Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng · GGS Green growth strategy GHG Greenhouse gas GSO Government Statistical Office ... SEDS Socio-economic Development

Document Date: 4-Jul 2016

Project No. 2000000968

Report No: [Insert report number]

Asia and the Pacific Division

Project Management Department

Socialist Republic of Viet Nam

Commercial Smallholder Support Project in Bắc Kạn

and Cao Bằng

Final project design report

Main report and appendices


Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng

Final Project Design Report

i

Contents

Currency equivalents iii

Weights and measures iii

Abbreviations and acronyms iv

Map of the Project area vi

Executive Summary vii

Logical Framework xxi

I. Strategic context and rationale 1

A. Country and rural development context 1

B. Rationale 4

C. Project area and target group 7

D. Development objective and impact indicators 9

E. Project Outcomes 9

F. Lessons learned and adherence to IFAD policies 21

II. Project implementation 22

A. Approach 22

B. Organizational framework 23

C. Planning, M&E, learning and knowledge management 26

D. Financial management, procurement and governance 31

E. Supervision 33

F. Risk identification and mitigation 34

III. Project costs, financing, benefits and sustainability 35

A. Project costs 35

B. Project financing 36

C. Summary benefits and economic analysis 37

D. Sustainability 39

E. Environment classification 40

List of Tables

Main Report

Table 1. Main CSSP risks and mitigation measures. xiii

Table 2: Estimation of Total Number of Project Beneficiaries 8

Table 3: Estimation of Total Number of Poor/Near Poor and Women Project Beneficiaries 8

Table 4. WSCG development by province 18

Table 5. Key positions of Provincial Project Coordination Unit 24

Table 6. Project staffing at district and commune levels 25

Table 7. Project Costs by Component and Output 36

Table 8. Financing Plan by Component and Outcomes (USD ‘000) 37




ii

Appendices

Appendix 1: Country and rural context background 41

Appendix 2: Poverty, targeting and gender 64

Appendix 3: Country performance and lessons learned 86

Appendix 4: Detailed Project description 98

Appendix 5: Institutional aspects and implementation arrangements 160

Appendix 6: Planning, M&E and learning and knowledge management 186

Appendix 7: Financial management and disbursement arrangements 198

Appendix 8: Procurement 212

Appendix 9: Project cost and financing 223

Appendix 10: Economic and Financial Analysis 259

Appendix 11: Draft Project implementation manual 280

Appendix 12: Compliance with IFAD policies 282

Appendix 13: Contents of the Project Life File 286




iii

Currency equivalents

Currency Unit = Vietnamese Dong (VND)

USD1.0 = 22,400

Weights and measures

1 kilogram = 1000 g

1 000 kg = 2.204 lb.

1 kilometre (km) = 0.62 mile

1 metre = 1.09 yards

1 square metre = 10.76 square feet

1 acre = 0.405 hectare

1 hectare = 2.47 acres




iv

Abbreviations and acronyms

ARD Agriculture and Rural Development

APIF Agribusiness Promotion Investment Fund

AWPB Annual work plan and budget

BDS Business development services

BIDV Bank for Investment and Development in Viet Nam

BMPs Better Management Practices

CAA Climate adapted agriculture

CBG Competitive Business Grants

CC Climate change

CCA Climate change adaptation

CCAP Climate change action plan

CDB Commune Development Board

CGIAR Consortium of International Agricultural Research

CIG Common interest group

COSOP Country Strategic Opportunities Project

CPC Commune People’s Committee

CSSP Commercial Smallholder Support Project

DARD Provincial Department of Agriculture and Rural Development

DARDD District Agriculture and Rural Development Departments

DA Designated Account

DBRP Doing Business with the Rural Poor

DoIT Department of Infrastructure and Trade

DOLISA Department of Labour Invalids and Social Affairs

DoNRE Department of Natural Resource and Environment

DoF Department of Finance

DPC District People’s Committee

DPI Department of Planning and Investment

DPPR Decentralized Project for Poverty Reduction

DRM Disaster Risk Management

DUS distinctiveness uniformity and stability

EA Economic analysis

EFA Economic and Financial Analysis

E2F Enterprise to Farmer

FA Financial analysis

FDD Forest Development Sub-department

FLFA Forest land forest allocation

FPS Forest protection Station

LF2F Lead Farmer-to-Farmer

GDP Gross Domestic Product

GGS Green growth strategy

GHG Greenhouse gas

GSO Government Statistical Office

GoV Government of Viet Nam

ICT Information communication technology

IFAD International Fund for Agriculture Development

IMHEN Institute of Meteorology, Hydrology and Environment

IP Indigenous people

IRR Internal rate of Return

LF Lead farmer

MARD Ministry of Agriculture and Rural Development

masl meters above sea level

M&E Monitoring and Evaluation

MTR Mid-term Review




v

MFI Micro Finance Institution

MIS Management information system

MoF Ministry of Finance

MoIT Ministry of Industry and Trade

MoLISA Ministry of Labour Invalids and Social Affairs

MoNRE Ministry of Natural Resources and Environment

MOP-SEDP Market-Orientated Participatory Socio-Economic Development Planning

MoU Memorandum of Understanding

NCPT National Centre for Plant Testing

NGO Non-Government Organization

NTP National Target Project

NTP-NRD National Target Project on the New Rural Development

NTP-RCC National Target Program to Respond to CC

NTP-SPR

ODA

National Target Program for Sustainable Poverty Reduction

Official Development Assistance

3PAD Pro-poor Partnerships for Agro-forestry Development

PC Project Coordinator

PCI Provincial Competitiveness Index

PCR Project Completion Report

PES Payment for Environment Assistance

PCU Project Coordination Unit

PFES Payment for forest environment services

PLF Project Life File

PPB Project Preparation Board

PPC Provincial People’s Committee

PPCO Provincial Project Coordination Office

PPSC Provincial Project Steering Committee

RFS Rural Finance Specialist

RIMS Results and Impact Management System

SBV State Bank of Viet Nam

SCG Savings and Credit Group

SECAP RN Social Environmental and Climate Assessment Procedures – Review Note

SEDP Socio-Economic Development Plan

SF IFAD Strategic Framework

SIP Strategic Investment Plan

SEDS Socio-economic Development Strategy

SME Small and Medium Enterprise

SMS Strategic Management Section

SOE Statements of Expenditure

ToR Terms of Reference

ToT Training of trainers

UNFCCC United Nations Framework Convention on Climate Change

UPOV International Union for the Protection of New Varieties of Plants

VAT Value Added Tax

VBARD Viet Nam Bank for Agriculture and Rural Development

VBSP Viet Nam Bank for Social Policy

VC VC

VCU value for cultivation and use

vnSAT Viet Nam Sustainable Agriculture Transformation

VDB Village Development Board

FU Farmers’ Union

VCAP Value chain action plan

VCMDO Value chain management development officer

VND Vietnamese Dong

WB World Bank

WSCG Women’s Savings and Credit Groups

WDF Women’s Development Fund

WU Women’s Union




vi

Map of the Project area




vii

Executive Summary1

1. Background: The Commercial Smallholder Support Project in Bắc Kan and Cao Bằng

provinces (CSSP) is financed through an International Fund for Agricultural Development (IFAD) loan

(USD 42.5 million), an IFAD grant (USD 0.5 million) and co-financing from the Government of Viet

Nam and Project beneficiaries. The CSSP was identified during the development of the Viet Nam

Country Strategic Opportunities Project 2012-2017 (COSOP), which has a strong pro-poor, climate

adapted and market-oriented agriculture development thrust, and was integrated into the pipeline of

projects that received Government of Viet Nam’s (GoV) approval. The CSSP is fully aligned with the

GoV’s Socio-Economic Development Strategy 2016-20 (SEDS), National Target Project on New Rural

Development (NTP-NRD), National Target Project on Sustainable Poverty Reduction (NTP-SPR) and

National Target Project on Response to climate change (NTP-RCC) and the Climate Change Action

Plan (CCAP) for the agriculture and rural development (ARD) sector.

2. Rationale and Approach: To accelerate rural poverty reduction, the GoV and Bắc Kạn and

Cao Bằng provincial governments have identified the need for pro-poor investment in market-oriented

agricultural commodity production and processing systems. This is consistent with the GoV objective

of shifting from a rural growth model built around the state-owned sector with its emphasis on quantity

rather than quality, to one of incentivising smallholder farmers linked to entrepreneurially-driven

private enterprise, to achieve greater productivity and better integration with national and global

markets. More than 70 per cent of workers in the Project provinces are engaged in the agriculture

sector. In the medium term, boosting agricultural productivity to raise farm incomes, lower the need for

labour in the agricultural sector and, eventually, free agricultural workers to move out of farming into

more productive, higher-paying sectors with more growth prospects is a top GoV priority. Improving

agriculture sector productivity, reducing its vulnerability to climate change (CC), expanding private

sector investment, and better targeting public investment, particularly for productive infrastructure and

agricultural value chain (VC) development, are central to improved agricultural productivity and

growth. Significant market demand and opportunities for improved productivity and value addition

exist in the forestry, non-timber forest products (NTFP), livestock, ginger, canna and fruit sub-sectors

in Bắc Kạn, and the cassava, seed peanut, NTFP, bamboo and livestock sub-sectors in Cao Bằng.

Opportunities also exist for eco-tourism development in selected Project districts in both provinces.

3. Building off the NTP-NRD participatory planning principles and process, the Project will be a

pilot for the adoption of climate-adapted, market-oriented socio-economic development planning

(MOP-SEDP) as the legislated provincial planning mechanism. The Project will place strong emphasis

on building an enabling environment for the engagement of the private sector in raising agricultural

productivity, creating rural employment and generating rural income, through developing and

promoting VC linkages between rural households, including poor households, and the growing

demand in urban centres and the global market. This will be accompanied by capacity building for

managing market-led development in both the public and private sectors. The Project will enable

provinces to update their CC adaptation (CCA) strategies and plans and will promote climate-adapted

production and processing technologies. All Project interventions will have a neutral or positive (“no

regrets2”) effect on the ability of communities and enterprises to adapt to CC and related, increasingly

frequent catastrophic weather events, underpinned by the development and systematic expansion of

resource allocation through a climate-adapted MOP-SEDP process. A planned USD 100 million Asian

Development Bank (ADB) Basic Infrastructure for Inclusive Growth in the North-eastern Provinces,

due to commence in 2017, is expected to complement CSSP investments.

1. Mr Garry Smith, Team Leader and Ms Rikke Grand Olivera, IFAD Senior Technical Specialist in Natural Resource

Management (11 to 22 April); Mr Thomas Muenzel, FAO Senior Economist (12 to 22 April); Mr Nguyen Thanh Tung,

IFAD Institutional Specialist (11 to 13 April and 20 to 22 April); Ms. Nguyen Thu Hoai, IFAD Finance Specialist (11 to 13

April); Mr Quang Nguyen Ngoc, Agribusiness Consultant (11 to 20 April); Mr Henning Pedersen, IFAD Country Director

joined the mission in the field from 20 to 22 April 2016. 2 A "no-regrets" approach is a proactive people and place-oriented approach to building resilience to CC that focuses

on transforming, strengthening and protecting assets and livelihoods, including the provision of basic needs (including

security) for all persons.




viii

4. CSSP Project area: The Project will support development in 35 communes in Ba Bể, Na Rì,

Ngân Sơn and Pác Nặm districts in Bắc Kạn province and 35 communes in Hà Quảng, Nguyên Bình,

Thạch An and Thông Nông districts in Cao Bằng province. In two communes in Bạch Thông district in

Bắc Kạn province the Project will support the development of tangerine VCs. The selection of

participating communes at final Project design has been based on, inter alia, (i) poverty rate;

(ii) vulnerability to natural disaster; (iii) commitment of leadership; and (iv) potential for development of

pro-poor VCs. The selected communes will include better market-linked communes as well as

communes that are more remote, but that can be joined-up through VC development. Ethnic

minorities form a large proportion of the population in all Project districts and about 95% of the total

population in the Project area.

5. Target population and expected benefits: The Project target groups are: (i) rural poor, near

poo rand non-poor households with land and labour, including household enterprises; (ii) unskilled

employed rural people; (iii) rural people lacking production land but having business acumen and

desire; and, (iv) key farmers who have the skills to promote commercial agricultural production.

Women and female-headed and ethnic minority households will be prioritised among the

aforementioned target group. The Project proposes specific measures to ensure women’s

participation in relevant activities, including minimum participation rates.

6. It is expected that by the end of the Project at least 72,000 people in 16,000 poor and near-poor

households will be lifted out of poverty, while 30,000 poor, near-poor and non-poor households and

135,000 people supported by the Project will have at least a 20% increase in household assets. This

will be achieved through a combination of capacity building, technology transfer and credit access,

supported by upgraded community infrastructure and co-financing of innovative investment in climate-

adapted farming and processing operations. These include about 23,000 CIG members,

5,500 WSCG3 members, as well as households that will benefit from Agribusiness Promotion

Investment Fund (APIF) investments, enterprise-based vocational training and farm-based extension

provided by the Project. Furthermore, up to 35,000 households in the 70 Project communes will

benefit from at least one community infrastructure investment, particularly market access roads and

irrigation development, including at least 17,600 poor and near poor households (see Appendices 2

and 10 for details).Other participants who will benefit from the Project include (i) government officials

empowered to support market-led growth; and, (ii) private market and VC agri-businesses that find

common interest in promoting viable pro-poor products and services. The Project will also generate

flow-on benefits to the entire rural population of the provinces through: (i) the institutionalization of a

climate-adapted MOP-SEDP process; (ii) an updated and devolved CC strategy and action plan;

(iii) better access to climate adapted agriculture technology and credit; and (iv) institutional

strengthening leading to more climate informed and market-oriented planning.

7. Gender: Poor women and women-headed household are facing significantly greater obstacles

in escaping poverty. In the Project communes in Bắc Kạn, there are 1,612 women-headed

households, of which 823 households are classified as poor. In the Project communes in Cao Bằng,

there are 2,232 women-headed households, of which, 1,225 households are classified as poor. The

Project proposes specific measures to ensure women’s participation in relevant activities, including

minimum participation rates in Village Development Boards (VDBs) and Common interest groups

(CIGs) and for vocational training and credit access. The support of the Woman’s Union and

establishment of Women’s Savings and Credit Groups (WSCGs) and Women’s Development Funds

(WDF) will be vital in this respect.

8. Project goal, objectives, outcomes and approach: The Goal of the Project is: Contribute to

sustainable poverty reduction in Bắc Kạn and Cao Bằng. The Development Objective is: Sustainably

improved income and reduced climate vulnerability of poor and near-poor farm households in targeted

Project communes. The main outcome at the goal level is a 20% improvement in Project commune

poverty reduction above average non-Project provincial commune rate by Project-end for 16,000

households considered poor and near poor in Project area (differentiated data for poor/near poor,

3 An additional 4,000 women will be mobilised into around 260 WSCGs in Bắc Kạn, financed through residual revolving

funds from the former 3PAD.




ix

ethnic minority & women-headed households) The main indicators at the objective level are: (i) 20%

improvement in household assets ownership index above non-Project provincial commune average

by Project-end for about 30,000 households in the Project area. (differentiated data for poor/near

poor/non poor, ethnic minority & women-headed households); and (ii) At least 14,000 poor and near

poor smallholder household members whose climate resilience4 has been increased by 30% (gender

and ethnic minority disaggregated).

Project components

9. The Project will have three main outcomes: (i) Provincial participatory planning institutionalised;

(ii) A greener agriculture future; and (ii) Profitable farms linked to finance and markets.

10. These outcomes will follow sequenced, parallel implementation routes. Building off Strategic

Investment Plans (SIP) that identify profitable VC development pathways, and the updated provincial

Climate Change Action Plans that lay out a CC agenda and technologies and processes (with

mitigation co-benefits) for smallholder farmer and enterprise adoption, the Project will: (i) empower

communities and public institutions to develop commune and district-level climate-adapted MOP-

SEDPs that holistically align NTP and Project investments with profitable commodity market and VC

opportunities; and (ii) through the implementation of those investments, assist communities of

smallholder farmers and agri-businesses to associate in various ways to take best advantage of those

opportunities and to co-finance their development. These pathways will merge from the second

Project year onwards.

11. Outcome 1. Province-based Participatory Planning Institutionalised. This outcome will

lead to: Legislated, holistic, participatory, climate-adapted and market-oriented provincial socio-

economic development planning. The outcome has three outputs, which, collectively, underpin the

market-oriented SEDP (MOP-SEDP) planning process: (i) Strategic investment plan; (ii) Climate

change adaptation plan; and (iii) Climate-informed, market-oriented and socio-economic development

plans.

12. Output 1. Strategic investment plan. In the first six months of the Project, the Provincial Project

Coordination Offices (PPCO), supported by international technical assistance, will, in partnership with

their respective DPIs, collectively conduct financial and economic analysis of key commodity and

associated VCs in Bắc Kạn and Cao Bằng provinces to identify and describe at least six Provincial

SEDP-incorporated commodity-based VC Strategic Investment Plans (SIPs) for integration into

commune and district MOP-SEDPs. As part of the SIP analysis, the supporting consultants will

assess constraints to private sector investment in Bắc Kạn and Cao Bằng.

13. Output 2. Climate change adaptation plan. This output will: (i) update the Provincial CC action

plans; (ii) raise district, commune and village level awareness of climate change risks and adaptation

options and prioritize actions to build household and agro-ecosystem resilience and climate adapted

SIPs; (iii) build capacities for CCA integration into the MOP-SEDP process and (iii) ensure strong

climate change adaptation and green growth agendas in the provincial SEDPs (2021-2025). The

“top-down”, technical and scientific, provincial-level climate change action planning and the “bottom-

up” commune and district-level participatory processes to capture local knowledge and understanding

of impacts, vulnerabilities and risks will converge to inform and strengthen both the Provincial CCAP

2016-2020 and the MOP-SEDP process at all levels.

14. Output 3. Climate-informed market-oriented socio-economic development plans. This output

will lead to (i) strengthened public sector market economy skills; and (ii) climate adapted, market

oriented and results-based provincial socio-economic planning. In Cao Bằng, the MOP-SEDP process

4 a resilient household is anticipated to exhibit, inter alia, the following characteristics: i) diversified livelihood and

income streams; ii) improved natural resource and risk management based on better access to knowledge and

adoption of CCA land and water conservation practices; iii) membership of social networks such as Common Interest

Groups (CIGs) and Saving and Credit Groups (SCGs); iv) ability to access credit; v) protection from some climatic

hazards as a result of small-scale community infrastructure; and vi) direct engagement in village and commune level

planning, and influence on provincial financial allocations. These criteria will, amongst others, be developed as a score

card to measure change.




x

is already institutionalised at commune level, including budget allocation for annual planning activities.

In Bắc Kạn, where participatory village development planning has been implemented under the 3PAD,

further MOP-SEDP capacity building is required. The Project will enable the Bắc Kạn DPI to lead a

capacity building Project for market-led development at commune, district and provincial levels, which

will precede the introduction of MOP-SEDP.

15. The Project will, thereafter, institutionalise a climate-adapted MOP-SEDP process at commune

and district level in both Project provinces. This will require, as a first step, the passage of provincial

legislation authorising the MOP-SEDP planning process and allocating an appropriate budget for its

implementation. In each province, the Political School, with DPI and Project MOP-SEDP staff support,

will integrate the MOP-SEDP process into their curricula and train trainers in its application. At

commune and district level, initially in Project districts and then across the provinces, the Project will

facilitate the integration of climate-adapted commodity and associated VC development planning into

a participatory SEDP process, The resulting MOP-SEDP process will engage relevant entities at the

village, commune and district level, including the effective participation of Village Development Boards

(VDBs) and private enterprise, and be inclusive of all funding sources, including the National Target

Projects (NTPs). The level of women’s representation in MOP-SEDP planning will be mandated in the

supporting legislation. Through the MOP-SEDP process, CSSP will assist DPI to operationalise a

participatory medium-term public investment planning framework.

16. NTP-NRD National Coordination Office (NTP-NRD NCO). A USD 500,000 IFAD grant to the

NTP-MRD NCO in the Ministry of Agriculture and Rural Development, Department of Cooperatives

and Rural Development will be attached to the CSSP. The grant will be used to (i) pilot the integration

of Rural Value Chains into the NTP-NRD leading to the identification of International Financial

Institution (IFI) investment opportunities; (ii) prepare guidelines for NTP-NRD2, including, inter alia,

participatory planning result-based M&E; (iii) build capacity within the NCO and at provincial and

district level for NTP-NRD2 implementation; (iv) pilot the implementation of NTP-NRD2 funded

initiatives and (v) strengthen NCO Operations.

17. Outcome 2. A greener agriculture future. This outcome, which establishes the basis for

climate-adapted green growth in the Project area, includes two outputs: Output 4: Forest land and

forest allocation, and Output 5: CIGs for climate adaptation. The Government of Viet Nam (GoV) is

committed to an ambitious “green growth” agenda and to global carbon emission reduction. The

CSSP will support this process through the promotion of CCA technologies that provide significant

mitigation co-benefits, as well as Projects for forest land and forest use rights certification and

rehabilitation that directly contribute to carbon sequestration.

18. Output 4: Forest land and forest allocation (FLFA). This one-off district-led and commune-

implemented activity in Bắc Kạn will result in a community-based land use plan (LUP) and the

allocation of 17,000 ha of forest land and associated forest to poor households, particularly women-

headed households, in Bắc Kạn Project communes. The LUP-FLFA will lead to the issuance of Pink

Book land use certificates which, for married couples, will be issued in the names of both the husband

and wife, together with forest use right certificates. As part of the allocation process the Forest

Protection Department and district and commune level monitoring units will be supported in

establishing the biomass baseline for forest status monitoring as a support tool for forest

management. DoNRE will monitor the forest land condition.0;

19. Output 5: Common Interest Groups for climate adaptation. This output will lead to: (i) at least

1,000 CIG in Cao Bằng province and 900 in Bắc Kạn province with the capacity to implement

profitable climate change adaptation technologies and practices within a VC framework, with co-

benefits for climate change mitigation; and (ii) forage production integrated into farming systems, with

co-benefits for soil fertility and stability. A wide range of technologies and practices are available to

Vietnamese smallholder farmers to reduce their vulnerability and increase their agro-ecosystem

resilience to CC impacts5, while also providing green growth co-benefits in terms of pollution

prevention and greenhouse gas (GHG) emission reduction. With the support of DARD extension

5 See SECAP RN Para’s. 54 to 63 for a discussion on CC impacts in Bắc Kạn and Cao Bằng provinces.




xi

stations and the Women’s Union, the Farmer’s Union will support the establishment of a Lead Farmer-

to-farmer (LF2F) extension system that will support CIG establishment and development.

20. Activity 5.1: Common Interest Groups. CIGs, together with eligible cooperatives, household

enterprises and women’s savings and credit groups (WSCGs), will be eligible to apply for

competitively allocated, co-financed climate change adaptation grants supporting both (i) the adoption

of climate adapted technologies and practices; and (ii) the alignment of their agriculture production

systems with emerging value chains. Beneficiary groups could be gender specific or gender

integrated, however, at district level, such groups will, in aggregate, include at least 50% of members

identified by the GoV as poor and near poor households and at least 40% female members. Grants

will focus on innovative production, CCA, risk reduction or value addition investments linked to

profitable commodity chains identified through the SIP process and incorporated into local MOP-

SEDPs. This could include investment in, inter alia: afforestation, irrigation management including SRI

rice, climate-resistant crop varieties and management systems, forage production, biogas and other

by-product utilisation including bio-fertilisers, minimum tillage and organic agriculture. CIG grants will

complement existing NTP-NRD and NTP-Sustainable Poverty Reduction (NTP-SPR) Project support

to poor households.

21. This activity will be amalgamated with the NTP-NRD farmer group grant programme. The

maximum Project grant value of USD 250 per group member and USD 3,500 for one group will cover

up to 50% of the total cost of each investment, with beneficiaries financing at least 50% including a

minimum 25% in cash and the balance in kind. All supported CIG investments must demonstrate

financial and environmental sustainability beyond the initial CSSP assistance. In particular, CIG grants

must be closely linked to VC development under Output 8. A part of each CIG grant could be used by

the group for procurement of technical support services, including LF2F support coordinated by the

provincial Farmer’s Union (FU). All such contracts will be output based. The Project will also provide

“farming as a business” management training to CIG and WSCG members, participation in which will

be a condition of Project support.

22. Activity 5.2 Forage inclusion into farming systems, particularly leguminous forage integrated

into hillside farming systems, offers a cost-effective approach to reducing soil erosion and land

degradation, and hence, strengthening the green economy. To ensure quick impact and longer-term

sustainability, forage Projects require an ample seed supply. The Project will initially focus on

developing selected forages as profitable seed crops, with the forage-based feed as a by-product.

Using an approach of Project procurement of forage seed at competitive prices (but well below import

cost) and free distribution of small quantities of seed to interested farmers, the Project will establish a

demand for low labour input forage technologies that integrate into local farming systems, providing

benefits in terms of animal nutrition, improved soil fertility and stability and reduced labour. The

Project will work closely with the Viet Nam National Centre for Plant Variety Test and Certification with

a view to certifying new, improved forage varieties for use in the Project area.

23. Outcome 3. Profitable farms linked to finance and markets. The result of this outcome will

be: increased public and private investment in sustainable, profitable commodity production and value

addition. The outcome will have three outputs, namely: (i) community infrastructure; (ii) rural financial

services; and (iii) agribusiness competitiveness fund.

24. Output 6: Community infrastructure. Public and collective infrastructure investment grants up to

USD 400,000 per commune6 (including local and NTP-NRD contribution) will be available for

infrastructure investments that provide public good and collective benefits essential to targeted

commodity VC development and/or CCA. This activity will be integrated into the NTP-NRD agriculture

infrastructure investment process, the funding for which will be a government contribution to the

Project. Consistent with NTP-NRD procedures, legislated to meet CSSP requirements, public good

infrastructure investment schemes will be identified and prioritized through the MOP-SEDP process

6 In Bắc Kạn, where USD 700,000 has been allocated for PES payments, commune infrastructure grants will average

about USD 380,000 per commune.




xii

WSCG development by province

Source

of

funds

Bắc Kạn

households

Cao Bằng

households

CSSP

funding 2,200 3,300

3PAD

reflows 4,000 -

Total 6,200 3,300

and evaluated/approved by Commune Development Boards (CDB)7. Beneficiary contribution of total

construction costs of public good infrastructure works will be at least 10 per cent (in kind), with

IFAD/NTP-NRD funding the balance. Individual public infrastructure investments exceeding

USD 60,000 will require no-objection from IFAD. The Project will, wherever practicable, use force

account processes for community infrastructure investments, designed to create jobs for the

vocational trainees and promote community ownership in their operation and maintenance. The

Project will also support on-the-job youth-targeted vocational training. The CSSP will explore an

innovative community-to-community payment for environment services (PES) scheme to protect

upstream catchments supplying water to CSSP-supported

irrigation developments.

25. Output 7. Rural financial services. To effectively

contribute to increased financial inclusion in the rural

communes of the Project target area, CSSP will

substantially support the newly established Women’s

Development Funds (WDF) of the respective provincial

Women’s Unions (WU) and their networks of savings and

credit groups. CSSP will include a major capacity building

Project for the provincial WDFs covering the management,

staff and members of the Funds, and provide the required

equipment and systems to operate the new branch offices in

the CSSP districts. The Project will support the establishment of new WSCGs in both provinces and

provide seed capital for the lending operations of the WDFs. Around 5,500 new low-income

households (of which at least 50% are poor, near-poor or women-headed households) are expected

to join the WSCGs as a direct result of the CSSP investments, covering a significant share of the poor

and near-poor households in the CSSP communes. The capacity building efforts by CSSP are,

furthermore, expected to enable the two WDFs to mobilise an additional 4,000 women into WSCGs.

Their initial loans will be funded largely through revolving funds from the closed IFAD-supported

projects. CSSP will also provide transformation support to the WDFs so that, towards the end of the

Project period, both can be converted into fully sustainable microfinance institutions registered and

supervised by the State Bank of Vietnam.

26. Output 8. Agribusiness8 Promotion Investment Fund (APIF). This output, in line with recent GoV

decisions, will catalyse at least 24 private sector agro-enterprise investment in Bắc Kạn and Cao

Bằng by co-financing investments that improve enterprise competitiveness and value chain linkages

to smallholder farmers, thereby generating incremental markets for raw material and value addition,

leading to increased income and job opportunities among rural households, particularly poor

households. The Project SIP process will identify commodities that have investment potential and that

are in compliance with the provincial SEDPs. The selected commodities will be chosen based on

having strong potential for: (i) export and/or import substitution; (ii) involving rural households to

undertake investments and thereby expanding their production/income and creating incremental jobs;

and (iii) engaging poor farm households. For each selected commodity, a SIP (see Activity 1.1) will be

prepared, including all potential activities within the VCs inherent in that particular commodity

segment. At least 50% of the total number of households benefiting from APIF-supported VC

investments should be represented by poor, near poor or women-headed households. Only legally

registered household enterprises, cooperative societies and companies of at least 12 months standing

will be eligible to apply. Start-up enterprises with financially viable business plans could be eligible for

small grants to support farmer and market linkages and staff training. APIF investments will be

awarded on a competitive basis for capital investments in civil works, equipment (processing,

packaging, energy generation or environment protection), transportation and marketing and

environmental management. The APIF will be established with IFAD co-financing up to 49% of total

investment cost, with the remaining investment being contributed by the benefitting business. Co-

7 In the first Project year, any existing procedure of District Development Board approval will be followed, however, this

will be transferred to the Commune Development Board as soon as their capacity permitted. 8 Includes agriculture, livestock, fishery and forestry sub-sector investments.




xiii

financing will start at USD 15,000 as a minimum and reach up to USD 75,000 as the maximum, while

not exceeding USD 500 per VC supply household. In cases where the potential export/import

substitution and social impact of the proposed Project is extremely high and/ or the investment is

pivotal for developing the respective commodity in Bắc Kạn or Cao Bằng, the maximum APIF grant

could, subject to IFAD's no objection, be up to USD 150,000.

27. The Project will support enterprise staff training and technical advisory services to farmer

suppliers on a cost sharing basis. APIF funds could also fully fund demand-driven applied research

that addresses industry-identified VC technical and marketing constraints or solve pollution, recycling

and renewable energy challenges. Output-based enterprise extension services and enterprise

vocational training Projects, will, if required, be included in APIF funding applications. Up to 30% of a

APIF grant could be used for training purposes or for the purchase of supporting services (business

development services, legal, technical, marketing, standards, applied research, farmer extension,

etc.) for the planned commodity chain investment. Within this limit, the Project will co-finance up to

70% of the cost of (i) vocational training for enterprise staff and (ii) outcome-based enterprise

extension contracts targeting improved commodity production and productivity that include at least

50% of poor, near poor and women-headed farm households. Extension services will, preferably, be

delivered by enterprise staff, however, enterprises could also employ experienced farmers or contract

third party technical advisors (e.g. NGOs, academic institutions, service centres, etc.) to deliver such

services.

28. Project Risks are summarized in Table 1 below9.

Table 1. Main CSSP risks and mitigation measures.

Risks Risk description Probability of

occurrence

Mitigation measures in Project design Comparative

sensitivity analysis

result (Proxy)

Economy External shocks to

macro economy

Medium Higher productivity and reduced cost per unit of quality

outputs

Costs +10%

Benefits -10%

Benefits lagged by 2

years

EIRR 8.3%

Institutional Lengthy process of

assessment and

planning saturates the

dynamics momentum

Provincial governments

cannot (due to lack of

legislation) integrate

commune level NTP

funding into the MOP-

SEDP process.

Uneven dynamics of

groups affect their

success potential

Weak technical and

management capacities

of district line agencies

High to Medium

Build on ongoing IFAD projects’ experience in market-

oriented participatory planning and incorporate into the

CSSP process

Planning and financial integration of CSSP and New Rural

Development measures

New Law on Public Investment and Decree on Medium-

term Public Investment Planning, mitigate this risk.

Clear criteria for identifying potential participating groups

and sound establishment training

Technical support and capacity building provided by

PPCOs and contracted short-term technical assistance,

and access to new techniques and know-how through

APIF grants

Annual capacity assessment and capacity development

plans to fill gaps

Costs +10%

Benefits -10%


years

EIRR 8.3%

Ineffective coordination

between provinces,

districts, communes and

agribusiness

undermining

implementation

progress

Medium Legislate MOP-SEDP process.

PAPIF enterprise beneficiaries and CIGs will be involved

in all the steps of preparation, implementation and

supervision.

Performance based contracting of TA providers, including

LF2F advisers

Costs (base case)

Benefits -10%


years

EIRR 11.1%

9 A discussion of potentially negative social, environmental and climate risk factors and mitigation measures can be

found in Annex III of the SECAP RN.




xiv

Risks Risk description Probability of

occurrence

Mitigation measures in Project design Comparative

sensitivity analysis

result (Proxy)

Sustainable use of

Project-financed civil

works and Inadequate

capacity for community-

based O&M.

Medium On-the -job vocational training for community members,

particularly of youth;

Community force-account procurement of local works to

increase ownership of the beneficiaries’;

Community training provided on committee establishment,

O&M, normal repair skills, as well as operation cost

arrangement and tariff collection to support sustainable

use of the Project-built works.

Costs (base case)

Benefits -10%


years

EIRR 11.1%

Elite capture of Project

investment funds and

benefits

Low to Medium Pro-poor investment policies and planning;

community empowerment, particularly women and youth;

and

close scrutiny and mentoring of all investments.

Costs (base case)

Benefits -10%


years

EIRR 11.1%

Market Lack of technical

capacity to respond to

the identified needs

Medium Market-led investment in appropriate technology;

Enterprise-to-farmer (E2F) and LF2F advisory services

APIF agreements link producers’ groups to agri-

businesses and markets

Costs +10%

Benefits -10%

Benefits lagged by

2yrs

EIRR 8.3%

Lower market prices for

commodities

Medium Increased and diversified production and improved value

addition and market access through APIF grants

Costs (base case)

Benefits -10%


years

EIRR 11.1%

Financial service

providers unwilling to

support Project

investments

Medium Increased emphasis on savings

Development of new financial products

Investment in profitable, climate adapted production

systems and VCs

Costs (base case)

Benefits -10%


years

EIRR 11.1%

Policy Farmers are not treated

as clients

CC does not become a

cornerstone in

agricultural and rural

development policies at

provincial and

subordinate levels

Poor business

environment in the

provinces does not

provide incentive for

APIF investments

Medium Empower farmers through technical training and group

and gender awareness. Train government agencies in

participatory development and cultural awareness.

Substantive and sustained investment in policy dialogue

at provincial level, with strong CC adaptation emphasis

within Project knowledge management.

Support provinces in improving their business

environment as part of Outcome 1 activities

Costs (base case)

Benefits -10%


yr.

EIRR 11.1%

Others Natural calamities

including flood and

drought lower output of

farm production

High Improvement of productive infrastructures and adoption of

climate-smart technologies and varieties to advance

production season will help ease the risk;

Access to meteorological and market info by farmers

Costs +20%

Benefits -20%


years

EIRR 4.8%

Damages to civil works

built caused by natural

disasters, like floods

and land sliding.

Medium Ensuring climate adapted design and protection measures

taken to avoid any predictable damages;

Government institution are responsible for the repair of

unusual damage that is beyond the community’s ability.

Costs (base case)

Benefits -10%


years

EIRR 11.1%

29. Implementation arrangements: The Project will build off the implementation arrangements

developed under the IFAD-financed 3PAD project in Bắc Kạn and the Doing Business for the Rural




xv

Poor (DBRP) project in Cao Bằng, which have received positive assessments of their impact on

decentralizing project investments to commune and village levels, increasing the participation of

beneficiaries and enhancing the ownership of local authorities, as well as, promoting grass-roots

democracy in poverty reduction. The primary difference between the 3PAD and the CSSP will be the

stronger focus on climate-adapted MOP-SEDP processes, while, compared with the DBRP, the CSSP

will focus more on profitable and sustainable private agri-business engagement in VC development.

The CSSP will also increase focus on Project delivery through government departments and national

Projects in both provinces.

30. The Provincial PPCs will be the owners of the CSSP. Provincial Project Steering Committees

(PPSC) will oversee Project implementation at provincial level. Provincial Project Coordination Offices

(PPCO), each with about 20 staff, will coordinate Project implementation at provincial level. All Project

districts will appoint the DPC Chairperson or Vice Chairperson responsible for agriculture as the

District Project Coordinator and a member of the PPSC. The chief of the district agriculture section will

be the Deputy District Project Coordinator with responsibility to oversee Project implementation at

district level. A fulltime M&E officer, accountant and a Business Linkages Facilitation Officer will be

appointed to support day-to-day Project implementation at district level. The CPC will be responsible

for Project implementation at commune level. The CPC Chairperson will be the Commune Project

Coordinator. The PPCO will recruit commune accountants each responsible for Project financial

administration in 2-3 adjoining communes. The commune agriculture officer will support Project

implementation. The Provincial government will provide suitable office accommodation for the PPCOs

and cover all staff costs The Project will co-finance the upgrading of the PPCO offices (if required),

provide the PPCO with support for staff training and workshops, technical assistance related to

climate change adaptation and value chain development, necessary office equipment, and the

maintenance of vehicles assigned to the Project. Participating provincial departments, districts and

communes will be provided office equipment. A detailed Project Implementation Manual (PIM), will be

prepared by the provincial PPB prior to IFAD Board presentation.

31. Project cost and financing. The total Project costs are provisionally estimated at

USD73.6 million (VND 1,670 billion). Funds allocated to the Project Management are about

USD 9.2 million or 12.5% of the total Project costs. The Project will be financed by: (i) an IFAD Loan,

USD 42.5 million (57.7% of the total Project costs); (ii) an IFAD grant of USD 0.5 million (0.7% of total

Project costs); (iii) Beneficiary contributions, USD 9.6 million (13.0% of the total Project cost); and

(iv) GoV contribution, USD 21.0 million (28.5% of the total Project cost) including taxes and duties

amounting to USD 1.5 million and contribution from government budget of USD 19.5 million.

32. EIRR and NPV. The overall CSSP Project EIRR is 14.9 per cent. The estimated NPV at a

nine per cent discount rate is USD 26.7 million. The BCR of 1.5 indicates a return of approximately

1.5 dollars for every dollar invested. These results indicate that the Project investments yield a

positive rate of return.




xvi

EFA Summary Pages

Table A: Overview of Financial Analysis of Crop, Livestock, Forestry Production and Processing Models

Models used in Analysis Province Unit Production period

Net profit per production period (VND '000)

Return to total labour per person day (VND'000)

FWOP WP Increment FWOP WP Increment

Livestock Production Cow fattening

BK 2 cow 6 months 6,492 16,142 149% 144 359 149%

H'mong Cow fattening /a CB 2 cow 3 months 6,117 22,737 272% 204 253 24%

Black Pig (fattening)

BK 5 porker 8 months 1,609 6,457 301% 32 129 301%

CB 5 porker 10 months 3,454 4,487 30% 55 72 30%

Crossbred Pig (fattening) BK 5 porker 4 months 1,091 4,139 279% 36 138 279% Crossbred Pig (breeding) BK 1 sow 1 year 7,501 11,785 57% 150 236 57%

Chicken BK 200 head 6 months 12,554 15,775 26% 126 158 26%

Crop Production

Annual

Rice - lowland su /b local BK 1 ha 4 months 42,310 51,048 21% 230 473 106%

hybrid CB 1 ha 4 months 20,545 32,087 56% 139 221 59%

wi /c local BK 1 ha 4 months 29,710 41,823 41% 161 387 140%


Rice – upland su /b local BK 1 ha 4 months 40,585 45,421 12% 221 421 91%

CB 1 ha 4 months 12,929 20,829 61% 82 140 70%

wi /c local BK 1 ha 4 months 30,565 38,498 26% 166 356 115% hybrid BK 1 ha 4 months 19,621 26,788 37% 109 165 52%

Maize – upland

CB 1 ha 4 months 14,775 21,643 46% 95 180 89% Maize - lowland BK 1 ha 4 months 10,271 19,226 87% 68 141 106%

Canna

BK 1,000 m2 10 months 5,142 7,480 45% 147 241 64%

CB 1,000 m2 10 months 4,952 8,774 77% 141 283 100%

Peanut

CB 1,000 m2 3.5 months 1,291 2,316 79% 92 154 67% Ginger

BK 1,000 m2 10 months 15,012 28,301 89% 500 943 89%

CB 1,000 m2 10 months 14,983 21,950 46% 456 616 35% Black Agar

CB 1,000 m2 10 months 9,383 11,883 27% 200 253 27%

Sugarcane

CB 1,000 m2 9 months 1,650 2,318 40% 122 143 17% Potato

BK 1,000 m2 3 months 1,947 3,447 77% 93 164 77%

Cassava

CB 1 ha 10 months 7,669 14,503 89% 111 160 44% Soybean CB 1,000 m2 3 months 652 1,703 161% 72 170 135%

Fodder VA06

CB 1,000 m2 9 months 2,168 3,583 65% 108 138 27% Fodder Mulato 2 BK 1,000 m2 1 year /d 6,680 9,394 41% 84 104 25%

Investment costs (VND million) Financial Internal Rate of Return


Perennial Crop Production Green Tea (Shan) BK 1 ha 20 years 24.7 36.1 11.4 17.2% 24.9% 7.7% Tangerine CB 1 ha 20 years 82.6 106.7 24.1 19.1% 37.3% 18.2% Plum BK 1 ha 10 years 47.8 45.5 -2.3 26.8% 45.3% 18.5% Banana BK 1 ha 8 years 31.9 36.2 4.3 22.3% 36.6% 14.3%

Forest Production Magnolia conifer BK 1 ha 10 years 23.9 23.9 0 3.6% 12.0% 8.4% Acacia BK 1 ha 10 years /e 17.0 13.3 -4 1.7% 27.1% 25.4% CB 1 ha 9 years /e 41.1 58.1 17 13.7% 22.0% 8.3%

Processing

Glass noodle

CB HH enterprise 1 year 38 72.2 33 23.7% 47.0% 23.3%

Tea BK Cooperative 1 year 62.3 182.1 120 23.5% 38.1% 14.6% Peanut CB HH enterprise 1 year 1,050 1,300 250 18.9% 37.0% 18.1% Cassava CB Med. enterprise 1 year 92,000 112,000 20,000 12.3% 15.8% 3.5% Wood processing (peel) BK Small enterpr. 1 year 395 955 560 15.6% 33.5% 17.9% BK Med. enterprise 1 year 1,500 1,700 200 21.3% 39.5% 18.2%

FWOP = future without Project; WP = with Project \a WP increased to 4 cows. \b Summer-autumn; \c Winter-spring. \d Production period 6 years; \e WP reduced to 8 years.




xvii

Table B: Project Cost and Indicators in Logical Framework

Total Project Costs (USD m): 77.75 IFAD (USD m): 43.00 GOV (USD m): 21.08 Beneficiaries (USD m): 13.67

Beneficiaries /a People: 147,000 Households: 33,000 Districts: 8 (19) /b

Cost per beneficiary 529 USD / person 2,356 USD / household Communes: 70 (179+112) /b

Outcomes/Components and Cost in USD m (% of total)

Outcome indicators Output indicators

Outcome 1: Province-based participatory planning institutionalised

8.11 (10.4%)

At least 80% of provincial communes and districts prepare medium-term climate-adapted MOP-SEDPs.

At least 10 new commodity-based VC SIPs prepared.

National peer reviewed CC adaptation communication and dissemination Project for CCA and MOP-SEDP prepared.

Project provinces have the legislative base, guidelines, tools and staff capacity for district and commune MOP-SEDP implementation.

Outcome 2: A greener agriculture future

17.64 (22.7%)

At least 20,000 farm households (66% of Project beneficiaries) sustainably adopting two or more climate change adaptation technology or practices.

Forest land and forest use rights for 17,000 hectares of forest transferred to private households in Bắc Kạn.

Members of up to 900 Bắc Kạn and 1,000 Cao Bằng climate-adapted commodity-based CIGs trained in climate adapted technologies and practices.

Outcome 3: Profitable farms linked to finance and markets

42.30 (54.4%)

SCGs maintain a minimum annual saving rate growth of at least 15% over base-year savings and < 5% non-performing loans in their portfolios.

Of USD 40 million invested in commodity-targeted, climate- adapted infrastructure, commodity production and enterprises development in Project communes, at least 70% of investments show an IRR > 10%.

Seventy Project communes have Commune Infrastructure Supervision Boards capable of supervising, inspecting and maintaining infrastructure activities in their communes by end-PY2.

6,200 new households in Bắc Kạn and 3,300 new households Cao Bằng become members of WSCGs.

At least 12 CIG-linked enterprise applications for APIF funding approved in each province.

Project Management 9.20 (11.8%)

NTP NRD National Coordination Office Grant

0.5 (0.6%)

\a See calculation in Appendix 2, Table 1. \b Districts/communes directly supported under Outcome 2 (Total number of districts/communes benefiting from Outcome 1 – all districts/communes in Bắc Kạn and Cao Bằng). In addition, in two communes in Bạch Thông district in Bắc Kạn province the Project will support the development of tangerine value chains.




xviii

Table C1: Financial Analysis Main Assumptions (see Table A for financial outcomes and production period)

Models used in Analysis Province Unit Unit of output Units of output per production period

(number) Price per unit of output (VND'000)



BK 2 cow head 2 2 0% 25,000 30,000 20%

H'mong Cow fattening CB 2 cow head 2 4 100% 25,000 30,000 20%


BK 5 porker Kg 240 294 23% 55 55 0%

CB 5 porker Kg 259 270 4% 50 55 10%

Crossbred Pig (fattening) BK 5 porker Kg 365 441 21% 40 40 0% Crossbred Pig (breeding) BK 1 sow Kg 259 342 32% 55 55 0%

Chicken BK 200 head Kg 342 392 15% 80 80 0%

Crop Production

Annual

Rice - lowland su /a local BK 1 ha kg 4,200 4,550 8% 16.0 16.0 0%

hybrid CB 1 ha kg 5,600 7,200 29% 6.5 7.5 15%

wi /b local BK 1 ha kg 4,200 4,900 17% 13.0 13.0 0%

hybrid CB 1 ha kg 5,200 6,400 23% 6.5 7.5 15%

Rice – upland su /a local BK 1 ha kg 3,500 3,850 10% 16.0 16.0 0%

CB 1 ha kg 4,000 5,000 25% 6.5 7.5 15%

wi /b local BK 1 ha kg 3,500 4,200 20% 13.0 13.0 0% hybrid BK 1 ha kg 3,640 4,550 25% 10.0 10.0 0%

Maize – upland

CB 1 ha kg 4,200 5,500 31% 7.0 7.5 7% Maize - lowland BK 1 ha kg 4,200 6,000 43% 6.0 6.0 0%

Canna

BK 1,000 m2 kg 6,000 7,500 25% 1.2 1.3 8%

CB 1,000 m2 kg 5,300 7,700 45% 1.9 1.9 0%

Peanut

CB 1,000 m2 kg 140 205 46% 20.0 20.5 2% Ginger

BK 1,000 m2 kg 1,150 1,850 61% 20.0 20.0 0%

CB 1,000 m2 kg 1,700 2,200 29% 15.0 15.0 0% Black Agar

CB 1,000 m2 kg 500 600 20% 25.0 25.0 0%

Sugarcane

CB 1,000 m2 kg 6,500 7,000 8% 0.9 1.0 11% Potato

BK 1,000 m2 kg 1,100 1,400 27% 5.0 5.0 0%

Cassava

CB 1 Ha kg 9,500 17,640 86% 1.4 1.4 0% Soybean CB 1,000 m2 kg 110 170 55% 16.0 17.5 9%

Fodder VA06

CB 1,000 m2 Kg 6,000 8,000 33% 0.8 0.8 0% Fodder Mulato 2 BK 1,000 m2 kg 11,000 15,000 36% 0.9 0.9 0%

Perennial Crop Production Green Tea (Shan) BK 1 ha kg 2,500 4,000 60% 15.0 18.0 20% Tangerine CB 1 ha kg 27,500 32,500 18% 10.0 14.0 40% Plum BK 1 ha kg 13,000 20,000 54% 15.0 15.0 0% Banana BK 1 ha kg 28,000 32,000 14% 2.5 3.0 20%

Forest Production Magnolia conifer /c BK 1 ha m3 90 25 -72% 600 400 -33% Acacia /c BK 1 ha m3 80 95 19% 400 500 25% Acacia CB 1 ha m3 178 235 32% 1,300 1,500 15%

Processing

Glass noodle

CB kg 1,814 125% 62 65 5% 23.3% Tea BK Cooperative Kg 2,100 3,150 50% 160 200 25% Peanut CB HH enterprise Kg 30,000 80,000 167% 32 32 0% Cassava CB Med. enterprise Kg 7,000,000 9,800,000 40% 8 8 0% Wood processing (peel) BK Small enterpr. m3 1,814 2,592 43% 2,200 2,310 5% BK Med. enterprise m3 4,480 5,760 29% 2,200 5,760 162%

FWOP = future without Project; WP = with Project. \a Summer-autumn; \b Winter-spring. \c WP output excludes additional thinning.

Table C2: Economic Analysis Main Assumptions

Parameter Value Remarks Official Exchange Rate 22,400 USD1=VND (May 2016)

Shadow Exchange Rate 22,400

Standard Conversion Factor 1.0 As commonly applied in recent project designs in Vietnam. As appropriate, financial costs are converted into economic costs by removing taxes and subsidies.

Value Added Tax 10% Included in Project costs as applicable but deducted from Project costs in Economic Analysis.

Labour Conversion Factor (Opportunity Cost of Family Labour)

70%-80% As percentage of cost of hired labour. Given the large variations depending on the season, location and alternative income opportunities, a standard labour conversion factor is not feasible. For the Economic Analysis all family labour is valued at its estimated opportunity costs.

Discount rate /c 9% Equals assumed 6% annual long-term average GDP growth rate in Vietnam + 3% for elasticity of marginal utility of consumption (World Bank Vietnam).




xix

Table D: Beneficiaries and Phasing

Output PY1 PY2 PY3 PY4 PY5 PY6

5. CIGs for climate CIGs New 400 800 700 0 0 0

Adaptation cumulative 400 1,200 1,900 1,900 1,900 1,900

members new 4,800 9,600 8,400 0 0 0

cumulative 4,800 14,400 22,800 22,800 22,800 22,800

7. Rural financial services WSCGs /a new 79 230 171 80 60 0

cumulative 79 309 479 559 619 619

members new 873 2,195 1,462 560 420 0

cumulative 873 3,068 4,529 5,089 5,509 5,509

8. Agribusiness USD'000 new 300 1,100 2,100 1,908 1,000 0

Promotion Investment cumulative 300 1,400 3,500 5,408 6,408 6,408

Fund (APIF) enterprises /b new 2 7 14 13 7 0

cumulative 2 9 23 36 43 43

VC supply New 600 2,200 4,200 3,816 2,000 0

households /c cumulative 600 2,800 7,000 10,816 12,816 12,816

6. Community

infrastructure - Roads km New 67 135 141 103 0 0

cumulative 67 202 343 446 446 446

villages new 67 135 141 103 0 0

cumulative 67 202 343 446 446 446

HH new 3,365 6,730 7,066 5,148 0 0

cumulative 3,365 10,095 17,161 22,310 22,310 22,310

people new 15,142 30,285 31,799 23,168 0 0

cumulative 15,142 45,427 77,226 100,394 100,394 100,394

- Irrigation schemes schemes new 76 152 160 117 0 0

cumulative 76 229 389 505 505 505

ha new 457 915 961 700 0 0

cumulative 457 1,372 2,333 3,033 3,033 3,033

HH new 4,920 9,839 10,331 7,527 0 0

cumulative 4,920 14,759 25,091 32,618 32,618 32,618

4. Forest land allocation ha new 4,000 8,000 5,000 0 0 0

and use (FLA) cumulative 4,000 12,000 17,000 17,000 17,000 17,000

(pink books) - Bac Kan HH new 2,667 5,333 3,333 0 0 0

cumulative 2,667 8,000 11,333 11,333 11,333 11,333

\a An additional 4,000 women will be mobilised into around 260 WSCGs in Bắc Kạn, financed through residual revolving

funds from the former 3PAD. \b Min. number of enterprises (rounded), based on max. USD 150,000 total investment per enterprise. \c Min. number of households, based on max. USD 500 co-financing per VC supply household.




xx

Table E: Project Economic Cash Flow (USD ’000)

Year Project costs

/a

Incremental Net Benefits by Outputs /b

Total net incremental

benefits Forest Land Allocation

Community development

Rural Financial Services

Agribusiness Promotion Investment Fund (APIF)

Community Infrastructure

Community Interest Groups

/c

1 -4,368 -295 -4,200 -1,625 -642 -420 -11,550 2 -5,432 -590 -8,158 -2,980 -1,472 -1,201 -19,834 3 -5,871 -369 -6,545 -2,255 -556 -2,086 -17,681 4 -5,546 -194 -1,297 510 293 -1,499 -7,734 5 -4,151 -403 7,426 1,035 528 964 5,400 6 -2,265 -217 8,512 1,140 911 1,257 9,337 7

0 8,964 1,140 911 1,352 12,367

8

0 8,964 1,140 911 1,352 12,367 9

502 8,964 1,140 911 1,352 12,869

10

1,505 8,964 1,140 911 1,352 13,872 11

2,132 8,964 1,140 911 1,352 14,499

12

2,132 8,964 1,140 911 1,352 14,499 13

2,132 8,964 1,140 911 1,352 14,499

14

2,132 8,964 1,140 911 1,352 14,499 15

2,132 8,964 1,140 911 1,352 14,499

16

2,132 8,964 1,140 911 1,352 14,499 17

2,132 8,964 1,140 911 1,352 14,499

18

2,132 8,964 1,140 911 1,352 14,499 19

2,132 8,964 1,140 911 1,352 14,499

20

2,132 8,964 1,140 911 1,352 14,499

NPV at 9% USD million 5.06 34.83 1.27 3.07 3.58 26.72

EIRR USD million 24.7% 26.8% 11.7% 21.6% 18.7% 14.8%

\a Only costs not included in Incremental Net Benefits by Output: Mainly Outcome 1 and Project Management costs. \b Outputs for which economic benefits have been quantified. Including related economic output costs. \c 50% of total costs of farmer group/Mass Organization awareness training on commodity production & CC adaptation deducted.

