growth and poverty reduction in Ethiopia, a significant increase inpublic funding for agricultural research and extension is essential. The RCBP i s an important step into this direction. For a future transformation o f the rural sector as envisaged by the PASDEP, increased investments in agricultural technology are urgently needed. The preliminary results o f the economic and financial analysis indicate that the investments would be economically and financially justified. However, it has to be considered that the investments may have significant fiscal impacts. The following analysis aims at assessing (i) the fiscal implications o f sustaining the activities which have been initiated under the project; and (ii) the fiscal implications o f scaling-up project investments and activities, particularly with regardto increasing the numbers o f Farmer Training Centers (FTCs). Current public expenditures on agricultural research, extension, and education will be compared with (i) the projected demands on public expenditures for sustaining project activities after the completion o f RCBP; and with (ii) the projecteddemands on public expenditures for scaling-up the initiated reforms under the project, The former part will contribute to the assessment o f the likelihood that sustainable local sources o f funds will be available at the end of the project to take over from funds providedunder the project. The latter part will inform the debate on the appropriate dimensions of scaling-up the FTCs in the four targeted regions. 104 6.1 BaseAnalysis of Increase in Public ~xpenditures28 Table 2 indicates that in 2002 public expenditures for TVETsfagricultural education amounted to US$17 million, for agricultural extension to US$11 million and for agricultural research to US$20 million. Together these expenditures add up to US$48 million which is equivalent to about 20% o f the total national public expenditures for agriculture and rural development and 2.2% o f the total government budget in2002. TABLE 2: BASE AN LYSISOFINCREASE IN1 I Public Incremental Incremental Expenditures 2007-2011 Public Public 2002* (US$ million) Expenditures Expenditures (US$ million) per Year (in%) (US$ million) Investment costs TVET -_ I 5.22 0.94 0.98 -- Extension 23.57 0.76 3.60 Research 16.00 0.70 2.23 Recurrent costs TVET -_ 0.00 0.77 0.00 -- Extension 0.90 0.77 0.17 I:;9* Research 2.60 0.77 0.50 II Total TVET 16.76 0.98 Extension 11.16 3.77 Research 20.12 2.73 13.6 Grand Total I 48.04 7.48 15.6 * Public expenditures foi ZOO2 were used, becausemore recent data were not available. Table 2 also indicates real costs o f the three RCBP components duringthe 5 year implementation period. To calculate a factor which reflects the proportion of the investment costs which would have to be taken over by the Government after the project ends, the investments were categorized according to maintenance and replacement versus one-off investments such as foreign technical assistance. The calculation o f a factor for recurrent costs i s based on the relation o f the recurrent costs inthe last year of the project in relation to the average annual recurrent costs o f the project. The table shows that public expenditures would have to increase in real terms by 16 percent annually in 2011 and beyond after the end of the project to sustain the investments and activities initiated by RCBP. This increase would correspond to an increased expenditure o f US$7.5 million per year, which are intotal about 2.5 percent of the total government budget in 2002. Public agricultural research expenditures are projected to increase by 14 percent or US$2.7 million annually. Public expenditures for agricultural education (TVETs) and extension would have to increase by 6 percent (or US$l.O million) and 34 percent (or US$3.8 million) respectively. International Comparators: Due to the lack o f data for education and extension, only public expenditures for agricultural research are compared to international levels (see Table 3). In average developed countries spent 2.6% of AgGDP on agricultural research in 1995. Incomparison to that, the levels spent in developing countries in average (0.62% of AgGDP) and Africa in average (0.85% of AgGDP) are relatively low, Public research expenditures inneighboringKenya, for example, were 2.7% of AgGDP in 2000. Tanzania and Uganda spent 0.4% o f AgGDP and OS% o f AgGDP on agricultural research respectively. 28The base analysis focuses on project expenditures for the TVET component, the extension component, andthe research component only. Due to the lack ofbaseline data and the relatively modest amount, the other components are excluded from this analysis. 