Table F: Project Economic Outcome and Sensitivity Analysis

Scenario Link to Risk Matrix /a EIRR

ENPV (USD‘000)

Base Case 14.8% 26,718

% Changes to Base Case

Project Costs

Incremental Benefits

Benefits delayed by

+ 10% (i) Increased cost of inputs; (ii) external shocks to macro economy.

13.2% 20,817 + 20% 11.8% 14,917

Base Case

- 20% - 40%

(i) Reduced producer prices/demand; (ii) lack of integration of NTP funding into the MOP-SEDP process; (iii) Community infrastructure investments are not directed to areas of highest financial/economic benefit; (iv) Technical coordination is not responsive to the grassroots level needs; (v) Climate change and disaster impacts.

11.2% 9,573 7.1% -7,572

+ 10% - 10% Combination of the above. 11.5% 12,245 + 20% - 20% 8.6% -2,228

Base Case Base Case 1 year 2 years 3 years

(i) Ineffective inter-institutional cooperation & dialogue on development issues resulting in financing is not disbursed in a timely manner; (ii) Inadequate skills base amongst local service providers; (iii) Financial service providers unwilling to support Project investments.

12.5% 17,266

10.7% 8,595

9.1% 640

Base Case - 10% 1 year

Combination of the above.

11.0% 9,639

+ 10% - 10% 2 years 8.2% -4,066

1 year 9.4% 2,012 Base Case - 20% 2 years 8.0% -4,925

3 years 6.7% -11,289

+ 20% - 20% 3 years 4.8% -23,091

Switching Values /b

Costs + 45% 9.0% 0 Benefits - 31% 9.0% 0

EIRR = Economic Internal Rate of Return. ENPV = Economic Net Present Value. \a See Table 5 in Appendix 10 and Table 1 in Main Report for details. \b Percent change in cost and/or benefit streams to obtain an EIRR of nine percent, i.e., economic viability threshold.




xxi

Logical Framework

Results Hierarchy

Indicators Means of Verification

Assumptions

Name Baseline YR1 Mid-

Term

End

Target Source Frequency Responsibility

Goal:

Contribute to sustainable poverty reduction in Bắc Kạn and Cao Bằng

by Project-end, 25% reduction in the multi-dimensional poverty rate for 16,000 households considered poor and near poor in Project area (differentiated data for poor/near poor, ethnic minority & women-headed households).

0 0 10% 20% Baseline, periodic and impact evaluation surveys

DoLISA statistics

Project start, mid-term and end-Project

Project Coordination Office (PPCO)

Development Objective:

Sustainably improved income and reduced climate vulnerability of poor and near-poor farm households in targeted Project communes.

20% improvement in household assets ownership index above non-Project provincial commune average by Project-end for at least 30,000 households in Project area. (differentiated data for poor/near poor/non poor, ethnic minority & women-headed households).

0 0 Baseline, periodic and impact evaluation surveys;

Provincial statistics


PPCO Multi-dimensional poverty approach is introduced by MoLISA, increasing accuracy of poverty indicator

Socioeconomic conditions remain reasonably stable in the Project area and climatic disasters are manageable

Macro-economy continues to improve.

Business regulatory system improves

At least 14,000 poor smallholder household members whose climate resilience score

10 has been increased

by 30% (gender and ethnic minority disaggregated).

11

0 0 10% 25% Baseline, periodic and impact evaluation surveys.

Provincial statistics

Project start, mid-term and end- Project

DARD

10

a resilient household is anticipated to exhibit, inter alia, the following characteristics: i) diversified livelihood and income streams; ii) improved natural resource and risk management based on better access to

knowledge and adoption of CCA land and water conservation practices; iii) membership of social networks such as Common Interest Groups (CIGs) and Saving and Credit Groups (SCGs); iv) ability to access

credit; v) protection from some climatic hazards as a result of small-scale community infrastructure; and vi) direct engagement in village and commune level planning, and influence on provincial financial

allocations. These criteria will, amongst others, be developed as a score card to measure change. Using these resilience characteristics, and drawing on emerging procedures for measuring household

resilience in Viet Nam and the SE Asia region, the Project will develop a weighted scorecard to measure changes in household resilience. 11

Indicator from ASAP




xxii

Results Hierarchy


Assumptions


Term

End


Outcome 1 Province-based Participatory Planning Institutionalised

Legislated provincial socio-economic and commodity development planning is holistic, participatory, climate adapted and market oriented.

At least 80% of provincial communes and districts implement medium-term climate-adapted MOP-SEDPs

0 Partial Partial Yes Government decision

Project M&E System

start, mid-term and end- Project

MoNRE with DARD and PPC

Provincial governments committed to participatory market-led socio-economic development planning;

Provincial governments committed to improving competitiveness index

CC planning is strengthened and prioritized;

Government issues enabling decrees for integration of CC and market orientation into SEDP

Output 1

Strategic Investment

Plan At least 10 new commodity-based VC

SIPs prepared; 0 10 10 10 Project M&E

records Annual DPI with input by

DARD and DoIT

Adequate skills available from local /national service providers.

VDBs, CPCs and DPCs can acquire and retain appropriate skills to enable effective climate adapted MOP-SEDP procedures.

Ethnic people enabled to participate;

Inter-institutional cooperation and articulation is maintained and reasonably effective

Output 2

Provincial climate

change action plan


0 Partial12

Yes Yes Provincial records

Project M&E records


PCCAB and PPCO

Output 3

Climate-adapted, market-oriented and results-based SEDPs

Project provinces have the legislative base, guidelines, tools and staff capacity for district and commune MOP-SEDP implementation;

0 Partial13

Yes Yes Commune, district and provincial records.


DPI with input by DoNRE

12

Previous CC adaptation strategy updated 13

Legislative base for district and commune MOP-SEDP processes approved




xxiii

Results Hierarchy


Assumptions


Term

End


Outcome 2

A greener agriculture future

Climate change adaptation technology provide mitigation co-benefits

At least 20,000 farm households (66% of Project beneficiaries) sustainably adopting two or more climate change adaptation technology or practices

0 0 30% 100% DARD and DoNRE climate change adaptation and mitigation records;

REDD databases


DoNRE ad DARD

Output 4

Forest land and forest allocation

Forest land and forest use rights for 17,000 hectares of forest transferred to private households in Bắc Kạn

?? 0 40% 100% Commune records

DoNRE and DARD records

Annual DoNRE & DARD

Output 5

Common Interest Groups for climate adaptation


0 0 40% 100% Project M&E system

Annual PPCO

Outcome 3 Profitable farms linked to finance and markets

Increased public and private investment in

SCGs maintain a minimum annual saving rate growth of at least 15% over base-year savings and < 5% non-performing loans in their portfolios

0 0 Yes Yes WU records

Project M&E system

Annual WU & PPCO

MOP-SEDPs are prepared and implemented at field level;

Project financing is disbursed in time to support field implementation;

Productivity improvements are




xxiv

Results Hierarchy


Assumptions


Term

End


sustainable, profitable commodity production and value addition

Of USD 40 million invested in commodity-targeted, climate- adapted infrastructure, rural financial services and enterprises development in Project communes, at least 70% of investments show an IRR > 10%

0 0 USD 15 million

USD 40 million

▪ Business financial records

▪ Case studies

▪ Project M&E system

Annual PPCO

in areas where there is continued growth in market demand.

Smallholders receive fair terms of trade for their products;

Farmers are unwilling to adopt recommended methods and technologies;

Technical service support system is strengthened and responds to the grassroots level needs;

Provincial governments integrate commune level NTP funding into the MOP-SEDP process

No major change in financial climate, lending terms

Financial service providers remain interested to invest in Project targeted commodity chains;

Government completes the regulatory framework for the implementation of MFI legislation

Output 6

Community infrastructure


0 ▪ CPC records

Project M&E system

Annual DPI

Output 7

Rural financial services


0 500 BK 200 CB

3000 BK

1500 CB

6200 BK

3300 CB

WU records Project M&E systems


Women’s Development Funds (WDF)

Output 8

Agribusiness Promotion Investment Fund (APIF).

At least 12 CIG-linked enterprise applications for APIF funding approved in each province 0 0 6 BK

6 CB 12 BK 12 CB

Surveys

Project M&E systems

Annual PPCO & DPIs




1

I. Strategic context and rationale

A. Country and rural development context

1. Since the introduction of a

comprehensive set of economic reforms

known as Đổi Mới (renovation) in 1986, Viet

Nam’s economy has sustained strong

economic growth. Over the last 20 years,

Gross Domestic Product (GDP) growth has

averaged 7.2% per annum, resulting in rapid

poverty reduction: from 28.9% in 2002 to

10.7% in 2010. Consequently, almost 30

million people have been lifted out of poverty

as defined by the national poverty line. The

country became a low middle income country

in 2009 and achieved five out of eight

millennium development goals by 2010.

Under an increased poverty threshold issued

by the GoV Statistical Office in 2014, 17.2%

of the population were considered below the

poverty line. The GoV has recently introduced

a new multi-dimensional poverty index, for

which national statistics are not yet available,

however, the new multi-dimensional poverty

rankings for Bắc Kạn and Cao Bằng

provinces have been used in identifying

CSSP beneficiaries.

2. In recent years, GDP growth has

lagged, averaging 5.2% in the period 2009-

2012, due to world economic stagnation, high

domestic inflation and low private sector business confidence, the latter the result of overleveraged

State Owned Enterprise (SOE) and banking sectors and weak domestic demand. Since 2012,

headline CPI inflation has stabilized, aided by subdued credit growth, easing of food price increases

and stronger external trade and capital account balances, which have enabled foreign exchange

reserves to build up to an import cover of about 3 months, up from 1.6 months in December of 2011.

GDP growth is projected to return to about 6.4% per annum by 2015, however, this will require

renewed attention on a number of structural reforms – with emphasis on the country’s state owned

banks and enterprises.

3. Viet Nam’s economic development has been accompanied by structural shifts in the economy.

Between 1990 and 2012, agriculture’s contribution to GDP declined by more than 20%, to 18% in

2013. The proportion of the labour force engaged in agriculture also decreased from more than 80%

in the 1990s to a provisionally estimated 46.3% in 2014, due to the industrial and construction boom.

4. Notwithstanding the economic transition taking place, towards industrialisation, agriculture

continues to play an important role in maintaining Viet Nam’s economic stability. The agricultural and

rural sectors of the economy have, in recent years, demonstrated solid annual growth of about 4.5%.

Viet Nam is now the world’s second largest exporter of rice and a significant exporter of coffee,

pepper, tea, cashew and seafood. Export earnings from agricultural and aquaculture products have

grown steadily since 1990, reaching USD 22.7billion in 2013, roughly equivalent to record 2012 levels,

contributing to an agriculture trade surplus of about USD 11.5 billion. Industrial crops, vegetables and

livestock production have also developed rapidly and largely meet domestic demand.

Multi-dimensional poverty measurement in

Viet Nam

In 2015, the GoV adopted a multi-dimensional

poverty index that incorporates 11 indicators

including: adult education, child education,

health care, health insurance, house, safe

drinking water, sanitation facilities, health,

shelter, information, accessing to services,

social insurance and social assistance. In the

period 2016 - 2020, the multidimensional

poverty line in Vietnam is expected to be

determined as follows: (i) a household would

be considered as a seriously multi-

dimensionally poor household when it lacks

more than ½ the total basic human needs;

(ii) a household would be considered to be

multi-dimensionally poor when lacking from

1/3 - 1/2 of the total number of basic human

needs; households will be considered as

being near multi-dimensional poor

households if they lack between 1/5 - 1/3 of

the total basic human needs. The new multi-

dimensional poverty ranking system does not

apply any household income targets for

poverty classification.




2

5. Although economic development in rural areas has resulted in higher income per capita and

consequent improvements in living standards, it has also brought with it income inequality,

environmental degradation and chronic malnutrition. Despite the gains in per capita income in rural

areas, tackling residual poverty is proving to be a persistent challenge as a consequence of limited

assets, low levels of education and poor health status, particularly amongst ethnic minorities, who are

disproportionately represented among the rural poor.

6. The average income per capita in rural areas is about VND 1 million/month (USD 47) - less

than 50% of that in urban areas. In the CSSP provinces average rural income of poor households is

just VND 400,000 (USD 19) per person per month. The rural poverty rate on the other hand is nearly

three times the urban rate. Many rural households are not considered poor, but maintain an income

level just above the poverty line. With little or no savings or state support (except in Project 30A

districts14

) and an almost total dependence on natural resource gathering and subsistence level

agricultural production, they are vulnerable to unexpected life events, climate shocks and degradation

of land and water resources. Around 90% of total spending of each person living in rural areas is for

basic living costs, and most of their income stems from agriculture-forestry-aquaculture production

and wage income derived from mostly unskilled manual labour. Two third of the country is

mountainous with significant hill side crop cultivation, which is highly vulnerable to soil erosion. Even

though terracing is common, some shifting farming is also practiced and application of soil and water

conservation technologies and practices are often limited. Many studies suggest that the loss of the

fertile top soil in upland crop cultivation systems is more than 8 times higher than the Soil Loss

Tolerance Value which over time effects yields.15

Deforestation of steep slopes, along water causes

and in upper watersheds is another factor that effects soil erosion as well as floods and dry seasons

stream flow. According to FAO, the total forest cover of Viet Nam was 13.8 million ha in 2010

reflecting an important recovery from 9.1 million ha in 1990. The increased forest cover is, however,

mostly coming from monoculture forest plantations and the natural forest which deliver higher levels of

services of soil erosion and flood control, maintenance of stream flows in dry seasons and

conservation of biodiversity, has not been recovered16

.This situation is further exacerbated as a result

of current and predicated CC impacts and their implications on rural livelihoods.

7. Poverty is concentrated in upland areas in the North East and North West Mountains, parts of

the Central Highlands and the Central Coastal region. At end-2014, Bắc Kạn had 10,830 poor and

7,140 near-poor households, representing 14.2 per cent and 9.4 per cent of its total number of

provincial households, respectively. Almost all (94%) of these poor and near-poor households are

ethnic minority households. In the four Project districts there are 6,674 poor and 3482 near-poor

households, representing 21.4 per cent and 11 per cent of the total number of Project district

households, respectively, almost all (98%) from ethnic minority groups. At end-2014, Cao Bằng had

24,397 poor and 12,266 near-poor households, representing 21.4 per cent and 10 per cent of its total

number of households, respectively17

. All of these poor and near-poor households are ethnic minority

households. In the four Project districts there are 9525 poor households and 2823 near-poor

households, all from ethnic minority groups (DOLISA 2014).

8. Viet Nam’s central planning system is complex, involving integrated planning at national,

regional and provincial levels. At the national level, it includes (i) a 10-year "Socio-Economic

Development Strategy" (SEDS); (ii) the associated, two consecutive "Five-year Socio-Economic

Development Plans" (SEDPs) and (iii) national, sectoral development plans that define the sector

specific objectives to be implemented by the line ministries. In addition, at sub national level there are

(i) regional development plans whose purpose is to tailor the objectives of the SEDS and SEDP to the

conditions of the regions in Viet Nam; (ii) the line ministries’ regional and provincial sectoral

development plans; and (iii) the Provincial People’s Committees’ (PPC) annual and 5 year plans for

14

Resolution No. 30a / 2008 / NQ-CP of the Government dated 27/12/2008 on rapid and sustainable poverty

reduction for 62 poor districts 15

Erosion and Nutrient Loss on Sloping Land under Intense Cultivation in Southern Vietnam, Nguyen Van De, et. al.

2007 16

The context of REDD+ in Vietnam Drivers, agents and institutions, CIFOR, 2012 17 According to the poverty lines (adopted by MoLISA) applicable for the 2011-2015 period.




3

provincial socio economic development. Under the national SEDP 2011-2015, there are four thematic

areas whose targets orient the planning for the agriculture and rural development sector. These

thematic areas are: Clean Water, the NTP-NRD; the NTP-RCC; and Clean Food & Agriculture. The

SEDP 2016-2020 is currently under preparation.

9. The context and functioning of the SEDP process at the local-levels (commune, district and

province) is of most relevance to the CSSP. It is this five-year plan that establishes the priorities and

defines all public budget and provincial expenditures for the coming years.

10. The Government’s development vision is laid out in its SEDS 2011-2020. The overall goal of the

SEDS is for Viet Nam to become a modern, industrialized country by 2020, placing emphasis on the

quality of growth and efficiency of investment. Sustainable development, human resource

development, improvements in market institutions and public administration, and developing a

synchronous infrastructure system with modern facilities are the major pillars. Under the national

SEDP 2011-2015, there are four thematic areas whose targets orient the planning for the agriculture

and rural development sector. These thematic areas are: Clean Water, the NTP-NRD; the NTP-RCC;

and Clean Food & Agriculture. The SEDP 2016-2020 is currently under preparation.

11. In recognition of the need to further reduce rural poverty, the MARD, in 2008, put forward a

comprehensive strategy on developing “Agriculture, Farmers and Rural Areas” popularly referred to as

Tam Nông, which calls for a partnership between government, farmers, scientists and the private

sector. To realize the objectives of Tam Nông, the NTP-NRD was launched in June 2010 with the

purpose of transforming rural areas, with progress at the commune level measured against a set of 19

“indicators”. The achievements of the NTP-NRD to date are currently being assessed and a new

model that is more accommodating of regional differences is expected to be launched in 2016.

12. Further, in recognition of Viet Nam’s vulnerability to environmental pollution and the impacts of

climate change, the National Green Growth Strategy (GGS) was approved in 2012 to support a low

carbon sustainable development. The main objectives of the GGS are: (i) restructure the economy

and improve the economic institutions by greening existing sectors and encouraging the development

of economic sectors to use energy and natural resources efficiently with higher added values;

(ii) conduct research and enhance application of appropriate advanced technologies to more

efficiently use natural resources, reduce greenhouse gas emissions intensity and to contribute to an

effective response to climate change; and (iii) improve living standards of the people, creating an

environment friendly lifestyle through employment generation from green industry, agriculture and

services; investment in natural capital; and development of green infrastructure. To achieve these

objectives the main strategic tasks and solutions relevant for agriculture and forestry are:

(i) development of a green agriculture based on environmentally friendly structures, technologies and

equipment, enhancing investment in natural capital, proactive prevention and treatment of pollution;

(ii) study the adjustment of master plans, shift animal husbandry and crop production structures, crop

planting seasons, livestock, forestry, aquaculture, irrigation and non-farming activities in rural areas;

(iii) research and apply production processes and economic technologies that efficiently use

seedlings, feed, agricultural materials, soil, water etc., and reduce greenhouse gas emissions from

agricultural production; (iv) replicate widely technologies that treat and reuse by-products and waste

from agriculture production to produce animal feed, mushrooms, materials for industries, biogas and

organic fertilizer while reducing greenhouse gas emissions; (v) speed up progress of afforestation and

reforestation projects, encourage enterprises to invest in production forests to increase forest

coverage to 45% by 2020, improve forest quality, enhance carbon sequestration capacity by forests

and increase standing biomass and secure timber production and consumption; and (vi)implement

programs to reduce greenhouse gas emissions through efforts in Reducing Emissions from

Deforestation and Forest Degradation (REDD), sustainable forest management in combination with

diversifying livelihoods of rural people.18

18

The GGS has set targets to be reached by 2020 including 8-10% reduction in GHG emissions as compared to the

2010 level, application of clean technologies in manufactures will reach 50%, and development investment for

supporting sectors to protect the environment and enriching natural capital will reach at 3-4% of GDP




4

13. The GGS integrates and builds on previous policies and action plans to address CC impacts

including: (i) NTP-RCC; (ii) The Action Plan Framework for Adaptation to CC in the Agriculture and

Rural Development Sector, 2008-2020; (iii) MARD’s Action Program in Response to CC of the

Agriculture and Rural Development Sector, 2011-2015 and Vision to 2050 (RCC-ARD); and (iv) The

National Program on Community-Based Disaster Risk Management to 2020.

14. While there is an impressive set of policy frameworks that guide Viet Nam’s development

aspirations, full implementation of those policies remains a continuing challenge. If Viet Nam’s

development gains are to be consolidated, many of the policies that support environmental

sustainability and socio-political equality will need to receive greater funding and implementation

support, otherwise, the gains achieved thus far could be lost.

B. Rationale

15. Bắc Kạn and Cao Bằng provinces, located in north-eastern Viet Nam, with populations of

350,000 and 512,500 people respectively, the majority of whom are from ethnic minority groups19

, are

amongst the ten poorest provinces in Vietnam. Rural development in both provinces is constrained

by; (i) the limited area of agricultural land, 50-60% of which is moderately to severally affected by soil

erosion (study exist for Bắc Kạn only); (ii) the mountainous kaast geography which makes the region

vulnerable to flash floods, landslides and soil erosion; (iii) a changing climate with increased

temperatures and minor reductions in rainfall the last 50 years and future predictions of more intense

extreme rainfall in the north and less intense in the south, and droughts to increase in east and

decrease in the west (see SECAP note for more details on CC trends and predictions)20

(iv) limited

rural infrastructure; and (v) lower literacy levels, particularly amongst the majority ethnic minority

population.

16. Bắc Kạn province has been supported by IFAD through the 3PAD project between April 2009

and 2015, while Cao Bằng was supported through the DBRP, between 2008 and 2014. Both the

3PAD and DBRP have been rated as successful and significant on-going support for the projects

districts is expected through both the NTP-NRD and NTP-SPR. 3PAD and DBRP success included

(see Appendix 2 for details): (i) a sharp drop in household poverty levels, supported by the adoption of

broad strategies for improved productivity; (ii) the mainstreaming (in Cao Bằng) of a comprehensive

decentralization and community empowerment strategy; (iii) infrastructure development supporting

enhanced agricultural production and market access; and (iv) strengthened agriculture VCs in Bắc

Kạn. Areas identified in the 3PAD and DBRP completion report recommendations for future poverty

reduction in the respective provinces include: (i) the promotion of market-oriented production,

focusing on high-value crops and animal production; (ii) building a sustainable LF2F information

network; (iii) the need for sustainable non-State rural financial services, especially for women; (iv) the

strengthening of linkages between enterprises and farmers through APIFs; and (v) the development of

upland production systems with due attention to natural resources management and CCA. These

areas are consistent with the COSOP Strategic Objectives, which include:

enable poor rural provinces to carry out market-led pro-poor rural development;

improve access of the rural poor– particularly women – to commodity and labour

markets;

enhance the capacity of poor rural households to adapt to CC

19

In Bắc Kạn, ethnic groups make up 95 percent of the population including Kinh, (13.9%), Tay (56.4%), Nung (10.1%),

and Dao (14.6%) The remainder of the population belong to the H'Mong (4.15%) Hoa (0.5%) San chi (0.35%) and

others (0.05%) ethnic groups. Cao Bằng is the home to 28 ethnic groups, with Tay people accounting for the largest

proportion (60%), followed by Nung (20%) and Dao (3%). Other Cao Bang ethnicities include the Mong, Kinh, San

Chay, Lo, Hoa and Ngai groups. 20

Even though the exposure to climate change in the northern mountain region is less obvious than in other parts of the

country along the Mekong delta and in coastal areas the vulnerability of the poor population is high because of their low

coping capacity. The Viet Nam Institute of Meteorology, Hydrology and Environment (IMHEN) and UNDP, (2015)

conclude that exposure is variable across the north; ranging from low to moderate in the North East to high and very

high in the North West, but the sensitivity is generally high throughout.




5

17. The government has initiated the NTP-NRD with a view to achieving broad-based, market

oriented and pro-poor agriculture growth till 2020, through a partnership between government,

farmers, scientists and the private sector. While the NTP-NRD faces numerous implementation

constraints (see Appendix 1), it is the principal national framework for scaling-up rural development

and many of its planned outcome are consistent with those of the Viet Nam IFAD COSOP 2012-2017,

which provides a sound basis for investment in market-oriented activities. The NTP-NRD is also the

subject of an on-going review supported by the World bank (WB) and IFAD that is likely to sharpen its

focus and is expected to receive substantial central government funding over the SEDP 2016-2020. At

the same time, as mentioned above, the government has approved the National GGS, which is being

rolled out in the provinces via the formulation of provincial green growth plans, which emphasises the

importance of mainstreaming climate change mitigation and adaptation as well as pollution prevention

activities in rural development Projects.

18. Building off the positive 3PAD and DBRP experiences, there is recognition within Provincial

Government of the benefits of decentralised participatory planning, as supported by the NTP-NRD,

and for pro-poor investment in climate-adapted, market-oriented production and value addition to

rapidly reduce rural poverty. The required investments, however, need to be effectively targeted to

enable profitable, cost-effective and sustainable engagement by market entities with poor upland

households. There are numerous constraints in Bắc Kạn and Cao Bằng to market-led growth in terms

of inadequate capacity for market oriented development and investment planning, poor agribusiness

and risk management skills, lack of access to finance and inadequate rural infrastructure, which

combine to increase agriculture investment costs and risks, particularly for upland economic activities.

These costs and risks are amplified by the effects of soil erosion and, particularly, the incidence of

intense rainfalls producing flooding, erosion and unseasonable drought, with resulting crop and

livestock losses. There is an urgent need to alleviate the impact of these factors, to enable profitable

agricultural VC to be fully and sustainably developed.

19. The approach taken by CSSP will be specifically oriented towards the consolidation and up-

scaling of past successful interventions, within the strategic framework of the NTP-NRD, for which a

substantial increase in central government funding is anticipated. Innovations related to climate

adapted and market-oriented participatory planning and poverty reduction have been successfully

piloted in various IFAD-supported projects in Viet Nam, including in Bắc Kạn and Cao Bằng. While the

commitment of Project provinces to these approaches is significant, particularly for the roll out of a

provincial MOP-SEDP process, a more-rigorous and market-oriented approach is required for the

effective stimulation and sustainable financing of private sector investment in agriculture production

and value addition along profitable VCs. The other imperative is that all interventions must be based

on the availability and sustainability of the required natural resources to support the value chain. This

includes the recycling of nutrient and organic residues, treatment of waste water treated, and support

to communities in building their ability to adapt to CC and build their resilience to extreme climatic

events.




6

20. The complexity of a modernizing

agriculture sector in Viet Nam extends

beyond what the State can readily

provide—in terms of investment,

expertise, and clear direction in the

face of many uncertain variables. As

elsewhere, the role of the State in the

sector must evolve to focus on

ensuring the provision of core public

goods and regulatory services, while

acting to facilitate farmer and private

sector investment and initiative. The

most common form of State interaction

is through the overall (or more

localized) enabling environment which

government provides for private agro

or rural enterprise investment or trade.

This includes provision of public

infrastructure, regulatory services, and

the maintenance of law and order, and

may also include some specific

incentives/subsidies/services/ resource

allocations which are favorable for agri-

enterprises or investors in certain

locations. In pursuit of certain social or

environmental objectives, the State

may subsidize or otherwise facilitate

certain production practices or

commercial relationships within

agricultural supply chains. In Viet Nam

(and elsewhere), public resources are

used to catalyze new supply chain relationships, especially between agribusinesses and small-scale

farmers (groups). The GoV seeks to pursue various forms of APIF in order to more quickly or

effectively realize key sectoral (economic, social, and environmental) goals. This is reflected in recent

government decrees and policies21. Specifically, the GoV expects APIF initiatives to contribute to:

(i) increasing the volume of rural and agricultural investment, even in the face of fiscal constraints;

(ii) Increasing the quality of sectoral investments and the quality of technical services, including

industry-based services; (iii) fostering innovation, both of a technical and institutional nature;

(iv) Improving management—of natural resources, supply chains, and of various production and

commercial risks; and (v) contributing to more rapid structural change at the primary production level

and within supply chains, to bring about improved efficiencies

21. Within this framework, CSSP will ensure a strong focus on smallholder farmers and household

enterprises and poor rural people. While building on implementation success under the 3PAD and

DBRP, the promotion and inclusion of the private sector under CSSP, particularly agri-enterprises, will

be significantly enhanced. The approach of the proposed Project will include: (i) sound commodity

chain analysis and VC action planning that will establish the Project focus; (ii) institutionalizing more

participatory and market-oriented approaches to socio-economic planning and NTP-NRD

implementation; (iii) building capacity for climate adapted, market oriented development across all

levels of public administration; (iv) vocational training targeting improved productivity and product

competitiveness and local employment, particularly through LF2F and E2F knowledge sharing; and

21

(i) GoV Decree No.: 210/2013/ND-CP on incentive policies for enterprises investing in agriculture and rural area;

(ii) MARD Decision No. 62 on promotion policy on cooperation and development of production links associated with

agricultural development.

Government support to public-private partnership

Decree 210/2013 provides for State incentives and

investment support for enterprises investing in agriculture

and rural areas. Key incentives include:

exemption or reduction of land use levy and land and

water surface rents;

support of up to 70% of the cost of vocational training,

applied research and market information access;

support of 70% of the cost of providing roads, electricity

system, water supply and drainage to the project’s fence;

capital grants of VND 2.0 bn. to VND 5 bn. (USD 90,000

– 225,000) or up to 70% of the total investment costs for

poultry and cattle slaughterhouses, dairy, pig, cattle and

goat farms, macadamia and medicinal plant farms, sea

aquaculture and commodity and food processing

MARD Decision 62 encourages cooperation and links

associated with the production of agricultural products. Key

provisions include:

exemption from land use or land rent;

support partial funding for implementation planning , soil

improvement , complete transport systems , inland

irrigation , electrical systems serving agricultural

production in major field projects;

support for up to 100 % funding of training institutions

and technical guidance to farmers to produce agricultural

products;

Support for up to 30 % in the first year and 20 % the 2nd

year of the actual cost of plant protection chemicals,

labor and machine hire to perform services for plant

protection common to investor members




7

(i) co-financing of sustainable pro-poor market infrastructure, commodity production and value

addition. To support the transition to a market-oriented commodity-chain approach, there will be

strong emphasis on building an enabling environment for the engagement of the private sector in

creating rural jobs and generating rural income, through promoting and co-financing the development

of pro-poor commodity chains and market linkages between rural poor households and the growing

demand in urban centres and the global market. These initiatives will be underpinned by building

public sector capacity to plan and implement climate adapted MOP-SEDP processes at provincial,

district and commune levels. The proposed CSSP will also address the financing gap for investments

aimed at providing communities with capacities and access to knowledge and practices to improve

the sustainability of their natural resources and strengthen their resilience and adaptation to a

changing climate and extreme weather events and other naturally occurring calamities at the

commune and household levels.

C. Project area and target group22

22. The Project will support development in 35 communes in Ba Bể, Na Rì, Ngân Sơn and Pác

Nặm districts in Bắc Kạn province and 35 communes in Hà Quảng, Nguyên Bình, Thạch An and

Thông Nông districts in Cao Bằng province. In two communes in Bạch Thông district in Bắc Kạn

province the Project will support the development of tangerine VCs. These districts have been

selected because of their relatively high levels of rural poverty, their production/processing potential,

access to rural infrastructure and markets and because they form the hubs of nascent rural industries

in Bắc Kạn and Cao Bằng (herbs and spices, tubers, fruits, livestock, bamboo and other timber

products, etc.) whose VCs reach into more remote upland communities. Ethnic minorities form the

majority in all Project districts. Commune selection will be based on, inter alia, (i) poverty rate;

(ii) vulnerability to CC and natural disaster; (iii) commitment of leadership; (iv) potential for

development of pro-poor VCs; and (v) level of on-going support projects. Project communes will

include those that are market-linked and other, remoter communes that can be linked through VC

development.

23. Project Target Group. The Project target groups are:

rural poor, near poor and non-poor households with land and labour, including household

enterprises;

unskilled employed rural people;

rural people lacking production land but having business acumen and desire; and

key farmers who have the skills to promote commercial agricultural production.

24. Poor and near poor households will benefit directly from all Project activities. For rural

infrastructure investments, poor and near-poor households will benefit from those investments that

directly improve agriculture production (e.g. irrigation) while poor, near-poor and non-poor households

will benefit from other infrastructure development such as roads. Non-poor households will also

participate in CIGs, WSCG and APIF investments as their participation is recognised as lifting the

overall performance of such investments, however, they would not represent more than 50 per cent of

the total number of beneficiaries of these Project activities.

Clearly, there are overlaps between Project outputs and the resulting beneficiary groups, with some some benefiting from just a single project activity (e.g. a road or footbridge) while other, typically poorer households, could benefit from multiple combinations of group grant, credit access, forest land and forest use rights, etc.

25. Table 2 below provides an estimate of the total number of households expected to benefit from

one or more Project outputs that impact on household wealth - in total about 33,000 households or an

estimated 150,000 people. Of this total, an estimated 30,000 households or 135,000 people are

expected to achieve a 20% improvement in household assets. Table 3 shows the expected number of

poor and near poor households and women, expected to benefit from Project outputs impacting on

household wealth – in total about 19,000 poor and near poor households are expected to benefit while

22

See Appendix 3 for further analysis of beneficiary targeting and gender issues.




8

more than 8,000 women will be direct beneficiaries of project wealth-creating outputs. Of this total, an

estimated 16,000 households or 72,000 people are expected to be lifted out of poverty.

Table 2: Estimation of Total Number of Project Beneficiaries

II.

III. Output

IV. Total output bene-ficiaries

Output beneficiaries not benefiting from Output(s): /a/b

5 5 or 7 5 or 7 or 8

5 or 7 or 8 or 6

5 CIGs HHs 15,960 %

7 RF services HHs 4,958 1,487 % 30%

8 APIF HHs 8,971 2,691

% 30%

6 CI /c HHs 31,821 8,032 % 40%

4 FLA HHs 9,067 4,533 % 50%

Total project HHs 32,704 beneficiaries /d people 147,167 \a Taking into account that many beneficiaries will benefit from more than one output.

\b Assumptions.

\c % referring to road beneficiaries. Estimated % of irrigation beneficiaries not benefiting from Outputs 5, 7 or 8: 0%.

\d Avg. no. of persons/HH: 4.5.

Table 3: Estimation of Total Number of Poor/Near Poor and Women Project Beneficiaries

V.

VI. Output VII. HHs

VIII. Total outpu

t bene-ficiari

es

IX. Output beneficiaries not benefiting from Output(s): /a/b

5 5 or 7 5 or 7 or 8 5 or 7 or 8 or 6

5 CIGs Poor/Near Poor 7,980 Women 6,384

7 RF services Poor/Near Poor 2,479 744 Women 4,958 1,487

8 APIF Poor/Near Poor 4,486 1,346

Women 897 269

6 CI /c Poor/Near Poor 15,911 6,364

4 FLA /c Poor/Near Poor 5,440 2,720

Total Project Poor/Near Poor 19,154 beneficiaries Women /c 8,141 \a Taking into account that many beneficiaries will benefit from more than one output.

\b Percentage assumptions same as for Total Beneficiaries Table.

\c Women HHs not counted under FLA and CI.

26. It is noted that in some areas, some ethnic minorities have a degree of dependency syndrome

due to prolonged reliance on government subsidies. This has been reduced in recent years with the

GoV shift from direct support to households to providing incentives and infrastructure in support of

increased agriculture productivity.

27. Other participants who will benefit from the Project include (i) government officials empowered

to support climate-adapted market-led growth; and, (ii) private VC agri-businesses that find common

interest in promoting viable pro-poor products and services.

28. Gender: In the Project communes in Bắc Kạn, there are 1,612 women-headed households, of

which 823 households are classified as poor. In the Project communes in Cao Bằng, there are

2,232 women-headed households, of which, 1,225 households are classified as poor. Poor women

and women-headed household face significantly greater obstacles in escaping poverty. These include




9

specific obstacles to their participation in commercial activities, including a general lack of business

planning, farm management and technical skills, less access to factors of production, and time

constraints imposed by cultural and domestic demands. While agriculture and forest land use rights

have been widely allocated, until recently, they were issued in the name of the male household head,

limiting women’s use of the title right for credit application. The Project will implement specific

measures to ensure women’s participation in relevant activities, including the issuance of co-named

land and forest use titles and mandated minimum women’s representation in Project outputs/activities

and committees.

D. Development objective and impact indicators

29. The Goal of the Project is: Contribute to sustainable poverty reduction in Bắc Kạn and Cao

Bằng. The Development Objective is: Sustainably improved income and reduced climate

vulnerability of poor and near-poor farm households in targeted Project communes.

30. The impact indicator at the goal level will be:

20% improvement in Project commune poverty reduction above average non-Project

provincial commune rate by Project-end for 16,000 households considered poor and near

poor in Project area (differentiated data for poor/near poor, ethnic minority & women-

headed households).

31. The main impact indicators at the development objective level will be:

20% improvement in household assets ownership index above non-Project provincial

commune average by Project-end for 30,000 poor, near-poor and non-poor households

in Project area. (differentiated data for poor/near poor, ethnic minority & women-headed

households);

At least 14,000 poor smallholder household members whose climate resilience score 23

has been increased by 30% (gender and ethnic minority disaggregated.

E. Project Outcomes


(ii) A greener agriculture future; and (ii) Profitable farms linked to finance and markets. There is also a

Project Coordination component.

33. These outcomes and outputs will follow sequenced, parallel implementation routes. Building off

a Strategic Investment Plan (SIP) that identify profitable value-chain development pathways, and an

updated Provincial CC Action Plans and associated knowledge dissemination Project, the CSSP will:

(i) empower communities and public institutions to develop commune and district-level climate-

adapted MOP-SEDPs that holistically align climate-adapted NTP and Project investments with

profitable commodity market and VC opportunities; and (ii) through the implementation of those

investments, assist communities of smallholder farmers and agri-businesses to associate in various

ways to take best advantage of those opportunities and to co-finance their development. These

pathways will merge from the second Project year onwards.

23

a resilient household is anticipated to exhibit, inter alia, the following characteristics: i) diversified livelihood and






card to measure change. Using these resilience characteristics, and drawing on emerging procedures for measuring

household resilience in Viet Nam and the SE Asia region, the Project will develop a weighted scorecard to measure

changes in household resilience.




10

Outcome 1: Province-based participatory planning institutionalised.

34. This outcome will ensure that: Legislated provincial socio-economic and commodity

development planning is holistic, participatory, climate adapted and market oriented.

At least 80% of provincial communes and districts prepare medium-term climate adapted

MOP-SEDPs;

35. This Outcome, which underpins Outcome 2 and Outcome 3 results, will, building off a

strengthened SEDP process, provide the capacity building, analysis and services required to reinforce

private sector development of climate adapted commodity-based VC investments that engage poor

upland households. The outcome has three outputs: Output 1. Strategic investment plan;

Output 2. Climate change adaptation plan; and Output 3. Climate-adapted, participatory market-

oriented socio-economic development plans.

36. Output 1. Strategic Investment Plan. In the first six months of the Project, the PPCO’s,

supported by international technical assistance, will, in partnership with their respective DPIs,

collectively conduct financial and economic analysis of key commodities and associated VCs in Bắc

Kạn and Cao Bằng provinces to identify and describe at least six commodity-based VC SIPs per

province for integration into commune and district MOP-SEDPs. The SIP process will involve 5 steps

(See Appendix 4, Annex 1 for details):

background research on the chosen commodity/crop by reviewing websites and other

secondary sources of information concerning the commodities provincial and national

importance, environmental requirements, role in household economies, end-markets, etc.

This will be followed by primary research in the provinces through interviews, focus

groups, surveys and observation involving VC actors (farm households, processors, input

suppliers, advisors etc.);

using the aforementioned information, map the commodity/crop sectors in Bắc Kạn and

Cao Bằng. VC mapping enables the visualization of the product flow from conception to

end consumer through various actors, as well as the supporting markets and enabling

environment affecting the VC;

prepare a table listing the structural and dynamic factors in the VC, and briefly describe

the current situation, opportunities, constraints and recommendations for addressing

those constraints including tangible How, Who and Financing;

prepare a financial and economic analysis of each key VCs detailing the estimated

potential incremental benefits from investment in their development, including, inter alia,

rates of return on investment, increased household income, number and type of

household benefiting; job creation; increased export; import substitution, etc.;

conduct a workshop bringing together key actors from various levels in the VC to vet the

findings of the analysis and discuss if the chosen strategy for increasing VC

competitiveness is valid.

37. An empowered DPI with Provincial Project Coordination Office (PPCO) and national and

international technical assistance (TA) support, will, subsequently: (i) support the integration of

prioritised VC development into the MOP-SEDP programme; (ii) provide mentoring to VC actors and

co-ordinate their capacity development; (iii) coordinate with specialists in specific VCs and in “climate

proofing” agriculture production; (iv) mentor contract negotiations between farmers and other VC

entities; and, (v) facilitate conflict resolution and mediation when required.

38. As part of the SIP analysis, the supporting consultants will assess constraints to private sector

investment in Bắc Kạn and Cao Bằng, with a view to improving provincial competitiveness and the

environment for doing business. They will particularly focus on governance of land and labour markets

and factors affecting business entry issues including registration time, cost and restrictions as well as

assessing the adequacy of provincial incentives and business support services. Current provincial

operating procedures in these areas will be benchmarked against selected high-performance

provinces, which will be visited by Bắc Kạn and Cao Bằng PPC and DPI administrators as part of a




11

“twinning” arrangement. The experience of agri-businesses supported through the Project APIF

(output 8) in dealing with provincial administrations will be monitored to measure changes in

benchmarked provincial indicator performance.

39. Output 2 Climate change adaptation plan. The main focus of this output will be to improve the

knowledge base and capacity among key institutional actors to integrate evidence-based, CCA

considerations into policy, strategy and public (government) and private (smallholder farmers, VC

actors and enterprises) investments. To accomplish this, the Project will, through a step-wise

approach:

Step One: during first 6-9 months, the Project will review and benchmark the current provincial CCAPs: o Organize a Thematic Ad-hoc Group (TAG), presided by DPI, comprising high-level

technical staff from the relevant line agencies (DARD, DoNRE, DOLISA) and their associated, specialized institutions. The role of the TAG will be to conceptualize, orient and monitor the technical content and focus of the Project’s support. In addition, they will be charged with leading technical cooperation and exchange between the two Project provinces and with defining the operational mechanisms for coordination of planning and budgeting processes between their various agencies.

o Carry out a national-level study tour for high-level decision-makers and key technical staff from the government institutions represented in the TAG to visit both the provinces most advanced in implementation of their CCAP, as well as to visit the lead, national-level technical institutions that support CCAP development and implementation.

o Contract with a national, lead CCA technical institution to provide technical assistance and support through the lifetime of the Project jointly to both Bắc Kạn and Cao Bằng

24. See Appendix 4, Annex 9 for detailed ToRs.

o Under the direction of the TAG, (i) assess the current status of provincial CCAP implementation; (ii) develop a set of first draft maps of provincial-level CC risks and vulnerability; (iii) develop first draft indicators for CC impact monitoring and; (iv) initiate a program of CC awareness building for key institutional actors at all levels whose participation in subsequent implementation will be critical.

Step Two; before end PY2, the Project will support the provincial CCAP framework through:

o A “top-down” scientific-technical process to refine/update the Provincial CC Action Plans; and

o Down-scaling of the provincial-level medium-term CC impact scenarios to Project district-level through: (i) district-level studies and mapping of CC impact, vulnerability, risks and CCAP priorities; (ii) Project district-level participatory diagnostics of commune-level CC impacts scale and ongoing adaptation, and (iii) integration of the “bottom-up” analysis from communes and villages of vulnerable areas, production systems, and populations resulting from the parallel work on CC concerns into the SEDP process.

Step three: as a parallel procedure linked to the institutionalization of the MOP-SEDP process: o Review existing methodologies for commune-level CC planning;

o develop a district-level zoning methodology, based on commune-level CC adapted planning;

o Pilot and update a commune-level CC planning instrument, building upon experience and prior work in the development of community-based, disaster risk-assessment methodology (MARD) as well as of other, more mature experiences nationally (e.g., CARE’s and OXFAM’s): and

24 It has been proposed by MFI that this activity should be funded from other sources (technical assistance

projects, grants, etc.). Final preparation will have to identify and ensure the availability, in time and quantity,

of these other resources to ensure that proposed outputs are delivered and objectives achieved.




12

o Provide capacity building and technical workshops addressing CC adapted planning integration into the SEDP processes at commune and district-levels. This will include: (i) key stakeholder progress reviews and evaluation workshops; (ii) learning and experience-sharing cross-visits by district and commune staff; (iii) field visits and study tours by DoNRE and DARD planning staff; (iv) systematization of processes, results and validation/updating of indicators and; province-wide dissemination of the provincial CCAP through publications, brochures, newspaper, radio programs and others

Step four: during PY2, initiate the systematic integration of CC to smallholder farmers and into the SEDP planning process, supported by: o the development of training materials and methodological guides;

o training of trainers, including Lead Farmers (LF); dissemination through publications, brochures, newspaper, radio programs and, others; Lead Framer-to-farmer (LF2F) extension, cross-visits by district and commune staff and CIGs, etc.;

o field visits and study tours for DPI planning staff; and

o the publication of results in web-based publications and journals.

40. In Project year three, efforts will begin for the province-wide roll out of the climate adapted

MOP-SEDP planning process to non-Project districts and communes. The Project will support non-

Project district/communes through (i) studies and mapping of CC impact, vulnerability, risks and,

CCAP priorities and (ii) district-level, participatory diagnostics of commune-level CC impacts, scale

and ongoing adaptation. Support will also be provided to DPI, DARD and DoNRE in the development

of Bắc Kạn and Cao Bằng Climate-Adapted, Provincial MOP-SEDP for 2021-2025.

41. Additionally, through the mainstreaming of CC adaptation concerns into studies, analysis,

training and technical assistance inputs for other, operational elements of the Project, support will be

provided to achieve: (i) climate-adapted, Project-supported SIPs and VC action plans (VCAPs);

(ii) development of a knowledge base, technical capacity and input supply for priority CCA systems

(e.g., forage development, soil fertility maintenance, soil and moisture conservation, micro irrigation,

etc.); (iii) the transfer of that knowledge to farmers through CIG and LF2F-led processes; and (iv) the

WU and WSCGs applying due diligence procedures in lending that include CCA and natural disaster

risk elements.

42. Output 3. Climate-adapted, participatory market-oriented and results-based planning. This DPI-

led output consists of two Activities: Activity 3.1: Strengthened public sector market economy skills;

and Activity 3.2: Climate adapted, participatory market oriented socio-economic development plans.

Over the last six years, IFAD-supported projects have successful developed and piloted MOP-SEDP

processes in several provinces of Viet Nam, including in Cao Bằng, where the process is

institutionalised at commune level. The CSSP will, following a review of existing planning processes

and supported by empowered communities and public sector institutions, establish a climate-adapted

MOP-SEDP process across all communes and districts in both Project provinces. The PPCO MOP-

SEDP planning officers, supported by a national training institution, will empower the DPI to lead a

Project in capacity building for market-led development at commune and district levels, which will

precede the institutionalisation of MOP-SEDP process. These activities will commence in the Project-

targeted communes/districts and be subsequently rolled out to all communes/districts in Bắc Kạn and

Cao Bằng. The MOP-SEDP process will incorporate the recommendations of the SIP analysis

described under Output 1. Under this output, the CSSP will collaborate with the the World Bank

financed Viet Nam Sustainable Agriculture Transformation Project (vnSAT), which has a nationwide

USD 7 million policy and institutional reform component that aims at strengthening the market

oriented planning processes at central and provincial level.

43. Activity 3.1. Strengthened public sector market economy skills. In Cao Bằng, where the MOP-

SEDP is already institutionalised at commune level, both commune and district staff have a sound

understanding of the market economy. This activity will assist Bắc Kạn government officials to

effectively support the provincial government’s market oriented development strategy. The capacity

building Project will provide public servants with the basic skills to implement a market-oriented




13

development strategy. The primary target will be village leaders, elected officials of People's

Committees and People's Councils, Supervision Boards and technical cadres and members of the

mass organisations at commune and district levels; Concise, targeted training programs, delivered by

competitively selected public or private institution(s), will focus on, inter alia, understanding the market

economy and associated roles of government and the private sector, the economics of supply and

demand and impact of market competitiveness, the nature of public and private goods, privatization,

the roles of capital, labour and international trade, and the transition from a planned to a market

economy. Supporting gender equality and environment management cross-cutting training will be

delivered to government staff in both Bắc Kạn and Cao Bằng. Staff in both provinces will also be

trained in group organization and leadership, participatory planning, and results based management

including effective monitoring and evaluation (M&E) and reporting and feedback to management

decision making. Trainees will be introduced to the VC SIPs developed under Output 1.

44. This training Project will be contracted to an academic institution in Viet Nam with appropriate

competencies in market-led economic development. With international technical assistance (TA)

support, the competitively selected training provider will develop the curriculum and apply the training

though a mix of in-province training courses and self-learning Projects including internet-based

information. The appropriate training institution will be identified by the Project Preparation Boards

(PPB) before Project start-up and contracted at start-up to initiate training within 6 months. Training

will focus initially on government staff within the Project districts/communes and, thereafter, be rolled

out to all Bắc Kạn, and on a selective basis, Cao Bằng government staff at commune and district

level. Results will be assessed through the measurement of the establishment of the legislative base,

guidelines, tools and staff capacity for district and commune MOP-SEDP implementation. Terms of

reference for the training Project are detailed in Appendix 4, Annex 2.

45. Activity 3.2 Climate adapted, participatory market oriented socio-economic development plans.

This DPI-led activity, supported by the provincial Political Schools, will build on the MOP-SEDP

process already institutionalized at commune level in Cao Bằng. At commune and district level,

initially in Project districts and then across the provinces, the Project will facilitate the integration of

commodity-based VC development (Outcome 1) and CCA plans (Output 2) into a participatory SEDP

process, The resulting climate-adapted MOP-SEDP process will engage relevant entities at the

village, commune and district level, including the effective participation of VDBs and private

enterprise, and be inclusive of all public funding sources, including CSSP funds and NTP-NRD, NTP-

SPR and NTP-RCC financing. Women’s representation in MOP-SEDP planning will be mandated.

Through the MOP-SEDP process, CSSP will assist the provincial DPIs to operationalise Decree No.

77/2015/ND-CP, prescribing medium-term and annual public investment plans, together with the

Vietnam Public Investment Law 2014 No. 49/2014/QH13.

46. The commune-level MOP-SEDP is a participatory process for establishing medium-term

climate-adapted, market oriented commune development plans that are informed by (i) villagers’

priorities; (ii) market information, (iii) climate adaptation, land use and disaster risk management plans

and (iv) orientation from higher government levels. The MOP-SEDP process will be built around

Decree No. 77/2015/ND-CP, which prescribes medium-term (5-year) and annual public investment

plans. It is expected that the MOP-SEDP process will be conducted intensively for each medium-term

planning period, with a lighter review mechanism for annual investment planning. The resulting

medium-term climate-adapted MOP-SEDP will comprise (i) a narrative including a medium-term

development vision; (ii) specific investment plans for market-oriented infrastructure and agricultural

enhanced production and processing; (iii) specific CCA actions/investments; and (iv) corresponding

planning tables (See Appendix 4, Annex 3 for details).

47. Before MOSEDP implementation, DPI will inform districts and communes about the

committed/available medium term and annual budget financing. Based on this budget provision, the

MOP-SEDP planning process will begin at the village level under the coordination of the NTP-NRD-

established VDB. VDBs in Bắc Kạn and Cao Bằng will be legislated to include at least 30 per cent

female membership and 30 per cent membership from DoLISA registered poor households. Village

level MOP-SEDP meetings will be held at times suitable to women members of the village and will




14

require at least 50 per cent women’s participation. The overall responsibility for the commune MOP-

SEDP rests with the CPC. CSSP assistance will be provided through district-based VC and Market

Development Officers (VCMDOs) and by the PPCO MOP-SEDP officers. The MOP-SEDP will be

approved by the Commune Development Board under the oversight of the Commune People’s

Council. The planning process is detailed in Appendix 4, Annex 3.

48. All aspects of the climate-adapted MOP-SEDP process at commune and district level will be

defined in supporting legislation passed by the Bắc Kạn and Cao Bằng PPCs in the first Project year

(PY1). Building off the current Cao Bằng MOP-SEDP manual and informed by the recent Oxfam-led

study of provincial planning systems and procedures (See Appendix 4, Annex 10), a comprehensive

MOP-SEDP guideline/manual will be developed and adapted to the needs of each province. The

MOP-SEDP process at commune and district level will be fully funded by the respective provincial

administrations.









Outcome 2. A greener agriculture future.