105 Table3: PublicExpendituresfor AgriculturalResearchin2000 ***Estimationbasedonofficial public expenditure data compiledas partof the ruralPER. Estimationbasedon estimations inTable 1 Source: ASTI Database-www.asti.cgiar.org According to the ASTI Database, Ethiopia's public expenditures amounted to 0.38% of AgGDP in2000, which i s significantly below the Afr-ican average and below most Sub-Sahara African countries. While more recent figures are not available for other counties inthe region, public support inEthiopia increased to 0.68% o f AgGDP in 2002. This increase i s mainly due to the support o f the Agricultural and Rural Technology Project (ARTP), This figure i s still below the average for Aftlca in 1995 and below the average o f many SSA countries in 2000. The projections in the above analysis would mean a further increase in GOE commitment to agricultural education, research and extension due to the RCBP. For example, public expenditures for agricultural research as a percent o f AgGDP would increase from 0.68 percent in 2002, to 0.77 percent in 2011. In the same time period, public expenditures for agncultural education and extension would increase fiom 0.56 percent o f AgGDP to 0.70 percent and 0.38 percent to 0.41 percent respectively. Considering the importance o f the agricultural sector in Ethiopia and comparing these figures with expenditures in other SSA countries, this public support seems to be justified. 6.2 Economic and Fiscal Analysis of Scaling- UpFarmer TrainingCenters This part o f the fiscal analysis assesses the profitability of scaling-up the Farmer Training Centers (FTCs) and the projected demands on public expenditures. The aim o f the profitability analysis i s to assess the magnitude of incremental benefits needed to cover the costs o f scaling-up the FTCs and arrive at a reasonable Internal Rate o f Return (IRR), As mentioned before, the results of this analysis would inform the debate on the appropriate scope o f the scaling-up process. As part of the analysis, costs associated with scaling-up the number of FTCs inthe four targeted regions of Tigray, Amhara, SNNP, and Oromiya were estimated, These cost estimates account for investment and recurrent costs required to make the FTCs fully operational. It is assumed that this would also include relatively modest investments o f for equipment, TA, and training at federal, regional, and woreda level. The costs at these levels are assumedto be 15% o f the costs at the FTC level. Another assumption is that benefits occur with a one year time lag over a period o f 15 years. The area on which benefits would be realized would increase by 17% per year untilthe entire area of agricultural land inthe four regions, i.e. on more than 10 million hectares, is reached after 6 years. The area increase per year is based on the adoption rates estimated based on household survey data (see section 5). Based on these parameters and assumptions, sensitivity analyses are conducted to show which magnitude o f incremental benefits per ha would be needed with varying numbers o f FTCs and what the projected demands on public expenditures wouldbe. 106 The current plan of the MoARD suggests a total number o f 18,000 FTCs. Assuming that FTC construction costs amount to US$14,700 as indicatedby the MoARD, the requiredincrementalbenefitha for the total agricultural land to pay for the costs of this investment would be US$19. This would leadto a reasonable IRR o f 12%. If the construction costs per FTC would be reduced by 50% (US$7,350), the needed incremental benefits to pay the costs would be reduced to US$15lha. Considering the fact that the project will have a broad focus with regard to agricultural development, required increases o f AgGDPlha to pay for the costs of the investment are probably the most appropriate indicator for the economic analysis. It i s estimated that AgGDPlha amounts to US$300 inthe targeted regions, Incremental benefits of US$19/ha and US$15/ha would be equivalent to an increase of the AgGDPlha o f only 6.3% and 5.0% respectively. While these productivity increasesseem to be achievable, the GoE should also take into account the fiscal implications while up-scaling the FTCs (see table 4). Assuming that FTC construction costs amount to US$14,700, as suggested by the MoARD, the expenditure during the first three years would amount to US$168 million per year and U S 9 8 million per year afterwards. If the construction costs would be reduced by 50%, expenditures during the first three years would be reduced to US$126 million per year and US$83 million afterwards. Number of costs Incremental Public Incremental InternalRate FTCs (US$ public