50. This outcome, which establishes the basis for climate-adapted green growth in the Project area,

includes two outputs: Output 4: Forest land and forest allocation, and Output 5: CIGs for climate

adaptation. The Government of Viet Nam (GoV) is committed to an ambitious “green growth” agenda

and to global carbon emission reduction. The CSSP will support this process through the promotion of

CCA technologies that provide significant mitigation co-benefits, as well as Projects for forest land and

forest use rights certification and rehabilitation that directly contribute to carbon sequestration. The

indicator for successful outcome implementation will be:

At least 20,000 farm households (66% of Project beneficiaries) sustainably adopting two

or more climate change adaptation technologies or practices

51. Output 4. Forest land and forest allocation. This output will support the equitable (across wealth

and gender groups) ownership and efficient use of production forest in all communes in Bắc Kạn

Project districts. The Project will create an asset base for future private sector investment in agro-

forestry by assisting DoNRE, DARD and rural communities to implement a participatory forest land

and forest allocation and use planning process leading to the equitable transfer of forest land and

forest use rights (Pink Book) for 17,000 ha of forests to poor households, and the development of

medium-term forest development plans consistent with Programme 30A and similar NTP-SPR

programmes. Pink Books with joint husband/wife title will significantly improve access to collateralized

credit, especially for women. Provincial policies and administrative procedures governing forest land

investment and use will be assessed, improved and decentralized to the commune level and a system

established through DARD to monitor poor household access and use. It is estimated that about

11,300 poor and near poor households in Bắc Kạn will each receive, on average, 1.5 ha of forest land

and associated forest. The participatory forest land and forest use planning and allocation will be built

on experience gained through 3PAD. The underlying principles of the approach will include

compliance with national and provincial regulations and policies, maximizing the participation of

households, the planning of forest land use before land allocation, and ensuring equity in resolving

disputes and sustainable development practices. The capacity of the Project CPCs in forest land and

forest use planning and land allocation will be significantly enhanced. The process, which will be

guided by a manual detailed in the PIM, will be managed by DoNRE for forest land allocation and

conservation and the DARD Forest Protection Department (FPD), DARD Forest Development Sub-




15

Department (FDD) for forest allocation and use, with the inter-agency support of the district Agriculture

and Rural Development Departments (DARDD) and district Forest Protection Stations (FPS).

52. The Project will build the capacity of DoNRE and DARD in both Bắc Kạn and Cao Bằng to

monitor forest environmental outcomes through experiential training in participatory forest land and

forest use planning and allocation, physical resourcing to improve mobility and field and information

technology and funding for participatory forest environment monitoring.

53. Output 5: Common interest groups for climate change adaptation. This output, which will

develop and promote CC adaptation technologies and processes that provide mitigation co-benefits,

will lead to: (i) at least 1,000 CIG in Cao Bằng province and 900 in Bắc Kạn province with the capacity

to implement profitable climate change adaptation technologies and practices within a VC framework,

with co-benefits for climate change mitigation; and (ii) forage production integrated into farming

systems, with co-benefits for soil fertility and stability. The output includes two activities: Activity 5.1:

Common interest groups for climate change adaptation and Activity 5.2: Integrating forages into

hillside farming systems.

54. Activity 5.1: Common interest groups for climate change adaptation. A wide range of

technologies and practices are available to Vietnamese smallholder farmers to reduce their

vulnerability and increase their agro-ecosystem resilience to CC impacts, while also providing green

growth co-benefits in terms of pollution prevention and greenhouse gas (GHG) emission reduction.

With the support of DARD extension stations and the WU, the Farmer’s Union (FU) will support the

establishment of a Lead Farmer-to-farmer (LF2F) extension system that will support CIG

establishment and development in line with MOP-SEDP priorities. CIG member groups, together with

eligible cooperatives, household enterprises and WSCGs, will be entitled to apply for competitively

allocated, co-financed climate change adaptation grants supporting both (i) the adoption of climate

adapted technologies and practices; and (ii) the alignment of their agriculture production systems with

emerging value chains. The selection of CIGs/members to be supported through CIG financing

should be based on a competitive mechanism integrated into the MOP-SEDP process at commune

level. CIG co-financing could cover (i) initial capital investment costs, (ii) upgraded farming inputs

through revolving working capital mechanisms, and/or (iii) required technical assistance. Grants will

focus on innovative production, CCA, risk reduction or value addition investments linked to profitable

commodity chains identified through the SIP process and incorporated into local MOP-SEDPs. This

could include investment in, inter alia: afforestation, irrigation management including SRI rice, climate-

resistant crop varieties and management systems, forage production, biogas and other by-product

utilisation including bio-fertilisers, minimum tillage and organic agriculture.

55. The Project will support both gender specific and gender disaggregated CIGs. To be eligible for

the CSSP competitive co-financing, the membership of CIGs must, in aggregate at commune level,

include (i) at least 50% of members from DoLISA-identified poor and near poor households and (ii) at

least 40% female members. All supported CIG sub-projects, managed and owned by the group,

cooperative or household enterprise (not individually), must demonstrate sustainability beyond the

initial CSSP assistance and be linked to APIF financed VC development as detailed in Output 6.

Output 4 activities will be integrated into the NTP-NRD CIG Project and implemented through NTP-

NRD structures at commune and district levels. CSSP will provide each Project district with a Value

chain management development officer (VCMDO), who will support the CIGs and be responsible for

the implementation of competitive co-financing in the district. All CIGs will receive training in group

formation and management and be familiarised with CSSP CCA technologies and practices and APIF

outputs.

56. The maximum Project grant value of USD 250 per group member and USD 3,500 for one group

will cover up to 50% of the total cost of each investment, with beneficiaries financing at least 50%

including a minimum 25% in cash and the balance in kind. VBARD, and especially VBSP expressed

their willingness to participate with loans in this joint financing scheme, especially as the Project co-

financing will significantly reduce the loan-funded amount. The WU-supported SCGs will be another

source of credit. The 20% cash contribution by group members is important to ensure the commitment

to and ownership of the investment by group beneficiaries. The activity will help reduce barriers to




16

male and female farmer access to finance, by (i) reducing collateral pressure through co-financing

and utilization of alternative loan securities and (ii) assisting CIGs to improve business plan quality as

per banks' requirements.

57. Up to 25% of each CIG grant could be used by the group for procurement of technical support

services, including LF2F support coordinated by the provincial FUs. All such service provision will be

through standardised output based contracts between the service provider and the CIG. LF2F

advisors will be certified under a CSSP developed and FU managed training and certification scheme,

providing both technical and pedagogic skills. DARD and the WU will support this process. The

Project will also provide “farming as a business” management training to CIG and WSCG members,

participation in which will be a condition of Project support to their respective groups. The farming as a

business training will build off existing training Projects in Viet Nam and the SE Asia region and use

contracted master trainers to train provincial FU trainers of trainers (ToT), who will train LF2F advisers

as business service providers. This activity will, where practicable, be integrated into the overall rural

vocational training Project in Viet Nam

58. Activity 5.2: Integrating forages into hillside farming systems. Many farming systems in the

Project area mine soil nutrients, and cropped areas are prone to severe soil erosion. Forage inclusion

in farming systems, particularly leguminous forages, is possibly the most cost effective approach to

reducing these negative impacts. To ensure quick impact and longer term sustainability, forage

Projects require an ample seed supply. Many upland farmers do not understand the need for

improved animal nutrition and are disinclined to grow forage. The Project could alter this behaviour by

first focusing on developing selected forages as a very profitable seed crop, with the forage based

feed as a by-product. If the forage seed crop is grown close the home, farmers quickly appreciate the

labour reduction in forage based cut and carry feeding and its value as a forage is enhanced. Using

an approach of Project procurement of forage seed at competitive prices (but well below import cost)

and free distribution of small quantities of seed to interested farmers, the Project could quickly

establish a demand for low labour input forage technologies that integrate into local farming systems,

providing benefits in terms of animal nutrition, improved soil fertility and stability and reduced labour.

The forage seed production, purchase and distribution Project will be managed by Project DARDDs

59. Short-term national and international forage specialists will conduct an initial assessment of

forage production opportunities in the Project districts, order initial seed requirements, provide

technical awareness training for DARD provincial and district staff including a domestic study tour to

inspect forage programs. The Bắc Kạn and Cao Bằng provincial DARDs, in collaboration with the

PPCOs and the national consultant will adapt existing forage manuals to meet Project requirements,

raise awareness amongst farming communities and identify farm households and farmer groups

prepared to establish home and village forage tree and grass nurseries and participate in large scale,

broad-based farming systems integrated forage demonstrations. The National Centre for Plant Testing

(NCPT) will support provincial “value for cultivation and use” (VCU) testing of new forage varieties

prior to their registration and multiplication. Based on field results, the Project will refine its seed buy-

back policy and regulations and train farmers in seed production, collection and storage.

Outcome 3: Profitable farms linked to finance and markets.

60. This outcome will lead to: Increased public and private investment in sustainable, profitable

commodity production and value addition The indicators for successful outcome implementation will

be:

WSCGs maintain a minimum annual saving rate growth of at least 15% over base-year

savings and < 5% non-performing loans in their portfolios; and

of USD 40 million invested in commodity-targeted, climate- adapted infrastructure,

commodity production and enterprises development in Project communes, at least 70%

of investments show an IRR > 10%;

61. The outcome will have three outputs, namely: Output 6. Community infrastructure;

Output 7. Rural financial services; and Output 8. Agribusiness Promotion Investment Fund (APIF).




17

62. Output 6. Community infrastructure. Infrastructure investment grants up to USD 400,000 per

commune25

(including beneficiary and GoV contributions) will be available for infrastructure

investments that provide public good and collective benefits essential to commodity chain

development and/or CC or disaster proofing. These could include, inter alia, disaster-proof roads,

secondary or tertiary irrigation structures, erosion protection and soil management, sanitation and

waste management, renewable energy or fresh water supply. The scheme will not support purely

private benefit investments. Public and collective good infrastructure investment schemes will, with

consultant support where required, be identified and prioritized by VDBs26

/communes, incorporated

into the medium-term commune MOP-SEDP and verified by the district line agencies in collaboration

with the PPCOs before approval. Beneficiary contribution will be at least 10% of total construction

costs of public and collective good infrastructure works with IFAD contributing 60% and the NTP- NRD

funding 30% of the investment cost. Individual public infrastructure investments will not exceed

USD 60,000 without prior agreement with IFAD.

63. CPCs will be the owners of the public infrastructure sub-projects, however, the VDBs in

benefitting communities will be responsible for managing the implementation of the public and

collective investments. VDBs should have at least: 30% female membership and 30% membership

from DoLISA registered poor households. Beneficiary communities will be required to demonstrate an

ability to support associated long-term operation and maintenance costs. Wherever possible, local

labour, particularly youth and minority people, will be used for works construction, supported by

vocational training when required (see para. 64). Technical oversight committees will be formed as

sub-committees of the VDBs and trained to monitor the work and implementation of contractual

commitments.

64. The community-based public infrastructure Project will be supported by youth-targeted

vocational training in skills that could be quickly applied through the community infrastructure Project.

The Project will, where practicable, use force account processes for community infrastructure

investments, designed to create jobs for the vocational trainees and promote community ownership in

the operation and maintenance. Initial on-the-job vocational training could focus on such skills as

concreting, carpentry, road levelling and surfacing, brick laying, semi-skilled machine operation,

painting and public infrastructure maintenance. Women’s participation in youth vocational training will

be strongly promoted.

65. The CSSP will explore an innovative community-to-community payment for environment

services (PES) scheme to protect upstream catchments supplying water to CSSP-supported irrigation

developments.

66. Outcome 7: Rural Finance Services. To effectively contribute to increased financial inclusion in

the Project communes and to stimulate investment activity amongst smallholder households, CSSP

will support the newly established Women’s Development Funds (WDF) of the respective provincial

Women’s Unions (WU) and their networks of savings and credit groups. This support will be organised

under three inter-related activities: 5.1: Development of Capacity of the WDFs; 5.2: Establishment of

New Savings and Credit Groups; and 5.3: Transformation of SCG Networks into MFIs. Under this

outcome, the CSSP will also support Activity 5.4: Leveraging Capital for Agricultural Commodity

Chains.

67. Activity 7.1: Development of Capacity of the WDFs. The WDFs in both provinces are relatively

new institutions. Although they have the core staff and basic operational systems to conduct financing

operations at their current level, significant capacity building support covering WDF staff and physical

facilities and systems, both at provincial and district levels, is required to effectively implement the

demanding task of scaling up WSCGs under the CSSP, especially during the first two years of Project.

68. In both Bắc Kạn and Cao Bằng, the Project will provide the necessary resources to enable the

WDFs to independently and professionally implement the WSCG expansion and eventually transform

25

In Bắc Kạn, where USD 700,000 has been allocated for PES payments, commune infrastructure grants will average

about USD 380,000 per commune. 26

Village Development Boards are established under the NTP-NRD.




18

Table 4. WSCG development by province

Source

of

funds

Bắc Kạn

households

Cao Bằng

households

CSSP

funding 2,200 3,300

3PAD

reflows 4,000 -

Total 6,200 3,300

these WSCG-based financing networks into State Bank of Viet Nam (SBV)-registered provincially-

based microfinance institutions. This will include a comprehensive provincial WDF skills development

Project covering their management, staff and members, and provision of the civil works, equipment

and systems required to operate the new branch offices in the CSSP districts.

69. Activity 7.2: Establishment of New Savings and Credit Groups. The Project will support the

establishment of new WSCGs in both

provinces and provide seed capital for the

lending operations of the WDFs. Around

5,500 new low-income households are

expected to join the WSCGs as a direct

result of the CSSP investments, covering

a significant share of the poor and near-

poor households in the CSSP

communes. The capacity building efforts

by CSSP are, furthermore, expected to

enable the Bắc Kạn WDF to mobilise an

additional 4,000 women into WSCGs

utilising residual funds from the closed

3PAD project.

70. In addition to comprehensive support to WSCG mobilisation and training, the CSSP will provide

seed loan capital to the new groups, for WSCG management, at an average level of VND 15 million

(USD 680) per member. This will encourage the households to invest actively, particularly in new and

diversified earning opportunities in the CSSP-supported key VCs. Each group’s savings mobilisation

and loan management performance will be assessed on a continuous basis by the WDF, and funds

recovered from poorly performing groups will be re-allocated to successful groups. At the same time,

increased attention will be paid by the WDFs to the active promotion of savings in the groups and to

the related target of increasing the self-financing capacity of the WDFs, with less dependence of

externally injected capital.

71. Activity 7.3: Transformation of SCG Networks into MFIs. This innovative activity aims to convert

the WDFs and the provincial WSCG networks into registered, sustainable microfinance institutions.

The target will be to bring the numerous WSCGs under an institutional arrangement that will ensure

an appropriate supervision of these small financial operators and create a sound and safe network for

their institutional growth. At the same time, the transformation will open opportunities for linking

mature WSCGs with financial institutions that have potential for financial intermediation with groups

and their members on a larger scale.

72. In both Bắc Kạn and Cao Bằng, the first step of this transformation process has already been

taken, with the establishment of the WDFs as “social funds”. Their eventual conversion into a

registered MFIs is planned to take place towards Project-end. The aforementioned CSSP investments

in capacity building and direct financial support to the WDF activities under activities 5.1 and 5.2 aim

to ensure that both WDFs will be able meet the MFI registration requirements by 2021-2022. To

improve the chances for both WDFs achieving a successful transformation, the CSSP, in both

provinces over the last two Project years will finance: (i) international TA to support the WDF to design

the 3-year Business Plans for 2021-2023, which is the key attachment required by the SBV for an MFI

registration application, and (ii) an allocation of unspecified transformation support during the last two

Project years that can be used both for capacity building purposes and for physical improvements in

the branch offices to upgrade them to meet the then required MFI standards.

73. Implementation Arrangement. Responsibility for the implementation of CSSP Activities 5.1, 5.2

and 5.3 will be with the Bắc Kạn and Cao Bằng province WDFs. At Project start-up, “Implementation

Agreements” will be signed between the provincial PCCs and the WUs/WDFs, which will define the

responsibilities of each party with respect to CSSP implementation. Models for this type of




19

Agreements are available from the IFAD-supported SRDP27

and AMD28

projects. The Implementation

Agreements will specify the resources that CSSP will provide to the WDFs during the Project period,

conditional on WDF performance meeting the criteria agreed for each activity as detailed in the

agreement. These Implementation Agreements will also define the monitoring and reporting

responsibilities of the WDFs for CSSP-related activities. To ensure that all activities under Output 7

are properly planned and executed, each PPCO will recruit a Rural Finance Officer (RFO) to support

and oversee the activities of Output 7 during the six-year Project period.

74. Output 8. Agribusiness Promotion Investment Fund (APIF). This output has two activities:

Activity 6.1: Competitive agribusinesses established; and Activity 6.2: Leveraging Capital for

Agricultural VCs

75. Activity 8.1: Competitive agribusinesses established. The Project will use APIF co-financing to

generate investments and job opportunities among rural enterprises and households, with particular

attention to poor and women-headed households in the Project area, who will form at least 50% of the

total number of households benefiting from APIF-supported VC investments. The aim of the APIF co-

financing instrument is to leverage investment in the agricultural commodity production in difficult rural

areas, initiating a process of value addition by both primary producers and processers. This approach

to promoting agri-business investment in rural areas is consistent with prevailing GoV policies

(see page no. 7, para. 22), but uses a simplified, single grant approach to supporting agri-business

investment in public and private goods and staff and supplier capacity building, with the allocation of

grants resources set, within defined limits, by the investor. This approach, which incorporates the key

elements of Decree 210 and MARD Decision 62, simplifies grant management and has proven

successful in other IFAD investment projects in Viet Nam. The Project will work closely with the Bắc

Kạn and Cao Bằng provinces to draw GoV grant financing into the APIF programme. The APIF,

together with all the other Project instruments, will strengthen agribusinesses and farmers’ groups as

potential loan customer’s banks in Bắc Kạn and Cao Bằng. VC actors will become more creditworthy

clients through improved business planning capacities, reduced collateral pressure, improved VCs,

improved infrastructure, and overall reduced risk to their production, with subsequently reduced risks

for the banks. In line with recent GoV decisions29

, CSSP will catalyze private sector agro-enterprise

investments in Bắc Kạn and Cao Bằng by co-financing up to 49% of investments that generate

incremental markets and value addition for raw material, leading to incremental production and

increased income and job opportunities among rural households, including poor households. APIF

applications with higher levels of own contribution will be assessed as more competitive. The Project,

through the SIP process detailed in Output 1, will identify commodities and associated VCs that have

investment potential and are aligned with the Bắc Kạn and Cao Bằng SEDPs 2016-2020. The

selected commodities/VCs will be chosen based on their having: (i) significant potential for involving

rural households, particularly disadvantaged households, in incremental production and job creation;

(ii) available technologies for improved productivity and CCA; (iii) reasonably assured national or

regional markets; and (iv) potential for export and/or import substitution. At least 50% of the total

number of households benefiting from APIF supported investments should be represented by poor,

near poor or women-headed households.

76. Only legally registered cooperative societies and companies of at least 12 months standing will

be eligible to apply. Entities that are the subject of bankruptcy, criminal investigation, fraud, corruption

or are in default of contractual agreements will be ineligible. APIF investments will be awarded on a

competitive basis for capital investments in civil works, equipment (processing, packaging, energy

generation or environment protection), transportation and marketing, related directly to the core

activity of the investor. The Provincial Project Steering Committees (PPSC) will be responsible for

adopting recommendations for APIF investments, which will be subsequently approved by the

respective Provincial People’s Committee (PPC). Poor people’s income and jobs, value added

27

Sustainable Rural Development for the Poor (SRDP) Project in Ha Tinh and Quang Binh 28

Adaptation in the Mekong Delta (AMD) in Ben Tre and Tra Vinh Provinces 29

(i) GoV Decree No.: 210/2013/ND-CP on incentive policies for enterprises investing in agriculture and rural area;

(ii) Prime Minister Decision No. 62 on promotion policy on cooperation and development of production links associated

with agricultural development




20

products, and productivity and market access and gender equality will be important criteria in

investment proposal evaluation, together with commercial viability, environment impact and cost

effectiveness assessments. The APIF Project will be underpinned by a technical, business

management, accounting and Information Communication Technology (ICT) capacity building

program for District and Commune level businesses with a view to improving their farmer service

capacity, profitability and enterprise linkages, both at the local level and to upstream quality suppliers

and markets. It is recommended that provincial Centre for Industry Promotion and Industry

Development Consulting in Bắc Kạn and Young Entrepreneurs Association in Cao Bằng mentor this

Project.

77. An APIF facility will be established with IFAD co-financing up to 49% of total investment cost,

with the remaining investment being contributed by the benefitting business. Up to 30% of APIF co-

financing will be available for the purchase of supporting services (business development services

(BDS), legal, technical, marketing, standards, farmer extension, etc.) for the planned VC investment.

Co-financing will start at USD 15,000 as a minimum and reach up to USD 75,000 as the maximum. In

cases where the potential export/import substitution and social impact of the proposed Project is

extremely high and/ or the investment is pivotal for developing the respective commodity in Bắc Kạn

and Cao Bằng, the maximum APIF co-financing could, with IFAD approval, be up to USD 150,000. In

case of the production of new commodities, the PPCO could recommend to the PPSC that trial

production could be financed at a smaller amount than USD 15 000, but otherwise follow the same

requirement as the mainstream APIF. The enterprise in-kind contribution should not exceed 50% of

total enterprise contribution (i.e. 50% of 51%). The in-kind contribution must be supported by

appropriated documentation stating its value based on market evaluation undertaken by an

independent authorized entirety. The minimum 26% (of total investment) enterprise cash contribution

for APIF investments must be deposited into a designated APIF co-financing Account held by the lead

enterprise and accounted for separately in their books of accounts. The cash contribution cannot be

reduced over the duration of the APIF co-financing period, however, the enterprise can expand this

level using own resources or other (equity and debt) funding. A co-financed APIF investment of

USD 500 should generate opportunity for one household either as labourer or supplier of raw material,

and the full return of investment in incremental household income should be accumulated within 10

years. The CSSP will provide approximately USD 6.4 million (including co-financing) for APIF facility

financing, including USD 2.6 million in Bắc Kạn and USD 3.8 million in Cao Bằng. APIF supported

investments in prioritized commodities/VCs must be within Bắc Kạn and Cao Bằng, but could fall

outside of the 9 nominated Project APIF districts. Examples of potential VC development opportunities

in Bắc Kạn and Cao Bằng are detailed in Appendix 4, Annex 8. Experience from successful 3PAD

investments in value chains in Bắc Kạn is detailed in Appendix 3, Annex 2.

78. The Project will also support enterprise staff training and E2F services on a cost sharing basis.

Output-based E2F services and enterprise vocational training Projects, will, if required, be included in

APIF funding applications. Up to 30% of an APIF grant could be used for training purposes. Within this

limit, the Project will co-finance up to 70% of the cost of (i) vocational training for enterprise staff and

(ii) outcome-based E2F contracts targeting improved commodity production and productivity that

include at least 40% of poor and women-headed farm households. E2F services will, preferably, be

delivered by enterprise staff, however, enterprises could also employ experienced farmers or third

party technical advisors (e.g. NGOs, academic institutions, service centres, etc.) to deliver such

services.

79. CSSP will provide business management training to existing and potential agribusiness

entrepreneurs in Bắc Kạn and Cao Bằng. The training Project will include, inter alia, setting

measurable goals, developing business plans, identifying markets and competitors and setting

marketing strategies and plans, financing your business, financial analysis, keeping accounts and

managing people. One two-week course will be run annual by an experienced business trainer.




21

F. Lessons learned and adherence to IFAD policies30

80. The key lessons from the on-going IFAD Viet Nam portfolio include:

(i). The effective application of MOP-SEDP processes in poor province’s needs:

(i) coordination among agencies through PPCOs and technical task forces; (ii) staff

capacity building; (iii) increased CCA awareness; (iv) integration of market information

and VC analysis in the SEDP process; and (v) private sector participation in the planning

process.

(ii). Poverty targeting and gender mainstreaming under the market-oriented approach can

benefit poor rural women and men through: (i) selection of pro-poor market and VC

interventions that create employment and relevant production, processing and marketing

systems for poor people; (ii) LF2F extension and increased use of appropriate climate

responsive technologies; (iii) vocational training opportunities in both farm and non-farm

skills for poor households, targeting youth, ethnic minorities and women; and (iv) market-

based infrastructure and improved connectivity in remote areas.

(iii). Engagement in community decision-making, representation in local institutions, off-farm

employment opportunities, women’s land-use entitlement, and WSCGs for investment

have proven to be successful in empowering ethnic minority people, particularly ethnic

women.

(iv). The voluntary development of CIGs can promote the transition from subsistence- to

commodity-oriented production and serve as a foundation for poor people to cooperate

with better-off groups and private business, including through LF2F extension. Improved

collaboration with mass organizations, such as the FU and WU, and with lead farmers in

facilitating CIG development has been shown to work. CIGs with access to credit, and

WSCGs, have been most successful in this context.

(v). Private stakeholders successfully drive the development of markets and VCs and

investment in agriculture input supply, production and processing, including in poor

areas, when: (i) legislation and policies are in place that enable private sector activity and

strengthen its competitiveness and transparency; (ii) province and district staff have the

capacity to promote the private-sector; and (iii) access to finance, business and technical

skills and market information is possible.

(vi). Partnering with the small- and medium-scale private entities can impart much-needed

technology and business skills to smallholders, in turn opening markets for them.

81. The mission was also guided by the lessons learned from the 3PAD project in Bắc Kạn and the

DBRP project in Cao Bằng, including, inter alia: (i) Project design should be relevant to the SEDP

policy of the Project area; (ii) capacity building at all levels, particularly through LF2F extension, is a

key to Project success; (iii) decentralization to village and commune levels, including beneficiary

“ownership” of infrastructure investments is essential; and (iv) farm enterprise development should be

driven through sustainable VCs. Both projects identified technologies for increased, CC-adapted

agriculture productivity and resulting reduction in household CC vulnerability and improvement in food

security, that will be broadly promoted under the CSSP.

82. Regarding capacity building and training, 3PAD/DBRP lessons include: (i) capacity building of

district and commune level Project staff was a key success factor; (ii) training needs assessments and

subsequently customized practical "real-life" training material improved training outcomes

dramatically, in contrast to “scientific” lectures; (iii) the ToT approach, engaging distinguished village

members and key farmers as trainers, improved outreach to non-Kinh-speakers; (iv) timing of all

farmer training need to be planned along with view on planting and harvest cycles. Regarding

production support, key project lessons include: (i) investment support to improved livelihood should

be conditional on significant beneficiary contribution; and (ii) to be effective. “agricultural models”

require thorough financial assessment, replication planning, capacity building, and large scale roll-out

30

See Appendix 3 for further discussion on lessons learned from earlier IFAD investments in NE Viet Nam.




22

instruments, particularly through LF2F extension. (see Appendix 3 for further discussion on DBRP and

3PAD lessons and results)

83. Key IFAD policies The CSSP is compliant with all three strategic objectives elaborated in the

COSOP.

(i) SO1: Enable poor rural provinces to carry out market-led, pro-poor rural Development.

This objective is satisfied through the provincial approach using the market-oriented

SEDP and the VC Approach.

(ii) SO2: Improve access of poor rural people – particularly women – to commodity and

labour markets. This objective is satisfied through the targeting methodology, ensuring

representation of the poor in planning forums and a range of pro-poor engagement

products, particularly those involving provision of rural financial services.

(iii) SO3: Enhance the capacity of poor rural households to adapt to CC. This objective is

satisfied through the outcome employed to finance CC adaptation.

II. Project implementation

A. Approach

84. The approach taken by CSSP will support GoV policy by focusing on enterprise-led growth,

within the strategic frameworks of the NTP-NRD, NTP-SPR and NTP-RCC. which are recognised in

the COSOP as key mechanisms for scaling-up climate-adapted poverty reduction investment in Viet

Nam. The Project will be a pilot for the adoption of climate-adapted, market-oriented participatory

socio-economic development planning (MOP-SEDP) as the legislated provincial planning mechanism.

The Project will place strong emphasis on building an enabling environment for the engagement of the

private sector in raising agricultural productivity, creating rural employment and generating rural

income through developing and promoting VC linkages between rural households, including poor

households, and the growing demand in urban centres and the global market. This will be

accompanied by capacity building for managing market-led development in both the public and private

sectors. The Project will enable provinces to update their CC adaptation (CCA) strategies and plans

and will promote climate-adapted production and processing technologies. All Project interventions

will have a neutral or positive (“no regrets) effect on the ability of communities and enterprises to

adapt to CC and related, increasingly frequent catastrophic weather events. This will be underpinned

by the development and systematic expansion of resource allocation through a participatory climate-

adapted MOP-SEDP process. A planned USD 100 million Asian Development Bank (ADB) Basic

Infrastructure for Inclusive Growth in the North-eastern Provinces, due to commence in 2017, is

expected to indirectly complement CSSP investments, the project being focused on major inter-

provincial roads, not village and commune roads.

85. The organizational and management structure proposed for CSSP is be based on the lessons

learnt under other IFAD projects in Viet Nam and, in particular, the 3PAD and DBRP projects, which

can be summarized as follows:

TORs specifying positions, roles and functions of the PPSCs, PPCOs at all levels and

their reporting system are critically important to ensure effective and timely Project

implementation performance in its early implementation stage;

lack of participation of private sector entities in key decision making processes such as in

meetings of the PPSC, PPCO and planning workshops and the MOP-SEDP process

reduced the effectiveness of the Project’s efforts in development of markets, VCs and

private sector partnership;

Financial management mechanism and flow of funds for all outcomes should be clearly

specified in the Project design and implementation guideline documents;

The IFAD Project management structure should not create a different system operating

in parallel with the existing local institutional setup;




23

Complicated structures of outcome lead agencies and co-implementing agencies at the

province level has led IFAD projects to face slow progress at the early stage of

implementation due to unclear roles and responsibilities among provincial agencies. The

Project capacity building interventions should focus on improving the public services at

the district and commune levels to ensure effective decentralization;

There was a lack of effective tools to ensure performance accountability and competition

of the Project districts and communes;

The Project M&E systems have been quite robust in terms of generation of timely and

sufficient data, but less effective was as a management tool for planning, strategizing

and implementation;

Insufficient cooperation/coordination among IFAD projects in the same region in terms of

market linkages, VCs and private sector partnership should be addressed.

86. The Project will adopt similar implementation arrangements to those used for previous IFAD

projects. Changes reflecting their operational and managerial experience and lessons learned will,

however, be incorporated. Project Management will aim at maximizing effectiveness and efficiency

through application of the following principles:

management structure will adhere to the current structure of local institutions, building

capacity to address poverty through market-based approaches;

decentralizing resources to the district, commune and village levels and promote private

sector service and input suppliers and markets;

focusing support in districts with higher productive potential but having strong linkages to

poor upland areas/communities;

applying a “learning by doing” approach to introduce innovations to farmer groups and

target LF2F learning mechanisms for scaling up results;

supporting changes in the roles of the provincial agencies from traditional implementing

bodies to the positions of knowledge sharing and policy/guidelines makers;

mainstreaming the participation of the private sector throughout the planning,

implementation, monitoring and evaluation of the Project activities;

strict implementation of IFAD policies and guidelines in result-based Project

management;

inter-provincial coordination for efficient technical assistance use, synergies development

and reduced implementation costs; and

the development and application of an effective anti-corruption policy.

B. Organizational framework

87. The Bắc Kạn and Cao Bằng PPCs will be the Project Owners. They will establish PPCOs to

coordinate Project implementation in their respective provinces and PPSCs, which will assist the Bắc

Kạn and Cao Bằng PPCs in leading government agencies, mass organizations, the private sector and

communities at all levels to ensure achievement of the Project objectives.

88. Provincial Project Steering Committee. The PPSCs are established by the Bắc Kạn and Cao

Bằng PPCs to inform the PPCs on overall execution of Project implementation and to ensure effective

coordination/integration/ cooperation among all government and donor-funded projects. The PPSCs

will be led by the PPC Chairperson (or a Vice-Chairperson) and composed of Coordinators or Vice-

Coordinators of concerned line-departments. Chairpersons of mass organizations and representatives

from the private sector. The PPSCs will inform the PPCs on matters concerning the strategic

management of the Project, including decisions such as the appointment of the Project Coordinator

(PC) and Deputy PC, approval of the PIM, annual work program and budget (AWPB), and other

decisions related to the Project coordination, orientation and mobilization of resources. The PPSCs

will invite the Chairperson of the provincial Chamber of Commerce and of the local Enterprise

Association (if existent) to join the PPSC. The PPSC will meet on a semester basis to coordinate




24

Project implementation, guide planning, review progress, and make recommendations for any

modifications of AWPB as needed.

89. Provincial Project Coordination Office. Bắc Kạn and Cao Bằng will each establish a PPCO

to assist the PPSC in coordination of the provincial agencies and in actual management of

government’s and IFAD resources. The PPCO will report directly to the PPSC and act as an advisory

body of the PPC and secretariat of the PPSC. The PPCO will be established at the administrative

level equal to a provincial department. The PPC Decision on the establishment of the PPCO and

TORs of the PPCO should ensure that the PPCOs function on behalf of the Project Owner, the PPC.

Furthermore, the Bắc Kạn and Cao Bằng PPCs will ensure that their respective PPCOs assist their

PPSC in coordination of all line agencies, relevant GoV and donor funded initiatives and other

stakeholders in the implementation of the Project.

90. The mandate of the PPCO will be to ensure: (i) coherence of the Project approaches and

strategies, and integration among Project activities in order to produce the Project outputs, outcomes

and impact; (ii) coordination and synergy of the co-implementing agencies (DARD, DoNRE, DPI,

DoLISA, DoIT) and technical service providers, and the district and commune level agencies, and

grassroots communities; (iii) mobilization of resources from the private sector, mass organizations,

professional associations, research institutes, technical units and non-government organizations;

(iv) contracting of suitable service providers to undertake various studies, technical assistance and

training; (v) accountable management of IFAD and Government’s resources, including preparation of

the PIM, AWPBs, procurement plans, selection of technical assistance and audit service providers,

establishment and operation of the Project M&E and associated management information system

(MIS), and other functions of the operational and financial management of the Project; and

(vi) knowledge sharing and policy development interventions, in collaboration with co-implementing

agencies.

91. Inter-provincial Coordination. There will be inter-provincial PCU meetings held each semester to enable coordination and cooperation on CC adaptation policies and investments, identification of shared technical assistance providers, inter-provincial value chain planning and implementation, mutual training among similar staff positions and exchange visits/workshops for regional replication and up-scaling. The AWPBs of the provinces will need to ensure the regional approach throughout all the Project activities. An Ad Hoc Technical Assistance Group (TAG) will ensure inter-provincial technical coordination.

92. The two PPCOs will each include about 21 staff as detailed in Table 5 below. DARD, DoNRE,

DPI and DoF staff shall be allocated appropriately for part-time positions. These staff shall be paid

part-time allowance in compliance with GoV ODA regulations.

Table 5. Key positions of Provincial Project Coordination Unit

III. Position IV. No.

V. Project Coordinator VI. 1

VII. Deputy Project Coordinator (Bắc Kạn)

Adviser to the Project Coordinator (Cao Bằng)

Strategic Management Section

MOP-SEDP coordinator (Project Deputy Coordinator) 1

Rural Finance Project Coordinator 1

Rural Finance Officer 1

Commodity and VC Project Coordinator 1

Community-based CCA and DRM Officer 1

Community Infrastructure Development Engineer 1

M&E/KM Coordinator 1

Financial and Administration Management Section

Chief Financial Officer/Chief Accountant – Head of Section 1

Accountant 2

Cashier 1

Chief Procurement Officer 1

Procurement Specialist 1

Commune accountants (responsible for 3 communes each) 12




25

III. Position IV. No.

Administration Section

Administrative support officer 1

Interpreter 1

Security Officer/office support 1

Driver 3

Total 2131

93. At each Project district and commune respectively, the CSSP will employ the staff detailed in

Table 6 below.

Table 6. Project staffing at district and commune levels

District Level

MOP-SEDP Support Officer 1

Community infrastructure engineer

Business Development Officer 1

M&E and KM Officer 1

Commune Level

CPC Chairperson (or deputy in charge of economic development) 1

Cadastral officer: facilitating land allocation and infrastructure activities

Agriculture officer: facilitating VC and CIG development activities 1

94. The Project Coordinator, who should have solid experience in working for a previous IFAD-

supported Project, will lead the PPCO. The PC shall be fully involved in the Project design and

negotiation and receive proper training from IFAD on new policies and management skills. The PC, as

the Head of the PPCO, will work full-time for the Project, and will have no additional responsibilities

within any other provincial department. The major responsibilities of the PC will be to ensure that the

involved provincial agencies, districts, communes and villages carry out the Project activities in line

with the Project approach, operating schedules and procedures. The PC will be provided with

adequate executive authorities and accountabilities through a Decision of the PPC. The PC will also

act as Secretary of the PPSC.

95. Project Management at District Level: At the district level, the District People’s Committee

(DPC) will be responsible for coordination of the Project activities and integration with the

organizational structures and mandates of the line agencies and mass organizations at district level.

The DPC Chairperson (or Vice-Chairperson) will be responsible for the coordination of Project

activities. Under guidance of the DPC, and with technical support from DARD and other province

departments, the District Planning and Finance Department (DPFD), District Agriculture and Rural

Development Department, the District Agriculture Extension Station, the District Trade and Commerce

Department, the District Plant Protection Station, the District Veterinary Station and the other

concerned district sections will be mobilized for Project implementation. The provinces will employ

district technical advisors in numbers proportional to the number of underlying communes and level of

Project support at commune level. The GoV will employ a Business Development Officer (BDO) and a

Monitoring and Evaluation (M&E) officer in Project districts.

96. Project Management at Commune Level. The CPC will be accountable for the Project

implementation at the commune level. The commune’s chairpersons and accountant will receive a

Project management allowance in line with government policy. To the extent possible, Project

implementation will be decentralized to the CPCs, which will receive substantial training to develop

their capacities. The MOP-SEDP process will guide Project implementation at Commune level, with

focus on the principles of commodity development and market orientation. At the village level the

Project will utilize VDBs established under the NTP-NRD, building on the experience of similar

structures under the 3PAD. The VDB is assigned to mobilize communities of the village in MOP-SEDP

planning and implementation including an integrated approach to the selection of pro-poor VCs and

31

Excludes commune accounts, who, although employed by and reporting to the NPCO, will work at commune level.




26

livelihood support activities, infrastructure scheme implementation and maintenance, development of

saving and credit groups, development of CIGs and the other community initiatives. VDBs should

have at least: 30% female membership; 30% membership from DoLISA registered poor households.

97. Staff Development and Training for the PPCO.

Key units of the leadership training Project will be:

(i). Market Economy Management Concepts, including: (i) roles of the State Agencies and the Private Sector; (ii) Public-Private Partnership/Cooperation in Agriculture and Rural Development; (iii) competition and agricultural competitiveness; (iv) market-oriented local economic development planning – concepts and techniques in the context of CC adaptation; and (v) market and VC techniques in planning development and Project interventions.

(ii). Market and commodity/VC Assessment, including: (i) new market trends (e.g. safe agriculture products, organic production, traceability); (ii) public and private certification systems and standards for agriculture products (national and international); understanding ‘market barriers’ (economic and institutional); and (iii) market and VC assessment methods and identification of viable market opportunities.

(iii). Program Planning for Developing Viable Market Opportunities, including: (i) review of policy and regulatory environment for agricultural market development in Viet Nam and in the Project provinces; incentive mechanisms for promoting agricultural markets; and (ii) feasibility assessment and economic appraisal of market investment proposals and program planning tools.

C. Planning, M&E, learning and knowledge management

Planning

98. Annual Work Plans and Budgets. Successful CSSP implementation requires the government

SEDP and Project AWPB planning process to effectively articulate the views of various public

institutions (government and line agencies), private entities, people’s and communities’ organizations

and groups. This requires building consensus around common objectives, constant communication

and a flexible decision-making structure. The SEDP is the principal planning process and instrument

that government utilizes to orient all public financing of relevance for the CSSP. Through

mainstreaming into the SEDP, the potential exists to institutionalize pro-poor, commodity oriented

development approaches and see them replicated across the Project provinces. The CSSP provides

an opportunity to assist both national and provincial government to learn and develop an appropriate

approach.

99. The Project AWPB details the expected annual results of the Project. Two innovations are

proposed to strengthen the AWPB (and, to some extent, the SEDP) process in terms of its technical

quality, institutional alignment and to enhance coordination among the implementation partners.

These are:

(a) A cross-provincial Thematic Ad-hoc Group, comprised of senior and knowledgeable technical staff from among key stakeholder groups, provide a flexible, temporary mechanism for organizing effective discussion; providing technical accompaniment and oversight to technical studies, evaluations, research and analysis; strengthening technical coordination and; providing useful and timely recommendations to local policy-makers; and,

(b) AWBP Coordination Subcommittee of the PPSC, enabling joint budgeting exercises that integrate and institutionalize Project activities into the line agencies own annual work programs. The Subcommittee will comprise the heads of the agencies (e.g., DPI, DARD, DoNRE, CEM, DoLISA, DoTI) or their representatives, along with the PPCO Coordinator; and

(c) Memoranda of Understanding negotiated and signed by the CSSP and DPI, DARD, DoNRE, CEM, DoLISA and DoTI managers respectively and endorsed by the PPC, which provide annual targets for departmental implementation of CSSP activities.




27

100. The basis for investment planning at the community level will be derived directly from the MOP-

SEDP process, which will initiate the preparation of investment plans for the public sector. Communes

will inform/channel potential private investor’s opportunities for investment support under the Project,

and prepare estimates for private sector activity financed by the Project. Specialist PPCO staff will

ensure that this commune-based planning process is genuinely representative and inclusive, as well

as being consistent with CSSP rules and policies. These PPCO officers will provide supervision to the

support staff at the district and commune levels and coordinate with the staff of the General Planning

Section under the DPI to organize the MOP-SEDP planning process in the Project target communes

and districts.

101. The commune plans will, through a district-led process led by the district DPFD, be integrated

into a district MOP-SEDP for negotiation at provincial level.

102. In the first year, the PPCO will also provide and coordinate training workshops on the Project

strategy and approaches, AWPB, and procurement procedures for key stakeholders. This will ensure

an accurate and shared understanding of the Project strategy and information needs.

103. The MOP-SEDP Project Officer, working with the PPCO Coordinator and other PPCO staff, will

incorporate the MOP-SEDPs of the Project communes and districts into the Project AWPB. They will

then assist the PC in drafting the AWPB and its revisions for the PPSC/PPC consideration and IFAD

comments and endorsement.

104. The PPCO will be responsible for the generation of plans not directly derived from the MOP-

SEDP process or planning delegated to DPI, DARD, DoNRE or Committee for Ethnic Minority Affairs

(CEMA) under the respective MoUs to be signed by these institutions and the PPCO. PPCO planning

responsibilities will include provision of specialist support and other specialist training under

Outcome 1, various forms of Technical Assistance under Outcome 2, and the requirements for Project

Management. The consolidated AWPB will reflect both the previous year’s achievements and

performance and anticipated Project progress. The PPCO ensures coordination between other

government agencies and externally financed projects in the Project area. The draft AWPBs will

include a procurement plan (an initial eighteen-month plan and then twelve-month plans for

subsequent years), a detailed description of planned CSSP activities, and the sources and use of

funds. The PC will be ultimately responsible for preparing the draft AWPBs in an accurate and timely

manner.

105. The draft AWPBs will be submitted to the PPSC for review and subsequent PPC approval. The

approved draft AWPB will then be transmitted to IFAD for comments and no objection no later than

sixty days before the beginning of the relevant Project year. An Annual Stakeholder Review and

Planning Workshops at which Annual Performance Report findings and management implications will

be discussed will support the AWPB preparation process.

Monitoring and evaluation

106. The M&E system will monitor performance and assess the impact of the activities. Monitoring

will focus on activities/inputs, outputs, outcomes and performance and risks, while evaluation will

assess the relevance, efficiency, effectiveness and impact on poverty reduction, agri-business

environment and growth and environment, empowerment and partnership, sustainability, replicability,

lessons learned, and knowledge up-take. The M&E system will cover both the operational and

financial aspects of the Project.

107. The Project M&E system will be designed to track and verify the levels of achievement of

Project outputs, the associated outcomes, and the success in achieving the Project objective and its

development goal. These levels are all causally connected as set out in the Project Logical

Framework. The M&E system will also monitor the agri-business environment in both provinces

through independent surveys of Project and non-Project supported agri-businesses in the Project

provinces (see Appendix 6 for details). To a large extent, the M&E system will be participatory,

involving the supported communes in data collection and management. The M&E and KM Officer will

assist the PPCO in the data management in a standardised system, keep a central system to compile




28

overall monitoring and evaluation information, and conduct studies to measure overall impacts. The

PPCO Strategic Management Section will be in charge of setting up and operating the MIS and

establishing and ensuring the M&E function, reporting and knowledge management.

108. The Project management information system (MIS) will be established to provide a

comprehensive system of data collection, analysis and exchange. It will bring together physical and

financial records with the main purpose of informing management decisions on Project matters.

Quantitative measures of progress will be supplemented with qualitative information related to the

acquisition of personal and shared skills, group behaviour changes, target groups’ perception,

awareness and attitudes. The MIS will be the sole channel of Project monitoring material and form the

basis of six-monthly and annual reports.

109. In order to ensure that a single and compatible system is implemented, the MIS will be set up

centrally at Project start-up and refinements will be introduced in the light of experience during the first

Project year. It will be based on the Logical Framework, which, together with the MIS, may be

modified at Project Mid-term Review (MTR) to adjust the Project to changing circumstances. The

preparation of reporting formats for use by implementing agencies, particularly the participating

communes, districts, and other partners will be part of the overall design of the MIS.

110. Monitoring: Monitoring will be an integral part of the Project coordination role. All staff will be

involved in strengthening Project progress and performance monitoring in their particular areas of

responsibility. A large part of the monitoring data will be collected and communicated by the

participating communes.

111. The monitoring will provide semi-annual and annual feedback on the extent to which the Project

is achieving its outputs, implementing the activities, identifying potential problems at an early stage

and proposing possible solutions. The accessibility of the Project to all sectors of the target

population, as well as the technical and financial efficiency will be monitored and possible

improvements suggested.

112. Monitoring indicators have been selected for each of the Project’s outcomes as detailed in the

Logical Framework. Wherever relevant and possible, gender-specific data, ethnic minority status and

poverty data as classified by Ministry of Labour, Invalids and Social Affairs (MoLISA) will be collected.

The Project will involve target groups and, when possible, women, in data collection through individual

interviews, focus group discussion or case studies.

113. Project training will be competency based. The performance of training activities will be

monitored through pre and post training knowledge tests with a further test 6-12 months post-training

to determine knowledge retention and adoption. It will not be possible to monitor all training events at

this level; however, random competency monitoring will be applied to all typologies of training events

across the Project life.

114. Evaluation: Project evaluation will be initiated and managed by the Strategic Management

Section (SMS) in two major forms (i) annual outcome/impact evaluations and (ii) thematic evaluation.

At the same time, full reviews at mid-term and at the conclusion of the Project will be conducted by

IFAD and GoV.

115. Impact evaluation: Project impact will be measured from the baseline data, at mid-term and at

Project end. The Baseline Survey will be undertaken shortly after Project start-up to provide a platform

of information from which the follow-on surveys could reveal changes in the households' livelihoods.

Similarly, the Mid-term Survey and the Completion Survey will be carried out just before the MTR and

towards the end of the Project, timed so that that their results will be available for the MTR and PCR.

These follow-on surveys will be carried out in the same manner as the Baseline Survey. Ideally they

will visit the same households so that developments in the course of Project participation can be

measured, and household members who have left the Project area as a result of finding employment

elsewhere will be captured as well. These three surveys will be carried out in conformity with IFAD's

Results and Impact Management System (RIMS) reporting requirements. They will use the standard

RIMS questionnaire form to collect key beneficiary data including household assets and base data




29

used to establish the prevalence of child malnutrition in participating households, with a few added

questions to reflect Project-specific impact data. The participating households will be randomly

selected from the Project communes. The data will be processed by a simple custom software

package to be provided by IFAD.

116. As the Project will be establishing investments using business principles and business plans,

there is the opportunity to use data generated during the planning and operation of such investments

to provide for impact assessment. The intention is that the pre-Project baseline, the operational data

(profit and loss, return on investment, returns to labour etc.) will provide the impact assessment at the

micro-economic level. (See Monitoring Framework for detailed indicators).

117. Thematic studies: The PPCO SMS will contract or carry out thematic impact studies that will

look at the impact of activities under Project Outcomes. Such impact assessment will include an

analysis of the effectiveness of: poverty impact of commodity-specific market support activities;

Public and Private Partnership in poverty reduction; impact of micro credits on women; effectiveness

of collective economic models; effect of SME development on the availability of jobs for the poor. The

topics for these thematic studies will be identified in consultation with relevant government

departments during Project implementation, taking into account NTP-NRD, NTP-SPR and NTP-RCC

policies. The Monitoring Framework provides the indicators, collection methods and the usage of the

processed data.

118. Mid-term Review and Completion Review: IFAD and Government of Viet Nam will be

responsible for carrying out two full reviews of the Project achievements: the MTR during Project

Year 3 and the PCR after Project completion. In PY2, the Project Supervision mission will include a

small, independent team of planning specialists who will conduct an assessment of the initial

experience of MOP-SEDP process. Key Questions to be answered during the reviews on the basis of

the indicators contained in the Logical Framework will include: (i) have Project investments enabled

coherent planning for commodity development and poverty reduction; (ii) has Project targeting been

successful; (iii) has the Project assisted the underemployed in getting jobs and have rural marketing

links been forged effectively; (iv) does the Project have the expected financial service outreach;

(v) has decentralised MOP-SEDP process been an effective development tool; (vi) has the Project

contributed good examples to the national policies related to agricultural commodity development; and

(vii) how have changes in the external environment including CC related challenges impacted on

Project beneficiaries.

119. Progress Reporting: The PPCO Coordinator will be responsible for the preparation of six-

monthly and annual provincial progress reports for submission to the PPSC/PPC, and IFAD within a

month from the end of the reporting period. The implementing agencies will be required to provide

their progress reports as an input for PPCOs to prepare a provincial report that will be submitted to

IFAD and Government in a timely and accurate manner. These reports will include the narrative report

as a harmonised source of key data and ensure the trends are highlighted. The reports will record the

financial and physical progress against AWPB targets. The Knowledge Management Officer will

prepare a report on KM survey and analytical work, with a tabular appendix showing the progress in

each Province against the Project indicators. The SMS will be responsible only for the availability of

data as indicated in the Logical Framework. The availability of all other data in the appendix will be the

responsibility of the institutions, assisted by the PPCO in the preparation of the standardised reporting

formats.

120. The implementing agencies will - within 2 weeks from the end of the reporting period - submit

six-monthly progress reports to the PPCO as a condition for release of funds for the ensuing period.

CPCs and DPCs, will report on Project supported SEDP initiatives. The Women's Union and others

will report directly to the PPCO.

121. Annual Results and Impact Reporting: The PPCO will report separately to IFAD on the

Project indicators that overlap with IFAD's COSOP. The information contained in these Annual Results

and Impact Reports will be drawn from the Project MIS, and set in relation to the targets contained in

this Report and those in the AWPB.




30

122. Mid-Term Review (MTR): This single report will be prepared by the PPCO and comprise the

assessment of the efficiency as well as the Project achievements to-date, an analysis of the Project

approach and activities, and detailed proposals for the implementation of the second part of the

Project.

123. Project Completion Report (PCR): At the end of the implementation period, a single,

comprehensive PCR will be compiled by the PPCO. The PCR will follow the IFAD guidelines and

format for Project completion reports. The assessment criteria will include: participation of the target

groups, the Project’s strategies and approaches, relevance, finance management, efficiency, outputs

delivery, effectiveness, impacts, sustainability, Innovation, up-scalability and replicability.

Learning and knowledge management

124. Knowledge Management: The Project’s knowledge management will be an essential element

for delivery of Project objectives, especially for learning related to poverty reduction through

commodity development. Two approaches will be taken: (i) a knowledge management program within

the Project for purposes of supporting within and between Project learning; and (ii) support for a

broader program of knowledge management aimed at informing government decision-makers and

influencing policy. Concerning policy development, the opinion of a single province, although

important, is unlikely to sway national policy in areas around the MOP-SEDP or APIF, however, the

collective knowledge of IFAD project experience in these fields in Viet Nam is substantial and will

continue to grow. As such, the IFAD country office must play a role in bringing key Project staff at

provincial level together to collate and evaluate Project outcomes and shape policy recommendations

that can be carried forward to the national level. IFAD Viet Nam has been requested by the Minister

MARD to assist with the development of governments APIF/APIF policy. It is also a member of a

donor group that was recently formed to support DPI with the development of the MOP-SEDP

approach. As such, IFAD Viet Nam is well placed to bring the collective experience of IFAD financed

investments in Viet Nam into national policy and strategic planning discussion.

125. The data management system will ensure that all reporting is completed and that information,

reports and data are available in suitably accessible formats. Evidence based learning is an important

output and the knowledge management system, combined with the evaluations must generate these

evidence backed lessons. Lessons may be about approaches that do not work as well as those that

do.

126. Consistent with the COSOP KM recommendations that projects should establish a “learning

agenda”, the CSSP knowledge management activities will focus around four areas relevant to IFAD’s

investment portfolio in Viet Nam and two areas specific to the CSSP. These include:

IFAD country portfolio KM themes will include:

o private sector investment in uplands areas;

o poor households’ responses to agriculture business opportunities;

o provincial institutions development and implementation of the MOP-SEDP process;

o the evolution of WSCGs into registered MFIs.

Project specific KM themes will include:

o The impact of forest land-use rights allocation on household poverty reduction;

o The role of forages in stabilising hillside farming systems and raising household

livestock production and income.

127. In order to develop and manage the knowledge and information of the Project, the following

activities will be conducted:

(a) Annual knowledge piece. Each PPCO will produce at least one piece (e.g. research paper,

audio-visual, or verbal presentation) per year on some aspect of one of the aforementioned

themes that relates directly to its work. The pieces will be derived from Project

implementation experiences related to the aforementioned KM themes and will be evidence-




31

based. The precise topic of the pieces will, within the aforementioned framework, be

determined by the PPCOs and will depend on the nature and stage of the Project. The

method or format for documenting the knowledge and the means of communicating it will

also be determined by the Project as a function of the knowledge it wishes to share and the

audience that it will like to benefit from that knowledge.

(b) Documenting lessons learnt, best practices and cases of success: The M&E and KM

Officer will collect all available relevant information to document lessons learnt, best

practices and cases of success. It could be based on information collected from: progress

reports, meetings and interviews, monitoring and evaluation reports, outputs evidence

provided by targeted groups, market and VC entities and other involved parties.

(c) Developing and delivering a lessons learnt study: Based on the information collected

along Project implementation, the M&E and KM Officer will develop an end of Project

Lessons Learnt Report, analysing the documented lessons learnt, best practices and cases.

It will be first submitted to IFAD and, once feedback has been incorporated, if any, the report

will be shared widely.

(d) Development of material for dissemination: The M&E and KM Officer will produce

communication materials summarizing some of the success stories to be distributed through

networks and policy dialogue. Based on analysis of the documented information, and the

reports, material for dissemination will be produced at the end of the Project; a mid-term

Lessons Learnt Report might be developed. A short film about the Project combining before

and after footage will be shared with target groups, policy makers and other stakeholders.

Recommendations and actions for market and VC development will be developed.

D. Financial management, procurement and governance

128. Financial Management. The provincial PPCOs will be responsible and accountable to GoV

and IFAD for the proper use of funds apportioned to them, in line with the respective legal

agreements, subsidiary financing agreements for financial institutions and contractual arrangements

for service providers. It will provide detailed financial statements of the operations, resources and

expenditures related to the Project for each fiscal year prepared in accordance with standards and

procedures acceptable to IFAD and deliver such financial statements to IFAD within four months of

the end of each fiscal year.

129. Subsequently, audit firms appointed on an annual basis will audit these financial statements.

The auditors will be jointly appointed by the PPCOs following a competitive procurement process

acceptable to IFAD. The selection of the auditors and the audit process itself will comply with IFAD’s

Guidelines for Project Audits and international auditing standards. The cost of the audits will be

financed from Project proceeds. The annual audit, which will be a single process across both

provinces, will be performed in accordance with International Standards on Auditing complemented by

ToR acceptable to IFAD. The auditors will issue separate opinions covering the financial statements,

statements of expenditures and the management of designated accounts. The audited financial

statements and audit reports will be submitted to IFAD within six months after the end of each fiscal

year and after the Project closing date. In addition, the auditors will also issue management letters

outlining any internal control weaknesses.

130. Flow of funds arrangement. IFAD will make funds available to the GoV under the terms and

conditions of the Finance Agreement. Project funds will flow from IFAD via a single Designated

Account (DA) established in a commercial bank acceptable to the IFAD. Government funds will flow to

a separate account.

131. Designated Account (DA): In accordance with the Financing Agreement and Section 4.04(d) of

the General Conditions, immediately after entry into force of the Financing Agreement, the GoV shall

open and thereafter maintain in a commercial bank accepted by IFAD, an account denominated in US

dollars for the purpose of financing the Project, “Designated Account”. The Designated Account will

be operated by the Ministry of Finance (MoF) and will be protected against set-off, seizure or




32

attachment on terms and conditions proposed by the Borrower and accepted by IFAD. The Borrower

shall inform the Fund of the officials authorized to operate the DA.

132. Initial Deposit into the Designated Accounts (Authorized Allocation): Upon the entry into

force of the IFAD loan and the Borrower’s request, IFAD will make one withdrawal of USD 2,5 million in

the aggregate, from the Loan Account on behalf of the Borrower and deposit such amount into the

Designated Accounts to carry out the Project

133. Project Account: The PPCOs shall open and maintain in their provincial treasuries an account

denominated in VND for Project operations, the “Project Account”. The Project Account shall be

funded and replenished as necessary from the resources held in the Designated Account, upon

request of the PPCO and in accordance with expenditures incurred under approved AWPBs. The

Project Coordinator shall be fully authorized to operate the Project Account.

134. Counterpart government contributions payments will be made from a Provincial Budget by

arrangement of the provincial Department of Finance, and be used specifically for the Vietnamese

contributions to the Project. These contributions will be received annually/quarterly in accordance with

normal budget procedures.

135. Statements of Expenditure (SOE). The SOE Threshold for all expenditures pertaining to all

categories is recommend to a ceiling of USD 60 000.

136. Financial management. As custodians of funds in the Project Account, the PPCOs will

undertake the following financial management tasks:

(a) Ensure that Project expenditure items and practices are consistent with those of the

Government and IFAD.

(b) Ensure that Project suppliers and locally paid staff are paid promptly and adequately

through liaison with Ministry of Finance and the IFAD Country Office finance staff.

(c) Ensure that Project expenditure is being coded correctly and consistently and that Project

funds are used solely for the purposes for which they were granted and in accordance with

relevant IFAD guidelines.

(d) Establish an asset register for all assets purchased by or provided to the Project in line with

standard IFAD policies.

(e) Check monthly Project financial report for accuracy and appropriateness, and ensure the

Finance Manager is current with events concerning financial reporting issues, errors, trends,

payment delays and related matters. and,

(f) Monitor expenditure on a monthly basis against the approved AWPB in order to prepare and

send timely fund withdrawal applications to IFAD and review expenditure projections to

ensure that expenditure stays within budget. Significant actual or anticipated expenditure

variances against the budget should be included in the monthly report to line management

together with any recommendations for changes to the budget.

137. The Head of Finance and Administration of the PPCOs will be responsible for the actual

management of these tasks, and will report to the PPCO Coordinator.

138. Taxation: The proceeds of the financing may not be used to pay taxes. All taxes are to be borne

by the Government.

139. IFAD Policy on Anti-Corruption and Fraud: It is IFAD‘s policy to require that the staff of IFAD,

(including beneficiaries of IFAD loans) as well as all bidders, suppliers, contractors and consultants

under IFAD-financed contracts observe the highest standard of ethics and integrity during the

procurement and execution of such contracts. Mechanisms for whistle-blowers to access IFAD

systems are provided at the following link: http://www.ifad.org/governance/anticorruption/how.htm

140. Procurement. Procurement of goods, works and consulting services financed by IFAD under

CSSP will be carried out in compliance with the IFAD’s Project Procurement Guidelines (as approved

by IFAD in September 2010 and which may be amended from time to time). The national procurement




33

procedures, processes and regulations under the Procurement Law could be applied to the extent that

they are consistent with IFAD Project Procurement Guidelines.

141. As soon as possible after Project commencement, the PPCOs shall submit to IFAD the Draft

AWPB. The Procurement Plan covering the initial eighteen (18) month period of Project

implementation is included in Appendix 8. This shall be updated to cover each succeeding twelve (12)

month period for IFAD review and no objection. Each procurement plan shall include the proposed

contracts, estimated costs and financings sources, methods of procurement, related IFAD review

procedures, time schedules, etc. as specified in the IFAD procurement format.

142. Procurement methods for work and goods packages under the CSSP include (i) national

competitive bidding applied for packages with estimated cost equivalent or exceeding USD 60,000;

(ii) local competitive bidding applied for packages with estimated cost less than USD 60,000;

(iii) procurement with community participation or Force Account applied for infrastructure schemes

that can use intensive un-skilled labour and simple techniques such as concrete roads, lined cannels,

storages, etc. with the estimated cost less than USD 30,000; (iv) direct contracting could be applied

for very small packages with estimated cost less than USD 5,000.

143. Methods for selecting consultants under the CSSP include (i) Quality and Cost Based Selection

applied for service packages with estimated cost equivalent to or exceeding USD 30,000; (ii) Select

Based on Consultants’ Qualifications applied for service packages with estimated cost less than

USD 30,000; (iii) Single Source Selection could be applied only in exceptional circumstances and will

need to be approved by IFAD in the procurement plan.

144. Prior review thresholds. In accordance with IFAD Project Procurement Guidelines the following

shall be subject to prior review by IFAD: (i) any goods contract estimated to cost USD 60,000 or more;

(ii) any work contract estimated to cost USD 60,000 or more; (iii) any consulting service contracts

estimated to cost USD 30,000 or more; and all APIF contracts irrespective of their value.

145. Governance. The PPCs, DPCs, and CPCs will have overall responsibility for program

management and coordination of all departments and other agencies at their respective levels for

146. The PPC, as the Project Owner, will provide oversight to ensure adherence to GoV policies and

norms and the IFAD Loan Agreement. In each province, the PPC will issue a decision enabling the

establishment of the PPCO.

147. The PPSC is established by the PPC to represent the PPC in overall execution of Project

implementation and ensure effective coordination/integration/cooperation among all government and

donor-funded projects. As such, it is the executive agency for Project governance.

148. The PPCO will sign MoU with the DPI, DARD and DoNRE Coordinators outlining those

institution’s CSSP implementation responsibilities and output, outcome and impact targets.

E. Supervision

149. The Project will be directly supervised by IFAD, in accordance with the on-going arrangements

in Viet Nam. The IFAD Country Office will manage the supervision, IFAD staff and consultants will

attend the Project start-up workshops, and specialist consultants and staff will continue to be involved

in supervision and implementation support. The initial supervision and implementation support

mission will take place soon after Project commencement. Further supervision missions will be

undertaken annually and complemented by short and focused follow-up missions as appropriate.

Supervision will be based on IFAD’s operational modalities and practices. As far as possible, the

identity of personnel engaged in supervision and implementation support will not be changed

frequently unless there are compelling reasons to do so. The frequency and composition of

supervision missions will be determined in light of actual requirements and in accordance with IFAD

and the Government.




34

F. Risk identification and mitigation

150. The main identified risks for this Project are identified in Table 1. They are:

151. At the Project Goal Level, the risk of external shocks to the macro-economy has the greatest

prominence. This risk is ever present in a relatively open economy such as that of Viet Nam,

particularly with the high proportion of income being derived from export revenue. This is a significant

risk for the Project. At the national level, sound macro-economic policies, including market determined

exchange rates are the main means of mitigation of this risk. The main mitigation measures at the

Project and enterprise levels are the emphasis on sound financial analysis of Projects, with emphasis

on quality and high productivity and low cost per unit of output value.

152. At the Development Objective Level, key risks are associated with that of the maintenance of

stable socio-economic conditions in the Project area and with business regulatory systems. Both

provinces are enjoying economic growth leading to reduced poverty, with the biggest socio-economic

risk associated with climatic disaster. The Project will advance the national agenda for CBDRM and

will ensure that all Project-financed interventions are CC adapted. The relatively weak private

business environments in both provinces are a significant risk and both PPCs have agreed to work

with the CSSP to create more favourable business environment, including benchmarking their

provincial performance against provinces having high competitiveness indices.

153. At the Outcome/Output Levels, an important risk is that there is insufficient skilled and

efficient contractors and service providers to implement the Project in a cost-effective manner.

Rigorous screening and investigation of potential contractors prior to engagement can deal with this

risk adequately. The experience of the IFAD country office and the PPCO in this respect remains vital.

In some circumstances, particularly for the facilitation services being provided to the MOP-SEDP

process, it may prove to be necessary for some intensive training and mentoring of service providers.

This is accommodated under Outcome 1.

154. Associated with this risk is that of the lack of experience of CPCs and DPCs in applying the

MOP-SEDP processes for identification of appropriate VC investments. This is a genuine risk in

communities because of their previous orientation towards production and public investment. This risk

is explicitly recognised in the Project design, and training and mentoring will be provided to change

the skills and mind-sets of the relevant officials. The commitment by both provinces to legislate MOP-

SEDP as the provincial SEDP process will require government officials at all levels to adopt the MOP-

SEDP, further diminishing this risk

155. There is a risk that integrated disaster risk management and vulnerability planning are not

effectively integrated into village, commune and district-level planning, which will particularly threaten

the sustainability of public infrastructure investments. The mitigating factors for this risk are:

(i) substantive investment in CC orientation; (ii) careful screening of all investments proposed; and

(iii) adoption of the closely mentored inclusive approach to participatory planning of development.

156. “Elite Capture” of benefits targeted for poor inhabitants of the Project area is a risk.

Although this risk is significant, there are a number of in-built devices within the Project design that

mitigate this. These include: (i) the use of specially trained district MDOs to assist at commune level;

(ii) the action of the RRA at the outset of MOP-SEDP process; (iii) the careful screening of all public

investments proposed through the MOP-SEDP; (iv) the adoption of the closely mentored inclusive

approach to participatory planning of development; and, (v) the rigorous use of screening and

approval of private investment proposals to ensure that there are strong backward linkages to the

primary target group.

157. Financial service providers may not be sufficiently interested to invest in Project targeted VCs.

Past performance by leading rural financial service providers has demonstrated this risk. It will be

alleviated by: (i) development of new rural financial service providers; (ii) increased emphasis on

savings; (iii) development of new financial products; and (iv) investment in profitable, climate adapted

production systems and VCs.




35

158. The allocation of land use title to male household heads is a significant risk to women’s

participation in productive investments. This risk will be addressed by Project acceleration of the

ongoing provincial process of assigning husband and wife’s name to any land use tenure document.

159. A detailed description of potentially negative social, environmental and climate risk factors and

mitigation measures can be found in Annex III of the SECAP RN.

III. Project costs, financing, benefits and sustainability

A. Project costs

160. The main assumptions underlying the derivation of Project costs, estimated Project costs and

financing plan are:

a. The Project costs are based on April 2016 prices.

b. The proposed Project will be financed over a five-year period (2017-2022).

c. Inflation. Inflation in Viet Nam has fallen to about 1.5% in 2016 and is expected to rise to

about 4.4% by 2020. A variable domestic inflation rate consistent with these trend has

been applied. Foreign inflation was set at 2% p.a. over the Project period, based on the

MUV (15) Index.

d. Exchange Rate. The Base Exchange rate for this analysis has been set at VND 22,400

to USD 1 as an official exchange rate prevailing in April 2016 (rounded).

e. The Project costs are presented in both VND and USD. Conversions from current USD

values into Dong use constant purchasing power exchange rates:

f. Taxes and Duties. There is value added tax (VAT) of 10% levied on all imported and

locally procured goods and services, except for agricultural outputs/inputs that are levied

at 5%. Vehicles have a tax of up to 50% depending on an engine power. International

technical assistance does not carry any taxes. For directly recruited local staff the Project

will cover the social insurance charges of 33.5%.

g. The Government will finance the cost of all taxes on goods and services procured under

the Project. GoV will also finance PPCO operating costs and contribute to the cost of

forest land allocation and community infrastructure development.

161. The total investment and incremental recurrent Project costs, including physical and price

contingencies, as detailed in Table 7 are estimated at about USD 73.6 million (VND 1,670 billion).

Physical and price contingencies make up just 2.0% of the total Project costs. The foreign exchange

component is estimated at USD 8.4 million or about 11.4% of the total Project costs. Taxes and duties

make up approximately USD 1.5 million (2.0%). Project Management costs amount to USD 9.2 million

(about 12.5% of the total Project costs). Hard investments in CIGs, FLFA, community infrastructure,

rural financial services and APIF constitute 76% of total project costs and 86% of the IFAD loan

amount. International TA for support to “hard” investments forms 0.8% of total project costs and 1.5%

of the IFAD loan.




36

Table 7. Project Costs by Component and Output

B. Project financing

162. An IFAD Loan of USD 42.5 million will finance 57.7% of total Project cost, including 50.4% of

Outcome 1: Province-based participatory planning institutionalised (USD 8.1 million), 62.5% of

Outcome 2: A greener agriculture future (USD 13.7 million), 66% of Outcome 3: Profitable farms

linked to finance and markets (USD 42.1 million) and 22.3% of the Project Coordination Component

(USD 9.2 million). An IFAD grant of USD 0.5 million will support the NTP NRD National Coordination

Office.

163. Beneficiaries will contribute approximately USD 9.6 million (13.0%) as co-financing of the

community infrastructure (at least 10%) and CIG grants (at least 50%, including at least 25% in cash

or credit), as well as in the form of at least 51% of the APIF investments (including not less than 26%

in cash or credit) to be contributed by the benefitting businesses.

164. The Government contribution (28.5% of total costs) will cover all taxes and duties on all Project

inputs that involve funding from the IFAD Loan/Grant and any other external source of funding

associated with the IFAD Loan/Grant (USD 1.5 million (2.0%)). In addition, the Government is

expected to contribute from its budget about USD 19.5 million (26.5%) to cover staff salary costs, its

contribution to the issuance of forest land pink books, forest use certificates and the NTP-NRD

contribution to community infrastructure grants. Table 8 provides a summary by the Project financing

plan by outcomes.

% % Total

(VND Million) (US$ '000) Foreign Base

Local Foreign Total Local Foreign Total Exchange Costs

A. Province-based participatory planning institutionalised

1. Strategic Investment plan 3,136.0 - 3,136.0 140.0 - 140.0 - -

2. Climate change adaptation plan 27,325.8 - 27,325.8 1,219.9 - 1,219.9 - 2

3. Climate-informed, market oriented socio-economic plans 148,333.9 772.8 149,106.7 6,622.1 34.5 6,656.6 1 9

Subtotal Province-based participatory planning institutionalised 178,795.7 772.8 179,568.5 7,981.9 34.5 8,016.4 - 11

B. A greener agricultural future

1. Forest land and forest allocation 56,872.3 - 56,872.3 2,538.9 - 2,538.9 - 4

2. CIGs for climate adaptation 204,485.7 39,977.5 244,463.3 9,128.8 1,784.7 10,913.5 16 15

Subtotal A greener agricultural future 261,358.0 39,977.5 301,335.6 11,667.8 1,784.7 13,452.5 13 19

C. Profitable farms linked to finance and markets

1. Community infrastructure 548,799.8 124,306.8 673,106.6 24,500.0 5,549.4 30,049.4 18 41

2. Rural financial services 98,749.5 7,537.6 106,287.1 4,408.5 336.5 4,745.0 7 7

3. Agriculture Promotion Investment Fund 159,837.4 2,240.0 162,077.4 7,135.6 100.0 7,235.6 1 10

Subtotal Profitable farms linked to finance and markets 807,386.8 134,084.4 941,471.2 36,044.1 5,985.9 42,030.0 14 58

D. Programme Management 178,606.0 11,529.7 190,135.7 7,973.5 514.7 8,488.2 6 12

E. NTP NRD National Coordination Office Grant 11,200.0 - 11,200.0 500.0 - 500.0 - 1

Total BASELINE COSTS 1,437,346.5 186,364.5 1,623,710.9 64,167.3 8,319.8 72,487.1 11 100

Physical Contingencies 5,030.9 764.9 5,795.8 224.6 34.1 258.7 13 -

Price Contingencies 36,765.3 3,789.1 40,554.4 780.1 79.7 859.9 9 1

Total PROJECT COSTS 1,479,142.7 190,918.5 1,670,061.2 65,172.0 8,433.7 73,605.7 11 102




37

Table 8. Financing Plan by Component and Outcomes (USD ‘000)

C. Summary benefits and economic analysis

165. Benefits. The Project is expected to generate substantial net incremental benefits for poor

farmers and rural entrepreneurs engaged in the supported commodity chains throughout the

provinces and result in improved poverty reduction in the Project communes32

. The primary benefits

from the Project will come from: (i) increased crop, forest and livestock productivity and production

that is more resilient to CC impacts, resulting from adoption of climate-smart agriculture technologies,

as well as improved access to better and more affordable inputs and their application; (ii) increased

proportion of marketed farm produce, resulting from improved market linkages and outlets;

(iii) reduced losses during production, processing and transportation of produce through innovative

technology and improved rural infrastructure, particularly village to commune access roads and

irrigation development; (iv) enhanced value addition along the VC and improved quality of products

resulting in higher producer prices; (v) enhanced access to longer-term credit and to co-financing for

productive investments; (vi) increased employment either for hired or family labour for both on-farm

and off-farm activities; and (vii) increased government tax revenues.

166. It is expected that by the end of the Project at least 72,000 people in 16,000 poor and near-poor

households will be lifted out of poverty, while 30,000 poor, near-poor and non-poor households

(135,000 people) supported by the Project will have at least a 20% increase in household assets. This

will be achieved through a combination of capacity building, technology transfer and credit access,

supported by upgraded community infrastructure and co-financing of innovative investment in their

farming value chain operations. These include about 23,000 CIG members, of whom 40% will be

women farmers and 50% will be poor or near-poor households, 5,50033

WSCG members as well as

households that will benefit from APIF investments, enterprise-based vocational training and farm-

based extension provided by the Project. Furthermore, up to 35,000 households in the 70 Project

communes will benefit from at least one community infrastructure investments, particularly market

access roads and irrigation development, including at least 17,600 poor and near poor households

(see Appendix 2, Annex 4, Tables 1 and 2 for details).Other participants who will benefit from the

Project include (i) government officials empowered to support market-led growth; and, (ii) private

market and VC agri-businesses that find common interest in promoting viable pro-poor products and

services. The Project will also generate flow-on benefits to the entire rural population of the provinces

through: (i) the institutionalization of a climate-adapted MOP-SEDP process; (ii) an updated and

devolved CC strategy and action plan; (iii) better access to climate adapted agriculture technology

32

It is expected that poverty reduction in Project communes at the end of the Project will be at least 20% above the

average non-Project provincial commune rate. 33

An additional 4,000 women will be mobilised into around 260 WSCGs in Bắc Kạn, financed through residual

revolving funds from the former 3PAD.

Local

IFAD Loan IFAD Grant GOV Taxes GOV Beneficiaries Total (Excl. Duties &

Amount % Amount % Amount % Amount % Amount % Amount % For. Exch. Taxes) Taxes


1. Strategic Investment plan 128.2 91.4 - - 12.0 8.6 - - - - 140.2 0.2 - 128.2 12.0

2. Climate change adaptation plan 954.6 76.6 - - 46.6 3.7 244.4 19.6 - - 1,245.6 1.7 - 1,199.0 46.6

3. Climate-informed, market oriented socio-economic plans 3,006.4 44.7 - - 509.3 7.6 3,210.0 47.7 - - 6,725.6 9.1 35.1 6,181.2 509.3

Subtotal Province-based participatory planning institutionalised 4,089.1 50.4 - - 567.9 7.0 3,454.3 42.6 - - 8,111.3 11.0 35.1 7,508.4 567.9


1. Forest land and forest allocation 1,626.2 63.8 - - 226.5 8.9 464.6 18.2 232.3 9.1 2,549.7 3.5 - 2,323.2 226.5

2. CIGs for climate adaptation 6,916.7 62.3 - - 129.4 1.2 740.0 6.7 3,325.0 29.9 11,111.1 15.1 1,817.9 9,163.8 129.4

Subtotal A greener agricultural future 8,542.9 62.5 - - 356.0 2.6 1,204.6 8.8 3,557.3 26.0 13,660.8 18.6 1,817.9 11,487.0 356.0


1. Community infrastructure 19,130.8 63.6 - - - - 8,114.1 27.0 2,844.7 9.5 30,089.6 40.9 5,549.4 24,540.2 -

2. Rural financial services 4,638.3 96.7 - - 108.1 2.3 48.5 1.0 - - 4,794.9 6.5 360.6 4,326.2 108.1

3. Agriculture Promotion Investment Fund 4,044.7 55.8 - - - - - - 3,199.6 44.2 7,244.3 9.8 103.5 7,140.8 -

Subtotal Profitable farms linked to finance and markets 27,813.7 66.0 - - 108.1 0.3 8,162.6 19.4 6,044.3 14.3 42,128.8 57.2 6,013.5 36,007.2 108.1

D. Programme Management 2,054.3 22.3 - - 471.7 5.1 6,678.8 72.6 - - 9,204.8 12.5 567.3 8,165.8 471.7

E. NTP NRD National Coordination Office Grant - - 500.0 100.0 - - - - - - 500.0 0.7 - 500.0 -

Total PROJECT COSTS 42,500.0 57.7 500.0 0.7 1,503.6 2.0 19,500.4 26.5 9,601.7 13.0 73,605.7 100.0 8,433.7 63,668.3 1,503.6




38

and credit; and (iv) institutional strengthening leading to more climate informed and market-oriented

planning.

167. The increased income and employment will result in increased demand for goods and services

in the rural areas in Bắc Kạn and Cao Bằng, which is expected to generate additional income and

employment effects, and further increase government tax revenues. The increased agricultural output

will increase national production, and thereby contribute to growth in overall GDP and national food

security. In addition, foreign exchange earnings/savings are expected from increases in exports

(mainly timber, medicinal plants, ginger and spices) and a reduction in imports (mainly timber).

168. Major institutional benefits expected from the Project are: (i) up to 1,900 CIGs and more than

1,000 newly established WSCGs as well as farmers’ cooperatives supported by the Project are

effectively serving their members; (ii) staff capacity at provincial and district level is built for

preparation of SIPs and market economy management; and (iii) all Bắc Kạn and Cao Bằng districts

and communes are implementing an institutionalised climate adapted MOP-SEDP processes.

169. The main social and environmental benefits expected from the Project are: (i) reduced

vulnerability and increased resilience to climate-change and disaster impacts, resulting from the

implementation of climate-adapted MOP-SEDP at district and commune level; (ii) increased

participation of women and the poor in decision making at local level; (iii) reduced environmental

degradation and conserved natural resource base for sustainable livelihoods of present and future

generations; and (iv) environmentally friendly agronomic practices, energy-efficient processing and

safe disposal of agro-industrial waste products. An overview of the potential Project benefits is

provided in Appendix 10.

170. Financial Analysis (FA). The FA is based on illustrative models for annual crops (21), tree

crops and forestry (9), animal production (7) and processing enterprises (6) which have been

identified for the main commodity chains that are likely to be supported by the Project. The commodity

chains have been selected on the basis of a preliminary analysis of the market demand, constraints,

opportunities and their potential to contribute to poverty reduction in Bắc Kạn and Cao Bằng34

.

Appendix 10 presents the main financial parameters. Detailed enterprise budgets are provided in the

Economic and Financial Analysis Annex in the Project Life File. The FA shows the potential for

significant increases in net profits, return to labour and return on investment resulting from the Project.

Decisions on Project support to investments in farming systems and enterprises will be based on

sound FA, specifically for (i) investment proposals for APIF co-financing; and (ii) business plans for

investments by CIGs and, as appropriate, by SCG members. The financial enterprise budgets

prepared together with the PPB and DARD staff provide the basis for the Economic Analysis of the

Project. Furthermore, it is envisaged that the templates developed will provide the building blocks for

a thorough VC analysis for the main VCs to be supported by the Project, as well as for the above

mentioned FA that will be carried out during implementation (after some modification as required).

171. Economic analysis (EA). The CSSP does not lend itself to the traditional EA of development

projects, as it is demand- and market-driven and it is not possible to determine ex-ante for which

types of eligible commodities and economic activities farmers and enterprises will request Project

support, which technologies and business practices they will actually choose, and what types of

community infrastructures will be funded. Therefore, the EA has been based on (i) an estimated

distribution of farm and enterprise models identified in the FA and conservative assumptions regarding

outreach, adoption and success rate; and (ii) representative models for rural road and irrigation

scheme construction/rehabilitation supported under Output 6. It should be noted that potential benefits

from Outcome 1: Province-based participatory planning institutionalised have not been quantified

separately as (i) this component will contribute to realizing the outcomes expected from Outcomes 2

and 3; and (ii) it is difficult to quantify in economic terms additional benefits resulting from the activities

supported, specifically (a) provincial CCA plan and investment Project preparation; and (b) climate-

informed, market-oriented socio-economic development planning. No economic benefits have been

34

Priority commodity chains identified and analysed during Project design include: timber, ginger, tangerine, canna,

peanut, black agar, banana, h’mong cow and black pig production.




39

calculated for the Project coordination component which is a precondition for Project implementation

and achieving Outcomes 1, 2 and 3.

172. Taking into account the total economic Project costs, the economic internal rate of return

(EIRR) of the Project for the base case is 14.8 per cent. The net present value (NPV), discounted at

nine percent is VND 598.5 billion (USD 26.72 million). An increase in Project costs by 10 per cent will

reduce the EIRR to 13.2 per cent, while a decrease in overall Project benefits by 20 per cent will result

in an EIRR of 11.2 per cent. Considering the possibility of a combination of 20 percent reduction in

incremental benefits with a two-year delay in benefits, the EIRR is reduced to 8.0 per cent. The

switching values show that the Project will remain economically viable if benefits decreased by 31 per

cent or Project costs increased by 45 per cent (see sensitivity analysis linked to the Project risk

analysis in Appendix 10).

173. Conclusions. On the basis of conservative assumptions, and given the fact that many potential

benefits that are expected from the Project have not been quantified in economic terms, the Project

can be justified on economic grounds. It should be kept in mind that not all potential economic

benefits (for example: environmental benefits; other direct and indirect benefits of community

infrastructure; and additional direct benefits from Outcome 1 have not been included in the analysis.

Furthermore, the likely multiplier effects mentioned above have not been quantified. Therefore, it can

be assumed that the estimated economic benefits are on the low side of the potential economic

returns that can be expected when the Project is implemented.

D. Sustainability

174. The emphasis of the Project is on enhancement of private sector activity and competitiveness

in the specific sub-sectors targeted for investment. The most important determinant of sustainability of

such investments and, by extension, provision of expected benefits, is their continued profitability. The

approach adopted will provide strong grounds for the expectation that a large majority of investments

will endure. The main tools used by the Project to enhance prospects of private business

sustainability will be:

Enhanced capacity of government staff, farmers and private rural enterprise actors to

analyse and prioritize investment choices;

Rigorous scrutiny of business proposals by CSSP and collaborating financial institutions;

The commitment of a substantial proportion of investment from the client’s own financial

resources;

The complementary public investment in infrastructure designed to improve business

conditions and lower costs; and,

The focussed approach to investment within the Communes provided by the MOP-SEDP

process.

175. The incorporation of the private sector into an enhanced MOP-SEDP process, which will

holistically plan both government and Project resources is critical to the post-Project economic welfare

of the target group.

176. The public investments through the leveraging of market and VC development provide a

different challenge for sustainability of benefits. The experience gained by IFAD and by 3PAD in

supporting this is crucial. The MARD is also supportive of APIF investments and, with donor support,

including IFAD, is preparing national guidelines for APIF that will be adopted by CSSP. The likelihood

of sustainability of the public investments, although not assured, will be further enhanced through the

following measures which are built in to Project design:

The operation of investments will largely be through existing institutions;

The requirement for a relatively significant contribution from the sponsoring agency or

community groups; and,




40

The assurance local ownership and participatory planning through the MOP-SEDP

process

E. Environment classification

177. In line with IFAD’s Social, Environmental and Climate Assessment Procedures, the Project is

classified as Category B. While the Project's design and implementation activities may have some

environmental and social impacts on human populations or environmentally significant areas, these

will be small in scale, dispersed and largely site-specific and reversible. The Project’s potential

adverse impacts are relatively minor, and these can be prevented or ameliorated by appropriate

actions and mitigation measures that will be described in an Environment and Social Management

Plan (ESMP) which is a compliance document that accompanies Category B projects (See SECAP,

para. 73).



Final Project design report

Appendix 1: Country and rural context background

41


A National Level

Overview of country development over the recent years:

1 Since the introduction of a comprehensive set of economic reforms known as Đổi Mới

(renovation) in 1986, Viet Nam’s economy has sustained strong economic growth. Over the last

15 years, Gross Domestic Product (GDP) growth has averaged 6.15% per annum, resulting in rapid

poverty reduction: from more than 60% in the early 1990s to 17.2% in 201435

. Consequently, almost

40 million people have been lifted out of poverty. In recent years, however, GDP growth has lagged,

averaging 5.2% in the period 2009-2013, due to world economic stagnation, high domestic inflation

and low private sector business confidence, the latter the result of overleveraged State Owned

Enterprise (SOE) and banking sectors and weak domestic demand.

2 During 2015, Vietnam’s macroeconomic conditions have improved as its economy completes

the seventh year of relative stability, post global financial crisis. With low inflation, a relatively stable

exchange rate, and increased reserves, Vietnam has left the recurrent episodes of macroeconomic

instability that started in 2007. Year on year inflation has fallen from a peak of 23 per cent in August

2011 to 0.9 per cent in October 2015. The official exchange rate has been relatively stable supported

by a new policy to widen the exchange rate band when the currency is under pressure rather than to

defend the currency. The stock of reserves with the Central Bank has more than doubled in the past

two years, with reserves covering about 3 months of imports at the end of 2014. Vietnam’s sovereign

spreads and country default swaps are now hovering at their lowest levels since the onset of global

economic crisis. Along with economic development, Vietnam has also provided opportunities for

greatly enhanced foreign direct investment and international trade. In the last decade, Vietnam’s

international trade turnover has increased more than 6 times (GSO, 2014), showing an open economy

and a commitment to integration.

3 Macroeconomic stability, in the absence of broad structural reforms, however, has not been

sufficient to lift the economy from its recent spell of relatively slower growth. The World Bank update

on economic affairs (World Bank, 2013) notes that policymakers have been consumed in recent years

with trying to stabilize the economy, with the hope that once macroeconomic stability is achieved,

growth will automatically resume. But even as the economy has stabilized, growth is only just starting

to improve. In fact, growth has been below 7 per cent for seven consecutive years, with GDP growth

in 2015 expected to reach 6.4 per cent, up from 6 per cent in 2014. Efforts to stimulate the economy

through tax breaks and accommodative monetary policy have faced diminishing returns, while raising

fiscal deficits and creating new contingent liabilities. Without accelerating structural reforms, especially

in the banking and State owned enterprise (SOE) sectors, Vietnam faces the risk of a prolonged

period of slow growth. A comparison of economic indicators between 2005 and 2014 is shown in

Table 1

Table 1: Major Economic Indicators for Vietnam

Indicator Unit 2005 2014

Population head 83.5 million 90.7 million

GDP USD 52.9 billion 186.0 billion

Inflation Rate % 9.5 9

Exports USD 32.0 billion 150.0 billion

FDI USD 5.8 billion 21.9 billion

Poverty % NA1 17.2%

Life expectancy years 75 76

Source: Vietnam General Statistics Office data and Ministry of Planning and Investment.

35

In 2010, a new poverty line was estimated by the General Statistical Office and World Bank that better reflects living

conditions of the poor. Based on the revised poverty line (equal to VND 653,000/person/month or $2.25/person/day,

2005) and updated monitoring system, the national poverty rate in 2010 was 20.7 percent vs. an official poverty rate of

14.2 percent in 2010 using former MOLISA urban and rural poverty lines of VND 500,000/person/month and VND

400,000/person/month, respectively.





42

The National Geography of Poverty

4 The most current estimates (for 2012) put the

percentage of the population below the poverty line at

17.2 percent. Rural areas remain disproportionately

affected by poverty. In 2012, the poverty headcount

ration (at national poverty lines) in rural areas –

22.1 percent – was roughly four times that of urban

areas at 5.4 percent. As about 67 percent of Viet

Nam’s 2014 population lived within rural areas, poverty

may be characterized as predominately a rural

phenomenon. (World Bank, 2015). Poverty also has

strong ethnic and geographic dimensions.

Disproportionate progress has been made in reducing

poverty amongst the different ethnic groups. While

only some 15 percent of the population, these groups

account for more than half the poor, and progress on

ethnic minority poverty reduction has slowed (World

Bank, undated). Rates of poverty have been reported

as 9 percent for the majority Kinh/Hoa peoples and

50.3 percent among ethnic minorities (VASS, 2011).

5 Geographically, data (VASS, 2011) indicate that

the Southeast and the Red River Delta have the lowest

rates of poverty in the country. Whereas, in the

Northwest, where a high percentage of the population

are ethnic minorities, the incidence of poverty is many

times higher at 45.7 percent. The Northeast, Central

Highlands and the North Central Coast displayed

similar incidences of poverty, as did the South Central

Coast and Mekong River Delta.

6 Children and women are particularly vulnerable

and often more strongly impacted by poverty in the

rural areas. In Viet Nam, most poor children live in

rural areas. Among ethnic minority children poverty is especially high. Using multi-dimensional criteria

to assess poverty (i.e., not only economic criteria, but also criteria related to child development needs:

education, health, housing, clean water, sanitation, not working at an early age, and social protection),

the two regions with the highest rates of poverty among children were the Northwest and the Mekong

River Delta. (GSO, 2009).

Agriculture and Rural Development

7 Agriculture generated 18.1 per cent of GDP in 2014 and generated USD 30.86 billion in export

earnings, of which fisheries export comprised USD 7.92 billion. Over the last 20 years, agricultural

growth has assured food security and made a key contribution to economic and social development

and stability. Based on 2014 figures some 68.8 per cent of the population or 60.6 million people live in

rural areas. 36

The economic structure, however, has shifted, with the number of households’

dependent on agriculture reduced from 71.1 per cent in 2006 to 46.2 per cent in 2014, with an

increasing share of households in industry and services, from 25.1 per cent in 2006 to 53.8 per cent in

2014. The sector’s share of employment, however, remains 2.5 times higher than its share of GDP,

indicating relatively low labour productivity. This shift in the rural economic structure varies greatly

among regions. In 2013, the three regions with shares of non-farm households higher than 30 per

cent are the South-East (58.1 per cent), Red River Delta (44.5 per cent) and Mekong River Delta

36

General Statistics Office of Vietnam 2014: provisional figures for 2014.

Figure 1. Provincial poverty head count as

percent of total population.





43

(32.2 per cent). In contrast, the Central Highlands, Central Coast and Northern Uplands regions have

more than 80 per cent of their population relying on agricultural incomes, while the share of non-farm

remains relatively low, which has many ramifications for poverty.

8 The annual

rate of growth in

agricultural

production slowed

from an

impressive

average of

5.7 per cent in

1990-2002 to

4.2 per cent in

2002-13. In 2013,

agriculture

exports formed

17 per cent of the

value of total

exports and just

9.8 per cent of

imports, leaving a

healthy, positive

agricultural trade

balance. The ratio of total agro-food export value to agricultural GDP was 70-80 per cent in the early

2010s, much higher than in China or Indonesia and equal to the ratio of total Viet Nam’s exports to

total GDP. The ratio of agro-food imports to agricultural GDP, while only half of that for exports, has

tripled since 1990. Rice remains by far the most important commodity, accounting for about 35% of

the total value of agricultural production in recent years. There has, however, been an important

change in the composition of production away from staple foods to other commodities, in particular

perennial crops such as coffee and rubber, and livestock production, especially pig meat. This reflects

the strong export orientation of perennial crops and the changing preferences of consumers to higher

value products37

. In 2014, total rice production was 45 million tons, an increase of 5 million tons

compared with 2010. Rising agricultural labour costs are slowly forcing efficiency gains

(mechanization and land consolidation) and accelerated production diversification. The livestock

subsector accounts for 25 per cent of agricultural GDP and is projected to rise significantly. The

forestry sector contributes around 1 per cent.

9 Fisheries output rose by an annual average of 4.6 per cent from 2010 to 2014, with

particularly rapid gains in freshwater aquaculture output and shrimp production, which now exceeds

the harvest of wild fish. Overall, the fisheries sector accounted for over 20% of the gross value of

agriculture, forestry and fisheries production and for 3.7 per cent of national GDP in 2012. In 2014,

total output of fisheries reached 6.3 million tons (provisional GSO estimate). Exports of seafood

increased to USD7.9billion in 2014 (an increase of 63 per cent from 2010), making it Viet Nam’s fifth

most valuable export and Viet Nam the third largest seafood exporter globally.

10 Despite this strong performance, a number of constraints remain. Product quality is low, and

Vietnam typically receives significantly lower prices than neighboring countries and market

competitors for its rice, coffee, tea, rubber and aquaculture exports. Agricultural knowledge systems

require significant investment and stronger client and market orientation, while massive infrastructural

investment in water management and transport infrastructure is needed. Rural markets are

characterized by weak farmer access to market information, limited integration along value chains,

low levels of value addition, and continued dominance by state- owned enterprises of some

commodities and markets, notably export markets. These business, market and quality constraints,

37

OECD Food and Agricultural Reviews Agricultural Policies in Viet Nam 2015.

Figure 1. The share of agriculture in GDP, employment, total exports

and imports, 2000-13

Extracted from OECD Food and Agricultural Reviews Agricultural Policies in Viet Nam 2015





44

combined with an underdeveloped processing sector, represent a very significant loss of investment,

revenue and employment opportunities, while seriously constraining farm profitability. With higher

rural labour wages and an increasingly scarce natural resource base, the agriculture sector urgently

needs to further diversify production to higher-quality products, promote value addition and

processing, and increase efficiency while ensuring resource-based sustainability.

11 Although 9 million hectares (ha) of agricultural land have been issued to 12 million households

and 11.5 million land-use rights certificates (LURCs) approved, the land reform process is incomplete,

requiring further investment in LURC issuance, land information systems and land-use planning and

consolidation, and the incorporation of customary land tenure into collective land use rights,

particularly for “residential communities” of ethnic minorities. Unsustainable natural resource use,

particularly of water and in the forestry sector, leads to problems of water scarcity and land

degradation, including saline intrusion and loss of biodiversity and flooding. This is amplifying

vulnerability to climate change and natural climate hazards, which are increasing in frequency and

severity. These constraints are compounded by the limited capacity of supporting institutions,

particularly at provincial and lower levels.

12 In its Fourth Assessment the Intergovernmental Panel on Climate Change (IPCC) described the

Mekong and Red River delta as a “hotspot of key future climate impacts and vulnerabilities in Asia”.

Long-term predictions show that expected impacts on the agriculture and rural development sector

will primarily derive from changes in temperature, rainfall and sea level. A 2007 World Bank study

concluded that the one-meter rise in sea level predicted for 2100 would directly result in a loss of

more than 5 per cent of the country’s land area, more than 7 per cent of agricultural lands and 28 per

cent of wetlands, and more than 10 per cent of GDP. It would impact about 11 per cent of the total

populated and urban areas.

The opportunities for rural development of Vietnam:

13 The Government of Vietnam primarily plays facilitating roles in infrastructure development,

public services, and in special programs. It also provides direct support for areas with extremely

difficult conditions in remote and/or mountainous areas. Government investment and support for rural

areas is prioritized towards infrastructure upgrading and development to provide better services for

production, transportation (and trade), and markets. It also provides direct support for non-agricultural

economic activities and development of SMEs and industrial villages in rural areas. In line with

priorities of government, the largest donor-funded activities are focused mostly on infrastructure such

as transportation, irrigation, utilities and other public facilities. ODA funding plays an important role

with 61% of funds goes to rural areas.

14 Involvement of the private sector: The private sector created 86% of the total employment in

Vietnam in 2014 (GSO). Moreover, with the initiation of public-private partnerships, the private sector

plays a more important role in providing education and training services to the poor. While challenges

still exist, the government has recognized the value of foreign investment and private enterprise in

steering economic growth and has made doing business in Vietnam much easier in recent years.

15 Within the policy and investment framework, there are numerous viable avenues for agricultural

and rural development in Viet Nam, building on the successes of the recent past. Viet Nam possesses

a well-educated rural work force, has relatively good rural infrastructure and relatively good physical

environment. All of these factors enable it to be a low cost producer of agricultural commodities. The

most prominent of the agriculture production and processing opportunities for Bắc Kạn and Cao Bằng

provinces are:

wood and wood products for domestic and export markets (particularly Bắc Kạn)

livestock products for burgeoning urban markets in the north-west mountains and

China;

NTFPs, particularly bamboo shoots. medicinal plants and spices for domestic and

export markets;





45

specialised local crops including ginger, canna, seed peanuts, tangerines, plums,

truc bamboo, black agar and Shan tea.

Public Sector Planning for rural development

16 The Ministry of Planning and Investment (MPI) has under its jurisdiction the entire planning

process as well as the development of the various strategies and plans, at all levels. The two central

components of the planning system are the 10-year "Socio-economic Development Strategy" (SEDS)

and the corresponding consecutive "Five-year Socio-economic Development Plans" (SEDP). In

addition, there are (i) regional development plans whose purpose is to tailor the objectives of the

SEDS and SEDP to the conditions of the regions in Vietnam; (ii) national sectoral development plans

that define the sector‐specific objectives to be implemented by the line ministries, (iii) at the sub‐

national level, the line ministries’ regional and provincial sectoral development plans, and (iv) the

Provincial People’s Committees’ long‐term and annual plans for socio‐economic development.

17 The current SEDS, covering the period from 2011-2020, focuses on structural reforms,

environmental sustainability, social equity, and emerging issues of macroeconomic stability. It defines

three “breakthrough areas”: (i) promoting human resources/skills development (particularly skills for

modern industry and innovation), (ii) improving market institutions, and (iii) infrastructure development.

18 The SEDP is the primary national planning tool for the implementation of the SEDS. The

current SEDP for the period 2011-2015 focuses on the need to restructure the economy to increase

the share of high value-adding economic activities, improve the living standards of ethnic minority

populations, strengthen environmental protection, and mitigate and prevent the adverse impacts of

CC. The Plan underlines the need to develop favourable conditions for the private sector and to

gradually reduce the contribution of the state sector to GDP. It also outlines the importance of

environmental protection, CC mitigation, and adaption and building resilience to natural hazards.

19 A bottom-up mechanism is employed in the development of the SEDPs, both the five year as

well as the annual SEDP plans. Local governments at the commune, district, and province-levels

develop and submit proposals to the next higher level of government, which are then ultimately and

eventually submitted to MPI, where they are incorporated into the annual SEDP plans.





46

Table 2. Types of socio‐economic development planning inputs.

Source: Tan, S. 2012. Reconsidering the Vietnamese development vision of “industrialization and

modernization by 2020”. Working Paper 102. ZEF Working Paper Series. Department of Political and

Cultural Change, Center for Development Research, University of Bonn

20 Of greatest relevance to the proposed Project is the context and functioning of the SEDP

process at the local-levels (commune, district and province). Their five-year plans establish the annual

targets for each Province and, by extension, the annual priorities to be incorporated into each years’

SEDP. Under the SEDP 2011-2015 there are four thematic areas whose targets orient the planning

for the agriculture and rural development (ARD) sector. These thematic areas are: Clean Water, the

National Target Program for New Rural Development, the National Target Program for Response to

CC, and Clean Food & Agriculture.

21 The National Target Program on New Rural Development (NTP-NRD) is to implement the

ARD sector’s “New Agricultural and Rural Development Strategy”. The policy calls for structural

changes that would widely affect policy, legal frameworks, planning, land use, investment and

principal factors of production within the sector and in the rural areas. The intent of the new policy is to

speed up industrialization and modernization of the rural sector. MARD is the lead Ministry for NTP-

NRD implementation. Among others, the policy calls for:

Improved natural resource management and CC adaptation for livelihood security,

and building capacity at grassroots level for promoting sustainable uses of natural

resources to enhance the livelihoods of the farmers;

Decentralization of decision making and resources covering both economic and

social issues;

The transition of the role of the State in agriculture, from service provider to

regulator and facilitator;

A continued transition to market-oriented agriculture and rural economic

development; and





47

Economic growth and competitiveness through the creation of non-farm and off-

farm employment opportunities through accelerated market-oriented reforms.

22 Operational details for the implementation of the NTP were defined in a 2010 decision which

detailed program’s eleven components and their institutional and implementation arrangements.

There are three components which are of particular importance in a discussion of climate adapted

investment and in building resilience for adaptation to CC:

General master plan for rural development – including all planning processes for

the development of “new rural areas”, i.e. planning of land use, basic

infrastructure, production of agricultural commodities, agro-industry, craft industry,

provision of services, socio-economic and environmental infrastructure, new

residential areas and improvements to existing residential areas in communes;

Socio-economic infrastructure development − construction of roads, power grids,

clinics, schools, irrigation systems, etc.;

Economic restructuring, development and income improvement – including

restructuring agricultural production towards production of commodities with “high

economic efficiency” and; strengthening extension activities, increasing research

outputs on advanced technologies for agro-forestry-aquaculture production.

Natural Resources Management and Climate Change Adaptation

23 Natural resources management concerns with regard to agriculture and forestry development in

Viet Nam include soil erosion and land degradation, deforestation and degradation and quality and

availability of water resources. Two third of the country is mountainous and hill side crop cultivation,

which is highly vulnerable to soil erosion, is widely used. Even though terraces are common, shifting

farming is also practiced (although reducing following the banning of "swidden” agriculture), and the

application of soil and water conservation technologies and practices is limited in some intensely

cultivated areas. Manny studies suggest that the loss of the fertile top soil in upland crop cultivation

systems is more than 8 times higher than the Soil Loss Tolerance Value, which, over time effects

yields.38

Deforestation of steep slopes, along water courses and in upper parts of watersheds, is

another factor that effects soil erosion as well as floods and dry seasons stream flow. According to

FAO, the total forest cover of Viet Nam in 2010 was 13.8 million ha (41 per cent of total land area of

the country) divided into the three forest management categories used in Viet Nam: Special-use

Forest (16% of total forest area), Protection Forest (36% of total forest area) and Production Forest

(48% of total forest area)39

. The current forest cover represents an important recovery from 9.1 million

ha in 1990, which was a result of high levels of deforestation in the second half of the 20th century.

However, the increased forest cover is mostly coming from monoculture forest plantations and the

natural forests, which deliver higher levels of services of soil erosion and flood control, maintenance of

stream flows in dry seasons and conservation of biodiversity, has only seen limited recovery. It is

estimated that Viet Nam has less than 1% primary forest left 40

.

38

Erosion and Nutrient Loss on Sloping Land under Intense Cultivation in Southern Vietnam, Nguyen Van De, et. al.

2007 39

Production forests are forest lands designated primarily for the production of timber and timber products. They can be

natural or plantation forests. Policy mandates that the production of raw material for forest industry should be prioritized

on these lands. However, some alternatives are allowed in mountain areas where the objectives of forest

rehabilitation/enrichment and livelihood improvements for local peoples can be met through establishment of multi-

purpose species and NTFPs. Protection forests are lands designated for purposes of watershed protection, coastal

zone and island protection, stabilization of lands subject to aeolian processes, environmental protection for large urban

areas and, as buffers on national borders. Multiple use is allowed, depending on how critical its protective function is

considered to be. Protection with agricultural production, aquaculture, scenic landscape management, outdoor

recreation, ecotourism, harvesting of forest products and other benefits for local communities may be permitted.

Special use forests are primarily for biodiversity protection, but contemplate some multiple-use by local communities

outside of the core zone (i.e., in the buffer zone) such agroforestry as a restoration option, or ecotourism and outdoor

recreation activities. 40

The context of REDD+ in Vietnam - Drivers, agents and institutions, CIFOR, 2012





48

24 These trends in the general status of the natural resource base for agriculture and forestry

effect the agro-ecosystems overall resilience to current and future challenges from climate change.

Viet Nam has been predicted to be one of the world’s most vulnerable countries and likely to be

significantly impacted by climate change. Globally, it has been ranked as a “Natural Disaster

Hotspot”, ranking 7th on economic risk, 9th on the percentage of land area and population exposed,

and 22nd on mortality from multiple hazards (Dilley et al, 2005). With its “mega deltas” and high

population concentrations within the Mekong and Red River Deltas, the IPCC’s Fourth Assessment

characterized Vietnam as a “Hotspot of key future climate impacts and vulnerabilities in Asia” (Cruz et

al, 2007). Roughly 40 million or more Vietnamese live in and around the deltas and along the coast. A

UK-based firm, specializing in the provision of risk intelligence services to private investors and

organizations, ranked Viet Nam as an “extreme risk” country and 13th of 170 countries in terms of its

vulnerability to the impacts of climate change over the next 30 years (Maplecroft, 2010).

25 Risk related to heavy rainfalls and extreme weather events is not a foreign concept in Viet Nam.

The Vietnamese people have long been subjected to the impacts of natural disasters. Globally, Viet

Nam is one of the ten countries most affected by natural disasters (CRED, 2010). With the majority of

the population living in low-lying river basins and coastal areas, more than 70 per cent of the

population is estimated to be exposed to risks from multiple natural hazards. From 1953 to 2010,

nearly 25,000 people died in natural disasters, another 77 million have been affected and damages

are estimated at over USD 7 billion. Typhoons (tropical cyclones) have been the main hazard. More

than 80 typhoons have hit Vietnam between 1953 and 2010. Floods, with around 60 major events,

have been the second major natural disaster-related cause of loss of life, property and livelihoods. In

terms of human exposure, floods are responsible for almost 60 percent of impacts on the population,

followed by storms and drought. In economic terms, storms are responsible for about 55 percent of

losses, followed by flood and droughts (GFDRR, 2011). National statistics show every year natural

disasters cause an average of 750 deaths and economic losses equivalent to 1.5 per cent of GDP.

Since damage and loss data are chronically underreported, real totals may be much higher. (GFDRR,

2011) and, the trend is increasing. Average annual property losses between 2005 and 2008 from

natural disasters were some three times the long term national average (MONRE, 2010). Scenarios

for future impacts of climate change suggest that these losses will greatly worsen over the course of

the 21st century.

Vulnerability to Climate Change, National

26 Of particular concern is the nexus between weather and climate risk and poverty. In a World

Bank study on the social dimension of adaptation to climate, village-level interviews found that

community members considered factors directly related to climate to be among the main causes of

poverty. In one particular instance, poor households participating in interviews maintained that they

had been non-poor up until 2008 when flash floods caused them to lose a significant portion of their

assets. Due to drought and crop losses the following year they had been unable to recover.

According to the authors of the study “drought and hazard damage were brought up again and again

as a main cause of poverty.” (McElwee, 2010).

27 These are not isolated cases. Research by the Vietnam Academy of Social Sciences (2011)

has shown that among the factors contributing to falling below the poverty line are exposure to risks

from natural disasters, crop and livestock epidemics, harvest losses, and other risks to production.