expenditure benefitper ha ofReturn(%) milliodyear) expenditure (YOAgGDP) required (IRR) ( Y O ) (US%) 18,000 FTCs Highcost 168* 198** 1527I891 3.7 12.3 19 12 Low cost 126I83 11451755 2.9 12.0 15 12 15,000 FTCs Highcost 142I 8 1 1291I736 3.1 11.9 16 12 Low cost 109I69 990 I627 2.5 I1.7 13 12 12,000 FTCS Highcost 110165 10001590 2.5 I 1.6 13 13 Low cost 88 I 5 5 800 I 500 2.1 11.4 10 11 10,000 FTCs Highcost 99 I 6 0 900 I545 2.3 I1.5 11.5 12 Low cost 79 I 5 0 718 I455 1.9 I1.3 9.5 12 Considering the current public expenditures for extension which are estimated to be about US$l1million, the additional expenditures to finance the scaling-up o f 18,000 FTCs would constitute a significant increase (inthe highcost scenario o f about 15 times inthe first 3 years and 9 times afterwards). Currently public expenditures for extension amount to 0.4% o f AgGDP. Inthe highcost scenario, the estimates o f US$168 million per year (in the first 3 years) plus the current expenditures o f US$11 million would be equivalent to 3.7% of the AgGDP andUS$98 million per year afterwards plusthe current expenditures o f US$11 million would be equivalent to 2.3% o f the AgGDP. In the case o f the low cost scenario the 107 additional expenditures would increase public expenditures to 2.9% of the AgGDP inthe first three years and to 2.0% o f the AgGDP afterwards. These figures illustrate that increasesinpublic expenditures would have to be very significant ifthe M o m would implement 18,000 FTCsas planned. The original plan of the MoARD was to implement 15,000 FTCs. Inthe high cost scenario incremental benefits would have to be US$16lha to pay the costs (which i s equivalent to 5.3% of the current AgGDPlha) and inthe low cost scenario US$13lha (which i s equivalent to 4.3% o f the AgGDPha). The fiscal implications are still significant. In the high cost scenario additional public expenditures would amount to US$142 million per year in the first three years (this i s 13 times of the current public expenditures for extension; including the current expenditures this i s equivalent to 3.1% o f the AgGDP) and US$81 millionper year afterwards (this i s 7 times of the current public expenditures; including the current expenditures this is equivalent to 1.9% o f AgGDP). Assuming reduced costs per FTC, additional public expenditures would be reduced to US$109 million per in the first 3 years and US$69 million per year afterwards. Another scenario was run with the assumption that only 10,000 FTCs would be implemented and made operational. The investment would likely to be profitable. Inthe high cost scenario incremental benefits o f US$11Slha would be needed to pay the costs and inthe low cost scenario an incremental benefit of US$9.5lha would be sufficient. The low cost scenario would imply incremental public expenditures o f US$79 milliodyear inthe first three years (equivalent to 7 times of the current expenditures; including the current expenditures this i s equivalent to 1.9% of AgGDP) and US$50 million annually afterwards (equivalent to 4.5 times o f the current expenditures; including the current expenditures this is equivalent to 1.3% of AgGDP). These sensitivity analyses demonstrate that the up-scaling o f the FTCs is likely to be a profitable investment. Obviously, with reducednumber of FTCs the likelihood o f profitability increases. However, it is important to note that it was assumed that with decreasing numbers of FTCs the same area of agricultural land could be reached. The fiscal analysis clearly shows the significant implications of scaling-up the FTCs on the public expenditures for extension. As described above, if only 10,000 FTCs would be implemented public expenditures for extension would have to increase by 7 times in the first three years and 4.5 times afterwards. These projections would have to be considered and discussed carefully before a decision on the number o f FTCs i s made. The MoARD also would have to think carefully how to select the locations o f the FTCs most strategically and which area can be reached per FTC. Assuming 18,000 FTCswould be implemented, one FTCwould have to cover inaverage an areaof 588 ha of agricultural land. Inthe case of 10,000 FTCs, this area would increase to 1,059 ha. 108 Annex 10: SafeguardPolicyIssues ETHIOPIA: RuralCapacity BuildingProject Project activities that may result innegative social or environmentalimpacts are: Technical Vocational EducationandTraining(TVET)Colleges CivilWorks: - Rehabilitation o f buildings, and related services, including dormitories, cafeterias, classrooms, clinics, libraries, bakeries, staffresidences, service quarters, etc.; Farmstructures for livestock; Access