Factors related to remaining below the poverty lines included lack of natural capital (having no or

insufficient land for cultivation, lacking capital and productive assets, having land but lacking funds for

investment), poor education and awareness, and lack of external support, such as technical

assistance. To all of these factors, women tend to have greater exposure, including those related to

natural disaster and production risks. Poor women are often the most exposed and sensitive due to

their involvement in agricultural livelihoods on disaster-prone lands. They are also the less endowed

and empowered to recover from disruptions and for shifting to alternative livelihoods (Fortier, 2010).

28 In sum, vulnerability to climate change in Viet Nam like in other countries is socially

differentiated. Impacts of extreme weather events are related to poverty status, access to resources,





49

and social security systems. Groups that are already the most socially vulnerable (women, ethnic

minorities, and the disabled) are likely to be disproportionally less able to adapt to climate changes.

The rural poor, and especially these socially vulnerable groups, are also exposed to greater risk given

their direct reliance on agriculture and the natural resources base for their livelihoods as well as their

greater exposure to natural disasters and their lack of assets and capital to recover or to shift to

alternative livelihoods.

29 The issue of vulnerability also extends to households of the non-poor. Work by Baluch and Hoa

(2010) suggests that while large numbers of households have moved out of poverty, many have not

moved far above the poverty line and remain vulnerable to exogenous shocks that might cause them

to fall back into poverty. Among the relevant factors (vulnerabilities) identified were global economic

downturns, rises in food and fuel prices and natural disasters (floods).

NRM and CCA policies and strategies

30 In recognition of Viet Nam's vulnerability to environmental pollution and the impacts of climate

change, the National Green Growth Strategy (GGS) for the period 2011-2020 with a vision to 2050

(GGS) was approved in 2012 to support a low carbon sustainable development. The underlying

viewpoint stated in the GGS is Green growth must lead to increased investments in conservation,

development and efficient use of natural capital, reduction of greenhouse gas emissions and

improvement of environmental quality, and thereby stimulating economic growth. The main objectives

of the GGS are: (i) restructure the economy and “perfectize” the economic institutions by greening

existing sectors and encouraging the development of economic sectors to use energy and natural

resources efficiently with higher added values; (ii) conduct research and enhance application of

appropriate advanced technologies to more efficiently use natural resources, reduce greenhouse gas

emissions intensity and to contribute to an effective response to climate change; and (iii) improve

living standards of the people, creating an environment friendly lifestyle through employment

generation from green industry, agriculture and services; investment in natural capital; and

development of green infrastructure. The GGS has set targets to be reached by 2020 including: (i) 8-

10% reduction in GHG emissions as compared to the 2010 level (includes a voluntary reduction of

approximately 10%, and an additional 10% reduction with additional international support), application

of clean technologies in manufactures will reach 50%; and (ii) development investment for supporting

sectors to protect the environment and enriching natural capital will reach at 3-4% of GDP.

31 To achieve these objectives and targets the main strategic tasks and solutions identified in the

GGS relevant for agriculture and forestry are listed below of which the CSSP project, depending of the

priorities of the CIGs, will support (i), (iii) in relation to climate change adaptation, (iv), (v), (vi), (viii), (x)

and eventual xiv:

(i) organize education, awareness raising, and technical assistance activities for communities on

the role and meaning of green growth as well as pragmatic actions that contribute to its

implementation including production and consumption models which are economic, safe,

civilized, respectful of the character of ethnic groups, harmonious and nature friendly

(ii) development of a green agriculture based on environmentally friendly structures,

technologies and equipment; enhancing investment in natural capital; proactive prevention and

treatment of pollution;

(iii) study the adjustment of master plans, shift animal husbandry and crop production structures,

crop planting seasons, livestock, forestry, aquaculture, irrigation and non-farming activities in

rural areas;

(iv) research and apply production processes and economic technologies that efficiently use

seedlings, feed, agricultural materials, soil, water etc., and reduce greenhouse gas emissions

from agricultural production;





50

(v) replicate widely technologies that treat and reuse by-products and waste from agriculture

production to produce animal feed, mushrooms, materials for industries, biogas and organic

fertilizer while reducing greenhouse gas emissions;

(vi) speed up progress of afforestation and reforestation projects, encourage enterprises to

invest in production forests to increase forest coverage to 45% by 2020, improve forest quality,

enhance carbon sequestration capacity by forests and increase standing biomass and secure

timber production and consumption;

(vii) implement programs to reduce greenhouse gas emissions through efforts in Reducing

Emissions from Deforestation and Forest Degradation (REDD), sustainable forest management

in combination with diversifying livelihoods of rural people.

(viii) enhance investment in irrigation systems with modern operation equipment to ensure

efficient regulation and protection of water resources, adequate supply of water for agricultural

production with better irrigation, drainage and flood control.

(ix) establish and complete the legal framework and policies to enforce and effectively

implement the Law on water resources, Law on land, Law on mineral resources, Law on

environmental protection and related regulations; to strengthen the use of economic and

administrative instruments based on the “the polluter pays” principle.

(x) encourage local authorities to have policies that prioritise and support green economic sector

development and integrate that in programs for development and poverty reduction,

improvement of landscapes and the environment.

(xi) establish effective administrative organizations, complete the management system for

natural resources and environment protection at the central and local levels.

(xii) apply an integrated management approach and improve management bodies of river basins

and ecological systems.

(xiii) formulate the green accounting system through valuation of natural resources.

(xiv) develop and issue standards for green/ecolabelling of products and issue special policies

on economic-technical assistance that encourage to expand markets and develop green

traditional products where Viet Nam has competitive advantage, including herbal medicines;

eco-agriculture, forestry and fisheries; foods; as well as commodities goods and garments made

from local materials.

32 An Inter-Ministerial Coordinating Board for implementation of the GGS has been established

under the National Committee on Climate Change to direct the implementation of the strategy. The

Board has the Deputy Prime Minister as its Head and the Minister of Planning and Investment as the

standing vice Head, with the four other vice-Heads being the leaders of MoF, MoIT, MARD, and

MoNRE. The Board also includes some other representatives of the ministries, sectors and local

authorities and some associations. The apparatus to assist the Board is located in the MPI, who will

organize and assist the Board in leading and executing the implementation of the GGS. The MoF has

the primary responsibility, in coordination with the MPI, for submitting budget proposals for approval

and ensuring funding for the implementation of the strategy in ministries and sectors under the current

regulations. MoF will also in collaboration with MPI develop policies to encourage all economic

sectors, organizations and individuals to invest in development of the green economy in Viet Nam.

The MoNRE has the lead and coordinate the policy making process for response to climate change in

general, guiding the registration, monitoring, verification and reporting of greenhouse gas emissions

and monitor the implementation of investment policies in natural capital.

33 The GGS integrates and builds on previous policies and action plans constituted to address CC

impacts including: (i) the NTP-RCC; (ii) the Action Plan Framework for Adaptation to CC in the

Agriculture and Rural Development Sector, 2008-2020; (iii) MARD's Action Program in Response to





51

CC of the Agriculture and Rural Development Sector, 2011-2015 and Vision to 2050 (RCC-ARD); and

(iv) the National Program on Community-Based Disaster Risk Management to 2020.

34 Payment for Forest Environmental Services. In December of 2010 the Office of the Prime

Minister approved Government Decree 99 establishing the scheme for the implementation of the

Policy On Payment for Forest Environment Services (PFES). Among the stated objectives of the

policy are: to “contribute to ensuring harmony and balance of the living environment; to conserve

biodiversity; to prevent and limit adverse impacts of natural disasters (flood, drought, soil erosion,

desertification, carbon sequestration and retention, air environment pollution; greenhouse gas

emissions; climate change, etc.).” It also recognizes that to be effective, the state will have to move

forward at a strong pace to allocate forest lands and assign or provides contracts for forest use in

order for the PFES to be of use.

35 Among the stipulations already made are: (i) river basin master plans will serve as the basis for

identifying forest areas, liable payers and potential payees of forest environment services payment in

each basin; (ii) the general census on forests, being carried out during 2010-2015, will provide the

basis for the implementation of the policy; (iii) that hydrologic services (water quality, seasonal flows,

other) will be considered and hydropower plants, water supply utilities, industrial water users drawing

from natural sources, and aquaculture facilities will be subject to payments and contribute to the

monitoring of the quality of forest environment services; and (iv) other eligible services will include

carbon sequestration; avoidance of deforestation; habitat services, particularly (fishery) spawning

grounds, food and natural seeds sources. Among the main target groups for the PFES payment are

the 30 per cent of the population that lives in mountainous regions (a high percentage being ethnic

minority people).

36 Details of payments and payment levels are still being worked through, but in the in the interim,

a payment of VND 200,000/ha/yr. has been set for PFES from hydropower and water utilities (Pham,

2009). Additional GoV programs are also providing payments to households and individuals for forest

protection as forms of PFES: (i) Program 661 – VND 100,000/ha/year for forest areas contracted to

the households by the Forest Management Boards; (ii) Program 135 – VND 100,000/ha/year for forest

areas managed by the Commune People’s Committees and Forest Management Boards;

(iii) Program 304 – VND 100,000/ha/year and 15 Kg of rice/individual/month for forest protection; and

(iv) Program 30A – VND 200,000/ha/year and 15 Kg of rice/individual/month for a maximum of 84

months. In addition, MARD Decision 5399 lays the ground in 2016 for piloting sharing of benefits

under the REDD programme, which will pay farmers in pilot districts (including districts in Bac Kan)

VND 100,000/ha/year if an increase in biomass is demonstrated (4m3/year for regeneration and

5m3/year for reforestation). The increase in biomass will be monitored by the Forest

Management/monitoring Boards at the commune level. The CSSP will support the further use of

PFES through the allocation of forest land and by creating synergies where possible with the REDD

pilot in Bac Kan and building further on the experiences from the 3PAD project in negotiating voluntary

payments to upland communes from and lowland communities benefitting from stabilized clean water

flows for irrigation systems and/or ecotourism.

37 In September 2015 Viet Nam submitted its new Climate Action Plan to the UN Framework

Convention on Climate Change (UNFCCC). The plan (GoV, 2015) was developed for the upcoming

COP21 in Paris in December 2015. In it, priority actions and outputs are established for climate

change adaptation in the period 2021 – 2030 (GoV, 2015). The proposed Project will assist the

Provinces of Bắc Kạn and Cao Bằng to develop the knowledge base, institutional capacity and

instruments to carry out a number of the priority actions and achieve desired outcomes identified in

the plan. Specifically:

produce Socio-Economic Development Plans based on climate change scenarios, with a focus on key sectors and regions;

implement disaster prevention plans and measures, protect peoples' lives;

develop infrastructure and make plans for residential areas households and communities [in] areas affected frequently…[by] flash floods and landslides;





52

allocate and mobilize resources for community-based climate change adaptation and disaster management; raise awareness and build capacities for climate change adaptation and disaster risk management;

review, adjust and develop livelihoods and production processes that are appropriate under climate change conditions and are linked to poverty reduction and social justice.

develop mechanisms, policies, and …share climate and disaster risks;

implement community-based adaptation, including using indigenous knowledge, prioritizing the most vulnerable communities;

ensure food security through protecting, sustainably maintaining and managing agricultural land; restructuring of crops and livestock; create new climate change resilient varieties; complete the disease control and prevention system;

strengthen the capacity to adapt to climate change at local level;

technology transfer tools to assess climate change impacts, vulnerability, exposure and climate change adaptation measures technology to prevent erosion and protect riverbanks and technology for sustainable agriculture, forestry;

finance for climate change adaptation, mainly…socioeconomic development in the context of climate change [and encouragement and creation of] favorable conditions for private sector investment in climate change adaptation activities.

38 While the GGS reflects GoV priorities 2011 to 2021 with a vision to 2050 the National Climate

Action Plan reflects GoV priorities for the period 2021 to 2030. The CSSP will position the two

proposed provinces so that they will be sufficiently well-advanced at Project closing (2022) to ensure

meeting these medium-to-long term goals. Of particular importance is the commitment at national-

level to evaluate the country’s climate change adaptation activities until 2030 based on the five key

indicators, of which “At least 90% of Socio-Economic Development Plans have integrated

disaster risk management and climate change adaptation”, is to be a principal outcome for the

proposed CSSP. Furthermore, the project will strengthen community adaptation capacities and the

transfer of technologies and practices to prevent erosion and increase resilience of agriculture and

forest production systems and, as such, contribute to the GGS targets of reducing GHG emissions

and investing in protection of the natural capital.

Climate Change in the Northeast of Viet Nam

39 With support from Australia’s Agency for International Development (AusAID), the Vietnam

Institute of Meteorology, Hydrology and Environment (IMHEN) has developed high-resolution climate

Projections for Vietnam in order to provide information and data for the update of the country’s official

climate change and sea-level rise scenarios (IMHEN, 2014). These efforts have provided detailed

information on current climate trends and variability, climate drivers, climate modelling and the climate

ions for Vietnam at the national-level, with subsequent downscaling of the Projections to the level of

the country’s seven climatic regions. The key findings for the North East Region, in which the

proposed Project provinces are located (see Figure 2) are:

Current trends

Annual Temperature has Increased – Annual temperature in the region has increased

significantly by approximately 0.11 to 0.25°C per decade (1961-2010) with the highest

rate of 0.25°C per decade observed in the southern portion of the region.

Minimum Temperature Has Increased More than the Maximum Temperature – While

minimum daily temperature has significantly increased by up to 0.26°C per decade,

approximately, the trend in maximum daily temperature was slightly smaller, with

increases of approximately 0.21°C per decade.

More Hot Days and Fewer Cold Nights – The number of hot days significantly

increased by up to 6 days per decade, while the number of cold nights has significantly

decreased at almost all recording stations by up to 5 days per decade.





53

Annual Rainfall Has Decreased – Observations at most inland stations showed a

significant decreasing trend in annual rainfall. The largest decrease is about 6% per

decade in the south. Trends in the east were not significant.

Extreme Rainfall Amounts Have Decreased – The annual maximum 1-day rainfall

amounts and the number of very wet days remain unchanged for almost all stations in

the region, while the annual maximum of 5-day rainfall amounts has decreased

significantly.

40 The last observation is interesting. Even though both the adaptation strategies for Bac Kan and

for Cao Bang mentions extreme rain falls causing flash flooding and landslides as an effect of climate

change this is in fact not sustained by the actual figures. Flash flooding and landslides seem to be

more caused by the topography of the region, worsened by the inadequate management of land,

water and forest resources and lack of erosion and landslide prevention practices in mountain road

construction. This already existing vulnerability, however, can result in high risks looking at future

projections, where extreme rainfalls might be increasing even though difficult to predict.

Projected trends through the 21st

Century

41 Regional and global models were used to project changes in rainfall and temperature by mid-

century (2045–2065) and end-of-century (2080–2099) relative to the baseline period (1980–2000).

Principal findings from these efforts included:

Temperature Increases – Projections from regional models for average temperature

changes by mid-century and end-of-century show very clear warming, with an increase in

annual temperature of about 1.3 to 3.4°C by mid-century and 2.5 to 6.1°C by end-of-

century under the higher (RCP8.5) greenhouse gas scenario. The largest warming is

projected in the SWMS6 (Jun–Sep) and the SIMS6 (Oct–Nov). Less warming is evident

in the lower greenhouse gas scenario (RCP4.5). Both global and regional models agree

on large increases in temperature by end-of-century, with less warming in the lower

(RCP4.5) greenhouse gas scenario. However, projections by the regional models show

slightly less warming in all seasons except for the SWMS (Jun–Sep). The varying

amounts of temperature increase signify the need to consider both mid-range and

extreme changes.

Some Seasonal Decreases in Rainfall – Similar to temperature, projections of seasonal

rainfall changes over time by global models, and the range of changes by end-of-century

for both global and regional models show larger variations in the direction of change than

were projected for temperature. This reinforces the need to consider both mid-range and

extreme changes. Projections from regional models for annual rainfall show large

variations in both direction and amount of change. However, there is medium agreement

on decreases projected for the SIMS6 (Oct–Nov) by mid-century and for the SWMS

(Jun–Sep) by end-of-century.

Slight Increases in Heatwaves – The number and length of heatwaves (consecutive

periods with hot conditions) are projected to increase slightly by end-of-century.

Increase in Hot Days in Some Parts – The number of hot days (days with maximum

temperatures above 35°C) is projected to increase in the lower lying areas of this region.

Since temperature decreases with height, increases in hot days are not projected to

reach the mountainous areas of this region, even by the end-of-century.

More Intense Extreme Rainfall in the North and less Intense in the South – Due to their

rarity, changes in extreme rainfall events (annual maxima of 1-day and 5-day rainfall

amounts) are not easy to project and are often associated with a large degree of

uncertainty. Nevertheless, some projections by regional models show a tendency

towards more intense extreme rainfall in northern parts (where the proposed Project

provinces are located) and less intense extreme rainfall in southern parts of this region.





54

Droughts to Increase in East and Decrease in West – Some projections by regional

models show that short-term droughts (3-month consecutive periods with a rainfall

deficit) are expected to occur more often in eastern parts and less often in western parts

of this region. On the other hand, long-term droughts (12-months) are projected to occur

more often and last longer in most parts of this region.

Southwest Monsoon Remain Unchanged – Based upon some projections by regional

models, the length and intensity of the southwest monsoon are expected to remain

unchanged by mid-century, with slight decreases in both evident by end-of-century.

Fewer but Possibly More Intense Tropical Cyclones (Typhoons) – Preliminary analysis of

projections by regional models in this study suggests that the number of tropical cyclones

may decrease in the East Vietnam Sea by mid-century. Other studies support this

decreasing trend and suggest increases in intensity by end-of-century.

Vulnerability

42 A World Bank assessment on the social dimensions of adaptation to climate change in Viet

Nam (2010) identified key biophysical and socioeconomic zones of vulnerability to climate change. In

this assessment, the northern mountainous regions (North East and North West) are concluded to

have low exposure and high sensitivity to climate change. However, as relates to current and historic

exposure to natural hazards and disasters, there are some differences of opinion. Earlier studies

(ADB, 2008; CARE, 2010) concluded that both exposure and sensitivity are high, whereas later

studies (IMHEN and UNDP, 2015) conclude that exposure is variable across the north; ranging from

low to moderate in the North East to high and very high in the North West, with generally high

sensitivity and vulnerability throughout (See Figure 3 in Working Paper Climate Risk Analysis and

Climate Change Adaptation).

43 In the Project region, the principal risks and impacts of concern derive from natural disasters

and their impacts on household and community assets, livelihood systems and, in extreme cases,

loss of human life. Assessments of disaster severity in the Project region (ADB, 2008) have rated as

(i) “severe” the impacts of storms, flash flooding, and droughts during spring and summer causing

limited access to drinking and agricultural water and shortening the growing season; and (ii) as

moderate, the impacts of landslides and fire. The region is also rated as very high in loss of human

life from flash flooding. Flash floods happen annually in late summer, washing down to lowland areas

causing considerable losses to homes and crops. Other climatic, or weather risks, in the region

derive from cold spells (including hoarfrost) in winter killing livestock and causing human illnesses,

wet weather and, intense storms (including hail, high winds).

44 The region’s high sensitivity is a function of its large and largely poor, ethnic minority

population. Some 75% of Viet Nam’s minority populations live in two regions, the Northern Mountains

and Central Highlands. Most minorities remain rural residents, leaving them potentially more sensitive

to climate events by virtue of being more likely to be farmers and to live in rural areas. They are also

more likely to be poor. They also face specific factors of vulnerability that other rural or poor areas

might not. Compared to the Vietnamese (Kinh) majority, minorities continue to be more dependent on

staple goods and traditional agriculture, and less diversified, and they report much lower rates of

agricultural investment, with resulting lower productivity (World Bank, 2009). Access to credit and

financial services is very uneven in minority areas; Kinh report more loans and larger bank loans than

minorities on average, while ethnic minorities report a higher need for credit (Hoang Cong Dung et al.

2006). Minorities also face many barriers in adaptive capacity as well, with the major factor in this

area being much lower levels of education. Dropout rates remain significantly higher for minorities,

resulting in higher rates of illiteracy and lack of language fluency in Vietnamese, which hinders

minorities’ ability to interact with others and take advantage of outside resources (World Bank 2009).

Combined, all of these factors likely make ethnic minorities especially vulnerable to climate changes

and natural disasters.





55

B. Bắc Kạn Province

45 Bắc Kạn is a mountainous province of north-eastern Vietnam that shares border with Lạng Sơn

province to the east, Cao Bằng province to the north, Tuyên Quang province to the west and Thái

Nguyên province to the south. The province covers The total land area of the province is 486,841 ha,

of which forest land is 301,722 ha and agricultural land is 30,509 ha. Of the total forest land,

170,000 ha are production forest land suitable for agro-forestry production. The province comprises

one urban municipality (Bắc Kạn) and seven districts: Ba Bể, Bạch Thông, Chợ Đồn, Chợ Mới, Na Rì,

Ngân Sơn and Pác Nặm.

46 At end-2014, the province had 350,000 inhabitants belonging to four main ethnic groups that

make up 94.95 percent of the total population (Kinh, 13.85%, Tay 56.4%, Nung 10.1%, and Dao

14.6%) Smaller ethnic groups include the H'Mong (4.15%), Hoa (0.5%), San chi (0.35%) and others

(0.05%) (see SECAP RN Annex 1 for a detailed description of these ethnic groups). Bắc Kạn is

ranked amongst the 10 least developed of Viet Nam’s 63 provinces, with 14.2 per cent of the total

population living under the poverty line and 9.9 per cent living just above the poverty line (DOLISA,

2014). The Bắc Kạn climate of is typical for northern Vietnam, with a tropical monsoon pattern of a

distinct wet season between April and September with most precipitation in July (on average 263mm),

and a dry season between October and March, when the mean precipitation range per month is 13.0-

70.5mm. Annual rainfall are between 2,145mm in the northern uplands and 1,148 mm in the lower

elevations of the southeast of the province, which gives in general good conditions for rain fed

agriculture in the summer season. In the summer months, temperatures range from 22.9-27.3ºC,

whilst in winter the average temperature is 18ºC, sometimes dropping to as low as 2ºC.

47 Over the past 5 years (2010-2014), there have been positive changes in economic

development of Bắc Kạn province with the annual economic growth rate averaging about 6.4 per cent,

with agriculture, forestry and fishery sector growing at 9% per year; Industry (infrasructure &

construction) declining by 2.1 per cent per year and services rising by 7.8 per cent per year. In 2014

the GDP per capita was about VND 22.4 million and it is expected to reach VND 24.4 million in 2015.

It is estimated that agro-forestry and fishery sector will account for 36.1 per cent of GDP in 2015,

industry - construction for 16.1 per cent, services for 44.9 per cent and production tax account for

2.9 per cent. The structure of the agriculture economy in 2015 is: annual and perennial crops, 52 per

cent; livestock, 22.5 per cent; forestry, 24 per cent and fisheries, 1.5 per cent.

48 Agriculture:41

Bắc Kạn has limited agricultural land; with only 30,509 ha out of 486,841 ha

(about 6%) classified as agricultural land. Most of this land has been allocated to households with the

red book certificate, however, only a few red books show dual ownership by husband and wife.

According to a recent study done by DONRE assessing over 80 per cent of the province’s agriculture

and forest land, soil erosion is widespread with 50-70% of both agricultural and forest land moderately

to severely affected causing productivity losses. Most of the annual rain fed crops are cultivated on hill

slopes with up to 45 per cent to 70 per cent slopes. Terraces are widely used, but there is a clear

need to combine with other soil conservation and fertility management measures and some hillside

fields are not terraced and have no other soil conservation measures like contour bounds or

hedgerows. Agricultural production is insufficient to meet provincial food requirement. Maize, wetland

rice, terraced rice soya bean, taro and sweet potato are the main food crops cultivated. Cash crops

include vegetables, tobacco, seed peanut, tea, tangerine, canna, seedless persimmon and cassava.

The livestock population in 2014 included 67,500 buffalo, 26,310 cattle, 212,000 pigs and

212,000 head of poultry. Aquaculture covers 1,122 ha. Many households in the province have a home

garden ranging from 300 to 1000 square meters producing vegetables, fruit trees and fodder for

livestock.

49 The province is in the upper reaches of 5 major rivers and has an amble network of smaller

rivers and streams with seasonal varying stream flow but relative abundant water resources. The

41

For more details on natural resources and environmental and climate change issues related agriculture and forestry

in the two provinces see the SEAP Review Note prepared for the project including the project’s summery

Environmental and Social Management Plan.





56

province has 1,029 small and medium irrigation schemes, 2 irrigation lakes with total volume of

1 million m3, 9lakes with embankment > 15m, 20 pumping stations and over 670 km of permanent

irrigation canals. In 2014, the total irritation capacity was 21,000 ha of 2-crop rice, (up 6,000 ha in

2010), meeting 90 per cent of provincial requirement for rice cultivation. In addition, irrigation facilities

can provide water for over 1,000 ha of vegetable and fish farming areas. Irrigation is in areas with an

available water source an important dry-spell and drought risk mitigation option. However, major

concerns for water quality are contamination from mining (Manganese, tin copper, bauxite, gold, etc.),

agrochemicals, sewage and wastewater from industrial and agro processing facilities with limited or

no treatment, and leakages from landfills. These concerns need to be considered in planning of

irrigation systems, water for livestock and product processing facilities as well as to avoid downstream

adverse impacts. Likewise, (sub)watershed management is a priority to reduce vulnerabilities to flash

flooding and landslides and insure stability in the hydrological cycle, water quantity and quality and

physical stability of watersheds.

50 The forest area provided a forest cover of 70.8 per cent in 2013, one of the highest forest cover

rates in Viet Nam, showing the success of the new policies allocating forest land to communities

introduced at the beginning of the millennium ending moderate rates of deforestation throughout the

1990ies. Between 2001-2014 an area of 47,576 ha was afforested (av. 11,894 ha per year), and

according to the Bac Kan’s recent land degradation study in the period 2005-2010 and in the period

2010-2014 12,846 ha and 9,062 ha respectively were deforested leading to a net increase in forest

cover. The assigned forest management categories are 65% of the total forest area (246,000 ha) as

Production forest, 28 per cent (107,000 ha) as Protection forest, and 7 per cent (26,000 ha) as

Special use forest (see note 39). The annual timber extraction volume is around 150,00 m3. There are

some examples of large areas of production forest in Bac Kan being converted into what should be

“agro forestry” but where the tree crop has been displaced with mono cropped maize, cassava,

cannas, tea and ginger as these are currently more economically attractive. According to government

policies the allocated production forest land should be utilized to produce wood as raw material for

industrial or other commercial uses intercropped with non-forest species the first years until the

canopy shades out this option. Through division of the land with the tree crop in different stages of its

growing cycle, each farmer should ideally always have land for non-forest species intercropping.

However, further work needs to be done to develop and provide technical assistance in economically

attractive and environmentally viable agroforestry farming models for the production forest land.

51 The provincial agriculture development direction to 2020 includes; (i) the intensification of rice

production, including the use of higher quality/production varieties and increase in cropped area to

22,000 ha; (ii) on poorer quality irrigated land, converting the second rice crop to maize, vegetable,

cash crops, flowers or fish production; (iii) the development of a stable canna production area of

1,500 ha; (iv) stabilizing tobacco production on 1,200 ha; (v) replacing 500 hShan Tuyet and O Long

tea varieties and expanding tea processing; (vi) expanding tangerine production to 2,300 ha and

seedless persimmon to 1,200 ha and introducing post-harvest grading and cool storage;

(vii) supporting growth in livestock production to bring its share of the total value of agriculture

production to 28 per cent; and (viii) raising the harvestable forestry area to 100,000 ha with an

average yield of 120 m3 per hectare on a 20-year rotation. Agri-enterprise development focuses on

timber, canna, tea and livestock feed processing supported by improved quality standards and

targeted vocational training.

52 Business Environment. Since the initiation of the 3PAD project, the Bắc Kạn business

environment has improved and numerous policies have been issued to encourage enterprise

investment in the agribusiness sector. The provinces business environment, however, is still amongst

the lowest performing in the country, ranked 59. out of 63 provinces in the 2014 Provincial

Competitiveness Index (PCI). The challenges in Bắc Kạn include: (i) weak transport infrastructure;

(ii) limited availability of trained labour; (iii) fluctuating input and output markets; (iv) expensive land

access in the remote areas; (v) limited access to loans due to missing or inadequate business

planning and long term strategies and limited legal/financial literacy, (vi) the inefficiencies of provincial

credit guarantee and credit interest support schemes.





57

53 Agro-industrial development. The DPI reports agriculture value chain opportunities in Bắc

Kạn to include: (i)wood tea, cassava and canna processing; (ii) wooden chopsticks manufacture

export; (iii) ginger cultivation and processing, (iv) paper manufacturing, and (vi) alcohol production. In

addition, these is private enterprise investment interest in producing tobacco, cinnamon, corn, sweet

potato and fruits, however for these crops, there is no local processing capacity. Between 2010-2013,

the value of food processing in Bac Kan has increased from VND 29.7 billion to 91.3 billion, including;

wood processing and bamboo production increasing from VND 30 billion to VND 70 billion; paper

production rising from around VND 10 billion to almost VND 20 billion; and wooden furniture

production increasing from VND 40 billion in 2010 to over VND 52 billion in 2013.

54 Although these numbers show growth, the agro-processing industry remains at a low level of

productivity and quality. To improve investment opportunity in the key commodities areas, the province

has issued a list of investment promoting policies and programmes, covering cattle production and the

supporting feed industry and the processing of oranges, tangerines, apricots, taro, medicinal

products), tea processing plants and fresh ginger. To date, these projects have not yet attracted

investor interest.

55 The main constraints identified by the Department of Trade and Industry (DoTI) include: (i) a

lack of market information and market orientation in agricultural and forestry production systems;

(ii) small-scale and fragmented primary production; (iii) insufficient public infrastructure investment in

roads and market places; (iv) outdated or obsolete production technology; (v) a relatively untrained

workforce; (vi) difficult access to capital; (vii) poor business and cooperatives management skills;

(viii) a lack of strategic business vision; (ix) weak marketing including lacking labels and packaging;

and (x) weak contractual agreements and law. For the agricultural co-operatives, the issues also

include an attitude of dependence from state support, poor accounting and a lack of business

planning.

C Cao Bằng Province

56 Cao Bằng is a mountainous province located in the northeast of Vietnam adjacent to China with

which it has a 333 km border. In addition to China, it shares its borders with Bắc Kạn province to the

south, Hà Giang to the west and Lạng Sơn to the southeast. Cao Bằng has a population of about

520,000 people belonging to 8 different ethnic groups accounting for 92% of the population and

including Tay (41%), Nung (31.3%), Hmong (10.1%), Dao (10.1%), Kinh (5.8%) and San Chay (1.4%)

(see SECAP RN Annex 1 for a detailed description of these ethnic groups). The province has a total

area of 6,707 km2, and includes 97,775 ha (14.6%) of agricultural land, 562,970 ha (78.5%) of forestry

land and 477 ha of aquaculture area. The forest area includes 28,133 ha (5.3% of forest cover) of

production forest, 480,724 ha (91.2%) of protection forest and 18,112 ha (3.4%) of special use forest.

The province comprises one urban municipality (Cao Bằng) and twelve districts: Bảo Lạc, Bảo Lâm,

Hạ Lang, Hà Quảng, Hòa An, Nguyên Bình, Phục Hòa, Trùng Khánh, Thạch An, Thông Nông, Trà

Lĩnh, and Trùng Khánh.

57 Cao Bằng is divided into four main agro-ecological regions: (i) a karst region to the north and

the northeast along the China border with an average altitude ranging from 700 to 1,000 masl

accounts for 32 per cent of the province's area and includes all or parts of the districts of Bảo Lạc,

Bảo Lâm, Thông Nông, Hà Quảng, Trà Lĩnh, Trùng Khánh, Hạ Lang, Quảng Uyên, Phục Hòa and

Thach An. (ii) the region of soil mountains to the west and southwest, which covers about 40 per cent

of the province and includes the districts of Bảo Lạc, Bảo Lâm and Nguyên Bình is characterized

mainly by mountainous terrain strongly split by deep valleys and has an average altitude of 700-

1,000 masl; (Iii) the basin region including the city of Cao Bằng and Hòa An district along Bang river

accounts for 12 per cent of the province’s area; and (iv) the low region (valleys, basins) accounting for

approximately 16 per cent of the province area, concentrated mainly in the districts of Hòa An, Hà

Quảng, Trùng Khánh and Trùng Khánh.

58 Cao Bang has the climate of tropical, alpine continental monsoon, which is distinctive compared

to the climate in other mountainous regions of the Northeast. There are two separate seasons per





58

year: hot season (a lot of rain) from April to October and cold season (less rain) from November to

March of the following year. Average temperature in summer is about 25-280C, which climbs to the

highest level (hottest time) in July. The winter average temperature is 14-18̊C, which drops to the

lowest level in January. In winter, on limestone mountains in the north and northeast of the province,

there is often frost, and the average temperature is about 5̊C, which sometimes falls down to 0̊C. In

addition, there are also sub-tropical climates allowing the development a wide variety of animals and

plants. Average annual rainfall in the province is from 1300 to 1500 mm / year, which gives in general

good conditions for rain fed agriculture in the summer season. Average number of rainy days is about

92, and number of sunshine hours are not many (only about 1,500-1,600 hours / year). Average

humidity is around 80%. Cao Bang is also favored with a diverse network of lakes connected by more

than 1,200 rivers and streams of which 5 are mayor river systems. However, water quality and

watershed management concerns are the same as for the Bac Kan province.

59 Over the last years, the provincial economy, which, in 2014 was comprised of agriculture,

forestry and fisheries (21.7%), industry (24.6%) and services (53.7%), has increased annually by an

average of 9.2 per cent, including agriculture growth averaging 3.5 per cent, industry growth

averaging 8.2 per cent and services averaging 9 per cent annual growth. GDP per capita in 2014 was

USD 1,035/capita. The provincial economic vision for the agriculture sector to 2020 is for an average

4.5 per cent growth per year with the agriculture share of GDP falling to 20% by 2020 with animal

husbandry forming about 1/3rd of the agriculture GDP. The vision includes the restructuring of

agriculture and rural economy towards commodity production, improved productivity, quality and

efficiency in line with market mechanisms, linking production to processing, storage and sale of

products. This will include a focus on the “green” production of high value crops including tobacco,

soybeans, peanuts, vegetables, beans and fruit trees including pears, chestnuts, oranges, tangerines

and herbs.

60 Key crops include rice (30,470 ha), maize (39,005 ha), tobacco (3,741 ha), soybean (4,663 ha),

sugarcane (4.266 ha), peanut (1,727 ha), and cassava (3,200 ha). In addition, the province produces

high-quality tea (>200 ha grown at 1,200 masl) anise (4,000 ha), medicinal plants, black agar

(300 ha), chestnut (1230 ha) and fruits (orange, tangerine, yellow pear, blood plum). Livestock

numbers in 2015 include: 101.228 buffalo, 126.321 cows, 383,136 pigs and 2,189,000 poultry. On

average, each household in Cao Bang have about 5000 m2 of agricultural land, and about 1-3 ha of

forestland. About half of forestlands (called by people as forest garden) are used for growing

commercial crops.

61 There is no similar systematic study on the status of the soil in Cao Bang province as the one

recently made for Bac Kan, but according to DoNRE reports the situation is more or less the same

with widespread soil erosion and low soil organic matter throughout the province. Like in the case of

Bac Kan, terraces are widely used, but there is a clear need to combine with other soil conservation

and fertility management measures and some hillside fields are not terraced and have no other soil

conservation measures like contour bounds or hedgerows. Like in the case of Bac Kan, deforestation

throughout the 1990s was turned around in Cao Bang and forest cover was maintained in the period

2000-2005. However, in the period 2005-2010 Cao- Bang’s southern part and western districts

(including the proposed project districts Thach An, Nguyen Binh and southern Thong Nong) again

experiences significant levels of deforestation, which overall may reflect the high population pressure

on land resources. The province has some 400,000 rural inhabitants mainly dependant on agriculture

but only 98,000 ha of agricultural land and 28,000 ha of production forest.

62 Business Environment. In recent years, Cao Bằng has (i) established an Investment

Promotion Centre under DPI to support private sector business registration and investment;

(ii) established a Value Chain Promotion Unit (VCPU) under DARD to support commercial agriculture;

(iii) conducted training and capacity building for enterprises, (iv) organized policy dialogue with the

participation of enterprises; and (v) issued policies to support public-private partnerships in agricultural

production. Despite efforts, the environment Cao Bang for private business and investment is still

among the lowest in Vietnam, with the province ranked 61. out of 63 provinces in the 2014 Provincial





59

Competitiveness Index (PCI). The Cao Bang DPI report reports that the key constraints in this regard

include: (i) distant location and bad transport infrastructure, (ii) limited quality labour force, (iii) limited

market orientation of the farmer households, (iv limited provincial budget to invest in economic zones

and industrial parks, (v) limited market promotion activities, mostly only focusing on trade fairs rather

than overall trade promotion, (vi) collective brands not efficiently established and product volumes

rarely meeting buyer demand; (vii) lacking of capacity and/or guidance by circulars to implement the

investment promotion laws and decisions; (viii) limited support to enterprises to deal with

administrative procedures, forcing businesses to use personal relationships; (ix) unsuccessful

investment promotion and business development service (BDS) activity; (x) linkages between farmers

and enterprises and contract farming are still limited, (xii) Cao Bằng's exceptional opportunity of

trading with China has not been fully exploited due to political instability between the countries; and

(xiii) the lack of strategy to attract private capital into agricultural sector. The DPI of Cao Bang has

recommended a number of concrete activities to respond to these challenges, ranging from inter-

agency coordination mechanism to value chain support through enterprises. The full list is available in

the Report on Cao Bang Investment and Business Environment.

63 Agro-industrial development. Agribusiness investment in the province includes (i) sugarcane

cassava tea and bamboo processing, (ii)glass noodle manufacturing, (iii) beverage production;

(vi) wood processing and manufacturing and (v) tobacco processing. The key companies in the

province are the Cao Bằng sugar JSC with capacity production of 1,200 tons of sugar cane / day, the

Quang Minh JTC with capacity of 6.000 m3 of wood products / year, the Cao Bằng bamboo import –

export JSC with capacity production of 200,000 products / year, the 688 bamboo import – export JSC

with capacity of 300 pieces / day, the Dung Phuoc alcohol production JSC with capacity of

30.000 liters of wine / year; Khanh Ha JSC with capacity to produce 30,000 tons of starch / year

(equivalent to 120,000 tons of raw cassava / year); and the Cao Bằng tobacco production JSC with

the capacity to produce of 120.000 tons of material/year (under construction).

64 The challenges facing these and other agribusinesses to invest in Cao Bằng include: (i) a

shortages of inputs to the processing units due to underdeveloped farming (especially for bamboo and

cassava); (ii) limited capacity of staff and limited technology for commodity processing (especially for

wood and sugar); (iii the weak transport infrastructure (iv) insufficient investment incentives; and

(v) fluctuating prices and competition from neighbouring provinces and countries.

Rural Finance

65 Overview of Rural Microfinance in Viet Nam The rural microfinance market in Viet Nam has

traditionally been dominated by state-owned financial institutions and social protection schemes. In

recent years, however, there have been developments that enable the emergence of a robust

microfinance market to serve rural and urban low-income people. In 2005, the Government issued a

decree that allowed the transformation of semi-formal micro finance institutions (MFIs) into licensed

credit institutions. In June 2010, the new Credit Institutions Law (CIL) was passed. It is landmark

legislation that aims to integrate the microfinance sector into the formal financial system, including

improved provisions for creating and regulating MFIs, Peoples Credit Funds (PCFs) and financial

cooperatives. The other key development was the approval by the Prime Minister in 2011 of the

Vietnam Microfinance Development Strategy 2011-2020 (MDS). It aims at: (i) establishing the

required legal and supervisory frameworks; (ii) strengthening policy formulation and supervision

capacity; (iii) increasing the capacity in MFIs, (iv) increasing the banking capacity of the Vietnam Bank

of Social Policies (VBSP) and making it more market-oriented and self-sustaining; (v) developing the

financial infrastructure, including training institutes; and (vi) promoting national financial literacy

campaigns.

66 Despite the above creation of the basic legal framework for microfinance, the

transformation of the sector has, in the past five years, been slow. So far, only three MFIs have been

licensed under the new CIL, and most of the implementing rules and regulations for the CIL are yet to

be drafted and approved. As shown in Table 3, the dominance of the state-owned banks in

microfinance continues. The VBSP is estimated to hold over 60 per cent of the microfinance portfolio,





60

followed by the 22 per cent market share of the Vietnam Bank of Agriculture and Rural Development

(VBARD). The network of People’s Credit Funds covers about 17 per cent of the microfinance

portfolio. The share of the three registered MFIs of the microfinance portfolio is minimal, while the

semi-formal and informal service providers such as social funds, Project-linked credit operations and

community-based schemes and groups are estimated to work with around 400,000 customers and

hold a total portfolio of some USD 100 million. In total, for a country of Viet Nam’s size and

development level, the volume of microfinance operations outside the large state-controlled schemes

remain very low.

Table 3: Microfinance Market in Viet Nam (31 December 2014)

Institution Number of Microfinanc

e Customers

Outstanding Microfinance

Portfolio

(USD Million)

Number of Microfinance Depositors

VBSP 5,760,000 4,142 4,600,000

VBARD 1,630,000 1,452 1,130,000

CCF and PCFs 1,800,000 1,051 1,800,000

Formal MFIs 96,000 4 100,000

Semi-formal and Informal Microfinance Providers

384,000 104 420,000

Total 9,760,000 6,753,000 8,050,000

Source: Data collected by the Vietnam Microfinance Working Group from the financial service providers.

67 The policy of the State Bank of Vietnam (SBV) is clearly to encourage the registration of the

semi-formal microfinance operators as licensed MFIs. The current plans include a ruling that this

registration would be compulsory for operators when their outstanding portfolio exceeds

VND 50 billion (around USD 2.2 million). Various IFAD-supported social funds already exceed this

portfolio level, and many of them plan for registration as MFIs in the coming five years. In addition to

increased regulation and supervision, this new status would permit much wider service operations

with the clientele of the social funds. These services would, importantly, include the opportunity of

collecting voluntary savings from the clientele, which would make it easier to finance the expansion of

the lending operations without further injections of external capital from donors or the Government.

Rural Microfinance in Cao Bằng

68 The status of rural microfinance operations in the planned CSSP operational area in Back Kan

and Cao Bằng provinces reflects, to a large extent, the above nationwide picture. The role of VBSP

and VBARD is dominant in both provinces. In Cao Bằng, VBSP has a branch in each of the

11 districts and operates a transaction centre in every commune, each open 1-2 days a week. The

total savings of VBSP in the province is around VND 41.6 billion (all figures below for end of 2014). As

everywhere, with the state-financed VBSP, the loan portfolio is very much higher, at VND 1,646 billion.

Some 90 per cent of the total portfolio is issued for agro-investments of individual borrowers. Most of

the 55,000 individual clients are listed as poor or near-poor.

69 The maximum VBSP loan size is VND 50 million, issued without collateral to groups organised

mainly by the Women’s Union (WU) and the Farmers’ Union (FU), who act as agents for the bank

against commission. The subsidised interest rate is 0.6 per cent per month for classified poor

borrowers, 0.72 per cent for the near-poor and 0.8 per cent for non-poor. In the districts covered by

Project 30A, the poor can borrow an additional VND 10 million at 0.3 per cent per month. As

everywhere in Viet Nam, the repayment performance is very good, with the non-performing loans for

VBSP at a low 0.3 per cent in the province.





61

70 In Cao Bằng, VBARD is the leading collector of deposits, with a total savings balance of

VND 4,600 billion. It is also a major agricultural lender, with a portfolio of VND 2,500 billion. Over

25,000 individual households have outstanding loans at VBARD, with an average individual loan of

VND 63 million (some USD 2,800). With a new government policy issued in July 2015, VBARD and

other banks can now lend to agricultural producers up to VND 100 million (USD 4,300) without fixed

collateral. Loan interest rates vary at a low 7 per cent -9 per cent p.a. level, and in the Project 30A

districts this rate is further reduced by 50 per cent. In the previous IFAD-supported project in Cao

Bằng, VBARD was one of the implementing partners through a credit line arrangement. A part of

these funds are still revolving, while a part is already paid back to the Ministry of Finance (MoF)

following the rulings of the Subsidiary Loan Agreement.

71 In addition to VBARD, with its sound liquidity position, a number of other commercial banks

have expressed their interest in participating in the financing of rural value chains, some on the

production side, but mostly in financing the lead companies and traders in the chains. The Lien Viet

Post Bank is a potential partner in these operations, particularly as its provincial savings

(VND 1,400 billion) exceed its provincial loan portfolio (VND 86 billion) by a wide margin. Loans

against valid collateral are issued at around 10% per annum (p.a.). The bank is currently planning to

expand its lending operations from the city to the districts. The Bank for Investment and Development

in Vietnam (BIDV) is the second largest bank in Cao Bằng, with savings of VND 2,400 billion and

loans at VND 1,600 billion. As the state is the main shareholder, BIDV actively implements

government’s agricultural and rural policies. The interest rate on loans is around 10% and no

collateral is required on loans for agriculture up to VND 100 million. The share of non-performing

loans, at 1%, is low. The bank plans to open more branches in rural districts. With its good liquidity

position, BIDV is an appropriate candidate, particularly for agro-enterprise financing. Vietin Bank, with

a 60% government ownership share, has a provincial savings base of VND 880 billion. Of its total

loans of VND 400 billion, some 75% are for around 200 enterprises. These are mainly urban

operations, but, according to the bank’s management, it is willing to expand to agro-processing, if the

investment plans show adequate viability and the projects are generally bankable. Further, the

Vietnam Development Bank also operates in Cao Bằng province, with a portfolio of VND 860 billion.

With its focus on infrastructure and business lending, the bank is a potential partner in value chain

operations with larger processing companies. In total, given the liquidity in the commercial banking

sector, it should be seen as a realistic potential partner when developing commodity value chains

under the planned IFAD-supported intervention in Cao Bằng.

72 The semi-formal and informal microfinance market is relatively poorly developed in Cao Bằng.

None of the three registered Vietnamese MFIs operate in the province. The FU and WU have largely

focused on the above-described operations with VBSP on an agency-based arrangement, not on their

own group-based savings and lending operations. Unlike most of the provinces in central and

southern Viet Nam, Cao Bằng does not have any People’s Credit Funds and is therefore not involved

in the operations of the new co-operative banking network. There have been various small

microfinance schemes in the province, led by NGOs and projects, but all with limited outreach and

poorly developed plans for institutional sustainability.

73 For the purposes of this design process, the group-based financing operations of the WU are of

particular importance. The previous IFAD-supported project, Doing Business with the Rural Poor

(DBRB) did not originally include activities with savings and credit groups or with the WU. During its

later years it, however, issued small loans from project funds to the members of CIGs. In 2013, this

loan portfolio (some USD 68,000) was transferred to be managed by the WU. Similarly, an additional

USD 136,000 was transferred as a grant to support the savings and credit operations of the WU.

These formed the principal capital base for the WU social fund, the establishment of which was

authorised by the PPC in May 2014. The new fund, into which the CIG portfolio was merged, was

called “Fund to Overcome Poverty Together”, below referred to with the generic name Women’s

Development Fund (WDF).





62

74 Today, the new WDF in Cao Bằng province is still an infant institution. It operates with women’s

savings and credit groups (WSCGs) in five districts and 13 communes. It has a total of 56 groups with

336 members. The total portfolio is around USD 218,000, with total savings at a low level of

USD 17,000. The average loan size is VND 14.4 million (USD 654), with the average savings at

USD 52. As positive developments, the WDF has: (i) designed an operations manual with DBRP

support; (ii) an Excel-based management information system (MIS) as well as basic but appropriate

governance and management structures; (iii) a perfect loan recovery record; and (iv) five full-time and

one part-time staff members. At the same time, as its operational income is very low, the WDF has no

branches in the districts, and all the field operations of the Fund are still conducted from its head office

in Cao Bằng City.

75 The newly established WDF in Cao Bằng provides an institutional framework for this design

process, upon which a pro-poor financing network can be built to support the economic and social

development of low-income women. Support from the Provincial People’s Committee (PPC) and the

WU, as well as the clearly expressed demand by rural women for the services of the WDF, encourage

the further development of this financial service option, with the ultimate target of establishing a

province-wide independent microfinance network in Cao Bằng.

Rural Microfinance in Bắc Kạn

76 As in Cao Bằng, the state-owned banks clearly dominate the agricultural credit and

microfinance market in Bắc Kạn province. VBSP operates similarly as in other provinces, based on

branches in districts and part-time offices in communes. Its outstanding portfolio is VND 1,270 billion,

covering some 90,000 clients. In rural areas, its coverage of poor and near-poor households is almost

total. VBSP’s savings base is minimal at VND 18 billion and its enterprise and cooperative lending

covers only around 20 relatively small clients. Lending terms and amounts are the same as indicated

above for Cao Bằng, and the highly subsidised Project 30A conditions apply to two districts, Pac Nam

and Ba Be, both CSSP districts. Non-performing loans are just 0.33% of the portfolio.

77 In Bắc Kạn, VBARD is the largest commercial bank and the leading collector of deposits, with a

total savings balance of VND 1,400 billion and around 20,000 depositors. It is also a major agricultural

lender, with a portfolio of VND 2,100 billion. Some 15,000 individual households have outstanding

loans with VBARD. Loan terms are the same as in Cao Bằng. The non-performing loans amount to

3 per cent of the portfolio.

78 Of the other commercial banks, BIDV has, in addition to Bắc Kạn town, operations in two rural

districts. Its total savings are VND 950 billion, with outstanding loans at a much higher level of

VND 2,800 billion. Enterprise loans cover some VND 2,250 billion of the portfolio, making the bank a

potentially interesting partner in company-led value chain investment. Loan terms are the same as in

Cao Bằng, with non-performing loans at 3% of the portfolio. Lien Viet Post Bank in Bắc Kạn also has

high liquidity, with total savings at VND 600 billion from 14,000 clients and loans at VND 100 billion.

The bank plans to upgrade its district offices in Bắc Kạn to full branches and is clearly interested to

co-operate with the planned CSSP. Vietin Bank operates in Bắc Kạn with a portfolio of around

VND 500 billion and total deposits of some VND 343 billion. It plans to open new branches in districts

with good road connections and is interested in expansion into agro-processing and trading projects.

In total, options for co-operation in value chain financing with commercial banks are substantial,

especially if the future management of the new IFAD-supported project takes a proactive approach in

its relations with the leading banks.

79 As in Cao Bằng, semi-formal and informal microfinance is relatively poorly developed in Bắc

Kạn. None of the three registered Vietnamese MFIs operate in the province. The FU and WU have

largely focused on the above-described operations with the VBSP based on an agency arrangement,

not on their own group-based savings and lending operations. Unlike most of the provinces in central

and southern Viet Nam, Cao Bằng does not have any People’s Credit Funds and is therefore not

involved in the operations of the new co-operative banking network. There have been various small

microfinance schemes in the province, operated by NGOs and projects, but all with very limited

outreach and poorly developed plans for institutional sustainability.





63

80 Importantly for this design process, the operations of the WU-managed savings and credit

groups are more developed and much better capitalised in Bắc Kạn than in Cao Bằng. The new

Social Fund of the WU in Bắc Kạn originates from the operations of the Agro-forestry Development

Fund (ADF) of 3PAD. This fund issued subsidised loans to the maximum value of VND 3 million per

borrower to low-income households of the Project communes. The scheme was managed by the WU

and especially its commune-level staff. The full capital of the fund, VND 56 billion (USD 2.53 million)

was disbursed to some 11,500 households by end-2013. The repayments of capital have commenced

and the bulk of the ADF funds are to be repaid by households between 2015 - 2017.

81 Following the recommendations of the MTR of 3PAD, a decision was taken to channel all the

reflows from the ADF loans to support the WU-managed SCG activities. The target of moving from the

ADF to the SCG model was to establish a basis for operationally and financially sustainable savings

and credit operations. Initially, starting in 2013, these WU operations with savings and credit groups

were conducted by the WU under a fund called the Savings and Credit Fund. 3PAD allocated a grant

of VND 4 billion (USD 190,000) to the WU to serve as start-up capital for these SCGs lending

operations. Supported by the capital from 3PAD, the WU started to form WSCGs, organised monthly

savings collection from the group members and issued loans to members from the 3PAD grant and

the ADF reflows.

82 The next step in this process was the decision by the PPC on 12 March 2014 to establish a

Social Fund to operate the SCG activities of the WU in Bắc Kạn province. The operations of this

Social Fund, called the WDF, started on 10 June 2014. The Social Fund is a necessary step required

by the SBV regulations when aiming at the later establishment of a registered microfinance institution.

The WDF took over the savings and the portfolio of the WU’s Savings and Credit Fund. Since its

establishment, it has received all the ADF reflows from the 3PAD communes and now manages all the

SCG operations of the WU in the province.

83 During 2015, the development of the WDF in Bắc Kạn has been encouraging and has largely

followed the Business Plan developed in January 2015 with support from a 3PAD-financed consultant.

In addition to its provincial Head Office, the Fund has branches in Na Rì and Ba Be districts. It also

manages groups in Pác Nặm and Ngân Sơn districts from its Ba Bể branch, and in Bạch Thông

district and Bắc Kạn city from the provincial office. At the end of October 2015, the WDF operated with

134 groups having 1,755 members. Its total outstanding portfolio was VND 14.5 billion

(USD 660,000), with the total savings at a much lower level of USD 14,800. The average loan size is

VND 8.2 million, reflecting the low-income of its clientele. The total loan repayments in arrears amount

to just 0.03% of the portfolio.