roads within the WET college boundaries and some upgrading o f roads to the colleges; 0 Land acquisition in conjunction with minor civil works, where additional lands are needed at some o f the colleges, yet to be defined. AgriculturalResearchCenters(ARC'S) CivilWorks: - Minor rehabilitation and construction of at research centers to be determined during implementation; FTC Support: Farmer Training Centers( FTC's) - Civil Works. Recurrent expenditures for farmer training and extension senrices, including on-farm trials and agricultural demonstrations. These activities have been screened against the Bank's ten Safeguard Policies and have triggered the following: (i) Environmental Assessment - OP 4.01; and (ii) Involuntary Resettlement - OP 4.12. Using the EA categorization requirement detailed inOP 4.01, the project hasbeen assigned EA Category B. The Africa Safeguards Policy Enhancement ( ASPEN) Team assigned an S2 Safeguard Category. Since the location of project investments and other technical details will be determined only during project implementation, the Government i s preparing An Environmental and Social Management Framework (ESMF) and a Resettlement Policy Framework (RPF) incompliancewithOP 4.01 and OP 4.12. The Government has disclosed the ESMF and RPF in Ethiopia according to its disclosure rules and ensure it i s accessible to members o f the general public and other stakeholders. Having disclosed the ESMF and RPF in-country, the Government has officially notified the Bank that it has done so and authorized the Bank to disclose these documents in the Infoshop. The date for disclosure was February 23d 2004. In compliance with the Disclosure Policy ( BP 17.50), the date for disclosure precedes the scheduled date for appraisal (April 2006). The disclosure date fell more than 120 days before the Board date, incompliance with the Pelosi Amendment Act. The ESMF and RPF establish a mechanism to determine and assess future potential environmental and social impacts o f project investments. The two documents set out mitigation, monitoring and institutional measures to be taken during design, implementation and operation o f project activities to eliminate adverse environmental and social impacts, offset them, or reduce them to acceptable levels. The ESMF The ESMF contains baseline information on Ethiopia relating to its physical geography, agro-ecological zones, land, forest, mineral, livestock and rangelands resources, water resources, agmultural profile for staple and cash crops, population, ethnic groups, health and HTVlAIDS levels. The administrative, policy 109 and regulatory framework for the agriculture sector and for management o f the environment are also discussed and an assessment of the World Bank's safeguards policies, conditions of applicability and triggers are presented. The ESMF confirms the appropriateness of triggering Environmental Assessment OP4.01 and Involuntary Resettlement OP 4.12. The ESMFidentifiedthe following critical environmentalissues facing Ethiopia: (i) degradation due land to soil erosion and exhaustion, over grazing, river bank degradation, and deforestation; (ii)lack of available and accessible, good quality water for both urban and rural inhabitants in some areas; (iii)loss of biodiversity, habitat and wetlands; and (iv) environmentalpollution (e.g. water and soil contamination from ago and miningpollutants). Whereas the main social issues identified were: (i) acute poverty and destitution., (ii)critically low rural incomes, (iii) insecurity, (iv) ethnic tensions and conflicts, (v) food land tenure,(vi) gender inequality, (v) high HIVlAIDS incidence rate on the young and most productive age groups and, (vi) on-going national resettlement program. Against this background the ESMF presents a detailed assessment o f potential Environmental and Social impacts on people and their environment from activities to be funded under the RCBP, Greater detail on institutional roles will be addedafter completion o f the ESMF. The ESMF utilizes a management framework to mitigate the environmental and social impact of TVET CollegeslFTC's activities and mainstreams it into project implementation arrangements. The management framework requires TVET Colleges and FTC's to screen their own planned activities by completing a specially designed screening form which identifies any potential impacts. Once potential impacts are identified, TVET Colleges and FTC's refer to a checklis?' to identify the corresponding mitigation measures which are to be incorporated in the designlcivil works packages for their planned activities. These designlcivil works packages would then be sent to the MoARD for environmental and social review andclearing. Once they are cleared they would then be approved for financing under the RCBP. The ESMF also contains a monitoring plan that establishes a mechanism for monitoring. Monitoring is requiredfor two reasons: (i) alert project authorities by providingtimely information about the success to of the environmental and social management process outlined above to ensure continuous improvement in the process; and (ii) allow a final evaluation to be made in order to determine whether the mitigation to measures designed during the implementation process have been successful. Data and reporting will be gathered through: (i) EA Screening Reports; (ii) construction and operations monitoring and facility reporting; (iii) training program evaluations and reporting; and (iv) ESMF compliance monitoring and reporting. The ESMF also developed a consultation plan to ensure a participation and inclusion o f all members o f the farming society (including vulnerable groups). Successful implementation o f the Consultation Plan will ensure good governance, but more particularly will introduce transparency, accountability and sustainability into the RCBP. The key features o f the consultation plan are: (i)a site development consultation process; (ii) farmer participation in the FTC extension service plans; and (iii) participatory techniques to ensure inclusive representation in peasant associations who are ultimately the target beneficiaries for training andextension services at the FTCs. The RPF Construction of FTCs and WET colleges may result in alteration of land use and could conceivably result ina change inlivelihoods or incomes. Changes to project design have now resultedinminimal civil works to be supported under the project and significant resettlement issues are not anticipated. Nonetheless, the RPF i s designed to address any potential involuntary resettlement, loss o f asset, and or impact on livelihood due to the activities o f the project and applies to all components under the project, whether or not they are directly funded inwhole or inpart by the Bank. 29 Bothscreeningforms andchecklist are containedinannexes o fthe ESMF. 110 Alteration of land use should be avoided where feasible, or minimized, exploring all viable alternatives. Where alteration of land use or access to resources i s unavoidable, mitigation and compensation activities will be initiated. Displaced and compensated persons will be meaningfully consulted and will have opportunities to participate in planning and implementing resettlement programs. Displaced and compensated persons will be assistedin their efforts to improve their livelihoods and standards of living or at least to restore them, in real terms, to pre-displacement levels or levels prevailing prior to the beginning o fproject implementation, whichever i s higher. The RPF utilizes a similar management framework as the ESMF to mainstream mitigationactivities into overall implementation. The RPF identifies affected populations as any people who meet any one o f the following criteria as a result of project activities: (a) need to be relocated or lose shelter; (b) lose assets or access to assets; or (c) lose income sources or means o f livelihood, whether or not they are required to move to another location. Once it i s determined there are affected people inthe project area, the RPF first advises reallocation o f alternate land or resources to affected people. For situations where this is may not be possible, the party ( 1.e. the TVET colleges or the FTCs) causing the impact will prepare a resettlement and compensation plans (RAP'S).RAPs contain specific and legal bindingrequirements to be taken by the TVET Colleges or FTCs to resettle and compensate the affected people before project activities causing the adverse impact are implemented. RAPs will draw on the socio-economic study and a baseline data collected as part o f the monitoring and evaluation system to identify the potentially affected persons on the individual, householdand vulnerable groups level and to calculate their household incomes. Once this i s done the RAPs are prepared and sent to MoARD and the World Bank for approval and clearance. Arrangements for monitoring and implementation for each RAP will be required by the respective TVET College or FTC. RAPs must include the schedule for the implementation o f activities agreedupon by TVET College or FTCs and the affected population, including target dates for start and completion of civil works, timetables for transfers of completed civil works to the affected persons, dates of possessiono f land that they are using(this date must be after transfer