84 The WDF is a well-capitalised operation, controlling funds of around USD 3 million, which

almost totally originate from 3PAD sources. At the same time, the Fund has ambitious plans for

expansion and greater impact, with a target of reaching some 7,500 women/households by the end of

2017. With this expansion plan and the related portfolio growth, the Fund would start to face fund

shortages towards the end of 2017, even with increased focus on savings collection.

85 By the time the proposed CSSP becomes operational, the WDF in Bắc Kạn is expected to

have achieved full operational sustainability, and the Fund would not require support to cover its staff

and other standard operational costs. At the same time, support for the expansion of its pro-poor

financing operations in the planned Project area and elsewhere in rural Bắc Kạn is well justified. This

is particularly the case as some 80%-90% of the loans issued by the WDF are invested by the

borrowing households in sub-projects in key agricultural value chains, many of which form the core of

the CSSP support to intensify and diversify agricultural production in Bắc Kạn province.




Appendix 2: Poverty, targeting and gender

64


Poverty

1. Bắc Kạn is amongst the 10 poorest provinces in Vietnam with one of its 7 districts supported under the national 30A poverty alleviation programme, including one Project districts (Ba Be). At end-2015, under the new multi-dimensional poverty standards

42, Bắc Kạn had 22,706 poor and 9,269 near-

poor households, representing 29.4 per cent and 12 per cent of its total number of provincial households,

respectively Almost all (94%) of these poor and near-poor households are ethnic minority households. In the four Project districts there are 9,988 poor and 2,747 near-poor households, representing 48 per cent and 13 per cent of the total number of Project district households, respectively, almost all (98%) from ethnic minority groups.

2. The primary causes of poverty in the four Bắc Kạn Project districts, as determined through a 2012 DoLISA survey, include lack of production land (31%), lack of access to productive capital (23%), and lack of means of production (12%); lack of business skills (13%) and labour constraints including lack of labour (4%) and sickness (7%).

3. Cao Bằng is also amongst the 10 poorest provinces in Vietnam with 5 of its 12 districts supported under the national 30A poverty alleviation programme, including two Project districts (Hà Quảng and Thông Nông). At end-2015, under the new multi-dimensional poverty standard, Cao Bằng had 52,410 poor and 12,111 near-poor households, representing 42.5 per cent and 9.8 per cent of its total number of households, respectively

43. All of these poor and near-poor households are ethnic

minority households. In the four Project districts there are 10,250 poor households and 1,543 near-poor households, all from ethnic minority groups.

4. The primary causes of poverty in the four Cao Bằng Project districts, as determined through a 2012 DoLISA survey, include lack of production land (54%), lack of access to productive capital (26%), and lack of suitable agriculture land (26%) and labour constraints including lack of labour (5%), old age (8%) and sickness (4%).

5. There are other “cross-cutting” factors which also influence poverty. These include:

(a) Poorly or inappropriately developed infrastructure. In some areas, roads, key bridges and

potable water supplies are either absent or in poor condition. In lowland areas irrigation

systems may be inefficient and inflexible in their means of operation.

(b) Limited knowledge and skills of the producers on market-orientation and organizing collective economic activities. The previous support by IFAD in Bắc Kạn and Cao Bằng contributed substantially to improving the producers’ practices in organizing the production in collective economic models (cooperatives, CIG) and approaching the domestic and international markets. However, most producers are far from capable in applying the advanced production and business management necessary for sustainable income improvement.

(c) Potentially profitable agricultural VCs have not received sufficient investment capital to

be fully and sustainably developed. There are significant potential VCs identified,

including livestock husbandry, wood and wood products, fruits, ginger, canna and

medicinal plants and herbs. Some innovative models which have been demonstrated

which confirm this, particularly in Bắc Kạn. These VCs, however, have not had sufficient

investment from the private sector or from debt financing. The loans offered by VBARD

and other financial intermediaries have been limited to a relatively few households, CIGs,

cooperatives and SMEs due to their lack of capability in formulating a profitable

business/investment plans and lack of collateral.

42

Viet Nam has adopted a national measure of multidimensional poverty, based on the Alkire-Foster method, which

will show the disadvantages poor people face across five different areas: (i) living conditions; (ii) income levels;

(iii) access to education and healthcare; (iv) access to information; and (v) access to insurance and social assistance.

Households that cannot meet over a third of their basic needs in these areas will be identified as multidimensionally

poor, while those lacking more than half will be considered critically poor. 43 According to the poverty lines (adopted by MoLISA) applicable for the 2011-2015 period.

http://www.ophi.org.uk/policy/alkire-foster-methodology/





65

6. The factors hindering poverty alleviation suggest the strategies for the Project intervention, taking into consideration the IFAD’s country strategy and the local Government’s socio-economic development priorities.

Target Area and population.

7. The Project will investment in awareness and capacity-building related activities to enable climate-adapted agriculture to be implemented throughout the province. However, due to the need to target the poorest and most vulnerable communes, the Project will concentrate its support for physical and commercial investments in 35 communes in 4 districts in both Bắc Kạn and Cao Bằng. The Project will operate wherever possible in NTP-NRD communes. The final selection of communes has been based on, inter alia, (i) poverty rate; (ii) vulnerability to natural disaster; (iii) commitment of leadership; (iv) potential for development of pro-poor VCs; and (v) level of on-going support projects. The commune selection also includes a balance between better market-linked and more remote communes that can be linked through VC development. Appendix 2, Annex 1 contains a detailed summary of the Project communes in Bắc Kạn and Cao Bằng.

8. The main groups of rural people targeted for support under the Project will be:

rural poor households with land and labour, including household enterprises;


rural people lacking production land but having business acumen and desire; and,


9. The Project, to a considerable degree, is self-targeting for the poor. The MOP-SEDP process supports the devolvement of participatory governance to the commune/village level, where poorest live. The Project will bring greater equity to forest land allocation and establish legal production forest land and forest use rights, particularly benefiting poor upland communities and women, who, if married, will have joint ownership of allocated forest land and forests. The community investment program will empower poor upland male and female farmers to choose investments and services that meet their perceived needs, with particular attention paid to women’s priorities. The development of value-chain linked and climate-adapted farming systems and technologies will directly benefit the poor, raising crop and fodder production, diversifying income generating opportunities in the process. Supporting CIGs membership will be identified through the MOP-SEDP process, with minimum quotas on women’s participation, thereby raising transparency and social accountability. The rural credit programme specifically targets women farmers and, with its modest loan size, will be of primary interest to poor women farmers. The selection criteria for support under APIF co-financing will be significantly weighted in support of investments that will benefit the poor. The Project responsiveness to IFADs Project targeting check list is Detailed in Appendix 2, Annex 2.

10. Poor and near poor households will benefit directly from all Project activities. For rural infrastructure investments, poor and near-poor households will benefit from those investments that directly improve agriculture production (e.g. irrigation) while poor, near-poor and non-poor households will benefit from other infrastructure development such as roads. Non-poor households will also participate in CIGs and APIF investments as their participation is recognised as lifting the overall performance of such investments, however, they would not represent more than 50 per cent of the total number of beneficiaries of these Project activities.

11. Annex 4, Table 1, provides a breakdown of the expected physical results and impacted populations for each Project output. Annex 4, Table 2, shows the total beneficiaries based on the expected success rates for each project output. Clearly, there are overlaps between Project outputs and the resulting beneficiary groups, with some benefiting from just a single project activity (e.g. a road or footbridge) while other, typically poorer households, could benefit from multiple combinations of group grant, credit access, forest land and forest use rights, etc. Table 1 below provides an estimate of the total number of households expected to benefit from one or more Project outputs that impact on household wealth - in total about 33,000 households or an estimated 150,000 people. Of this total, an estimated 30,000 households or 135,000 people are expected to achieve a 20% improvement in household assets. Table 2 shows the expected number of poor and near poor households and women, expected to benefit from Project outputs impacting on household wealth – in total about 19,000 poor and near poor households are expected to benefit while more than 8,000





66

women will be direct beneficiaries of project wealth-creating outputs. Of this total, an estimated 16,000 households or 72,000 people are expected to be lifted out of poverty.

Table 1: Estimation of Total Number of Project Beneficiaries

Output

Total output bene-

ficiaries


5 5 or 7 5 or 7 or 8

5 or 7 or 8 or 6

5 CIGs HHs 15,960 %

7 RF services HHs 4,958 1,487 % 30%

8 APIF HHs 8,971 2,691

% 30%

6 CI /c HHs 31,821 8,032 % 40%

4 FLA HHs 9,067 4,533 % 50%

Total project HHs 32,704 beneficiaries /d people 147,167 \a Taking into account that many beneficiaries will benefit from more than one output.

\b Assumptions. \c % referring to road beneficiaries. Estimated % of irrigation beneficiaries not benefiting from Outputs 5, 7 or 8: 0%. \d Avg. no. of persons/HH: 4.5.

Table 2: Estimation of Total Number of Poor/Near Poor and Women Project Beneficiaries

Output HHs Total output

bene-ficiaries


5 5 or 7 5 or 7 or 8

5 or 7 or 8 or 6

5 CIGs Poor/Near Poor 7,980 Women 6,384

7 RF services Poor/Near Poor 2,479 744 Women 4,958 1,487

8 APIF Poor/Near Poor 4,486 1,346

Women 897 269

6 CI /c Poor/Near Poor 15,911 6,364

4 FLA /c Poor/Near Poor 5,440 2,720

Total Project Poor/Near Poor 19,154 beneficiaries Women /c 8,141 \a Taking into account that many beneficiaries will benefit from more than one output.

\b Percentage assumptions same as for Total Beneficiaries Table. \c Women HHs not counted under FLA and CI.

Gender44

12. Vietnam's development background is rooted in a feudal and highly patriarchal society derived from Confucian philosophy, with a more recent history of socialist government overlaid by an increasingly market-led economy. Social justice and the role of women have been circumscribed by these features, although, over the past two decades, significant demographic shifts and changes in the role and status of women have taken place. In the "modern" era which began in 1946, women are no longer viewed primarily as wives and mothers, but also as a significant labour force with many of the same potentials and rights as men. The first Constitution of 1946 stated in Article 9 that "All power in the country belongs to the Vietnamese people, irrespective of race, fortune, class, religion..." and that "women are equal to men in all respects" (First Constitution of Vietnam, 1946)

44

This note on gender draws information from multiple sources, but is particularly indebted to the work of Ms. Sandy

Stephens on analysing gender and development issues in Viet Nam.





67

13. The current Constitution of Viet Nam enshrines the principle of gender equality, and specifically prohibits the violation of women’s rights. In regard to legal rights, the position of Vietnamese women has improved over the past decades. In 2006, the National Assembly passed the country’s first Law on Gender Equality. This law aims to address a range of issues (such as wage gaps) and eliminate discrimination based on gender. The position of women varies considerably among Viet Nam’s 54 official ethnic groups. Harmful practices such as such as the marriage of young girls and marriage of a widow to her deceased husband’s brother are prevalent among some groups, despite being prohibited by law since 2000. Viet Nam ratified the Convention on the Elimination of all Forms of Discrimination against Women (CEDAW) in 1982, but has not yet ratified the Optional Protocol. Under the 2015 Human Development Report, Viet Nam’s Human Development Index (HDI) value for 2014 is 0.666 — which is in the medium human development category — positioning the country at 116 out of 188 countries and territories. Between 1980 and 2014, Viet Nam’s HDI value increased from 0.463 to 0.666, an increase of 44 percent or an average annual increase of about 1.3 per cent. The country’s score in the Gender Inequality Index for 2014 is 0.308, ranking it 60 out of 155 countries. In Viet Nam, about 25 per cent of parliamentary seats are held by women, and about 60 per cent of adult women have reached at least a secondary level of education compared to about 70 per cent of their male counterparts. For every 100,000 live births, 59 women die from pregnancy related causes; and the adolescent birth rate is 29 births per 1000 live births. Female participation in the labour market is 72.8 percent compared to 81.9 for men.

14. Although women in Vietnam enjoy a large measure of equality under the law and men regard women as partners in the labour force, the practice of social and economic gender equity lags behind both the spirit and the application of legislation and official support for equality. Public life is still traditionally viewed as a predominantly male domain, while women remain responsible for unpaid work in the household. This is particularly true in rural areas and in the highlands, where women also face limited education and employment opportunities, and access to healthcare.

15. Agriculture employs the majority of people in Vietnam, with about 68 percent of women and 58 percent of men working in agriculture. Most women work as unpaid family labour on farms, and their free labour is often assumed in planning agricultural development projects and programmes - 53% of all employed women work as unpaid family labourers compared with 32% of men. Regulations governing minimum wages for women are widely ignored or circumvented by contract and piece-work, and by offering "part-time" menial, low-paid tasks which sometimes add up to more hours for less remuneration than full-time work. In addition, women are responsible for most of the unpaid household and community work which is usually invisible, unrecognised and carries low status.

16. There is almost no gender gap in enrolment and achievements of Vietnamese children in primary schools, but at secondary and tertiary levels, particularly in rural areas, the decline in enrolment is much higher for girls. This is especially clear in poorer families where girls are either needed as productive labour and for the care of siblings, or where preference is shown for boys' education when there is insufficient money for both. Among ethnic minorities access to education is much more limited for both sexes, and gender gaps are more marked at all levels. Illiteracy remains relatively high, with females showing about twice the illiteracy rate of males, and where higher education is valued it is generally valued only for males. Physical isolation usually requires the minority student’s board at secondary and tertiary educational institutions, and it is usually culturally unacceptable for girls and women to leave home before marriage in most minority groups. At tertiary level therefore it is extremely rare to find a female ethnic minority student enrolled in full-time study.

17. Cultural attitudes to women remain a major constraint to their achieving equality and parity with men. Confucian values expressed in dao or ways, stipulate that women should be obedient to their fathers before marriage, to their husbands after marriage, and to their sons upon their husbands' death. A second dao lists four wifely virtues: beauty, hard work, modesty, and faithfulness to one's husband.

18. The Vietnam Women's Union (WU) remains the most active mass organisation in the country, existing since 1930 first to mobilize women for wartime activities, and later as the central organisation for promoting women's issues. Although technically not a Government body, the WU has been supported mainly by Government until the recent past. Under economic reforms the President of the WU retains the right to participate as an equal member in the regular meetings of Government, but inputs into significant policy areas such as macro-economic reform have been very limited. WU resources have not allowed adequate research and analysis of gender issues, nor the monitoring of





68

the impact of reform and development on women and on poor families. Research carried out by others e.g. internationally funded projects is ad hoc and confined to rather small geographical areas. WU activities are like those of non-governmental organisations, operating at four administrative levels - central, provincial, district and commune - and reaching through all 53 of Vietnam's provinces to its estimated membership of 10 million. Membership is voluntary, and consists mainly of rural women between the ages of 30 and 50. The small membership fee is routinely waived for poor women who cannot afford to pay. WU membership allows access to credit and training provided by the Union, which now receives significant international donor assistance for the implementation of government policies and programmes oriented to the integration of women in development, as well as for special projects and welfare for women. Their limited human resources, however, are constrained by insufficient technical expertise, and a lack of transport and equipment to carry out their work efficiently. The level of international assistance fluctuates, and varies between provinces, and those most in need tend to receive the least.

19. With limited female participation in decision-making for national and provincial policy and plans, these are heavily biased towards male priorities and preferences. In the agriculture sector the absence of women in macro and in local level policy planning is even more conspicuous, and agricultural policy and resource allocations tend to ignore female needs, favouring for example, cash crops over subsistence, export crops over self-sufficiency in food, cattle over small ruminants and poultry, raw materials production for factories over sustainable community and social forestry, capture fisheries over aquaculture. Official proclamations about gender equity and equality clearly remain to be internalised by men and women in decision-making, and to be applied to resource allocations and Project implementation.

20. Women farmers remain, officially, largely invisible. When they are not seen, they are not addressed by policy, and their needs are routinely overlooked. Farmers are considered male, households’ heads are men, households are viewed as homogeneous, and official inputs to agriculture are directed at men by men. The feminization of farming as a policy issue has barely been recognised in Vietnam or elsewhere so little strategic planning has been done. Instead, an ad hoc approach channels occasional inputs to women as passive recipients of welfare rather than as economic partners in a vital and dynamic production sector. In response, women ignore official proffering and get on with their long and lengthening work day. In Vietnam as elsewhere, policies and plans that are not explicit about including women in rural development effectively exclude them and thereby retard all development. Most policies are silent on gender and on broader issues of equity; plan objectives are gender blind; data are unavailable, inadequate or misleading; resource allocations are extremely limited; women remain invisible and strategies by-pass them; mandates and accountability for gender mainstreaming is absent; and gender awareness and commitment to equity are weak. Job descriptions rarely mention gender, and management is not held accountable for meeting either gender or social objectives. This situation generally pertains at all levels and in most development projects.

21. The trend for men to migrate out of agriculture into more attractive employment (or any employment) in other sectors will continue to place an increasing burden on women farmers. Women left behind will be expected to shoulder more of the agricultural and rural development work in the future, leading inexorably to a longer working day on a natural resource base which may be depleted or degraded due to over-exploitation and misuse. Studies show rural women's work day already significantly longer than that of men and it is lengthening, so labour-saving technologies and more efficient working methods (e.g. in organised groups) is indicated. The fragmentation of women's time which significantly lowers their productivity also needs to be reduced by the provision of child care facilities where this is cost effective. In rural areas this may simply mean one woman in a group taking care of others' children to free the majority from such responsibilities during productive work periods. Communities which can afford it may hire child carers and pre-school education personnel.

22. Labour bottlenecks could limit growth, delay or extend critical periods such as harvesting, and increase the unattractiveness of agriculture as a career for the brightest and best among youth. Low female productivity in agriculture will increase food insecurity, decrease rural household incomes and thereby increase rural poverty. It may also force women into unsustainable practices which further degrade the environment. These issues can be addressed with education, training and technology to lighten the drudgery of women's work, increase their productivity and add value to their production,





69

but these will be insufficient without increasing women's strategic intervention potential by enabling them to participate in decision-making and management.

23. Women farmers' lower education levels, their inferior physical strength and their limited access to land and other capital, as well as the constraints imposed by culture and their multiple roles on the farm, in the community and in the household negatively affect their capacity to take advantage of available technological innovations. Men's advantaged position on the other hand enables them to gain access to opportunities, new technologies and other agricultural innovations before women do. This gap needs to be addressed in plans and strategies for achieving gender equity, and to enable women who are "breadwinners" and farmers in their own right, to increase their productivity.

24. Expanding investments in human capital for women will help in the long run to integrate more women in the economy, improving their opportunities and thereby the efficiency and effectiveness of all development. Initiatives will be needed to encourage girls to continue to secondary and tertiary education, and to provide non-formal education and training directly to rural women to enhance their long term productive potential. In the short term, targeted training of rural women will increase their total production, their productivity and incomes, and hopefully increase their leisure time and their options in life.

25. Women's access to land and other capital is far less than that of men, and men control most productive inputs in the farming and forestry sectors. If women are to take increasing responsibility for primary production and processing, barriers around their access to and control over relevant resources must be removed. These include direct access to credit, land, water and other agricultural inputs, women's active participation in organisations including decision-making bodies at all levels, access to extension information and services, access to education and training, and participation in decision-making and management.

26. Credit from the formal banking sector is an input which is relatively in-accessible to women, yet women have shown themselves, particularly through WU managed SCGs to be bankable clients with rates of return often exceeding those of men. It is extremely cost-effective to make special provisions to accommodate women as users of credit in their own right, and this may include changes in rules and regulations especially for collateral, direct extension support to women, special education and training, and the provision of financial packages which complement the provision of credit.

Gender Targeting and Equality Strategy.

27. In conjunction with the Viet Nam Women Union (VWU), the CSSP will promote gender equality as well as women’s participation in village development planning, CIGs, forest land and forest use, rural financial services and market linkage programmes, assisting them to gain equal access to agricultural support and investment opportunities. Specific measures include: (i) gender analysis of the farming systems and value chain development in the Project area is conducted through the SIP; (ii) gender awareness-raising will be conducted at village level and amongst all Project stakeholders at all administrative levels; (iii) all committee members (women and men) will be trained on group formation and capacity strengthening training in participatory decision-making and facilitation techniques, leadership skills, public speaking, confidence building; (iv) ensuring women’s participation in the underlying MOP-SEDP planning process through a minimum 30 per cent women’s representation on VDBs and CDBs; (v) requiring at least 50 per cent women’s participation in village-level MOP-SEDP discussions and decision meetings; (vi) establishing a forest land and forest use allocation process that (a) prioritises women-headed households

45; and (b) amongst other

participating poor and near poor households, requires the signature of both spouses on forest land and forest use certificates; (vii) requiring a minimum 40 per cent women’s participation in CIGs and the strong promotion of female lead farmers under the LF2F programme; (viii) ensuring that both male and female family members have access to group technical training and other capacity development activities, (vii) developing the capacities of extension agents to include women, particularly through female Lead Farmers under the LF2F programme, and, where appropriate, organising special sessions for women; including gender audits in annual farmer groups’ capacity assessments; (ix) technical training materials will include training needs and topics highlighted by women and extension training schedules will ensure that location and timing of delivery are convenient for women

45

In the Project communes in Bắc Kạn, there are 1,612 women-headed households, of which 823 households are

classified as poor. In the Project communes in Cao Bằng, there are 2,232 women-headed households, of which,

1,225 are classified as poor.





70

(x) enabling at least 9,600 women to benefit from access to loans under the WSCGs programme and the empowerment of the VWU to manage a sustainable and scalable MFI in each province; and (xii) promoting APIF-generated smallholder farmer contractual agreement targeting poor and women-headed households with contracts jointly signed by both spouses where applicable. (xiii) appoint a Gender specialist to the CSSP PPCO team and undertake gender awareness training of the entire PPCO and district CSSP coordination units; (xiv) disaggregating M&E data and analysis by gender; and (xv) supporting the recruitment of women to ensure gender-balanced Project implementation teams at all levels. Additionally, NSLCP-FSP will support the VWU in building its capacity to own and manage sustainable and scalable MFIs in the Project provinces.

Gender Action Plan

28. A gender aware approach will be a crucial focus of the Project whereby women's position and roles will be recognized and acknowledged and women's economic empowerment will be realized through the development of pro-poor gendered economic opportunities. A gender action plan, to be included in the Project PIM will be developed as per the following outline and will seek to maintain women's access and participation across all components of the Project, from extension to Project evaluation and across all thematic areas of Project activities.

29. The purpose of the gender action plan will be to promote gender equality so that targeted women and men have equitable access to, and control over, resources (e.g., livelihood supports) provided by and benefits (e.g., increased agricultural production, productivity and market access) gained from the Project. The gender action plan will ensure:

Gender equality concepts are adequately introduced to Project staff as well as

women and men from Project communities as much as possible during the Project

work.

Facilitation of women’s/men’s equal and meaningful participation in the Project

activities and their voices heard in decision-making to be ensured by the Project

implementing partners.

Gender sensitive language is used in all documents – resource and information,

education, and communication materials, reports, etc.

Mechanisms and tools are in place to ensure equitable access to and control over

resources

Gender impact assessment of the Project are to be conducted along with periodic

review and learning of the Project.

Sex disaggregated data is to be collected, analysed and used for ongoing Project

development and reporting - with both quantitative and qualitative information.

Gender sensitive organizational policies, practices and staff recruitment for all

levels (from management positions to field level positions). This includes ensuring

that the Project identifies and trains sufficient female Lead Farmers under the

Project.

Ethnic groups inclusion framework

30. Ethnic people in the targeted Project districts have familiarity and considerable local knowledge in agriculture production and climate change adaptation. The Project will abide by the following safeguards to ensure that Project activities are culturally sensitive and do not have any negative impact on livelihoods and practices of the ethnic people:

the PPCO, at the beginning of the Project, clearly defines a list of sub-ethnic

groups and guides the provincial and district government in the collection of data

disaggregated by ethnicity.

undertake a screening with the objective to (a) determine if the impacts on ethnic

groups are significant; (b) identify the level of assessment and institutional

resources required to address indigenous people (IP) safeguard issues; and

(c) determine information and consultation requirements;





71

a social impact assessment will be carried-out by the PPCO, with the

data/information used to prepare an ethnic groups development plan. The

assessment will include a gender-sensitive assessment of the affected minorities’

perceptions about the Project and its impact on their social, economic, and cultural

status;

an ethnic groups development plan shall be prepared for both Bắc Kạn and Cao

Bằng. The ethnic groups development plans will be prepared by PPCO with

support of Project financed TA, based on the results of screening, social impact

assessment and meaningful consultations;

meaningful and culturally-sensitive consultation process will be undertaken with all

ethnic groups affected by the projects. They will be properly informed and

consulted about the Project, the scope, implementation schedule and activities, as

well as expected impacts, both positive and negative, on the community and ethnic

groups. Ethnic peoples' aspirations, needs, and preferred options for the projects

will be sought and measures to enhance benefits or mitigate negative impacts will

be considered and recorded;

SCCP Coordination Offices at the district level will ensure that at least two staff in

the unit speak ethnic languages and relevant information and trainings to Project

beneficiaries are delivered in local ethnic languages; and

all M&E data, analysis, and reporting will be disaggregated by ethnicity.





72

Annex 1. Project commune poverty details

Table 1. Cao Bằng: Poor and near poor households in CSSP districts and communes at end-2015

No. Commune District

2015

Total Poor HH % Poor

HH

Near Poor

HH

% near

poor HH

Total poor

& near

poor HH

%

Project Area 14,883 10,250 68.87 1,543 10.37 11,793 79.24

1. Ha Quang district 3,387 2,675 78.98 276 8.15 2,951 87.13

1 Quý Quân Ha Quang 282 200 70.92 7 2.48 207 73.40

2 Vân An Ha Quang 219 174 79.45 22 10.05 196 89.50

3 Cải Viên Ha Quang 240 190 79.17 31 12.92 221 92.08

4 Nội Thôn Ha Quang 393 310 78.88 50 12.72 360 91.60

5 Thượng Thôn Ha Quang 491 377 76.78 11 2.24 388 79.02

6 Tổng Cọt Ha Quang 531 425 80.04 49 9.23 474 89.27

7 Sỹ Hai Ha Quang 245 193 78.78 14 5.71 207 84.49

8 Hồng Sỹ Ha Quang 280 219 78.21 33 11.79 252 90.00

9 Mã Ba Ha Quang 254 201 79.13 31 12.20 232 91.34

10 Hạ Thôn Ha Quang 170 131 77.06 9 5.29 140 82.35

11 Vần Dính Ha Quang 282 255 90.43 19 6.74 274 97.16

2. Nguyen Binh district 4,368 2,993 68.52 557 12.75 3,550 81.27

1 Vũ Nông

Nguyen

Binh 356 290 81.46

46 12.92 336 94.38

2 Hoa Thám

Nguyen

Binh 319 210 65.83

64 20.06 274 85.89

3 Minh Thanh

Nguyen

Binh 345 90 26.09

68 19.71 158 45.80

4 Thái Học

Nguyen

Binh 333 190 57.06

38 11.41 228 68.47

5 Tam Kim

Nguyen

Binh 640 294 45.94

125 19.53 419 65.47

6 Triệu Nguyên

Nguyen

Binh 209 161 77.03

30 14.35 191 91.39

7 Phan Thanh

Nguyen

Binh 575 526 91.48

10 1.74 536 93.22





73

No. Commune District

2015

Total Poor HH % Poor

HH

Near Poor

HH

% near

poor HH

Total poor

& near

poor HH

%

8 Ca Thành

Nguyen

Binh 564 491 87.06

39 6.91 530 93.97

9 Thành Công

Nguyen

Binh 647 452 69.86

102 15.77 554 85.63

10 Quang Thành

Nguyen

Binh 380 289 76.05

35 9.21 324 85.26

3. Thach An district 3,654 2,261 61.88 379 10.37 2,640 72.25

1 Đức Thông Thach An 446 334 74.89 18 4.04 352 78.92

2 Canh Tân Thach An 519 314 60.50 28 5.39 342 65.90

3 Minh Khai Thach An 518 429 82.82 38 7.34 467 90.15

4 Thụy Hùng Thach An 290 199 68.62 23 7.93 222 76.55

5 Quang Trọng Thach An 488 362 74.18 41 8.40 403 82.58

6 Vân Trình Thach An 431 147 34.11 82 19.03 229 53.13

7 Trọng Con Thach An 477 300 62.89 94 19.71 394 82.60

8 Đức Long Thach An 485 176 36.29 55 11.34 231 47.63

4. Thong Nong district 3,474 2,321 66.81 331 9.53 2,652 76.34

1 Đa Thông

Thong

Nong 896 578 64.51

60 6.70 638 71.21

2 Lương Thông

Thong

Nong 929 665 71.58

116 12.49 781 84.07

3 Cần Yên

Thong

Nong 438 228 52.05

86 19.63 314 71.69

4 Cần Nông

Thong

Nong 369 270 73.17

28 7.59 298 80.76

5 Thanh Long

Thong

Nong 302 190 62.91

6 1.99 196 64.90

6 Lương Can

Thong

Nong 540 390 72.22

35 6.48 425 78.70





74

Table 2. Bắc Kạn: Poor and near poor households in CSSP districts and communes at end-2015

Project Districts and

Communes

Total number of households Based on multi-dimensional poverty standard established by Decision No

59/2015/QD-TTg dated 19 Nov 2015

Poor Households Near-poor Households

No. of HHs Ethnic

Households Total % Total %

Total 35 communes 20,609 19,911 9,988 48% 2,747 13%

Pac Nam District 6,692 6,510 3,402 51% 730 11%

An Thang 264 264 172 65% 44 17%

Boc Bo 943 774 347 37% 98 10%

Bang Thanh 732 730 422 58% 118 16%

Cao Tan 777 774 377 49% 18 2%

Cong Bang 610 608 291 48% 105 17%

Co Linh 811 811 441 54% 79 10%

Giao Hieu 403 401 145 36% 59 15%

Nghien Loan 1,175 1,171 719 61% 88 7%

Nhan Mon 409 409 209 51% 77 19%

Xuan La 568 568 279 49% 44 8%

Ba Be District 6,071 5,751 2,463 41% 995 16%

Cao Thuong 792 784 420 53% 130 16%

Khang Ninh 958 943 310 32% 193 20%

Dia Linh 812 744 349 43% 134 17%

Yen Duong 615 587 277 45% 142 23%

Chu Huong 841 718 353 42% 168 20%

Ha Hieu 642 612 102 16% 57 9%

Phuc Loc 690 678 359 52% 111 16%

Banh Trach 721 685 293 41% 60 8%

Na Ri District 3,897 3,783 1,933 50% 571 15%





75

Project Districts and

Communes

Total number of households Based on multi-dimensional poverty standard established by Decision No

59/2015/QD-TTg dated 19 Nov 2015

Poor Households Near-poor Households

No. of HHs Ethnic

Households Total % Total %

Lam Son 487 463 270 55% 57 12%

Vu Loan 420 418 242 58% 51 12%

Van Hoc 243 240 173 71% 13 5%

Cu Le 531 516 250 47% 82 15%

Huu Thac 369 342 152 41% 37 10%

Xuan Duong 532 518 221 42% 107 20%

Liem Thuy 297 294 124 42% 63 21%

Quang Phong 380 357 152 40% 55 14%

Dong Xa 638 635 349 55% 106 17%

Ngan Son District 3,949 3,867 2,190 55% 451 11%

Coc Dan 588 584 350 60% 61 10%

Thuong An 442 440 247 56% 26 6%

Bang Van 719 706 337 47% 60 8%

Duc Van 362 353 201 56% 53 15%

Thuan Mang 556 556 344 62% 35 6%

Huong Ne 324 321 180 56% 37 11%

Lang Ngam 637 602 348 55% 118 19%

Trung Hoa 321 305 183 57% 61 19%

Bach Thong District 973 843 187 19% 151 16%

Quang Thuan 492 417 98 20% 99 20%

Duong Phong 481 426 89 19% 52 11%





76

Annex 2: CSSP Targeting Mechanism

IFAD’S TARGETING POLICY - CHECKLIST for DESIGN

Key issue Design response

1. Does the main target group - those

expected to benefit most- correspond to

IFAD’s target group as defined by the

Targeting Policy (poorer households and food

insecure)?

Yes. Both Bắc Kạn and Cao Bằng are

amongst the 10 poorest of the 63 provinces in

Viet Nam. The primary target group are poor

and near poor smallholder farmers, who form

a significant proportion of total poor

households in the Project area. Poor women-

headed households are specifically targeted

including the application of high minimum

participation rates for women in key Project

production and decision making activities.

As poverty at household level is well identified

in Viet Nam, the Project can readily target the

poor and near poor. In the four Project districts

of Bắc Kạn province there are 9,988 poor and

2,747 near-poor households, representing

48 per cent and 13 per cent of the total

number of Project district households,

respectively, almost all (98%) from ethnic

minority groups. In the four Project districts of

Cao Bằng province, there are 10,250 poor

households and 1,543 near-poor households,

all from ethnic minority groups

2. Have target sub-groups been identified and

described according to their different socio-

economic characteristics, assets and

livelihoods - with attention to gender and

youth differences? (matrix on target group

characteristics completed?)

Yes. The level of multi-dimensional poverty in

the Project provinces, districts and communes

was completed in 2015 and the data is

presented in Appendix 2, Annex 1. The

principal targets are poor and near poor

households, including women-headed

households, with quotas set for the level of

poor household and women’s participation.

Given the projects value chain development

thrust, non-poor households will also benefit

from project investments. A detailed

breakdown of the level of household

participation in various project activities is

given in Appendix 2, Table 1.

3. Is evidence provided of interest in and

likely uptake of the proposed activities by the

identified target sub-groups? What is the

evidence? (matrix on analysis of Project

components and activities by principal

beneficiary groups completed?)

Yes. In both provinces, the Project is building

off the experience of prior IFAD development

investment including the 3PAD project in Bắc

Kạn and the DPBRP in Cao Bằng. Lessons

learned from the implementation of those two

project (see Appendix 3) have been central to

CSSP design.

Rural communities in the Project area are





77


already engaged in participatory socio-

economic development planning, which will be

strengthened and made more climate-adapted

and market oriented. There is ample evidence

in Viet Nam and in the Project provinces and

districts that farmers are committed to

improving their agricultural production and

productivity. The evidence that minority people

in the Project area will take up this challenge

or that farmers will engage robustly with an

expanding agri-business sector is less certain,

but 3OAD and DBRP evidence suggests that

this will not be a major constraint to Project

implementation

4. Does the design document describe a

feasible and operational targeting strategy

in line with the Targeting Policy, involving

some or all of the following measures and

methods:

4.1 Geographic targeting – based on

poverty data or proxy indicators to identify, for

area-based projects or programmes,

geographic areas (and within these,

communities) with high concentrations of

poor people

Yes. The Project is targeting the poorest and

most food insecure provinces of Viet Nam

(both provinces are amongst the 10 poorest of

Viet Nam’s 63 provinces) and the poorest

districts and communes in both Bắc Kạn and

Cao Bằng. provinces. In Bắc Kạn, 48 per cent

of the households in the Project communes

are multi-dimensionally poor, while in Cao

Bằng this figure reaches to 69 per cent

4.2 Direct targeting - when services or

resources are to be channelled to specific

individuals or households

Yes. The project technical services will rely

extensively on lead farmer-to-farmer

extension, financed through CIG-managed

grants, whereby knowledge is transferred in

the local language. This approach has already

been successfully applied in Bắc Kạn. The

Project credit programme specifically targets

poor women and the methodology has been

widely and successfully applied in Viet Nam.

The forest land allocation programme in Bắc

Kạn, which extends an earlier successful

initiative under the 3PAD project, targets poor

households, including women-headed

households. Land use certificates issued to

couples are in the name of both spouses. The

VC development is pro-poor with APIF-

supported agri-businesses required to

incorporate poor-households in proportion to

the size of their co-financing.





78


4.3 Self targeting – when goods and

services respond to the priority needs,

resource endowments and livelihood

strategies of target groups

Yes. The Project activities and beneficiaries

would be primarily self-targeted. The

identification of project investment activities

and beneficiary groups is driven by the MOP-

SEDP process, which is community based and

demonstrably transparent (See Appendix 4 for

details).

4.4 Empowering measures - including

information and communication, focused

capacity- and confidence-building measures,

organisational support, in order to empower

and encourage the more active participation

and inclusion in planning and decision

making of people who traditionally have less

voice and power

Yes. Through the MOP-SEDP process, all

committee members (women and men) of

Village Development Boards would be trained

on group formation and capacity strengthening

training in participatory decision-making and

facilitation techniques, leadership skills, public

speaking, confidence building.

Beneficiary contributions have been carefully

set to ensure commitment and ownership

without being onerous. A significant proportion

of beneficiary contributions can be made in

kind. For CIGs, where poor households may

have more difficulty meeting beneficiary

contributions, the option exists for them to

increase their in-kind contribution. The VBSP

and LWU WSCG programme have confirmed

their willingness to finance beneficiary

contributions where necessary.

4.5 Enabling measures – to strengthen

stakeholders’ and partners’ attitude and

commitment to poverty targeting, gender

equality and women’s empowerment,

including policy dialogue, awareness-raising

and capacity-building

Yes. Social inclusion and gender awareness

training of the entire PPCOs staff would be

undertaken. Gender awareness trainings

would be also conducted at village level and

amongst all Project stakeholders at all

administrative levels. Both PPCOs include a

gender specialist. The Women’s Union will be

a key Project stakeholder and minimum

women’s and poor household participation in

key activities is mandated. The Project

Coordination Office, Technical Advisory Group

and Project Steering Committee will seek

gender balance in membership. ToRs are all

gender sensitive.

4.6 Attention to procedural measures- that

could militate against participation by the

intended target groups

Yes. Possible procedural constraints for

people from minority ethnic groups and

women have been analyzed and addressed in

the design. Almost 99 per cent of people in the

project area belong a minority ethnic

community and most of the administration at

commune, district and provincial levels are





79


ethnic people. The capacitation of the VWU for

the implementation of the rural financial

services programme, with its 100 per cent

focus on female borrowers ensures poor

women’s credit access.

Beneficiary contributions have been carefully

set to ensure commitment and ownership

without being onerous. A significant proportion

of beneficiary contributions can be made in

kind. For CIGs, where poor households may

have more difficulty meeting beneficiary

contributions, the option exists for them to

increase their in-kind contribution. The VBSP

and LWU WSCG programme have confirmed

their willingness to finance beneficiary

contributions where necessary.





80

Annex 3: Gender and Targeting Checklist

Gender targeting

Key Issue Design Response

1. The project design report contains – and project

implementation is based on - gender-disaggregated

poverty data and an analysis of gender differences in

the activities or sectors concerned, as well as an

analysis of each project activity from the gender

perspective to address any unintentional barriers to

women’s participation.

Yes. Gender differences are analyzed during poverty

analysis and Project activities are gender-sensitive.

The CSSP has taken into account women and men’s

roles, constrains and needs in designing the Project

activities including setting minimum quotas for

women’s participation in a range of activities.

2. The project design report articulates – or the project

implements – actions with aim to:

Expand women’s economic empowerment through

access to and control over productive and

household assets;

Yes. CSSP activities are designed to expand

women’s economic empowerment by facilitating

women’s access to production inputs, technical

training and business development skills. Project-

supported gender-mixed and gender-disaggregated

farmer groups must, in aggregate at district level,

include at least 40 per cent female members, while

individual groups must include at least 50% of

members from community-identified poor households

46. Under Output 5, women will be specifically

targeted to develop WSCGs and, ultimately, MFIs

owned by the provincial WUs. Under Output 4, male

and female farmers will have the opportunity to form

gender-disaggregated and/or mixed gender groups

to increase farm production/productivity and link to

markets. Minimum women’s participation in all

planning decision meetings is mandated by the

Project.

Strengthen women’s decision-making role in the

household and community, and their

representation in membership and leadership of

local institutions;

Yes. CSSP will build women’s capacity to partake in

participatory community needs assessment and

prioritisation, using separate women’s meetings

where appropriate. Women’s participation in all

decision making meetings and in subsequent

implementation management teams must be at least

40%.

Achieve a reduced workload and an equitable

workload balance between women and men.

Yes. Rural ethnic women experience extreme “time

poverty” and the Project is highly conscious of the

need to reduce women’s labour demands. The CSSP

would facilitate separate consultation with women to

ensure the Project activities do not account for

additional workload for women. Trainings and

meetings would be organized in locations and

timings suitable for women beneficiaries. The LF2F

46

IFAD project experience in Viet Nam shows that, dependent on activity and community, some farmer group activities

may be most successful if implemented through gender disaggregated groups. The project will therefore require a

gender balance at the level of the district, rather than within individual groups, but each group, irrespective of its gender

mix, will require 30% participation by community-identified poor households.





81


programme would include female lead farmers.

The Project financial and economic analysis has

assessed likely impacts on women’s labour. The SIP

analysis will include a detailed assessment of female

and male labour responsibilities and time

commitments and will promote labour saving

technology where profitably possible. All VC

investments are expected to provide significantly

higher returns to family labour, enabling the use of

hired labour to help address demand for women’s

labour at critical points in the production cycle.

3. The project design report includes one paragraph in

the targeting section that explains what the project

would deliver from a gender perspective.

Yes. The CSSP Gender Action Plan, essentially

guided by IFAD’s Gender Equality and Women’s

Empowerment Policy47

, aims to enhance women’s

participation and role in agriculture production and

marketing by increasing their access to resources

and empowering them both technically and

entrepreneurially as managers of agriculture

programmes. The strategy is not only to support

women in production but also to move them further

up the value chain by engaging them in processing,

management, marketing, and ownership.

4. The project design report describes the key

elements for operationalizing the gender strategy, with

respect to the relevant project components.

Yes, CSSP activities and investments will contribute

in tackling the major constraints faced by the women

and implementation arrangements concerning

women’s engagement are detailed in the main report

and Appendices 2 and 4.

5. The design document describes - and the project

implements - operational measures to ensure gender-

equitable participation in, and benefit from, project

activities. These would generally include:

Yes, as detailed in the Gender Action Plan.

5.1 Allocating adequate human and financial

resources to implement the gender strategy

Yes. Adequate budget has been allocated in the

design for the implementation of the gender strategy.

The Women’s Union will be represented on the

PPSCs and lead the implementation of Output 5.

Gender action plans with quantifiable targets and

indicators will be developed and the Project AWPB

will be prepared to reflect the requirements of the

action plans.

5.2 Ensuring and supporting women’s active

participation in project-related activities, decision-

making bodies and committees, including setting

specific targets for participation

Yes. Specific measures and strategies are designed

to ensure women’s access to information about

Project activities and their participation in Project

activities, including minimum participation quotas in

all planning meetings.

47

http://www.ifad.org/gender/policy/gender_e.pdf





82


5.3 Ensuring that project/programme management

arrangements (composition of the project management

unit/programme coordination unit, project terms of

reference for staff and implementing partners, etc.)

reflect attention to gender equality and women’s

empowerment concerns

Yes. CSSP will promote a gender-balanced working

team to have at least 20 percent women as

professional staff at in the PPCO technical teams.

Project staff, supporting government agency staff

and service providers will receive gender awareness

training during start up and refresher training after

mid-term. PPCO staff ToRs all require attention to

gender equality.

5.4 Ensuring direct project/programme outreach to

women (for example through appropriate numbers and

qualification of field staff), especially where women’s

mobility is limited

Yes. CSSP will work closely with provincial, district

and commune WU representatives in Project

implementation. The DARD will facilitate women-led

farmer-to-farmer extension services and will develop

meeting and training venues and timetables in

consultation with women beneficiaries.

5.5 Identifying opportunities to support strategic

partnerships with government and others development

organizations for networking and policy dialogue

Yes. CSSP will ensure proper and balanced

representation of women and men and poor

households, including women-headed households in

decision-making/influencing bodies at village and

commune levels.

6. The project’s logical framework, M&E, MIS and

learning systems specify in design – and project M&E

unit collects, analyses and interprets sex- and age-

disaggregated performance and impact data, including

specific indicators on gender equality and women’s

empowerment.

Yes. CSSP will adopt a gender-sensitive M&E

system to address gender issues by reporting and

analysing sex-disaggregated data throughout the

Project cycle. Where appropriate, the Project

logframe indicators are gender-sensitive and ethnic

group-disaggregated.





83

Annex 4: CSSP Beneficiaries by Project Output

Table 1: Expected CSSP physical results and impacted populations


5. CIGs for climate CIGs new 400 800 700 0 0 0


members new 4,800 9,600 8,400 0 0 0

cumulative 4,800 14,400 22,800 22,800 22,800 22,800


cumulative 79 309 479 559 619 619

members new 873 2,195 1,462 560 420 0

cumulative 873 3,068 4,529 5,089 5,509 5,509




cumulative 2 9 23 36 43 43

VC supply New 600 2,200 4,200 3,816 2,000 0


6. Community


cumulative 67 202 343 446 446 446

villages new 67 135 141 103 0 0

cumulative 67 202 343 446 446 446

HH new 3,365 6,730 7,066 5,148 0 0

cumulative 3,365 10,095 17,161 22,310 22,310 22,310

people new 15,142 30,285 31,799 23,168 0 0

cumulative 15,142 45,427 77,226 100,394 100,394 100,394


cumulative 76 229 389 505 505 505

ha new 457 915 961 700 0 0

cumulative 457 1,372 2,333 3,033 3,033 3,033

HH new 4,920 9,839 10,331 7,527 0 0

cumulative 4,920 14,759 25,091 32,618 32,618 32,618




cumulative 2,667 8,000 11,333 11,333 11,333 11,333







84

Table 2: Expected number of beneficiary households by project output, adjusted

for expected success rates

Total by Output

Output Beneficiaries Unit Total Project Outreach /b

Success rate Effective Project

Outreach

5 CIGs for climate adaptation

CIG members - total

HHs 22,800 70% 15,960

CIG members - poor/near poor /a 50% HHs 11,400 70% 7,980

CIG members - women /a 40% HHs 9,120 70% 6,384

7 Rural financial services

WSCG members - total HHs 5,509 90% 4,958

WSCG members - poor/near poor /a 50% HHs 2,755 90% 2,479

WSCG members - women /a 100% HHs 5,509 90% 4,958

8 Agribusiness Promotion Invest-ment Fund (APIF)

VC supply households - total HHs 12,816 70% 8,971

VC supply HHs - poor/near poor /a 50% HHs 6,408 70% 4,486

VC supply HHs - women /a 10% HHs 1,282 70% 897

6 Community infrastructure (CI)

Road beneficiaries - total HHs 22,310 90% 20,079

Irrigation scheme beneficiaries - total HHs 32,618 90% 29,356

Total road/irrig. scheme beneficiaries /c HHs 35,357 90% 31,821

Total road/irrig. benef. - poor/near poor /a 50% HHs 17,678 90% 15,911

4 Forest land allocation and use (FLA)

Household issued with pink book - total HHs 11,333 80% 9,067

HHs with pink book - poor/near poor /a 60% HHs 6,800 80% 5,440

\a As % of total. \b Based on Output Detailed Cost Table. \c Assumption: 60% of irrigation scheme beneficiaries are also road beneficiaries.




Appendix 3: Country performance and lessons learned

86


1. Performance. Viet Nam became a lower-middle-income status country in 2010, as average per capita GDP has been above USD 1,000 since 2009. The strongest income growth has been associated with urban areas and export-oriented economic activities. Economic growth in Viet Nam is expected to average 6.5- 7.0% per year in the period 2015-2020, driven by sustained growth in consumption, investment and exports. Despite a downturn in foreign direct investment following the global financial crisis, FDI has risen in recent t\years, reaching USD 21.9 billion in 2014, which, at 11.3% of GDP, is among the highest rates globally and export-oriented foreign investor interest looking forward appears robust.

2. Viet Nam experienced double digit inflation and macroeconomic instability in 2011, leading the Government to introduce remedial measures such as tightening monetary and fiscal policy, reduction in public investment and the budget deficit, control of the trade deficit and export promotion. As a result, inflation has been steadily brought under control (the consumer price index for October 2015 was just 0.9%), public debt is being kept at a safe level, at about 50.5% of GDP by the end of 20124 and the total budget deficit has been reduced to 4.4 % of GDP in 2014. Exports continue to grow. Their total value of exports reached a record USD 150 billion in 2014, which is a 13.6 % increase over 2013, which itself was a 13.2% increase over 2012 levels. Viet Nam balance of trade remained in a surplus of USD 1.5 billion in 2014, up on USD 917 million in 2013, following a 19 years of trade deficit that ended in 2012. Vietnam recorded a Current Account surplus of 4.4% of the country's GDP in 2014. Despite recent surpluses, the current account is expected to remain in low surplus or in deficit in the medium term, due to strong consumption and investment growth and rising profit repatriation by foreign-invested enterprises.

3. Agriculture and rural poverty. Agricultural growth has assured national food security and made a key contribution to economic and social development and stability. Some 68.8 per cent of the population or 60.6 million people live in rural areas – an 11% increase compared with 2006. The increase in rural household numbers is due both to growth of the rural population and to multiplication of households. to 46.2 per cent in 2014, with an increasing share of households in industry and services, from 25.1 per cent in 2006 to 53.8 per cent in 2014. The sector’s share of employment, however, remains 2.5 times higher than its share of GDP, indicating relatively low labour productivity. This shift in the rural economic structure varies greatly among regions. The three regions with shares of non-farm households higher than 30 % are the South-East (58.1%), Red River Delta (44.5%) and Mekong River Delta (32.2%). In contrast, the Central Highlands, Central Coast and Northern Uplands regions have more than 80% of their population relying on agricultural incomes, while the share of non-farm households remains relatively low, which has many ramifications for poverty.

4. The annual rate of growth in agricultural production slowed from an impressive average of 5.7% in 1990-2002 to 4.2% in 2002-13. In 2013, agriculture exports formed 17 per cent of the value of total exports and just 9.8 per cent of imports, leaving a healthy, positive agricultural trade balance. The ratio of total agro-food export value to agricultural GDP was 70-80% in the early 2010s, much higher than in China or Indonesia and equal to the ratio of total Viet Nam’s exports to total GDP. The ratio of agro-food imports to agricultural GDP, while only half of that for exports, has tripled since 1990. Rice remains by far the most important commodity, accounting for about 35% of the total value of agricultural production in recent years. There has, however, been an important change in the composition of production away from staple foods to other commodities, in particular perennial crops such as coffee and rubber, and livestock production, especially pig meat. This reflects the strong export orientation of perennial crops and the changing preferences of consumers to higher value products

48. In 2014, total rice production was 45 million tons, an increase of 5 million tons compared

with 2010. Rising agricultural labour costs are slowly forcing efficiency gains (mechanization and land consolidation) and accelerated production diversification. The livestock subsector accounts for 25 per cent of agricultural GDP and is projected to rise significantly. The forestry sector contributes around 1 per cent.

5. Despite this strong performance, a number of constraints remain. Product quality is low, and Viet Nam typically receives significantly lower prices than neighbouring countries and market

48

OECD Food and Agricultural Reviews Agricultural Policies in Viet Nam 2015.





87

competitors for its rice, coffee, tea, rubber and aquaculture exports. Agricultural knowledge systems require significant investment and stronger client and market orientation, while massive infrastructural investment in water management and transport infrastructure is needed. Rural markets are characterized by weak farmer access to market information, limited integration along VCs, low levels of value addition, and continued dominance by state- owned enterprises of some commodities and markets, notably export markets.

6. These business, market and quality constraints, combined with an underdeveloped processing sector, represent a very significant loss of investment, revenue and employment opportunities, while seriously constraining farm profitability. With higher rural labour wages and an increasingly scarce natural resource base, the agriculture sector urgently needs to further diversify production to higher-quality products, promote value addition and processing, and increase efficiency while ensuring resource-base sustainability.

7. Although use rights on 9 million hectares (ha) of agricultural land have been issued to 12 million households and 11.5 million land-use rights certificates (LURCs) approved, the land reform process is incomplete, requiring further investment in LURC issuance, land information systems and land-use planning and consolidation, and the incorporation of customary land tenure into collective land use rights, particularly for “residential communities” of ethnic minorities. Unsustainable natural resource use, particularly of water and in the forestry sector, leads to problems of water scarcity and land degradation, including saline intrusion and loss of biodiversity and flooding. This is amplifying vulnerability to CC and natural climate hazards, which are increasing in frequency and severity. These constraints are compounded by the limited capacity of supporting institutions, particularly at provincial and lower levels.

8. In the period 1993-2014, national poverty incidence declined from 58.1 percent to 17.2% in 2014

49., lifting some 40 million Vietnamese people out of poverty. Rural poverty incidence over a

similar period fell from 66.4% to 22.4% in 2012. Poverty is now predominantly a rural phenomenon: rural people comprised 91 % of total poor people in 2012 a figure that has shown little decline since 1993 when it stood at 95%. It is of particular concern that ethnic minorities, who represent just 13% of the total population, account for almost 30% of poor people, however, poverty rates vary significantly among ethnic groups. Factors for the higher incidence of poverty among minority peoples include: lower enrolment in primary education and earlier departure from formal education; lower quality of endowments in community, educational or physical assets and lower returns on assets; location in isolated, less endowed, more disaster-prone areas; lack of social, physical, human and financial capital; greater dependence on agricultural sources of income; reduced access to employment opportunities and lower received wages; social constraints on the transition from communal to market-based land tenure systems; inability to speak the majority language, i.e. Kinh Vietnamese; and negative stereotyping of minority communities.