date for completed civil works to affected persons and payments of all compensation), and how these activities are linked to the implementation o f the overall project activity. When the TVET colleges or FTCspresent their RAPs to MoARD and the World Bank for approval, they would be evaluated to determine whether they contain acceptable measures that linkresettlement activity to civil works. The RPF would ensure that no individual or affected household would be displaced (economically or physically) due to civil works activity before compensation is paid andresettlement sites with adequate facilities are prepared and provided for, to the individual or householdaffected. Once the RAPS as approved by the local and national authorities, they should be sent to the World Bank for final review and approval. Individual and household compensation will be made incash, inkind, andlor through assistance, The type of compensation will be an individual choice although every effort will be made to instill the importance andpreference of accepting inkindcompensation ifthe loss amounts to more that 20% o fthe total loss of subsistenceassets. Cash Payments Compensation will be calculated inEthiopian Birr. Rates will be adjusted for inflation. Compensation may include items such as land, houses, other In-kindCompensation buildings, building materials, seedlings, agricultural inputs and I Assistance financial credits for equipment. rnay include moving allowance, transportation and l,.L-- 111 Compensation for land i s aimed at providing a farmer whose land is acquired and used for project purposes with compensationfor land, labor and crop loss. For this reason, and for transparency, "Land" is defined as an area or homestead: (i) cultivation; (ii) prepared for cultivation; or (iii) in being cultivated duringthe last agricultural season. The current prices for cash crops would have to be determined. All crops to be compensated using a single rate regardless of the crop grown. This rate incorporates the value o f crops and the value o f the labor invested in preparing a new land. Determining compensation using a single rate creates transparency because anyone can measure the area of land for which compensation is due and multiply that by a single rate known to all. This approach also allows assignment o f values to previous year's land (land in which a farmer has already invested labor) and land that have been planted but have not yet sprouted. Further, it avoids contention over crop density and quality o f mixed cropping. The value o f the labor invested in preparing agricultural land will be compensated at the average wage inthe community for the same period o f time. The rate used for land compensation i s to be updated to reflect values at the time compensation is paid. The following example, which is based on 2003 data, derives a total value for a one hectare land from the value o f the crops on the land and the value o f labor invested inpreparing a replacement land. EXAMPLEOF METHOD TO BEUSED TO DETERMINE A MONETARY COMPENSATION RATE FORCROPS* (Based on 2003 data.) Ethiopian Birr payments will be revised to reflect crop values and labor rates in I effectat the time of conmensation) ItemCompensated I Basis o fValue I EthiopiaBirrha I ~~ Average o f the highest 2003 Value o f Crops official and market survey land prices per ha o f staple food crops (maize, rice etc.),plus cash crops (e.g. sugar cane, corn). 1 Labor Invested Labor costs o f preparing replacement land. Total Replacement value o f crops plus labor. Community compensation will be in-kindonly for a community as a whole inthe form o f reconstruction o f the facility to at least the same standard or equivalent better standard required by local planning regulation. Examples o f community compensation include: school building(public or religious), public toilets, well or pump, marketplace, road, and storage warehouses. Community compensation may initself require land acquisition, which will need to be compensated for. At the time that the individual resettlement plans are approved and individual compensation contracts are signed, affected individuals and households would have been informed o f the process for expressing dissatisfaction and to seek redress. The grievance procedure will be simple, administered as far as possible at the local levels to facilitate access, flexible and open to various proofs taking into cognizance the fact most people are illiterate requiring a speedy, just and fair resolution o f their grievances. An independent third party would be available if the local level procedures do not adequately resolve grievances. The arrangements for monitoring would fit the overall monitoringplan o f the entire RCBP which would be through the Ministry o f Agnculture and Rural Development (MoARD). The project will institute an administrative reporting system that: 112 0 Alerts project authorities to the necessity for land acquisition in TVET College or FTC project activities and its technical requirements; Provides timely information about the valuation andnegotiationprocess; e Reports any grievances that requireresolution; Documents timely completion of project resettlement obligations ( i.e. payment of the agreed- upon sums, construction o f new structures, etc.) for all permanent and temporary loses, as well as unanticipated, additional construction damage. Consistent with the ESMF, the TVET colleges, FTCs and MoARD would be responsible for periodically transferring the information compiled "on the ground" to the MoARD, so that it is alerted in a timely manner to any difficulties arising at the local level. The objective of monitoring will be to make a final evaluation inorder to determine: 4 If peoplehavebeenpaidinfullandbeforeimplementationofthesubprojectactivities; affected If peoplewhowereaffectedbytheprojecthavebeenaffectedinsuchawaythattheyarenow the living a higher standard than before, living at the same standard as before, or they are they are actually poorer than before. 113 Annex 11:ProjectPreparationandSupervision ETHIOPIA: RuralCapacityBuildingProject Planned Actual PCNreview January 5,2004 InitialPID to PIC February 5,2004 InitialISDSto PIC February 9,2004 Appraisal April 18-30,2006 April28,2006 Negotiations May 15,2006 May 16- 18,2006 BoardlRVP approval June 22,2006 Planneddate of effectiveness September 22,2006 Planneddate of mid-term review September, 2009 Planned closing date October 31, 2011 Key institutions responsible for preparation of the project: MinistryofAgriculture andRuralDevelopment Bank staff and consultants who worked on the project included: Name Title Unit DavidNielson TTL, Senior Economist AFTS2 Assaye Legesse Senior Agricultural Economist AFTS2 Jacob Kampen Agricultural Research Specialist Consultant Derek Byerlee Lead Economist AFTS2 James Monday Environmental & Social Safeguards Consultant HammadHundal Economic and Financial Analysis FAOICP JohannesWoelcke Economist AFTS2 Melissa Brown Rural Development Specialist FAOICP Eshetu Yimur Financial Management Specialist AFCOG Samuel Haile Selassie Procurement Specialist AFC06 Vince Ashworth Agricultural Extension Specialist Consultant Arvil Van Adams Senior Advisor -Vocational Education AFTHD Azeb Fissha ETConsultant AFTS2 Madhur Gautam Senior Economist AFTS2 Jonathan Pavluk Senior Counsel LEGAF Rajat Narula Senior Finance Officer LOAG2 Laketch Mikael Imru RuralDevelopment Specialist AFTS2 Abiy Admassu Temechew Procurement Analyst AFTPC Samuel Haile Selassie Procurement Specialist AFTPC James Keough Analyst AFTS2 Rohan Selvaratnam Sr. ProgramAssistant AFTS4 ElizabethKatz Agricultural Extension Specialist Consultant Almaz Teklesenbet ProgramAssistant AFTS2 Wendy Wiltshire Operations Analyst AFTS2 EamonnDarcy Vocational Education Specialist Consultant Harit Wadhawan Project Management Specialist Consultant MichellePhillips RuralDevelopment Specialist Secondeefrom DFID TimBene Monitoring& Evaluation Specialist Consultant Bank funds expendedto date onproject preparation: EstimatedApproval and Supervision costs: Bankresources: US$755,000 Remaining costs to approval: $40,000 Trust funds: US$O Estimatedannual supervision cost: $120,000 Total: US$755,000 114 Annex 12: Documentsinthe ProjectFile ETHIOPIA: RuralCapacity BuildingProject A. ProjectImplementationManual "(draft) Project Implementation Manual" May2006. B. Others "Draft Report on Rural Capacity Building Project DesignMission, Ethiopia" JeanGarsonnin Cowater International Inc, June 15,2004, "The Challenges ofChangesfor AgriculturalExtensioninEthiopia :A discussionpaper, Vince Ashworth, Agricultural and RuralDevelopment Consultant, March07,2005 a "The LongTerm MiddleLevelAgriculturalTechnical Vocational Education & Training (ATVET) Programme: Proposal(Draft), Department ofAgricultural ExtensionandTVET, April 2005. "More Details for the Extension Services Component", ElisabethKatz and Vince Ashworth, April 2006, unpublishedworking paper. "The RevisedRuralCapacity BuildingProject'' Ministryof Agriculture andRural Development, October 2005. 115 Annex 13: Statement ofLoansandCredits ETHIOPIA: Rural CapacityBuildingProject Differencebetween expected and actual Original Amount inUS$Millions disbursements Project ID FY Purpose IBRD IDA SF GEF Cancel. Undisb. Or&. Frm. Rev'd PO49395 2003 ETHIOPIA -ENERGY ACCESS 0.00 132.70 0.00 0.00 0.00 147.29 24.74 0.00 PO50938 2003 Capacity Building for Dec.Serv.De1. 