9. Women, particularly rural and ethnic women, continue to be disadvantaged in terms of the nature of opportunities and quality of resources available to them, despite the passage of gender equality legislation. Women are overrepresented in economic sectors that are vulnerable in times of economic downturn, including the informal sector, and still lack equal access to land tenure (women hold just 19% of Land Use Right Certificates) and to agricultural credit and technologies. Despite Viet Nam’s progress towards educational equity, girls are more likely to drop out of school as a result of the demands of domestic work. One fifth of ethnic girls have never attended school and, in secondary school, lag behind their Kinh counterparts’ enrolment by 10%. Inadequate knowledge of the benefits of breastfeeding and micronutrients, and lack of women’s time for child and personal care, appear to be the main contributing factors in stunting. Reduction of the persistently high levels of child malnutrition in ethnic communities and of the early departure of minority girls from the formal education system are specific concerns for longer-term poverty reduction.

10. The nexus between climate risk and poverty is of growing concern. The most socially vulnerable groups (women, ethnic minorities and the disabled) are likely to be disproportionally less

49

In 2010, a new poverty line was estimated by the General Statistical Office and World Bank that better reflects living

conditions of the poor. Based on the revised poverty line (equal to VND 653,000/person/month or $2.25/person/day,

APIF 2005) and updated monitoring system, the national poverty rate in 2010 was 20.7 percent vs. an official poverty

rate of 14.2 percent in 2010 using former MOLISA urban and rural poverty lines of VND 500,000/person/month and

VND 400,000/person/month, respectively.





88

able to adapt to CC. They are exposed to greater risk, given their frequent direct reliance on agriculture and the natural resource base for their livelihoods, their greater exposure to natural disasters and their lack of assets and capital to recover or to shift to alternative livelihoods, and their susceptibility to climate-related health problems.

11. Past Performance of the IFAD Portfolio. The 2011 IFAD Country Portfolio Evaluation (CPE) found overall performance of the country programme to be satisfactory, particularly in terms of support for decentralization, capacity-building, participatory planning, gender mainstreaming, small-scale infrastructure, development of savings and credit groups (SCGs), and improving rural livelihoods through production for markets. The CPE found that the country programme has had a positive impact on household income and assets, particularly through the women-centred savings and loan programme, increased levels of agricultural productivity, and investment in livestock and improved animal health services. The impact that the country programme has had on the quality of women’s lives and empowerment is positive, while vocational training has been important for income diversification and promoting non-farm employment for rural youth. In terms of efficiency, much has been achieved with regard to Project implementation and management, capacity-building at the provincial, district and commune levels, planning, coordination, monitoring and evaluation (M&E), and direct supervision and implementation support. The CPE noted that in every province in which IFAD has been active there is evidence of a significant reduction in levels of poverty.

12. The CPE also pointed out the need for a holistic approach to the continued development of ethnic minorities in upland areas. There is a need for a strengthened market oriented approach, more comprehensive geographic coverage, a more favourable credit environment for smallholders, more strategic knowledge management, strengthening of partnerships, increased counterpart funding by the Government, and a strategic approach to the conservation of natural resources and the response to CC.

13. Lessons. The key lessons from the on-going portfolio include:

(a) Application of participatory, market-oriented local economic planning processes in poor province needs:

(i) Coordination among agencies through Project steering committees and technical task forces;

(ii) Staff capacity to prepare and implement participatory market-oriented socio-economic planning processes and VC approaches; and,

(iii) Integration of market information and VC analysis in the market-oriented participatory SEDP process.

(b) Poverty targeting and gender mainstreaming under the market-oriented approach with market linkages can benefit poor rural women and men through:

(i) Selection and promotion of pro-poor VCs that create employment and relevant production, processing and marketing systems for poor people;

(ii) Farmer-to-farmer extension and increased use of appropriate technologies for adoption by poor farmers, particularly ethnic minorities;

(iii) Vocational training opportunities for poor households, targeting ethnic minorities and women; and,

(iv) Market-based infrastructure and improved connectivity in remote areas.

(c) For the empowerment of ethnic minorities, and particularly ethnic women, engagement in community decision-making, representation in local institutions, off-farm employment opportunities, women’s land-use entitlement, and women’s SCGs for investment in improved agricultural productivity, livestock production and animal health have proved to be successful.

(d) The voluntary development of CIGs can promote the transition from subsistence- to commodity-oriented production and serve as a foundation for poor people to cooperate with better-off groups and private business. Improved collaboration with mass organizations, such as the Viet Nam Farmers’ Union (VFU) and VWU, and with key farmers in facilitating CIG development has been shown to work. CIGs with access to credit and women’s SCGs have been most successful in this context. Lessons learned from IFAD’s partnering with the private sector through CIG agreements are detailed in Appendix 3, Annex 1.





89

(e) Private stakeholders and service providers drive the development of markets, VCs and investment in agriculture production and processing, including in poor areas, where:

(i) Legislation and policies are in place that enable the private sector and strengthen competitiveness and transparency;

(ii) Capacities of province and district staff for private-sector promotion are available;

(iii) Access to finance, skills and market information is possible.

(f) Partnering with the small- and medium-scale private entities can impart much-needed technologies and skills to smallholders – in turn opening markets to them. Lessons learned from IFAD’s partnering with the private sector through APIF agreements is detailed in Appendix 3, Annex 2. Experiences from 3PAD supported APIF investments in Bắc Kạn are detailed in Appendix 3, Annex 3.

14. With regard to CC and disaster risk management, relevant lessons from local experience include:

(a) Policies to adapt to CC need to be focused on poor and vulnerable people;

(b) Adaptation to CC in high-risk, marginalized communities should target “no regret” approaches, i.e. those that have little additional cost in enhancing livelihoods, sustainable agriculture and poverty reduction;

(c) As the poor are the most vulnerable to climate risks, emphasis on improving their incomes is of itself a viable climate-risk adaptation strategy;

(d) Capacities of agricultural and water systems to cope with current weather variability must be enhanced, while remaining sufficiently flexible; and,

(e) Increased long-term investment in agricultural knowledge and dissemination is important in supporting farmer adaptation to CC.

15. The PCR for the DBRP in Cao Bằng attributed the project’s success to (i) the high level of commitment of the PPC and line agencies in the decentralization of resources to poor communes as investment owners as well as in adopting and institutionalizing the MOP-SEDP into the existing local agencies; (ii) innovative approaches introduced from the DBRP with good technical assistance from the LuxDev TA; (iii) effective support for leading enterprises in improving their competitiveness, product promotion and market expansion as well as in connecting them with the CIGs along VCs; (iv) systematic support to the CIGs, especially concerning their annual performance assessment and classification, building stronger linkages with businesses in contract-farming, building capacity for all three parties (enterprises, CIGs, and CIG support group), and better integration of group saving approaches. Besides these key factors, the project would have been more effective if; (i) the project focused on fewer participating districts; (ii there had quicker decentralization from project start up; (iii) pro-poor value chain development focused more on the “actors” in nodes along the VC processes; (iv) earlier and more effective establishment of the VC management unit; (v) a manual for proper management of CIGs was introduced from the outset; and (vi) formation of a social fund through WSCG as a stepping stone for the poor to gradually approach the financial services market instead of the credit line through VBARD.

16. Regarding capacity building and training, DPPB lessons include: (i) capacity building of district and commune level Project staff was a key success factor; (ii) training needs assessments and subsequently customized practical "real-life" training materials improve trainings dramatically, in contrast to scientific lectures; (iii) TOT approach engaging distinguished village members and key farmers as trainers allows outreach to non-Kinh-speakers; (iv) timing of all farmer trainings need to be planned along with view on planting and harvest cycles.

17. Regarding production support, DPPB lessons include: (i) all support should be conditional in terms of investment in improved livelihood and contribution of beneficiary resources; (ii) production models by Project need to be replicable and profitable among target groups; (iii) new technologies should be accompanied by related technical training; and (iv) extension service should be demand driven and engage alternative extension agents.





90

Table 1. Key DBRP Results

Key Indicator DBRP Result Lessons for CSSP Design

Percent reduction in

poverty rate in project

districts

Reduced from 49% (2010) to 31.6%

(2013) in project district population

CSSP continues IFAD focus on

agriculture-led poverty reduction, targeting

the poorest households

Reduction in the

prevalence of child

malnutrition (w/h; h/a;

w/a), by gender (children

below the age of five)

By 2014, the proportion of project

children suffering from chronic

malnutrition (too short for one’s age)

was 38.9%, lower than that in 2011

(44.2%) and 2009 (56.3%), and also

lower than that of non-project

children (40.6%).

Child nutrition remains a serious

development issue in Bắc Kạn and Cao

Bằng, and upland Viet Nam in general.

Given the strong community awareness of

child malnutrition impacts and their

solution, the CSSP can directly influence

malnutrition through stronger economic

growth.

Up to 500 CIGs in 10

project districts in Cao

Bang formulated. At least

70% of poor households

participated, by types of

business and production

until 2012

Average revenue of the poor has

significantly improved, especially for

a CIG household with VND 10.7

million in 2013 from crop production

(compared with VND 6.2 million for

non-CIG households) and about

VND 15 million from animal

husbandry (68.5% higher than that

of non-CIG households, only VND

8.9 million)

Grouping farmers and linking them to

markets is an effective, efficient and

sustainable mechanism for raising farm

household income, including for poor

households. Market connection through

value chains further enhances this

process.

CIF construction

145 Km of road

30 irrigation schemes

Two rural markets

2 water supplies

5 electricity schemes

CIF investment in irrigation

schemes showed an h EIRR of

50.3%, while savings associated

with force account procurement

across 64 small scale infrastructure

schemes created savings of

between 29.8% and 236.4% (for

concrete roads).

Community driven infrastructure

investment implemented through force

account procurement provides

considerable cost savings, income for poor

households and increased community

ownership. Investing in vocational training

to boost force account procurement

benefits the poor and rural youth.

At least 1000

households, CIGs and

MSMEs in the province

have access to long-,

medium-, short-term

loans until 2013 (by

gender)

Financial access for poor

households to the project credit line

VBARD has been not successful

due to high interest rates and

collateral requirements

The IFAD project model of developing WU

managed WSCGs with a longer term view

to building an MFI is a more practical and

sustainable mechanism for delivering

credit to poor rural (and ethnic)

households in Viet Nam.

18. The 3PAD project was fully disbursed on time, with a higher beneficiary contribution than originally planned. The PCR for the 3PAD project in Bắc Kạn found that the project approach and strategy of creating the institutional, investment, technological and sociological frameworks necessary to achieve sustainable and equitable poverty reduction and improved livelihoods of the rural poor in Bắc Kạn, upon which the CSSP design is based, fitted well to the national and provincial policies and programs. Project relevance, financial management, efficiency, effectiveness and impacts were all rated as satisfactory. The project sustainability was rated marginally satisfactory due to: (i) the lack of sustainable financial mechanisms to maintain community based forest management committees at the village level; (ii) an insufficient provincial policy base supporting market-based LF2F extension services; (iii) weak leadership of a significant number of CIGs and inadequate FA and WU support; and (iv) the need for further investment in the LWU in support of WSSG group management.

19. Key lessons identified by the PCR included: (i) the original project design was focussed on agro-forestry development for sustainable poverty reduction and lacked appropriate instruments to





91

promote agribusiness through market and value chain development; (ii) for decentralization to be effective it must be comprehensive, not only concerning implementation arrangements but also timely budget allocation, local empowerment and regular supervision; (iii) sustainable natural resource management can only be achieved, sustained and replicated if the introduced practices bring local users both immediate and long-term financial benefits; (iv) sustainable and effective pro-poor CIGs require voluntary establishment, competent, business-oriented group leaders, feasible business plans and regular support from responsible agencies; (v) output-based service contract should be based on practical beneficiary training needs and be provided by competent trainers either from the public agricultural extension system or through LF2F services; (vi) an effective APIF model requires competent lead firms with good business models relevant to local agricultural potential smallholder farmer capacity and adequate government support; (vii) the VSCG model works well when there is a clear vision and roadmap and appropriate, early VWU capacity development; and (viii) effective project management requires competent managers, good government human resource policies, particularly concerning staff retention, and an effective M&E system from project inception.

Table 2. Key 3PAD results

Key Indicator 3PAD Result Lessons for CSSP Design

At least 15 per cent reduction in the number of poor households in project area

27.5 per cent reduction in the number of poor households in project area

CSSP continues 3PAD focus on agriculture- and agroforestry-led poverty reduction, specifically, but not exclusively targeting poor and near poor households

5 per cent reduction in the prevalence of child malnutrition (w/h; h/a; w/a), by gender (children below the age of five)

5.2 per cent reduction in child stunting

Child nutrition remains a serious development issue in Bắc Kạn and Cao Bằng, and upland Viet Nam in general. Given the strong community awareness of child malnutrition impacts and their solution, the CSSP can directly influence malnutrition through stronger economic growth.

A 20 per cent increase in the household asset index of poor and ethnic minority households in the project area

The project achieved a 26.1 per cent improvement in the household asset index of poor and ethnic minority households in the project area

Improved agriculture and agroforestry production and productivity can lead to wealth accumulation in the project area. Careful SIP analysis understanding of CC impacts and participatory socio-economic development planning are essential elements of sustainable improvements in agriculture production and productivity and value chain linkage, and will lead to poverty reduction and wealth accumulation

At least 15 per cent of households in project communes experiencing improved food security

The project achieved a 72,2 per cent improvement in project communes experiencing improved food security

See above

Annual income per capita within project districts increases by 20 per cent

The project achieved a 27.5 per cent improvement in per capita income in the project area.

As above

Selected other indicators

Forest land use plans are completed for at least 80% of production forests in project communes.

The project achieved 124 per cent of its target

Forest land and forest use rights allocation to poor and women headed households is strongly demanded and can have a significant impact on poverty reduction a

Beneficiary satisfaction The project achieved an 85% Communities empowered to self-manage





92

with agro-forestry technical services and investment support increases by 25 per cent.

improvement in beneficiary satisfaction

project resources show a high level of ownership and commitment.

At least 50 good farmers become trainers and provide services

The project eventually trained and deployed 106 lead farmers, who were effectively employed by CIGs and other farmer groups

LF2F is a highly effective mechanism for technology transfer and should be institutionalised in the project area.

At least 192 infrastructure schemes completed and operational

The project completed 241 infrastructure schemes

MOP-SEDP driven infrastructure development is a high community priority and can contribute significantly to household wealth and market access.

At least 15% of poor households within the Ba be GEF project area benefit from a pilot PES p

100% of poor households in the GEF project impact area benefitted from community-based PES programmes

Inter-community PES payments can be an effective environment measure and will be used to protect water supply in new irrigated areas under the CSSP>





93

Annex 1: Lessons learned: Co-investment with farmers

The guideline: "Competitive Small Grants" (CSG) provides the procedures for farmer co-investment. The aim is to introduce productive and sustainable agricultural technologies and practices in poor rural areas. The poverty reduction impact is direct, and sustainability is high as the poor stakeholders are given the accountability and resources for value chain upgrading. Further, the methodology of competition between household proposals enables a learning process for investment planning.

Practical lessons have emerged for a more efficient implementation of farmer co-investments. Following was learned during MTR mission in Tuyen Quang, Ninh Thuan and Gia Lai provinces:

Assessment of the first co-investment competition round should take place prior to second, third and possible further calls for competition. The assessment should assess the competition process weaknesses and strengths and propose revisions for the coming rounds.

Capacity of farmer groups is crucial. Prior to a grant competition, the Project needs to identify farmer capacity levels at the target communes, and accordingly simplify the grant proposal templates to realistic complexity, and organize continuous and comprehensive investment planning support to the farmer groups.

Joint ownership and management of assets by farmer groups need to be agreed upon in writing. The groups need to plan for equal sharing of investment benefits to the group members.

Farmer contribution requirement to the co-investment potentially hinders the participation by poorest households. To allow participation of the poor, projects should encourage establishment of mixed farmer groups between well-off and the poor. Project investment should prioritize mixed groups where all contribute as possible to their capacities, in cash and in kind.

Group revolving funds. In addition to the usual capital investment (e.g. machines, buildings, training), the co-investment can also support working capital for initial input materials such as seedlings and fertilizers. However, by nature such investment tends to provide benefits for only one harvest season. To retain the benefit for a longer period of time, such working capital investment should form the basis for a revolving fund mechanism. The method is that individual members repay their respective portions back into the group’s owned and managed revolving fund. The terms and conditions are decided by the group. The potential uses (working capital and capital investment) of a farmer co-investment illustrated:

1. Initial input

materials for

improved production

2. Machines,

buildings and other

physical investment

3. Training for

improved practices

and efficient use of the

investment

LONG TERM BENEFIT

ONE-OFF INVESTMENT

SHORT TERM BENEFIT

REVOLVING INVESTMENT





94

Annex 2: Lessons: Co-investment with enterprises The IFAD Vietnam guideline: "Competitive Business Grants" (CBG) describes requirements and procedures for competitive enterprise co-investment programme. Co-investing with an enterprise aims at two development targets: (i) increased and better supply opportunities for rural farmer households, and (ii) increased and better jobs at the enterprises. Strengthening the enterprise to have higher production volumes and to become more profitable will increase the livelihood impact at the household level and ensure sustainability of the achievement.

Further to the co-investment procedures as per the CBG guideline, some practicalities require special attention. Following are some key lessons learned from APIF investments in Bac Kan:

Management responsibilities and rules of a co-investment scheme need to be agreed in detail and made fully transparent to all stakeholders. Any misinformation will quickly influence the Project reputation among potential private sector partners, making implementation difficult.

Available land for enterprise processing and/or storage units need to be identified, if not already available. As part of co-investment agreement, the details of a specific land area need to be cleared with the relevant provincial authorities, including all related costs and land use.

Procurement will be done by the enterprise, according to sound commercial practices and in line with the Project approved enterprise co-investment manual. Vietnam public procurement law need not to be followed when private sector partners implement the co-investment.

The ownership of assets by the co-investment need to be fully clarified from the beginning of the partnership agreement. In principle, the co-investing enterprise is responsible for all assets management and the full owner of all its own contribution to the sub-project. The Project's contributed co-investment is implemented and managed by the enterprise, and procured assets will be moved to ownership of the enterprise when the agreed commitments are completed.

The disbursement of the Project contribution to a co-investment is made as advance payments to enterprise bank account. All advance payments need to be scheduled in the co-investment agreement per work plan milestones. The payments per investment should be at least two, preferably three or four, with most of the enterprise financing scheduled in the beginning of the work plan. The detailed schedule always depends on the nature of the investment. Below a typical example.

1. USD 40 000

USD 70 000 invested by the project, USD 120 000 by the enterprise

2. USD 75 000

3. USD 75 000

CO-INVESTMENTS SCHEDULED IN THREE TRENCHES:

100% private sector financing


50% project financing


50% project financing

MILESTONE 1

ACHIEVED

MILESTONE 2

ACHIEVED

ALL TARGETS

ACHIEVED





95

Annex 3: Inspiring experiences: Bắc Kạn APIF Co-investments

Ginger production, drying and trading

Lead Firm: Minh Be Agricultural Product Exporting and Processing Company

Project description: Minh Be Company invests in storage and drying facilities and provides support for farmer inputs and capacities in ginger production in Pac Nam.

Investment budget: VND 10,056,348,000

+ Private contribution: VND 5,956,348,000

+ APIF co-investment: VND 4,100,000,000

Cooperation model:

Seedlings and trainings Fresh Ginger

Supply of fresh ginger Dry ginger

Key achievements:

- 528 HHs (including 166 poor, 66 near poor) received seedlings and training 2012-13

- Between 2013 and early 2014, the LF purchased 133.35 tons of ginger from 245 HHs in Pac Nam (including 119 poor, 39 near poor)

- Construction of a facility for ginger processing and trading including storage space, access roads, loading area and a power station

- The households including the poor gained incremental average income of 6,150,477 VND per HH per ginger harvest in 2013

Ginger CIGs Minh Be

Company





96

Cannas starch and vermicelli production

Lead Firm: Hong Ha JSC

Project description: The Hong Ha JSC invests in facilities, processing equipment, procures cannas roots from local farmers and provides input materials and production equipment for farmers in Na Ri.


+ Private contribution: VND 14,165,000,000

+ APIF co-investment: VND 5,000,000,000

Cooperation model:

Fertilizes, equipment Cannas noodles

Supply of cannas roots Cannas starch

Key achievements:

- In 2013, the LF purchased 3000 tons of cannas roots from 511 households (including 92 poor, 27 near poor) in Na Ri

- In 2014, the LF signed procurement contracts and provided fertilizer to 405 HHs (including 108 poor, 19 near poor) in Na Ri

- Construction, installation and full establishment of full operations of the processing plant for cannas starch (grinding, filtering and drying systems)

- The households including the poor gained incremental average income of 3,414,736 VND per HH per cannas root harvest in 2013

Cannas CIGs Hong Ha JSC





97

Poultry production and trade

Lead Firm: Lan Thieu Poultry Facility

Project description: The Lan Thieu Poultry Facility provides inputs and technical support to farmers to raise chicken and purchases the grown chicken from the households.


+ Private contribution: VND 774,000,000

+ APIF co-investment: VND 604,000,000

Cooperation model:

Chicks, feed, meds, support Chicken meat

Supply of poultry Eggs

Key achievements:

- 150 farmer households (including 21 poor and 33 near poor) received 200 chicks each and support for purchase of feed, equipment, medicine and technical trainings.

- Lead firm purchased 18 tons of chicken from participating households during the beginning stage (65,000 VND per kg)

- Incubator facility (15,000 eggs/batch) established and operational

- The households including the poor gained incremental average income of 8,620,000 VND per HH per batch of 200 chicken (max 3 batches per year)

Chicken

raising HHs

Lan Thieu

Poultry Facility




Appendix 4: Detailed Project description

98


Introduction

1. The CSSP is to be aligned with and support the implementation of national policies and

strategies. Specifically, the Project will support:

MARD’s Tam Nông strategy on Agriculture, Farmers and Rural Areas and its Agriculture-

Sector Development Plan at commune-level to complement investments and integrate

CC response;

Decision 158/2008/QDTTg on the NTP-RCC and MARD’s Action Plan Framework for

Adaptation to CC in the Agriculture and Rural Development Sector through the training

and development of human resources to respond to CC challenges and create

development opportunities, awareness raising and the development of specific

programs/projects in response to projected impacts through the CBA programme

The National Program on Community-based Disaster Risk Management to 2020

(1002/QD-TTg), through capacity building for local government staff at all levels on

managing and implementing; developing participatory community-level hazard and

vulnerability maps, integrating CC concerns and; small-scale works for disaster

prevention, response and management in the community.

Decree No. 772015ND-CP prescribing medium-term and annual public investment plans,

effective on 1st September 2015

Strengthening the national SEDP process to make it more participatory, climate adapted

and market oriented

Project area and target group

2. The Project will support development in 35 communes in Ba Bể, Na Rì, Ngân Sơn and Pác

Nặm districts in Bắc Kạn province and 35 communes in Hà Quảng, Nguyên Bình, Thạch An and

Thông Nông districts in Cao Bằng province. In two communes in Bạch Thông district in Bắc Kạn

province the Project will support the development of tangerine VCs. These districts have been

selected because of their relatively high levels of rural poverty, their production/processing potential,

access to rural infrastructure and markets and because they form the hubs of nascent rural industries

in Bắc Kạn and Cao Bằng (herbs and spices, tubers, fruits, livestock, bamboo and other timber

products, etc.) whose VCs reach into more remote upland communities. Ethnic minorities form the

majority in all Project districts. Commune selection was based on, inter alia, (i) poverty rate;

(ii) vulnerability to CC and natural disaster; (iii) commitment of leadership; (iv) potential for

development of pro-poor VCs; and (v) level of on-going support projects. Project communes will

include those that are market-linked and other, remoter communes that can be linked through VC

development.

3. Project Target Group. The Project target groups are:

rural poor households with land and labour, including household enterprises;


rural people lacking production land but having business acumen and desire; and


4. Other participants who will benefit from the Project include (i) government officials empowered

to support market-led growth; and, (ii) private market and VC agri-businesses that find common

interest in promoting viable pro-poor products and services.

5. Gender: Poor women and women-headed household face significantly greater obstacles in

escaping poverty. These include specific obstacles to their participation in commercial activities,

including a general lack of business planning, farm management and technical skills, less access to

factors of production, and time constraints imposed by cultural and domestic demands. While





99

agriculture and forest land use rights have been widely allocated, until recently, they were issued in

the name of the male household head, limiting women’s use of the title right for credit application. The

Project will implement specific measures to ensure women’s participation in relevant activities,

including (i) ensuring women’s participation in the underlying MOP-SEDP planning process through a

minimum 30 per cent women’s representation on VDBs and CDBs; (ii) requiring at least 50 per cent

women’s participation in village-level MOP-SEDP discussions and decision meetings; (iii) establishing

a forest land and forest use allocation process that (i) prioritises women-headed households; and

(ii) amongst other participating poor and near poor households, requires the signature of both

spouses on forest land and forest use certificates; (iv) requiring a minimum 40 per cent women’s

participation in CIGs and the strong promotion of female lead farmers under the LF2F programme;

(v) enabling at least 9,600 women to benefit from access to loans under the WSCGs programme and

the empowerment of the VWU to manage a sustainable and scalable MFI in each province; and

(vi) promoting APIF-generated smallholder farmer contractual agreement targeting poor and women-

headed households with contracts jointly signed by both spouses where applicable.

Development objective and impact indicators

6. The Goal of the Project is: Contribute to sustainable poverty reduction in Bắc Kạn and Cao

Bằng. The Development Objective is: Sustainably improved income and reduced climate

vulnerability of poor and near-poor farm households in targeted Project communes.

7. The impact indicator at the goal level will be:

20% improvement in Project commune poverty reduction above average non-Project

provincial commune rate by Project-end for 16,000 households considered poor and near

poor in Project area (differentiated data for poor/near poor, ethnic minority & women-

headed households).

8. The main impact indicators at the development objective level will be:

20% improvement in household assets ownership index above non-Project provincial

commune average by Project-end for at least 30,000 households considered poor and

near poor in Project area. (differentiated data for poor/near poor, ethnic minority &

women-headed households).

At least 14,000 poor smallholder household members whose climate resilience50

has

been increased by 30% (gender and ethnic minority disaggregated).51

Project outcomes


(ii) A greener agriculture future; and (ii) Profitable farms linked to finance and markets. There is also a

Project Coordination component.

10. These outcomes and outputs will follow sequenced, parallel implementation routes. Building off

a Strategic Investment Plan (SIP) that identify profitable value-chain development pathways, and an

updated Provincial CC Action Plans and associated knowledge dissemination Project, the CSSP will:

(i) empower communities and public institutions to develop commune and district-level climate-

adapted MOP-SEDPs that holistically align climate-adapted NTP and Project investments with

profitable commodity market and VC opportunities; and (ii) through the implementation of those

investments, assist communities of smallholder farmers and agri-businesses to associate in various

50

a resilient household is anticipated to exhibit, inter alia, the following characteristics: i) diversified livelihood and






card to measure change. 51

Indicator from ASAP





100

ways to take best advantage of those opportunities and to co-finance their development. These

pathways will merge from the second Project year onwards.

Outcome 1: Province-based participatory planning institutionalised.

11. This outcome will ensure that: Legislated provincial socio-economic and commodity

development planning is holistic, participatory, climate adapted and market oriented. The indicators

for successful outcome implementation will be:

At least 80% of provincial communes and districts prepare medium-term climate adapted

MOP-SEDPs;

12. This Outcome, which underpins Outcome 2 and Outcome 3 results, will, building off a

strengthened SEDP process, provide the capacity building, analysis and services required to reinforce

private sector development of commodity-based VC investments that engage poor upland

households. The outcome has three outputs: Output 1. Strategic investment plan; Output 2. Climate

change adaptation plan; and Output 3. Climate-adapted, participatory market-oriented socio-economic

development plans.

Output 1. Strategic Investment Plans.

13. In the first six months of the Project, the PPCO Commodity and VC Development teams,

supported by international technical assistance, will, through a mix of theoretical and case-based

training and resource allocation, capacitate DPI and DARD to conduct financial and economic

analysis of commodity and associated VCs in Bắc Kạn and Cao Bằng provinces and to provide

sustainable technical support to Bắc Kạn and Cao Bằng agro-industry. An immediate output will be at

least six Provincial PPC approved commodity-based VC Strategic Investment Plans (SIP) in each

province, for integration into commune and district MOP-SEDPs. An empowered DPI/DARD with

PPCO support, will, subsequently: (i) support the integration of VC development in the MOP-SEDP

programme; (ii) provide technical support to VC development across the Project area; (iii) provide

mentoring to VC actors and co-ordinate their capacity development; (iv) coordinate with specialists in

specific VCs and in “climate proofing” agriculture production; (v) mentor contract negotiations between

farmers and other VC entities; and, (vi) facilitate business registration, conflict resolution and

mediation when required.

14. Based on the commodity chain analysis completed during Project preparation, the PPCO will

select sectors/sub-sectors having investment potential and that are in compliance with the Bắc Kạn

and Cao Bằng Provincial SEDPs. The selected sectors/sub-sectors will be chosen based on having:

(i) significant potential for involving rural households, particularly disadvantaged households, in

incremental production and job creation; (ii) available technologies for improved productivity and CCA;

(iii) reasonably assured national or regional markets; and (iv) potential for export and/or import

substitution. At least 50% of the total number of households benefiting from APIF supported

investments should be represented by poor, near poor or women-headed households.

15. The SIP process will involve 5 steps (See Appendix 4, Annex 1 for details):

background research on the chosen commodity/crop by reviewing websites and other

secondary sources of information concerning the commodities provincial and national

importance, environmental requirements, role in household economies, end-markets, etc.

This will be followed by primary research in the provinces through interviews, focus

groups, surveys and observation involving VC actors (farm households, processors, input

suppliers, advisors etc.);

using the aforementioned information, map the commodity/crop sectors in Bắc Kạn and

Cao Bằng. VC mapping enables the visualization of the product flow from conception to

end consumer through various actors, as well as the supporting markets and enabling

environment affecting the VC;





101

prepare a table listing the structural and dynamic factors in the VC, and briefly describe

the current situation, opportunities, constraints and recommendations for addressing

those constraints including tangible How, Who and Financing;

prepare a financial and economic analysis of each key VCs detailing the estimating

potential incremental benefits from investment in their development, including, inter alia,

rates of return on investment, increased household income, number and type of

household benefiting; job creation; increased export; import substitution, etc.;

conduct a workshop bringing together key actors from various levels in the VC to vet the

findings of the analysis and discuss if the chosen strategy for increasing VC

competitiveness is valid.

16. The SIP will be used as the framework for calling agribusiness entrepreneurs to express their interest for investing in Bắc Kạn and Cao Bằng.

Output 2. Climate change adaptation plan.

17. This output will include one activity. Activity 2.1 Mainstreaming climate change adaptation into provincial Agriculture and rural development.

18. Activity 2.1 Mainstreaming climate change adaptation into agriculture and rural development.

The principal objective to be pursued under Activity 2.1 is to mainstream climate change adaptation

into Provincial planning and government’s principal programs for rural development and poverty

reduction52

. To achieve this objective, the program will support efforts by the Project provinces to

develop climate change adaptation as a cross-cutting theme that is integrated into the SEDP process

and, by doing so, ensure the post-project sustainability of program outputs (i.e., institutionalization). A

principal outcome and indicator of success will be a five year (2021-2025), climate-adapted MOP-

SEDPs approved at provincial, district and commune levels.

19. The main focus of the proposed support will be to improve the knowledge base and capacity

among key institutional actors to integrate evidence-based, climate change adaptation considerations

into policy, strategy and public (government) and private (value chain actors and enterprises)

investments. To accomplish this, the Project will take a step-wise approach as follows:

Organizational phase (first 6 to 9 months). At Project outset, an organizational phase will be carried out, consisting of a series of actions to:

o organize a Thematic Ad-hoc Group (TAG), presided by DPI, comprising high-level technical staff from the relevant line agencies (DARD, DoNRE, DOLISA) and their associated, specialized institutions. The role of the TAG will be both to conceptualize, orient and monitor the technical content and focus of the Project’s support. In addition, they will be charged with leading technical cooperation and exchange between the two Project provinces and with defining the operational mechanisms for coordination of planning and budgeting processes between their various agencies;

o garry out a national-level study tour for high-level decision-makers and key technical staff from the government institutions represented in the TAG to visit both the provinces most advanced in implementation of the CCAPs, as well as to visit the lead, national-level technical institutions that support CCAP development and implementation;

o contract with a national, lead CCA technical institution to provide technical assistance and support through the lifetime of the Project. A joint contract with both Project provinces will be preferable. See Appendix 4, Annex 9 for ToRs.

53

52

National Target Programs for New Rural Development (MARD), Sustainable Poverty Reduction

(MOLISA) and, Response to Climate Change (DONRE). 53

It has been proposed by MFI that this activity should be funded from other sources (technical assistance projects,

grants, etc.). Final preparation will have to identify and ensure the availability, in time and quantity, of these other

resources to ensure that proposed outputs are delivered and objectives achieved.





102

o Under the direction of the TAG, (i) assess the current status of provincial CCAP implementation; (ii) develop a set of first draft maps of provincial-level climate change risks and vulnerability; (iii) develop first draft indicators for CC impact monitoring and; (iv) initiate a program of climate change awareness building for key institutional actors at all levels whose participation in subsequent implementation will be critical.

Development Phase (PY 1 and 2). This phase, to be completed by the beginning of Project year (PY) three, will comprise a two-pronged approach. One set of actions will support the provincial CCAP framework and consist of a “top-down” scientific-technical process in order to both refine and update the Provincial Climate Change Action Plans (2015-2020) and to down-scale the provincial-level medium-term climate change impact scenarios to Project district-levels. This latter will be accomplished, among others, through:

o district-level studies and mapping of climate change impact, vulnerability, risks and CCAP priorities;

o Project district-level participatory diagnostics of commune-level CC impacts scale and ongoing adaptation; and

o integration of the “bottom-up” inputs from district and commune-level of vulnerable areas, production systems, and populations resulting from the parallel work on climate change concerns into the MOP-SEDP process (see Output 3).

The other, parallel set of actions will be directed at the development of a provincial-level

methodology for the integration into sectoral MOP-SEDPs of commune and district

vulnerability mapping, zoning and community-level climate change adapted planning.

This will be accomplished through:

o a review of existing methodologies for commune-level climate change planning;

o the development of a district-level zoning methodology, based on commune-level climate change adapted planning;

o piloting and updating of a commune- level climate change planning instrument, building upon experience and prior work in the development of community-based, disaster risk-assessment methodology (MARD) as well as of other, more mature experiences nationally (e.g., CARE’s and OXFAM’s) and;

o provide capacity building and technical workshops for addressing climate change adapted planning integration into the SEDP processes at commune and district-levels. This will include: (i) key stakeholder progress reviews and evaluation workshops; (ii) learning and experience-sharing cross-visits by district and commune staff; (iii) field visits and study tours by DoNRE and DARD planning staff; (iv) systematization of processes, results and validation/updating of indicators and; province-wide dissemination of the provincial CCAP through publications, brochures, newspaper, radio programs and others

Additionally, during PY2, the systematic integration of climate change concerns into the MOP-SEDP planning process will be initiated. This will be supported by:

o extensive discussion with smallholder farmers concerning their perceptions of climate change in the project area and the adaptation strategies they are adopting;

o the development of training materials and methodological guides;

o training of trainers;

o dissemination of climate change impacts and adaptive technologies to smallholder farmers through publications, brochures, newspaper, radio programs and, others;

o cross-visits by district and commune staff and lead farmers and field visits and study tours for DPI planning staff; and

o the publication of results in web-based publications and journals.

Consolidation and Roll Out Phase. In PY3, efforts will begin for the province-wide roll out of the climate adapted MOP-SEDP planning process. The Project will support non-Project district: with:





103

o studies and mapping of climate change impact, vulnerability, risks and, CCAP priorities; and

o district-level, participatory diagnostics of commune-level climate change impacts, scale and ongoing adaptation.

20. Climate-Adapted, Provincial MOP-SEDP (2021-2025). By PY4 most of the elements for

developing Bắc Kạn’s and Cao Bằng’s Climate-Adapted, Provincial MOP-SEDP for 2021-2025 will be

in place (e.g., the updated sectoral CCAPs, district-level impact/risk/vulnerability dimensioned,

prioritized and mapped, district and commune-level SEDP planning process capturing local needs and

demand for CCA support, information and learning systematized, etc.). Additional support from the

Project will thus primarily consist of assistance to consolidate and integrate the available inputs into

the new five-year climate adapted MOP-SEDP – primarily sectoral and cross-sectoral planning and

review meetings, technical assistance and, specific gap-filling studies. Output 2 activities are

summarised in Figure 1 below.

21. Implementation Risks. It must be noted that the proposed timeframe for organization,

development and roll out of climate change adaptation aspects of the Project is ambitious. If the risks

of slippage and delay are to be managed, it will require that:

the approach for roll out into non-Project districts for the mapping, vulnerability, risks, and priorities will be one where multi-District workshops – with grouping of Districts to be determined on similarity of climatic, biogeophysical, socio-economic conditions – will be used;

for the non-Project District, participatory assessments (of commune-level impacts, scale and ongoing adaptation) similar District groupings should be used with at least two well-structured workshops (lead by the national TA) of several days. Participants should be drawn from technical people (both public and private sector) and carefully selected lead farmers from principal VC CIGs, leaders from SCGs and enterprises to validate study outputs and fill in the “local knowledge”. The first workshop will be to produce a set of draft results that participants could take home and discuss with colleagues, neighbors, etc. A discussion guide should be developed for them to take home to facilitate and standardize discussions. After two or three months, the participants will return for the second workshop to finalize;

financing and budget must be guaranteed and controlled by the Project to ensure needed amounts, responsiveness and timeliness of outputs; and

DPI will have to be fully committed to the schedule and take a strong lead in ensuring it is met.





104





105

Output 3. Climate-adapted, participatory market-oriented and results-based planning

22. This DPI-led output consists of two Activities: Activity 3.1: Strengthened public sector market

economy skills; and Activity 3.2: Climate adapted, market oriented socio-economic development

plans. Over the last six years, IFAD-supported projects have successful developed and piloted MOP-

SEDP processes in several provinces of Viet Nam, including in Bắc Kạn and, in particular, in Cao

Bằng, where the process is institutionalised at commune level. The CSSP will, supported by

empowered communities and public sector institutions, establish a climate-adapted MOP-SEDP

process across all communes and districts in both Project provinces. The PPCO MOP-SEDP planning

officers, supported by a national training institution, will empower the DPI to lead a Project in capacity

building for market-led development at commune and district levels, which will precede the

institutionalisation of MOP-SEDP process. These activities will commence in the Project-targeted

communes/districts and be subsequently rolled out to all communes/districts in Bắc Kạn and Cao

Bằng. The MOP-SEDP process will incorporate the results of the commodity-based SIP analysis

described under Outcome 1.

23. Activity 3.1. Strengthened public sector market economy skills. In Cao Bằng, where the MOP-

SEDP is already institutionalised at commune level, both commune and district staff have a sound

understanding of the market economy. This activity will assist Bắc Kạn government officials to

effectively support the provincial government’s market oriented development strategy. The capacity

building programme will provide public servants with the basic skills to implement results-based

planning, management, monitoring, reporting and learning within the framework of a market-based

economy. The primary target will be village leaders, elected officials of People's Committees and

People's Councils, Supervision Boards and technical cadres and members of the mass organisations

at commune and district levels; Concise, targeted training programs, delivered by competitively

selected public or private institution(s), will focus on, inter alia, understanding the market economy

and associated roles of government and the private sector, the economics of supply and demand and

impact of market competitiveness, the nature of public and private goods, privatization, the roles of

capital, labour and international trade, and the transition from a planned to a market economy. Gender

equality and environment management will be cross-cutting training targets delivered to government

staff in both Bắc Kạn and Cao Bằng. Staff in both provinces will also be trained in group organization

and leadership, participatory planning, and results based management including effective monitoring

and evaluation (M&E) and reporting and feedback to management decision making. Trainees will be

introduced to the VC SIPs developed under Outcome 1.

24. This training programme will be contracted to an academic institution in Viet Nam with

appropriate competencies in market-led economic development. With international technical

assistance (TA) support, the competitively selected training provider will develop the curriculum and

apply the training though a mix of in-province training courses and self-learning programmes including

internet-based information. The appropriate training institution will be identified by the Project

Preparation Boards (PPB) before Project start-up and contracted at start-up to initiate training within

6 months. Training will focus initially on government staff within the Project districts/communes and,

thereafter, be rolled out to all Bắc Kạn, and on a selective basis, Cao Bằng government staff at

commune and district level. Results will be assessed through the measurement of the establishment

of the legislative base, guidelines, tools and staff capacity for district and commune MOP-SEDP

implementation; Terms of reference for the training programme are detailed in Appendix 4, Annex 2.





106

25. Activity 3.2. Climate adapted, participatory market oriented socio-economic development plans.

This DPI-led activity, supported by the provincial Political Schools, will build on the MOP-SEDP

process already institutionalized at commune level in Cao Bằng. At commune and district level,

initially in Project districts and then across the provinces, the Project will facilitate the integration of

commodity-based VC development (Outcome 1) and CCA (Output 2) into a participatory SEDP

process, The resulting climate-adapted MOP-SEDP process will engage relevant entities at the

village, commune and district level, including the effective participation of VDBs and private

enterprise, and be inclusive of all funding sources, including NTP=NRD, NTP-SPR and NTP-RCC.

Women’s representation in MOP-SEDP planning will be mandated. Through the MOP-SEDP process,

CSSP will assist the provincial DPIs to operationalise Decree No. 77/2015/ND-CP, prescribing

medium-term and annual public investment plans, together with the Vietnam Public Investment Law

2014 No. 49/2014/QH13.

26. The commune-level MOP-SEDP is a participatory process for establishing medium-term

climate-adapted, market oriented commune development plans that are informed by (i) villagers’

priorities; (ii) market information, (iii) climate adaptation, land use and disaster risk management plans

and (iv) orientation from higher government levels. The MOP-SEDP process will be built around

Decree No. 77/2015/ND-CP, which prescribes medium-term (5-year) and annual public investment

plans. It is expected that the MOP-SEDP process will be conducted intensively for each medium-term

planning period, with a lighter review mechanism for annual investment planning. The resulting

medium-term climate-adapted MOP-SEDP will comprise (i) a narrative including a medium-term

development vision; (ii) specific investment plans for market-oriented infrastructure and agricultural

enhanced production and processing; (iii) specific CCA and CBDRM actions/investments; and

(iv) corresponding planning tables. Before MOSEDP implementation, DPI will inform districts and

communes about the committed/available medium term and annual budget financing. Based on this

budget provision, the MOP-SEDP planning process will begin at the village level under the

coordination of the NTP-NRD-established VDB. VDBs in Bắc Kạn and Cao Bằng will be legislated to

include at least: 30% female membership and 30% membership from DoLISA registered poor

households. Village level MOP-SEDP meetings will be held at times suitable to women members of

the village and will require at least 50 per cent women’s participation. The overall responsibility for the

commune MOP-SEDP rests with the Commune People’s Committee (CPC). CSSP assistance will be

provided through district-based VC and Market Development Officers (VCMDOs) and by the PPCO

MOP-SEDP officers. The MOP-SEDP will be approved by the Commune Development Board under

the oversight of the Commune People’s Council (CPC). The planning process is detailed in Appendix

4, Annex 3.

27. The framework for integrating market orientation into the SEDP from the commune to the

provincial level will have the following elements:

capacity building in, inter alia, the market economy (see Sub-component 1.1), with

particular attention on village leadership and commune level public servants;

Work through existing NTP-NRD VDBs, ensuring equitable representation of women

(30%) and poor households (30%) on VDBs;

the incorporation of commodity chain planning and mentoring of the MOP-SEDP process

concerning market and VC development opportunities

empower VDB members to identify and analyse market and development opportunities

and to articulate their opinions effectively in the MOP-SEDP process;

directly involve agri-business entrepreneurs in the MOP-SEDP process;

integrate all NTP agriculture sector funding (New Rural Development; Response to CC;

Sustainable Poverty Alleviation) at commune level into the MOP-SEDP process;

28. In the medium to long-term, the major opportunity for achieving effective and durable pro-poor

responses to CC lie in synergistically combining concerns for disaster risk management and

adaptation to CC through local planning instruments and processes, i.e., the annual and medium-term





107

MOP-SEDPs. As such, the CSSP, building on regional and national approaches, will, in Project

communes, pilot the development, testing, validation and replication of guidelines and tools to ensure

that local land use, infrastructure and economic planning processes for the MOP-SEDP are climate-

sensitive.

29. The CSSP will establish the climate-adapted MOP-SEDP process at district level, which is

expected to further empower the participatory planning process through higher level representation of

community-owned plans to the provincial level. This will be achieved through three tasks: (i) district

Financial and Planning Department (DFPD), DARDD, district Natural Resources and Environment

Department (DNRRD) and District Labour, Invalids and Social Affairs Department (DLISAD) heads, or

their deputies, will participate in the CPC MOP-SEDP decision meeting; (ii) the aforementioned district

department heads will be required to specifically address commune MOP-SEDP priorities in their

submissions to the District MOP-SEDP; and (iii) CPC chairpersons will participate in the DPC MOP-

SEDP decision meeting, representing commune and VDB interests. The alignment of the Project

MOP-SEDP approach with the recommendations of a recent review of decentralised planning in Viet

Nam is detailed in Appendix 4, Annex 10.

30. All aspects of the climate-adapted MOP-SEDP process at commune and district level will be

defined in support legislation passed by the Bắc Kạn and Cao Bằng PPCs in the first Project year

(PY1). A comprehensive MOP-SEDP guideline/manual will be developed, building off the current Cao

Bằng MOP-SEDP manual, and adapted to the needs of each province. The MOP-SEDP process at

commune and district level will be fully funded by the respective provincial administrations.










32. This outcome, which establishes the basis for climate-adapted green growth in the Project area,

includes two outputs: Output 4: Forest land and forest allocation, and Output 5: CIGs for climate

adaptation. The Government of Viet Nam (GoV) is committed to an ambitious “green growth” agenda

and to global carbon emission reduction. The CSSP will support this process through the promotion of

CCA technologies that provide significant mitigation co-benefits, as well as Projects for forest land and

forest use rights certification and rehabilitation that directly contribute to carbon sequestration. The

indicator for successful outcome implementation will be:

At least 20,000 farm households (66% of Project beneficiaries) sustainably adopting two

or more climate change adaptation technologies or practices

Output 4. Forest land and forest allocation

33. This activity will support the equitable (across wealth and gender groups) ownership and

efficient use of production forest in Bắc Kạn.

34. The four Project districts in Bắc Kạn include a forest area of about 209,700 ha representing

about 97 per cent of the total land area. Some 19,241 ha are classified as special use forests

including 9,000 ha in the Ba Be national park and 32,148 ha are classified as high value natural

protection forests mainly valuable due to their rich biodiversity. In total, about 41,159 ha are

designated protection forests mainly due to their importance for watershed protection, and some

168,510 ha are production forests. All of the three categories include natural forests, as well as

plantations forests and forest land without forest cover. A large proportion of the natural forest





108

(154,723ha) is classified as regenerating forest or rock forests with tress (50,836 ha) mainly on

inaccessible limestone hill sides. Some 20,274 ha have been designated as plantation forest. Various

ownership and management arrangements are currently in place for the forestry land including

allocation to a State-owned enterprise (6,960 ha) and individual households (115,773 ha) for which

forest Land Use Rights Certificates (LURC), known as Pink Books (formerly Red Books), have been

issued by DoNRE, with accompanying forest use right certificates issued by DARD. A total of

87,796 ha of forest is still in the hands of the CPCs. This includes 56,006 ha of production forest land.

Therein the Project will target a large area of so-called forest land without forest, - 26,992 ha in the

production forest category.

35. While some of these forests are remote and relatively difficult to access, both types of forest

lands offer enough potential for a significant productive development and, if allocated to poor

households and communities, will provide a significant source of additional income.

36. The Project will create an asset base for future private sector investment in agro-forestry in Bắc

Kạn by assisting DoNRE and rural communities to implement a participatory forest land allocation and

forest use rights planning process leading to the equitable transfer of forest use rights (Pink Book) to

poor households and the development of medium-term forest development plans consistent with

Programme 30A and similar NTP-SPR programmes. Pink Books with joint husband/wife title will

significantly improve access to collateralized credit, especially for women, with women-headed

households also benefitting from specific targeting and prioritization under this output. Provincial

policies and administrative procedures governing forest land investment and use will be assessed,

improved and decentralized to the commune level and a system established through DOLISA to

monitor poor household forest access and use. It is estimated that about 6,800 poor and near poor

households in communes in Bắc Kạn Project districts will each receive, on average, 1.5 ha of

production forest land. The participatory forest land and forest use planning and allocation will be built

off experience gained through 3PAD. The underlying principles of the approach will include

compliance with National and Provincial regulations and policies, maximizing the participation of

households, the planning of forest land and forest use before land allocation, and ensuring equity in

resolving disputes and sustainable development practices. The capacity of the Project CPC in forest

land use planning and land allocation will be significantly enhanced. The process, which will be guided

by a manual detailed in the PIM, will be managed by DoNRE, with the inter-agency support of the

Forest Protection Department (FPD), DARD Forest Development Sub-Department (FDD), DARDD

and district Forest Protection Stations (FPS) for forest use rights certification.

37. A DoNRE/ADAR partnership will coordinate the process of allocating commune forest land and

forest use rights in Project districts to communities, households and enterprises, overseen by

Commune and Village Forest Management Boards (CFMBs/VFMBs) with balanced, trained gender

representation, bringing the activity of land use planning down to the village level. CFMBs will be

established in each commune under a Decision issued by the chairman of the commune people’s

committee (CPC). Members will include the Board Chairperson – Vice chairperson of the CPC,

commune forest rangers, agro-forestry staff of the commune and representatives of the FU and the

WU of the commune (no more than a total of 5 members from the commune). In addition, each CFMB

will include two members from each VFMB including one man and one woman. VFMBs will be

established in villages/hamlets managing at least 100 ha of forest land and be approved by the

Chairperson of the CPC. The VFMB will consist of the village leader, hamlet patriarch and

representatives of WU and FU with a total of 7 – 9 members, of whom at least 30% will be women.

Both women and men will be trained in community forest management and planning.

38. The CPC will be responsible to undertake Land Use Zoning on a 10 year cycle and Land Use

Planning (LUP) on a five year cycle. Land Use Zoning establishes land use purpose including the

three categories of forest land use purpose (production, protection and special use forest land) while

the Land Use Plan describes any planned changes in land use. The Project will bring the activity of

land use planning down to the village level and prepare village level LUPs as a prerequisite for forest





109

and forest land allocation for each village. The capacity of the CPC in forest land use planning and

land allocation will be significantly enhanced.

39. DoNRE, through the PPCO, will contract a suitable mapping and design institution to collect

information, consult with land users regarding forest land boundaries, classify forest land use and

forest type to be allocated, and prepare cadastral maps for forest and forest land allocation and the

documentation required for the issuance of Forest and Land Use Rights Certificates (LURCs). The

processes will be guided by the Project Environment and Social Management Plan (ESMP) and

overseen by the Commune Councils and Commune Forestry Management Boards. The EIMP

process will address: (i) social risks related to ensuring equity and maximizing benefits to poor

households, women and ethnic minorities; (ii) environmental risks related to minimising damage to the

natural resource base and preserving biodiversity; and (iii) institutional un-stainability risks related to

inter-agency cooperation and the future rollout of the land use planning and allocation process across

the province. This programme will focus on, but not be limited to the forest classified land without

forest in the three districts that are currently under CPC management. MoNRE requires the following

compulsory steps for the participatory land allocation process: (i) information dissemination,

(ii) participatory survey with local “expert”, (iii) household applications for LURCs, and (iv) public

posting of results at the commune centre. The Project will adapt guidelines already prepared in Viet

Nam that will strengthen this process including early meetings at village level for information

dissemination, inclusive consultation processes, and appropriate involvement of women and poor

households in the decision making process. The technical service provider will be required to have at

least one staff member on site trained in Project participatory processes and social and environmental

safeguard issues. The main activities involved are:

preparation/ training of CPC staff and CFMB members in forest and forest land allocation processes;

village meetings to create awareness, disseminate policies/ guidelines, establish VFMBs and invite applications from households and community groups;

preparation of a draft plan for the forest and forest land allocation for each village, which will then be aggregates at the commune level;

village meetings to discuss the draft plans plus formal publicizing of the plans to receive comments;

plan finalization and documentation.

submission and approval by the CPC and the DPC.

plan implementation including boundary marking and preparation/issuing of formal forest land/forest use certificates (‘red books’) to communities, or if allocated to households, in the joint names of the husband and wife.

40. The Project will also build the capacity of DoNRE in Bắc Kạn and Cao Bằng to monitor forest

environmental outcomes through experiential training in participatory forest land use planning and

allocation, physical resourcing to improve mobility and field and information technology and funding

for participatory forest environment monitoring. Training programs will include participatory land use

planning and allocation; the application of new cadastral software and general computer training; and

the application of GIS/GPS technologies for forest land use planning and allocation.

Output 5. Common Interest Groups for climate adaptation.

41. This output, which will develop and promote CC adaptation technologies and processes that

provide mitigation co-benefits, will lead to: (i) at least 1,000 CIG in Cao Bằng province and 900 in Bắc

Kạn province with the capacity to implement profitable climate change adaptation technologies and

practices within a VC framework, with co-benefits for climate change mitigation; and (ii) forage

production integrated into farming systems, with co-benefits for soil fertility and stability. The output

includes two activities: Activity 5.1: Common interest groups for climate change adaptation and

Activity 5.2: Integrating forages into hillside farming systems.