0.00 26.20 0.00 0.00 0.00 27.90 10.71 0.00 PO44613 2003 ET Road SectorDevelopmentProgramI1 0.00 0.00 0.00 0.00 0.00 134.39 0.00 0.00 PO75915 2003 ET PastoralCommunityDevelopment 0.00 0.00 0.00 0.00 0.00 29.57 -0.59 0.00 PO81773 2003 EMERGENCY DROUGHTRECOVERY 0.00 0.00 0.00 0.00 0.00 17.69 -16.58 0.00 PROJECT PO50383 2002 Ethiopia:FOOD SECURITYPROJECT 0.00 85.00 0.00 0.00 0.00 98.44 -2.98 0.00 PO57770 2002 ET CULTURAL HERITAGE 0.00 5.00 0.00 0.00 0.00 5.22 0.94 0.00 PO69886 2001 MultisectoralHTVlAIDS 0.00 59.70 0.00 0.00 0.00 40.24 37.29 0.00 PO73196 2001 ETDemobilizationandReintegrationProj 0.00 170.60 0.00 0.00 0.00 41.90 34.73 0.00 PO52315 2001 ET:CONSERVATION OF MEDICINAL 0.00 2.60 0.00 0.00 0.00 2.03 -0.88 0.00 PLANTS PO67084 2001 EMERGENCY RECOVERYAND 0.00 230.00 0.00 0.00 0.00 110.39 88.91 0.00 REHAB.PROJECT PO50342 2001 Women Dev. Initiatives 0.00 5.00 0.00 0.00 0.00 4.17 1.78 0.72 PO35I47 2001 ETCONSERV.& SUSTAIN. USE 0.00 0.00 0.00 1.80 0.02 1.89 1.oo 0.00 MEDIC. PLANTS PO69083 2001 AFTKL ET GLOBAL DISTANCE 0.00 4.90 0.00 0.00 0.00 5.25 4.61 0.00 LEARNING PO00756 1999 Health Sector Dev. 0.00 100.00 0.00 0.00 0.00 33.00 30.01 0.00 PO00736 1998 ET ENERGY I1 0.00 200.00 0.00 0.00 0.00 36.21 39.49 0.00 PO00733 1998 ET: AG. RESEARCH& TRAINING 0.00 60.00 0.00 0.00 0.00 21.38 17.83 0.00 PO00755 1998 ETHIOPIA ROAD SEC. DEV. PROG. 0.00 309.20 0.00 0.00 0.00 89.60 90.77 68.40 PO00732 1998 Educ. Sect. Dev. 0.00 100.00 0.00 0.00 0.00 13.39 14.15 0.00 PO00771 1996 Social Rehab. (ESRDF I) 0.00 120.00 0.00 0.00 11.48 33.15 24.89 19.37 Total: 0.00 1,610.90 0.00 1.80 11.50 893.10 400.82 88.49 ETHIOPIA STATEMENT OF FC's Held and DisbursedPortfolio InMillions ofUS Dollars Committed Disbursed IFC IFC FY Approval Company Loan Equity Quasi Partic. Loan Equity Quasi Partic. Totalportfilio: 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ApprovalsPendingCommitment FY Approval Company Loan Equity Quasi Partic. Total pendingcommittment: 0.00 0.00 0.00 0.00 116 Annex 14: Countryat a Glance ETHIOPIA: RuralCapacityBuildingProject am- Emfm LO#- BMW imxmls w110 0 719 zwa 03 913. 7 6 432 ?,la? 22 110 2 1.3 20 2.1 M 16 57 31 42 46 5B 112 iD1 73 47 44 22 $3 75: 42 63 6t E rm ys 91 wfO 10% 1 a4 1481 2m zoo4 43 65 8.3 $52 21 Q 212 io0 176 l8.i TF& 56 24 0.3 $42 i§ 13.4 1 T -23 -62 -7.7 09 0 7 0 3 B 5 d 1123 $5.3 e 3 7.6 EO 3 3w'4 2ow 2 w 1 2W4448 -39 i3.1 -53 28 c fO 9 $89 tW 2QDr( E5 1 43.3 4 3 9.: x 1 43.E 332 82.7 'L4 5 a 17.t 333 '3M-a 27 ? 3 -126 -15 15 '43 -42 40 29 6.7 16 7 0 2a 6 5 117 118 Annex 15: MAPIBRD 33405 119 32E 36E 40E 42E 44E ERITREAERITREA To To ETHIOPIA Keren Keren R e REP.REP d OFOF SELECTED CITIES AND TOWNS ETHIOPIA To To AdigratAdigrat S YEMENYEMEN PROVINCE CAPITALS Gedaref Gedaref Humera Humera 14N Tekeze AxumAxum NATIONAL CAPITAL T I G R AY MekeleMekele RIVERS Ras Dashen Ras Dashen Terara (4620 m) rara (4620 m) MAIN ROADS Atbara D e n a k i l e 14N a D RAILROADS Gonder Gonder A M H A R A PROVINCE BOUNDARIES Lake A FA R Dinder INTERNATIONAL BOUNDARIES Tana 12N Debra Debra 12N Tabor abor Weldiya eldiya esert DJIBDJIB DJIBOUTI Bahir Dar Bahir Dar Blue AsayitaAsayita 46E 48E Aba Nile n Dese Dese e G u l f o f A d y SUDANSUDAN BENSHANGULBENSHANGUL AsosaAsosa Hanger Debre Debre Markos Markos Awash E t h i o p i a n 10N 10N Didesa P l a t e a u DIRE DAWA DIRE DA Dire Dawa Dire Dawa To To HarerHarer Hargeysa Hargeysa Gimbi Gimbi Nekemte Nekemte ADDIS ABABA ADDIS ABABA ADDISADDIS HARARHARAR Jijiga Jijiga ABABAABABA Awash Aw SOMALIASOMALIA Nazret Nazret Baro Welkite elkite O R O M I YA Ramis Aware Aw Degeh Bur Degeh Bur GambelaGambela Gore Gore 8N G A M B E L A y Domo Domo 8N Asela Asela e Akobo Jima Jima Hosaina Hosaina l l Shebele Bonga Bonga a Wabe O g a d e n Shashemene Shashemene V S O M A L I SodoSodo Awasa wasa Goba Goba t Dodola Dodola Warder arder Kebri Dehar Kebri Dehar SOUTHERN NATIONS, SOUTHERN NATIONS, Wendo endo f i Imi Imi NATIONALITESNATIONALITES R 6N AND PEOPLES AND PEOPLES Wabe Gestro t Wabe 6N a Shebele 0 50 100 150 200 Kilometers r e Genale Negele Negele 0 50 100 150 Miles G FerferToTo Yavello avello Dawa Mogadishu Mogadishu Dolo Dolo Odo Odo This map was produced by the Map Design Unit of The World Bank. DECEMBER Lake IBRD The boundaries, colors, denominations and any other information 4N MegaMega 4N Turkana shown on this map do not imply, on the part of The World Bank Group, any judgment on the legal status of any territory, or any 33405 endorsement or acceptance of such boundaries. INDIAN 2005 UGANDAUGANDA KENYAKENY Moyale Moyale To To OCEAN To To 32E 34E 36E 38E To To Wajir Wa Marsabit Marsabit 40E 42E Mogadishu Mogadishu 44E 46E 48E R