110

42. Activity 5.1: Common interest groups for climate change adaptation. The provincial policy in

both Bắc Kạn and Cao Bằng, which follows IFAD’s policy in Viet Nam, is that investments in

agricultural production should be financed by loans. At the same time, both the government and IFAD

agree that using competitive co-financing as an interim instrument to support productive projects is

acceptable where they play a catalytic role for innovative investment activities and serve as

demonstration facilities for new farming technologies and crops, particularly when operating with

disadvantaged minorities or when stimulating investment activity supporting CC adaptation. When

selectively utilised, these co-financed investments in new production systems also often provide

public goods in the form of environmental protection, while, at the same time, increasing the incomes

of participating households on a sustainable basis.

43. To support the introduction of new farming technologies, climate adaptation and DRM

strategies or new VC linkages, CSSP will, on a co-financing basis, support innovative investment in

sustainable, climate-adapted, commodity-based production systems by eligible farmer CIG, farmers’

cooperatives or lead farmers (not SMEs or other companies). Selection of farmers to be financed

should be based on a competitive mechanism. CIG co-financing will cover (i) initial capital investment

costs, (ii) upgraded farming inputs through revolving working capital mechanisms, and/or (iii) required

technical assistance. CIG investments must be linked to VC APIF investments identified through the

SIP process and incorporated into commune MOP-SEDPs.

44. The Project will support both gender specific and gender disaggregated CIGs. To be eligible for

the CSSP competitive co-financing, the membership of CIGs must, in aggregate at commune level,

include (i) at least 50% of members from DoLISA-identified poor households and (ii) at least 40%

female members. All supported CIG sub-projects, managed and owned either by the individual

members or as a group activity, must demonstrate sustainability beyond the initial CSSP assistance

and be linked to APIF financed VC development as detailed in Output 6. Activity 4.2 will be integrated

into the NTP-NRD CIG programme and implemented through NTP-NRD structures at commune and

district levels. CSSP will provide each Project district with a VCMDO, who will support the CIGs and

be responsible for the implementation of competitive co-financing in the district. All CIGs will receive

training in group formation and management and be familiarised with CSSP CCA and APIF outputs.

45. The maximum Project group grant value of USD 250 per member and USD 3,500 for one group

will cover up to 50% of the total cost of each investment, with beneficiaries financing at least 50%

including a minimum 25% in cash and the balance in kind. VBARD and especially VBSP and the

VWU expressed their willingness to participate with loans in this joint financing scheme, especially as

the Project co-financing will significantly reduce the loan-funded amount and associated risk The 20%

cash contribution by members/group is important to ensure the commitment to and ownership of the

investment by each beneficiary. The activity will help reduce barriers to male and female farmer

access to finance, by (i) reducing collateral pressure through co-financing and utilization of alternative

loan securities; and (ii) assisting CIGs to improve business plan quality as per banks' requirements.

The co-financing applications, and the subsequent co-financing contracts, must clearly define each

member share of the CSSP grant.

46. Up to 25 per cent of each CIG grant could be used by the group for procurement of technical

support services, including LF2F support coordinated by the provincial FUs. All such service provision

will be through standardised output based contracts between the service provider and the CIG. LF2F

advisors will be certified under a CSSP developed and FU managed training and certification scheme,

providing both technical and pedagogic skills. The Project will also provide “farming as a business”

management training to CIG and Women’s Savings and Credit Groups (WSCGs) members,

participation in which will be a condition of Project support to their respective groups. The farming as a

business training will build off existing training programmes in Viet Nam and the SE Asia region and

use contracted master trainers to train provincial FU trainers of trainers (ToT) who will train LF2F

farming as business service providers. This activity will, where practicable, be integrated into the

overall rural vocational training programme in Viet Nam.





111

47. Implementation Arrangements. The overall responsibility of the CIG competitive co-financing

operations under CSSP will be with the CSSP Project Coordinator. At the provincial level, he/she will

be supported in the planning and supervision of the activity by the Commodity & VC Development

Officer (BDO) and other senior staff of the PPCO. At the district level and in the communes, the

coordination and implementation responsibility is with the district-based Business Development

Officers, who will work in close co-operation with the CSSP District Agricultural Section.

48. The processing and approval of the CSSP competitive co-financing to CIGs follows the already

functional procedures of the NTP-NRD CIG programme. At CSSP start-up, Project staff will, in a

proactive manner, inform the districts and communes of the CIG competitive co-financing sub-

component. After the focal commodity chains have been identified through the SIP process (Output 1)

for CSSP operations, the BDOs will have the main responsibility of informing the villages, CIGs and

cooperatives about the investments opportunities in these commodity chains and the competitive co-

financing support that CSSP will offer to successful applicants. The BDOs will also provide more

detailed information on the scheme objectives and rules to interested groups in the CSSP communes

and assist groups in the drafting of business plans and co-financing applications. They will also inform

the CIG members of different options of raising their own contributions from banks and available loan

schemes.

49. The CIGs and cooperatives will submit their co-financing applications to the Village

Development Board (VDB). After assessing them, the VDBs will submit the recommended

applications to the Commune Management Boards (CMBs). The CMBs will assess applications and

submit the recommended applications to the Agricultural Section of the DPC. The Agricultural Section

will review the applications and submit them to the District NRD Steering Committee for final approval

or rejection.

50. The above procedure will be applied during the first two semi-annual approval rounds of the

CSSP competitive co-financing, after which CSSP/IFAD will evaluate the performance of the scheme.

If the system functions smoothly at all level, the final approval of competitive co-financing will then be

decentralised to the commune level for the remaining part of the CSSP period.

51. All competitive co-financing will be disbursed by the communes to the bank accounts of

individual group members, following the division of funds included in each Co-financing Agreement. In

the case of group-managed activity (or group training activity), the funds will be disbursed to a group

account or the account held for the group activity in the name of two group leaders.

52. The benefiting group will submit a report of the Project implementation performance when the

co-financed investment has been completed. Continuous follow-up for the co-financed projects will be

provided by the BDOs and different types of CSSP missions. In cases in which a group or its

members do not follow the co-financing Contracts, the funding to the group will stop immediately and

the commune will request the repayment of all co-financed funds issued to the group. In the event that

a commune fails in their management and follow-up tasks in the competitive co-financing scheme, the

CSSP management is expected to stop the operations with the co-financing of CIGs and cooperatives

in that commune and re-allocate the funds to the other, better performing communes in the CSSP

target area.

53. While the aforementioned principles were agreed to form the core of the CIG competitive co-

financing investment procedure, the final Operations Manual, including eligibility criteria and detailed

co-financing processes, will be developed during 2016, to be ready when the actual implementation is

expected to commence in late 2016.

54. The household income benefits from CIG co-financing are expected to be substantial. The

number of directly benefiting households is expected, when calculated at an average co-financing of

USD 3,500 equivalent and average group size of 12, to be around USD 10,000 households.

Significant flow-on benefits will accrue from technology demonstration through innovative CIG co-

investments. As many of the on-farm investments are expected to follow tested methods for CC





112

adaptation and disaster risk mitigation, the benefits for each household and community are expected

to be long-lasting and sustainable.

55. Activity 5.1 Exit Strategy and Scaling-up. CIG members often use a part of their grant to

establish a revolving element to finance ongoing working capital requirements or additional lending

rounds to the poorer group members. Such arrangements were established by CIGs under both the

DBRP and 3PAD are proving sustainable. At the same time, if successfully implemented, CIG grant, if

not rotated, can have a major demonstration effect in their implementation areas, which are, typically,

significantly impacted by both poverty and CC. This could encourage similar investments by other

funding agencies, including the government. Importantly, the inclusion of the financial institutions in

the scheme from the beginning aims at making them aware of investment opportunities of this type, to

finance innovative agricultural projects also in the future, increasingly from their own funds.

56. Activity 5.2: Integrating forages into hillside farming systems. Many farming systems in the

Project area “mine” soil nutrients and cropped areas can be prone to severe soil erosion. Forage

inclusion in farming systems, particularly leguminous forages, is possibly the most cost effective

approach to reducing these negative impacts. To ensure quick impact and longer term sustainability,

forage programmes require an ample seed supply. Many upland farmers do not understand the need

for improved animal nutrition and are disinclined to grow forage. The Project could alter this behaviour

by first focusing on developing selected forages as a very profitable seed crop, with the forage based

feed as a by-product. If the forage seed crop is grown close the home, farmers quickly appreciate the

labour reduction in forage based cut and carry feeding and its value as a forage is enhanced. Using

an approach of Project procurement of forage seed at competitive prices (but well below import cost)

and free distribution of small quantities of seed to interested farmers, the Project could quickly

establish a demand for low labour input forage technologies that integrate into local farming systems,

providing benefits in terms of animal nutrition, improved soil fertility and stability and reduced labour.

57. Short-term national and international forage specialists will conduct an initial assessment of

forage production opportunities in the Project districts in Bắc Kạn and Cao Bằng in order to identify

initial seed requirements and provide technical awareness training for DARD staff including through a

domestic study tour. Terms of reference for an international forage and forage seed advisor are

detailed in Appendix 4, Annex 4.

58. The Bắc Kạn and Cao Bằng DARDs, in collaboration with PPCOs and the national consultant

will adapt existing forage manuals to meet Project requirements, raise awareness amongst farming

communities and identify farm households and farmer groups prepared to establish home and village

forage tree and grass nurseries and participate in large scale, broad-based farming-systems-

integrated forage demonstration trials. Based on field trial results, the PPCOs will refine the seed buy-

back policy and regulations and train farmers in seed production, collection and storage.

59. Forage varieties not registered in the national seed catalogue, but that have already undergone

“distinctiveness, uniformity and stability” (DUS) testing in an International Union for the Protection of

New Varieties of Plants (UPOV) member country only require successful “value for cultivation and

use” (VCU) testing before registration in the Viet Nam national seed catalogue. VCU testing, which

can be done at provincial level, is required over three seasons for varietal registration, however, this

can be reduced to a single season if the variety demonstrates outstanding VCU properties and low

risk. The National Centre for Plant Testing (NCPT) and the MARD Bureau of Cultivation will, with

Project support, facilitate provincial VCU testing of new forage varieties prior to their registration and

multiplication. If, exceptionally, DUS testing is required, the Project will finance the NCPT to conduct

the test. Where forage varieties are subject to royalty payments, the project would negotiate those

payments with the registered owners, however, this is unlikely to be a constraint to the programme as

most of the relevant improved fodders are registered with Consortium of International Agricultural

Research (CGIAR) centres and usually available free for smallholder forage development.





113

Approach

60. Appropriate forage development can substantially impact on the viability of the majority Bắc

Kạn and Cao Bằng’s smallholders, through more sustainable livestock development and cropping. It

can also address the broader issues of land degradation and CC adaptation through the introduction

of more resilient strategies and genetic material.

61. The forage initiatives are appropriate to smallholders regardless of holding size. On-farm

strategies require no financial inputs54

, and can be gradually expanded with family labour. There are

significant benefits for small livestock, including pigs and scavenging poultry, in terms of improved

productivity and reduced feed costs. The forage strategies enable an intensification of smallholder

farming systems, and strengthening of livestock/crop interactions.

62. The fodder development approach is based on perceived needs for such interventions amongst

stakeholders, and the experiences of successful programs with smallholders’ systems, and broad-

scale pasture improvement in similar environments elsewhere. It can support a quick shift towards

more sustainable and economically viable livestock enterprises, and can assist in developing

mechanisms to reduce pressures on fragile grazing areas.

63. Benefits may accrue in addition to improvement in livestock productivity. The more vigorous

legumes in grazing land improvement systems could reduce the severity of wildfires. Within cropping

systems, there are marked benefits to soil fertility from the inclusion of well adapted forage legumes,

with or without grazing. Dense swards of Shrubby stylo (Stylosanthes scabra), for example, have

shown some efficacy in reducing the incidence of some species of tick. Conspicuous forage

programmes can provide a convenient entry point for the promotion of other livestock management

interventions.

64. It is not practical to pre-test technical options within a conventional research mechanism. The

forage programme will be based on farmer-led and managed development. This approach has proved

to be highly effective in many similar development environments, with rapid gains achieved in many

countries including Nepal, India, Thailand, and Ethiopia.

65. The approach will encompass:

Quick start-up, involving a wide range of sites and a large number of communities/

individual farmers from the outset. This will rapidly define appropriate genetic material

and development interventions. (The environmental diversity demands such an

approach; extrapolating from a small number of sites is fraught with extreme risk).

Participation of numbers of diverse farmers has been highly effective elsewhere.

Using a wide array of genetic material for each strategy or agro-ecological situation. This

improves the prospects of identifying the most suitable material for a particular site,

reduces the risk of failure, and spreads the seasonal production. The approach will

generally include quick-establishing species, with those which are slower to establish, but

with high productivity or good persistence in the long term. It will, subject to local seed

registration regulations, also involve both commercial and pre-release material. The

programme will not be dependent on pre-screening of genetic material on existing

research sites. Including a broader array of species does not necessarily complicate the

delivery process at field level, because simple mixtures will be used. There will be

considerable flexibility in terms of species mixtures, with composition varying according

to availability and price of various component species.

Close linkage of intensive forage programmes with intensive livestock enterprises.

Monitoring. Farmers and field staff will be at the cutting edge of fodder development, and

will be actively involved in continuous monitoring of performance of species and

strategies (using simple rapid ranking approaches).

54

Assuming free distribution of small quantities of fodder seed and the availability of on-farm labour.





114

Free distribution of planting material, in small start-up kits.

Supporting extension materials, including very simple plasticized hand-arounds for

farmers, and basic fact sheets for field staff.

Use of media. The role of mass media in the promotion of appropriate initiatives will be

assessed. This will be done after suitable benefits had been determined from case

studies, and only after there is a well-established capacity for supply of planting material.

Land tenure / land use have been raised as constraints on forage development, but,

while land tenure issues will be addressed by the Project, generally, they in fact do not

present difficulties for forage development.

Development will emphasise low-cost improvement of grazing areas, through legume

oversowing, with seed provided free of charge. Widely scattered sites within any target

community will be sown, with the legumes spreading naturally through grazing stock.

Benefits will accrue, then, to all members of the community.

Traditionally, most cropping areas are grazed communally in the dry season. Dry season

grazing will not impede the survival of the introduced legumes, and in fact will improve

their spread. It is anticipated that dry-season grazing control will gradually increase,

which will enable higher productivity of forages.

The communal land strategies could be implemented without any new by-laws on usage.

66. Grazing land improvement through low-cost oversowing of well adapted legumes has been

shown to be effective in Bắc Kạn under the 3PAD. A logical strategy is to oversow with a broader

array of well-adapted genetic material, and to initiate sowing on very widely scattered sites to

maximise the rate of natural spread. Inclusion of pasture legume species in grassland areas will, over

time, assist in the control of tall grasses and reduce the devastating environmental impact of wildfires.

67. The appropriate pasture/forage development technologies are not sophisticated, and quick

start-up over a broad range of sites is feasible with hands-on, short duration training. Applicable

innovative extension and delivery approaches have been developed in similar environments

elsewhere.

68. Encompassing large numbers of smallholder producers, and broad scale rangeland sowing, will

demand the availability of low cost seed of an array of legume species. Imported seed is expensive,

but there are well-proven technologies for the production of high quality seed at low cost, within

manual production systems on smallholder (rainfed) farms.

69. Approaches have been widely discussed with producers and with livestock/agricultural

extension staff at all levels and there is now widespread support for such a program. At the outset, it

is important to:

emphasise areas with potential for high adoption and satisfactory technical success;

include some small-scale activity in lower potential areas to enable refinement of

approaches and the opportunity for localised training.

70. From the outset, pilot activities will be initiated in all areas, rather than gradually phasing-in

provinces and districts. (Spontaneous exchanges/ adoption between widely scattered districts/

provinces will be relatively very slow; different agro-climatic areas require distinctly different technical

packages.) The program will target the beneficiary farmer group livestock grants.

71. Seed production will require a different approach, and it is imperative that production areas are

selected with the potential for high seed yields. If it is to be successful, clusters of contract seed

producers must be selected on a basis of the site /community suitability for reliable seed production;

these are most likely to be distinct from the other target groups.





115

Selecting species for various locations and strategies

72. Species mixtures will typically be broad, to accommodate grazing pressure and edaphic

variations. (Most of the species recommended will be adapted to persistence under the entire rainfall

range.) Mixtures will be gradually modified in the light of local experience, but typically should remain

broad for at least several years, given that it will take time for expression of long term production

potential, persistence, and spread. For example, shrubby stylo is likely to be the most useful species

for grazing land improvement in the long term, but is very slow and inconspicuous during the first two

years. Leucaena will be strongly promoted, and is likely to be the key forage species for smallholder

development. Various varieties well suited to most soil types and rainfall zones in Bắc Kạn and Cao

Bằng, and it has high potential for all livestock production; its successful promotion will depend on use

of superior culitvars, and of intensive establishment and management systems. It also has great

potential for broader scale oversowing development. The range of successful species already being

used for smallholder in Viet Nam will be retained in the programme. These will be complemented by

other genetic material which is not well known in the country.

73. The Project will also promote the use of Vetiver grass (Chrysopogon zizanioides) for hillside

stabilization and for environment waste management linked to APIF investments. Vetiver can be used

to support soil and water conservation, soil moisture improvement, groundwater recharge, recycling

soil nutrients, pest control, mulch, forage, clean up of agricultural contaminated waste water,

protection of farm infrastructure (canals, drains, roads, and building sites).

Smallholder forage development

74. Smallholder forage development will focus on clusters of producers. Development will include

specific forage plots (for seed production/forage replication and for cut-and-carry utilisation) and

legumes established into crops including cassava and maize.

75. Specific forage plots Perennial forage plots will be established, typically of 0.25ha, which is a

manageable area for establishment, protection from grazing, and for cut-and-carry utilisation; this area

is also adequate to demonstrate the production benefits from improved forage supplies. Plots will be

adjacent to the house for efficient utilisation and to enable use of farm-yard manure. Protection from

dry season grazing will be preferable, but is not imperative. (Dry season grazing typically does not

impact severely on the subsequent wet-season productivity.)

76. Plots will be based on broad mixtures. It is crucial to have conspicuous results from the first

year of establishment, if plots are to be protected; in this context, the quick-establishing and very

productive legumes such as Pigeon pea, Leucaena, and sunn hemp will play a key role. Species will

vary depending on site, but will generally include, inter-alia55

:

Grasses:

Mulato II (B. brizantha x B. ruziziensis) and drought tolerant lines of Megathyrsus

maximus for most rainfall areas; the Atherton sterile ecotype of Setaria sphacelata for

higher rainfall areas, and Paspalum atratum for seasonally wet areas. Some Napier

types will be included for conspicuous early results, but will gradually be de-

emphasised56

. Vetiver grass (Chrysopogon zizanioides) will be used for hillside

stabilization. All grasses will be established vegetatively.

Legumes:

Leucaena (cv Tarramba or Cunningham) established in hedgerows at 1m spacing, using

home-grown bare-root/ bare-stem seedlings, and Gliricidia established by cuttings.

Sunn hemp, Pigeon pea, lablab, cowpea, and velvet bean (Mucuna pruriens), using

proven locally available genetic material.

55

See alsohttp://aciar.gov.au/publication/mn062 56

Napier is highly productive, but has inherently low nutritive value, especially when mature. Also, in recent years in

Kenya there have been catastrophic impacts of Napier stunt virus on some lines of Napier. The spread of this virus to

other lines of Napier, and geographically, is unpredictable, but the risks should be accommodated.

http://www.tropicalforages.info/key/Forages/Media/Html/Brachiaria_brizantha.htm

http://www.tropicalforages.info/key/Forages/Media/Html/Brachiaria_ruziziensis.htm

http://aciar.gov.au/publication/mn062





116

Desmanthus spp, with the selection based on rainfall (D.pernambucanus for higher

rainfall areas, D.leptophyllus/ virgatus for other areas.)

Stylosanthes scabra, S.guianensis, S.seabrana and S.hamata, with the species

depending on soil type; Wynn Cassia, Aztec atro; forage peanut (Arachis pintoi), with the

species determined by rainfall.

Other forages

Rape (Brassica napus) which has been introduced into Ha Giang province as a winter

forage and green manure plant will be tested in Bắc Kạn and Cao Bằng.

Note: some free seeding types including the stylos will be included partly to encourage efficient

spread into adjacent grazing areas.

77. Small back-yard or kitchen nursery areas will be established to enable vegetative planting-out

of key species, particularly the grasses and Leucaena57

, to improve establishment. A more detailed

list of possible varieties is detailed in Appendix 4, Annex 6.

Forage legumes in cropping systems

78. The Project will support existing activities promoted under conservation agriculture programs,

but with more emphasis on leguminous species with high potential for livestock production. Perennial

and self-regenerating legumes will be established by undersowing / under-planting in crops including

maize and cassava, to maintain soil fertility in the long term, and to provide convenient forage for

utilisation by grazing or cutting management. (Note: No grass species will be used in these systems.)

79. The key leguminous species will be Stylosanthes spp, Wynn Cassia, Desmanthus spp, Glenn

jointvetch (Aeschynomene americana), site-specific forage peanut lines, and with Leucaena and

pigeon pea also included in more intensive production systems. Leucaena seedlings and forage

peanut slips will be transplanted at the beginning of the growing season. Most legumes will be direct-

seeded after the first weeding.

Outcome 3: Profitable farms linked to finance and markets.

80. This outcome will lead to: Increased public and private investment in sustainable, profitable

commodity production and value addition The indicators for successful outcome implementation will

be:

WSCGs maintain a minimum annual saving rate growth of at least 15% over base-year

savings and < 5% non-performing loans in their portfolios; and

of USD 40 million invested in commodity-targeted, climate- adapted infrastructure,

commodity production and enterprises development in Project communes, at least 70%

of investments show an IRR > 10%;

81. The outcome will have three outputs, namely: Output 6. Community infrastructure;

Output 7. Rural financial services; and Output 8. Agribusiness Promotion Investment Fund (APIF).

Output 6. Community infrastructure.

82. Infrastructure investment grants up to USD 400,000 per commune58

(including beneficiary and

GoV contributions) will be available for infrastructure investments that provide public good benefits

essential to commodity chain development and/or CC or disaster proofing. These could include, inter

alia, disaster-proof roads, secondary or tertiary irrigation structures, erosion protection and soil

management, sanitation and waste management, renewable energy or fresh water supply. The

scheme will not support purely private benefit investments. Public and collective good infrastructure

investment schemes will, with consultant support where required, be identified and prioritized by

57

For bare root, bare stem transplantation 58

In Bắc Kạn, where USD 700,000 has been allocated for PES payments, commune infrastructure grants will average

about USD 380,000 per commune.





117

VDBs59

/communes, incorporated into the medium-term commune MOP-SEDP and verified by the

district line agencies in collaboration with the PPCOs before approval. The PPCO will coordinate and

monitor public infrastructure investment implementation, including construction supervision, and will

annually review performance of the Project communes and make revised allocations as necessary.

Beneficiary contribution will be at least 10% of total construction costs (less taxes) of public and

collective good infrastructure works, with IFAD funding 60% and the NTP- NRD funding 30% of the

investment cost. The beneficiary contribution to the investment can be made in cash and/or in kind. In

kind contributions could be in the forms of labour, local materials, land acquisition, machinery

operation and crops/structures lost for scheme construction. The in-kind contribution must be

supported by appropriated documentation stating its value based on market evaluation undertaken by

an independent authorized entirety.

83. Individual public or collective good infrastructure investments will not exceed USD 60,000

without prior agreement with IFAD.

84. Community People’s Committees (CPCs) will be the owners of community infrastructure

projects, however, the VDBs in benefitting communities will be responsible for managing the

implementation of the public investment. The VDB will establish a community supervision board, with

at least three representatives from the beneficiary groups and 30% women’s participation, for the

supervision of construction works for each scheme. Members of community supervision boards will be

trained in construction supervision and provided sufficient information about investment works.

Beneficiary communities will be required to demonstrate an ability to support associated long-term

operation and maintenance costs. The Competitive Small Grants Manual, developed by the IFAD Viet

Nam Country Office, will form the basis of the Project Implementation Manual (PIM) for this activity.

Wherever possible, local labour, particularly youth and minority people, will be used for works

construction, supported by vocational training when required.

85. The community-based public and collective good infrastructure programme will be supported by

youth-targeted on-the-job vocational training in skills that could be quickly applied through the

community infrastructure programme. The Project will, where practicable, use force account

processes for community infrastructure investments, designed to create jobs for the vocational

trainees and promote community ownership in the operation and maintenance. On-the-job vocational

training could focus on such skills as concreting, carpentry, road levelling and surfacing, brick laying,

semi-skilled machine operation, painting and public infrastructure maintenance. Women’s participation

in youth vocational training will be a priority.

By integrating the CSSP community infrastructure programme into the NTP-NRD, the CSSP will

improve the methodology for NTP-NRD investment planning in Bắc Kạn and Cao Bằng, including

increased participation by women and poor households in priority setting, thereby establishing the

framework for more efficient and effective NTP-NRD investments in the longer term. It is expected

that the NTP-NRD will continue to fund community- and collective-based -infrastructure investment

beyond the life of the CSSP.

Output 7: Rural Finance Services.

86. Rationale. Reflecting the overall development trends in Viet Nam, the financial sector has,

during the past 20 years, gone through a period of major transformation. The rapid expansion in

banking activities and in the volume of their financing operations is considered one of the key factors

behind Viet Nam’s fast economic growth. Despite the overall financial sector progress, however, the

commercial banks still prefer lending to large and known borrowers at the expense of low-income

rural clients and small and medium enterprises (SMEs).

87. Rural microfinance in Viet Nam is almost totally dominated by two government-controlled

financial institutions, the Vietnam Bank of Agriculture and Rural Development (VBARD) and

particularly the Vietnam Bank for Social Policies (VBSP) (see Appendix I for description on rural and

59

Village Development Boards are established under the NTP-NRD.





118

microfinance market in Viet Nam). Private, market-based and NGO-based rural microfinance

institutions operate on a very limited scale in Viet Nam. To increase financial inclusion and to improve

the livelihoods of the poor especially in the least served rural communes, continuous attention and

support is required to improve pro-poor financial services delivery.

88. Since the beginning of IFAD’s operations in Viet Nam, interventions in rural finance have been

an integral part of its area-based multi-component Projects. The key lessons for the CSSP design

from the evaluations of these and other rural finance Projects include:

the promotion of community-based women’s savings and credit groups (WSCG) remains a valid intervention for CSSP as they serve as a useful entry point for low-income people to financial services and act as an effective empowerment tool. In previous IFAD-supported interventions, they have consistently shown their capacity to increase the incomes and asset ownership of poor households;

to move the SCGs and their members to the next development stage, the issue of developing SCGs and their networks into more sustainable microfinance schemes requires attention and investment under CSSP;

agricultural VC finance should be seen as a comprehensive, holistic approach that involves the systemic analysis of an entire VC and the relationships among its actors, including all the financial institutions with potential interest in the focal VCs.

89. To effectively contribute to increased financial inclusion in the rural communes of the Project

target area, the design of the “Rural Financial Services” output of CSSP relies strongly on these

lessons learnt, the expected trends and regulatory reforms in the financial markets, and the best

practices developed for rural microfinance and VC financing. The selected approach and interventions

are clearly in line with the current policies of the GoV, which emphasise the need to modernise

smallholder agriculture, to improve the quantity and quality of marketed produce and particularly to

improve the resilience of poor households that face the adverse impacts of CC. One of the key

strategies to reach these targets is the increased, sustainable inclusion of poor and near-poor

households into the financial market.

90. The Output 7 design also reflects IFAD’s current priorities in rural development in Viet Nam.

According to the COSOP 2012-2017, rural finance activities should support the overall objective of

building enabling environments for the engagement of the private sector in providing rural jobs and

generating rural income and for the development and promotion of pro-poor VCs. They should aim to

increase the agricultural productivity and competitiveness of smallholders, enhance opportunities for

market entry and diversify livelihood opportunities for both male and female workers, including off-

farm activities. These principles have been central to selecting the activities for rural finance support

under CSSP. At the same time, the selected approaches and activities are a core part of CSSP’s “no-

regret” approach to CC adaptation, with its focus on improving the income and asset base of

smallholders, in that manner building adaptive capacity in rural households to deal with the existing

and predicted effects of CC.

91. Strategies and activities. The following key strategies and approaches will be followed when

implementing the Rural Financial Services output:

actively expand the community-based women’s savings and credit networks and introduce them into new rural communes, with special focus on women-headed households and minority communities;

develop across the SCG operations a stronger savings focus and internal sustainability, to reduce future dependence on externally injected capital;

develop the capacities of the Women’s Development Funds (WDFs) with the objective of eventually transforming them and their networks of savings and credit groups into registered, sustainable microfinance institutions (MFIs).

92. Output 5 is organised in three inter-related activities:





119

5.1: Development of Capacity of the WDFs

5.2: Establishment of New Savings and Credit Groups

5.3: Transformation of SCG Networks into MFIs.

Activity 7.1 Development of Capacity of WDFs

Task 7.1.1 Cao Bằng Province

93. Task Description. The previous IFAD-supported Project, DBRB did not in Cao Bằng originally

include activities with savings and credit groups or with the WU. During its later years, the Project

provided small grants totalling around USD 200,000 to support the savings and credit operations of

the WU. These grants formed the principal capital base for the WU social fund, the establishment of

which was authorised by the PPC in May 2014. The new fund, called below the Women’s

Development Fund or the WDF, operates today in five districts of the Cao Bằng province, although

with a small capital base and the related limited outreach to the rural communes.

94. The new WDF in Cao Bằng is a start-up institution (see description of the Cao Bằng WDF in

Appendix I). It has its core staff and operational systems in the provincial Head Office, but no

branches or staff in the rural districts. To be able to carry out its demanding work for the promotion of

the WSCGs in the province, including the planned CSSP-related tasks, the WDF requires substantial

capacity building, covering both its Head Office and emerging branch staff, as well as major

improvements in its provincial and district level physical facilities and systems.

95. Under Task 7.1.1, the CSSP will enable the Fund to independently and professionally

implement its WSCG tasks and to promote and eventually transform the WSCG-based financing

network in Cao Bằng into a registered microfinance institution. The key CSSP investments in this

process include (see Costs Tables for detailed budgets and descriptions for each rural finance-related

expenditure):

international TA to support the design of a Strategic Plan for the WDF for 2017-2021 (see TOR in Appendix 4, Annex 7);

national TA to assist in updating the operations and manuals of the WDF based on the principles of the new Strategic Plan;

training for the senior operational management, Management Council and Supervisory Board of the WDF in microfinance and in the management of social funds, to be organised by the Vietnam Microfinance Working Group;

initial training courses and refresher courses for the WDF staff at all levels in WDF/WSCG methodologies;

a staff exchange programme between the Cao Bằng WDF and selected, more mature WDFs in Viet Nam;

the procurement of accounting and loan/savings management software, based on experience and specifications from more mature WDFs;

a package of equipment, including computers, for the Head Office of the WDF;

a package of equipment, including computers, for four new district level WDF branches, required for the management and effective implementation of the field operations;

a 4WD vehicle for the WDF Head Office to effectively coordinate and supervise the WDF operations in the province;

motorcycles for WDF district branches for field implementation of WSCG activities;

limited operational support to the WDF during the first two years of CSSP, after which the WDF is expected to cover all its operational costs from its lending-related operational income.





120

96. Implementation Arrangements. To ensure that all activities under Output 7.1 are properly

planned and executed, the Cao Bằng CSSP PCO will recruit a Rural Finance Officer (RFO) to support

and oversee this sub-component during the six-year Project period. The TOR for the RFO is provided

in Appendix 5, Annex 2.

97. Responsibility for the implementation of CSSP Activities 7.1, 7.2 and 7.3 in Cao Bằng will be

with the WDF. At Project start-up, an “Implementation Agreement” will be signed between the Cao

Bằng PCC and the WU/WDF, which will define the responsibilities of each of these two parties with

respect to CSSP implementation. Models for this type of Agreement are available from the IFAD-

supported SRDP and AMD projects. The Implementation Agreement will define resources that CSSP

will provide to the WDF during the Project period, conditional on WDF performance meeting the

criteria agreed for each activity. This Agreement will also define the monitoring and reporting

responsibilities of the WDF for CSSP-related activities.

Task 7.1.2: Bắc Kạn Province

98. Task Description. The operations of the WU-managed WSCGs are more developed and better

capitalised in Bắc Kạn than in Cao Bằng. The operations of WU’s Social Fund, called the WDF,

started on 10 June 2014 (see description of the Bắc Kạn WDF in Appendix I). The WDF is a well-

capitalised operation, controlling on-lending funds of around USD 3 million, which mostly originate

from 3PAD sources. In addition to its provincial Head Office, the Bắc Kạn WDF has, since January

2015, operated branches in Ba Bể and Na Rì districts. In addition, it manages groups in Ngân Sơn

and Pác Nặm districts from its Ba Bể branch, and in Bạch Thông district and Bắc Kạn city from the

provincial office. At the end of October 2015, the WDF operated in total with 134 groups and 1,755

members. Its total outstanding portfolio was VND 14.5 billion (USD 660,000), with the total savings at

a much lower VND 311 million (USD 14,800). The Bắc Kạn WDF has ambitious plans for expansion

and greater impact, with a target of reaching some 7,500 women/households by the end of 2017.

99. While the operations of the Bắc Kạn WDF have progressed well, especially in 2015, it is still at

an early developmental stage as a financial institution. Although it has the core staff and basic

operational systems to conduct its financing operations at their current level, considerable institutional

development work is still required to reach an adequate level of professionalism and efficiency in its

operations. To effectively implement its demanding tasks in the promotion of WSCGs in the province,

including the planned CSSP-related tasks, the Bắc Kạn WDF requires significant capacity building

support covering its staff and its physical facilities and systems, both at provincial and district levels.

100. The proposed CSSP will include a major capacity building programme for the Bắc Kạn WDF,

especially during the first two years of CSSP, with the objective of making the Fund capable to

independently and professionally implement its tasks in WSCG promotion and eventually transform

the WSCG-based financing network in Bắc Kạn into a registered microfinance institution. The key

CSSP investments in this capacity building process under Activity 7.1.2 include:

international TA to support the design of a Strategic Plan for the WDF for 2017-2021 (See TOR in Appendix 4, Annex 7);

training for the senior operational management, Management Council and Supervisory Board of the WDF in microfinance and in the management of social funds, to be organised by the Vietnam Microfinance Working Group;

initial training courses and refresher courses for WDF staff at all levels in WDF/WSCG methodologies;

support to a staff exchange programme between the Bắc Kạn WDF and selected more mature WDFs in Viet Nam;

training of relevant WU staff at all levels on the WDF/WSCG methodology, especially in the related communication and mobilisation skills;

a package of equipment, including computers, for the Head Office of the WDF;





121

a package of equipment, including computers, for district level WDF branches, required for the management and effective implementation of the field operations;

a 4WD vehicle for the WDF Head Office to effectively coordinate and supervise the WDF operations in the province;

101. Implementation Arrangements. To ensure that all activities under Output 5 are properly planned

and executed, the Bắc Kạn CSSP PCO in will recruit a Rural Finance Officer (RFO) to advise and

oversee this sub-component during the six-year Project period. The TOR for the RFO is provided in

Appendix 5, Annex 2.

102. The responsibility for the implementation of Activities 7.1, 7.2 and 7.3 of CSSP in Bắc Kạn will

be with the WDF. At Project start-up, an “Implementation Agreement” will be signed between the Bắc

Kạn PCC and its WU/WDF, which will define the responsibilities of each of these two parties in CSSP

implementation. Models for this type of Agreement are available from the IFAD-supported SRDP and

AMD projects. The Implementation Agreement defines the resources that CSSP will provide to the

WDF during the Project period, conditional on the WDF meeting the performance criteria agreed for

each activity. This Agreement will also define the WDF CSSP monitoring and reporting

responsibilities.

Activity 7.2: Establishment of new Savings and Credit Groups

Task 7.2.1: Cao Bằng Province

103. Task Description. To contribute to increased financial inclusion in Cao Bằng, CSSP will support

the establishment of new WSCGs in the Project area. With WSCG operations, while the principle is to

let the groups decide on their own membership, the targeting approach under CSSP operations will

emphasise the importance of focusing on:

poorer villages in the 30 CSSP communes

the inclusion of the poor household and minority people in the WSCGs, with special emphasis on inclusion of women-headed households.

104. Following the above targeting approach during the 6-year Project period, the implementation

target is for a total of 472 new WSCGs with an average of seven members to be established in the

30 target communes. In total, around 3,300 new rural households will be included into the WDF-

managed savings and credit operations with the support from CSSP.

105. With the Cao Bằng WDF as the responsible institution for implementing this activity, CSSP will

provide a comprehensive support package to ensure the smooth establishment of WSCGs and

appropriate follow-up support for their operation. The CSSP support under Activity 7.2.1 will include:

funding and information material for mobilisation and initial training meetings in the villages;

substantial initial training and follow-up courses for WSCG group leaders and members in savings and credit methods;

focused farm management and production diversification training for group members, covering around 3,300 women, with special emphasis on new and diversified earning opportunities in the focal VCs (VC) supported by CSSP;

injection of capital for each trained and savings-mobilised WSCG for on-lending to the group members.

106. Two issues in the agreed CSSP WSCG method require attention. Firstly, globally, the injection

of Project capital for on-lending to group members is not generally considered an appropriate or

necessary intervention when aiming to create sustainable community-based groups. In the previous

WSCG operations in Viet Nam, capital for on-lending has, however, always been a part of the IFAD

investment and has been consistently evaluated as a successful initiative, with nearly 100% recovery

rates and high group cohesion and sustainability. This approach will continue under the CSSP





122

operations. The Cao Bằng WDF will be allocated VND 100 million (USD 4,700) as seed lending

capital per each established WSCG (average seven members), which the WDF will on-lend through

the WSCGs to their women members. Each group’s savings mobilisation and loan management

performance will be assessed on a continuous basis by the WDF, and recovered funds from poorly

performing groups will be re-allocated to successful groups.

107. Secondly, increased attention will be paid by the WDF to the active promotion of savings in the

groups and to the related target of increasing the self-financing capacity of the WDF, with less

dependence of externally injected capital. The savings targets for groups and individual members and

the target ratios between savings and loans will be defined in an up-dated WDF operations manual,

based on the principles to be agreed on in the new WDF Strategic Plan. The increased savings

emphasis will become even more important when, towards the end of the CSSP period, the Cao Bằng

WSCG network will be transformed into a registered and supervised MFI.

108. Implementation Arrangements. The Cao Bằng WDF will be fully responsible for the

establishment of new WSCGs in the Project communes. As indicated above, at Project start-up, the

rules and conditions for cooperation between CSSP and the WU/WDF will be documented in a

detailed Implementation Agreement. The WDF will establish branches in rural districts with permanent

professional staff, from which it can reach the targeted CSSP communes and villages. Under Activity

7.1.1, CSSP will assist the Cao Bằng WDF in: (i) the establishment of the new branches; (ii) building

of the capacity of the WDF management and staff; and (iii) the establishment of the appropriate

procedures and systems for WDF financing operations.

109. For the seed capital for on-lending, the Cao Bằng PCC will, at the Project start-up, sign a

Subsidiary Loan Agreement with the Ministry of Finance (MoF). Models for an Agreement of this type

are available from the SRDP and AMD provinces. The MoF is expected to lend the funds to the PCC

at a similar highly subsidised interest rate as used in the cases of the SRDP and AMD provinces. The

other terms of the subsidiary loan will follow the terms of the IFAD loan to support CSSP. The Cao

Bằng PPC is expected to on-lend the funds to the WDF at these same terms.

Task 7.2.2: Bắc Kạn Province

110. Task Description. To contribute to increased financial inclusion in Bắc Kạn, CSSP will support

the establishment of new WSCGs in the Project area. With WSCG operations, while the principle is to

let the groups decide on their own membership, the targeting approach under CPRP operations will

focus on:

poorer villages in the 32 CSSP communes

the inclusion of the poor household and minority people in the savings and credit groups with special emphasis on the inclusion of women-headed households.

111. Following the above targeting approach, the target over the 6-year Project period is for 147 new

WSCGs with an average of 15 members to be established in the 32 target communes in Bắc Kạn. In

total, around 2,200 new rural households will be included through CSSP support to the WDF-

managed savings and credit operations. In addition, the Bắc Kạn WDF plans to establish some

250 new WSCGs with around 3,500 new members and finance the new loans to these groups with

the incoming reflows from the 3PAD/ADF loans. By 2020, with these activities, the total borrowing

membership of the WDF in Bắc Kạn will exceed 8,000 low-income households, making it an important

provider of rural finance services in the province.

112. With the Bắc Kạn WDF as the responsible institution for implementing this CSSP activity, the

Project will provide a comprehensive support package to ensure the smooth establishment of WSCGs

and appropriate follow-up support for their operations. The CSSP support under Activity 7.2.2 will

include:

funding and information material for mobilisation and initial training meetings in the villages;





123

substantial initial training and follow-up courses for WSCG group leaders and members in savings and credit methods;

focused farm management and production diversification training for group members, covering around 2,200 women, with special emphasis on new and diversified earning opportunities in the focal VCs supported by CSSP;

injection of capital for each trained and savings-mobilised WSCG for on-lending to the group members.

113. Two issues in the agreed CSSP WSCG method require attention. Firstly, globally, the injection

of Project capital for on-lending to group members is not generally considered an appropriate or

necessary intervention when aiming to create sustainable community-based groups. In previous

WSCG operations in Viet Nam, capital for on-lending has, however, always been a part of the IFAD

investment and has been consistently evaluated as a successful initiative, with nearly 100% recovery

rates and high group cohesion and sustainability. This approach will continue during the CSSP

operations. The Bắc Kạn WDF will be allocated VND 215 million (USD 10,200) in two tranches of

USD 5,100 each, as seed lending capital per each established group (average 15 members), which

the Fund will on-lend through the WSCGs to their members. Each group’s savings mobilisation and

loan management performance will be assessed on a continuous basis by the WDF, and recovered

funds from poorly performing groups will be re-allocated to successful groups.

114. Secondly, increased attention will be paid by the Bắc Kạn WDF to the active promotion of

savings in the groups and to the related target of increasing the self-financing capacity of the WDF,

with less dependence of externally injected capital. The savings targets for groups and individual

members and the target ratios between savings and loans will be defined in the WDF’s up-dated

operations manual, based on the principles to be agreed on in the new Bắc Kạn WDF Strategic Plan.

The increased savings emphasis will become even more important when, towards the end of the

CSSP period, the WSCG network in Bắc Kạn will be transformed into a registered and supervised

MFI.

115. Implementation Arrangements. Responsibility for the establishment of new WSCGs in the Bắc

Kạn Project communes will be with the provincial WDF. As indicated above, at Project start-up, the

rules and conditions for cooperation between CSSP and the WU/WDF will be documented in a

detailed Implementation Agreement. The WDF will establish, as required, additional branches in rural

districts with permanent professional staff, from which it can effectively reach the targeted CSSP

communes and villages. Under Activity 7.1.2, CSSP will assist the Bắc Kạn WDF with: (i) the

establishment of the new branches; (ii) building of the capacity of the WDF management and staff;

and (iii) the establishment of the appropriate procedures and systems for WDF financing operations.

116. For the seed capital for on-lending, the PCC in Bắc Kạn will at the Project start-up sign a Subsidiary Loan Agreement with the Ministry of Finance (MoF). Models for an Agreement of this type are available from the SRDP and AMD provinces. The MoF is expected to lend the funds to the PCC in Bắc Kạn at a similar highly subsidised interest rate as used in the cases of SRDP and AMD provinces. The other terms of the subsidiary loan will follow the terms of the IFAD loan to support CSSP. The PPC is expected to on-lend the funds to the WDF at these same terms.

Activity 7.3 Transformation of SCG Networks into MFIs Bắc Kạn and Cao Bằng Provinces

117. Activity Description. This innovative activity aims to convert the WDFs and the provincial WSCG

networks into registered, sustainable microfinance institutions. The target will be to bring the

numerous WSCGs under an institutional arrangement that will ensure an appropriate supervision of

these small financial operators and create a sound and safe network for their institutional growth. At

the same time, the transformation will open opportunities for linking mature WSCGs with financial

institutions that have potential for financial intermediation with groups and their members on a larger

scale.

118. Vietnamese regulations require that the WSCG networks of this type be initially registered as

Social Funds (Women’s Development Funds) to be supervised by the provincial SBV. Later, when





124

adequate capabilities have been developed and operational and financial sustainability has been

reached, these WDFs can be converted into MFIs, registered and fully supervised by the SBV. The

procedure is still new in the country. IFAD, in co-operation with other donors, is currently financing

international technical support for this transformation process, initially targeting Ha Tinh, Quang Binh,

Ben Tre and Tra Vinh provinces. The result of this support will directly benefit the planning and

implementation of the transformation processes in Bắc Kạn and Cao Bằng.

119. In both Bắc Kạn and Cao Bằng, the first step of this transformation process has already been

taken, with the establishment of the Women’s Development Funds as social funds. Their eventual

conversion into a registered MFIs is planned to take place towards the end of the CSSP

implementation period. Following this plan, one of the aims of the CSSP rural finance interventions is

to ensure that both Funds will, in six years’ time, meet all the MFI registration requirements of the

SBV. These requirements include:

operate with a clientele that needs small-scale financial services;

have a decision by the provincial PPC in which its Head Office operates, supporting the establishment of the financial institution;

have a minimum equity capital as defined in Section 2, Article 1 of the Decree No. 165/2007/ND-CP, which currently defines it at VND 5 billion (around USD 233,000)

have appropriate offices and equipment to operate the MFI;

have appropriate IT systems to safely conduct small financing operations;

have appropriately qualified people in the governance and managerial positions of the institution to operate it professionally and safely;

have an appropriate Business Plan for the three first years when operating as a registered MFI.

120. The above-described significant CSSP investments in capacity building and direct financial

support to the WDF activities under activities 5.1 and 5.2 aim to ensure that both WDFs will be able

meet these MFI registration requirements by 2021-2022. To improve the chances of successful

transformation for both WDFs, two additional investments are included in the CSSP budgets in both

provinces for the last two years of Project implementation:

one month of international TA to support the WDF to design the 3-year Business Plans for 2021-2023, which is the key attachment required by the SBV for an MFI registration application

a lumpsum allocation of unspecified transformation support during the last two Project years that can be used both for capacity building purposes and for physical improvements in the branch offices to upgrade them to meet the then required MFI standards.

121. Implementation Arrangements. The ultimate implementation responsibility for the

transformation of the WDFs into MFIs will be with the respective WDF and WU management. For

these processes to be successful, it is critically important that Bắc Kạn and Cao Bằng WUs/WDFs

work the close cooperation with the WUs and WDFs in provinces which are more advanced in the MFI

transformation process and which currently receive substantial transformation support from IFAD and

other donors.

Benefits and Impact

122. Significant benefits to the group members can be expected from participation in the new

WSCGs. Around 5,500 new low-income households are expected to join the WSCGs as a direct

result of the CSSP investments, covering a significant share of the poor and near-poor households in

the focal CSSP communes. The capacity building efforts by CSSP, furthermore, are expected to

make it possible for the Bắc Kạn WDF to mobilise an additional 3,500 women to SCGs. Their initial

loans will be funded largely through revolving funds from the closed IFAD-supported projects. With





125

stronger, better capacitated WDFs, a wider outreach and impact can be clearly achieved than is the

case today.

123. All impact evaluations, including those conducted by IFAD, confirm the beneficial impact that

these SCG operations have on member household incomes and livelihoods. Similarly, the farm

models of this design document confirm the potential of the WDF-financed investments to improve the

incomes and the CC adaption capacity of the beneficiary households. In addition, while more difficult

to measure, the impact of these groups on the self-confidence of the group members can be

substantial, which, in the longer term, can support the members’ participation in larger scale income

generating activities.

124. CSSP support to progressively transform WDFs and their networks into registered, sustainable

provincial microfinance institutions is expected to result in major long-term benefits to their

members/clients. The registration status can open doors for larger scale financing operations,

enabling current and future members of WSCGs to engage in larger income generating projects than

is currently possible. Linkages to formal financial sector operators through the new MFI can secure

such funding that the current mode of WSCG operations does not allow.

Exit Strategy and Scaling Up

125. Most of the CSSP rural finance enhancement activities have an in-built exit strategy. New

WSCGs are expected to operate independently after the training they receive from the WDFs and the

local WU staff. The WDFs in both provinces are projected to reach full operational sustainability

during the CSSP period. After that, they will aim at registration as independent MFIs, which will give

them wider operational options as members of the regulated financial market.

Risks and their mitigation

126. Specific risk to the successful implementation of the rural finance enhancement activities of

CSSP are listed below in Table 1, together with mitigating issues and mechanisms:

Table 1: Output 5: Potential Risks and Mitigating Issues

Potential Risks Likelihood Severity Mitigating Issues

The Women’s Union may not

have the resources and

capacities required for the

gradual transformation of the

SCG network into a Social

Fund and later into an MFI.

M M The design of activities 2.2.1,

2.2.2 and 2.2.3 is aimed to

mitigate this concern, with

large amounts of financial and

capacity building support and

significant allocations of

national and international TA

to the WU.

Financial institutions may not

be ready to finance the

investments required in

various VC activities.

M M The support operations of

Outcomes 1 and 2 and the

pro-active method proposed

for supporting rural financial

services are planned to

mitigate just this potential risk.

The WDFs may not be able

to professionally handle the

significantly larger member

numbers and increased

business volumes assumed

in the CSSP plan.

M M The CSSP is designed to

mitigate this risk, through

increased emphasis on

savings, large injections of

financial and capacity building

support and significant

allocations of national and

international TA as well as





126

strategic planning support to

the WDFs.

Follow-up Actions

127. To ensure a smooth take-off of CSSP rural finance enhancement activities, the following follow-

up actions can be foreseen during 2016:

complete the selection process for the villages for the establishment of new WSCGs in the CSSP communes and start preparations for sub-component activities in these areas;

in the latter part of 2016, start the recruitment and training processes for the staff for the new WDF branches to be opened in 2017;

in Cao Bằng, explore the possibility to pre-finance an international support mission to design a Strategic Plan for the WDF for 2017-2021 and carry out the design work before CSSP effectiveness.

Output 8. Agribusiness Promotion Investment Fund.

128. Vietnam’s agricultural sector has enjoyed almost 2 decades of strong growth, contributing to

significant poverty reduction, national food security, social stability, and increased regional and

international economic integration. There are, however, concerns about both the quality and

sustainability of the country’s agricultural growth and its impact on the welfare of producers and

consumers. Viet Nam’s agriculture growth is frequently characterised by mixed or uncertain product

quality and food safety, low value addition and limited technological and institutional innovation.

Agriculture growth has, in some cases, also incurred a high environmental cost.

129. In keeping with the current SEDP, the Resolution No. 26 on Agriculture - Farmer – Rural Area,

the Proposal on Agriculture Restructuring and the recently completed Green Growth Strategy,

Vietnam’s strategy for agricultural and rural development is evolving to adopt and apply the concept of

‘sustainable development’, organizing key objectives under the ‘Triple Bottom Line’ of economic

development, social development and environmental protection. In applying this strategy, the GoV

sees the opportunity and need to pursue various forms of public-private collaboration in order to

realize these objectives.

130. The complexity of a modernizing agriculture extends beyond what the State can readily

provide—in terms of investment, expertise, and clear direction in the face of many uncertain variables.

As elsewhere, the role of the State in the sector must evolve to focus on ensuring the provision of

core public goods and regulatory services, while acting to facilitate farmer and private sector

investment and initiative. In some areas, the State may be able to delegate or contract others to

provide certain services; in other areas, systems of ‘co-management’ or ‘co-regulation’ may be

possible as observed from local and international experience. In essence, GoV seeks to pursue

various forms of public-private partnership/collaboration in order to more quickly or effectively realize

key sectoral (economic, social, and environmental) goals. Specifically, GoV expects APIF initiatives to

contribute to:

increasing the volume of rural and agricultural investment, even in the face of fiscal

constraints;

increasing the quality of sectoral investments and the quality of technical services;

fostering innovation, both of a technical and institutional nature;

improving management—of natural resources, supply chains, and of various production

and commercial risks; and

contributing to more rapid structural change at the primary production level and within

supply chains, to bring about improved efficiencies.





127

131. The Project will use APIF co-financing to generate investments and job opportunities among

the rural households, with particular attention to poor and women-headed households in the Project

area, who will form at least 50% of the total number of households benefiting from APIF-supported VC

investments. To achieve the objective CSSP will entice private sector agro-enterprise investments in

Bắc Kạn and Cao Bằng by co-financing up to 49% of investments that will generate incremental

markets for raw material leading to incremental production of agriculture primary produce resulting in

increased income and job opportunities among the rural households. Applications with higher levels of

own contribution will be assessed as more competitive. This approach to promoting agri-business

investment in rural areas is consistent with prevailing GoV policies (see page no. 7, para. 22), but

uses a simplified, single grant approach to supporting agri-business investment in public and private

goods and staff and supplier capacity building, with the allocation of grants resources set, within

defined limits, by the investor. This approach, which incorporates the key elements of Decree 210

and MARD Decision 62, simplifies grant management and has proven successful in other IFAD

investment projects in Viet Nam. The Project will work closely with the Bắc Kạn and Cao Bằng

provinces to draw GoV grant financing into the APIF programme. The Project will identify commodities

having investment potential and which are in compliance with the Bắc Kạn and Cao Bằng SEDPs.

The selected commodities will be chosen based on having: (i) significant potential for involving rural

households, particularly disadvantaged households, in incremental production and job creation;

(ii) available technologies for improved productivity and CCA; (iii) reasonably assured national or

regional markets; and (iv) potential for export and/or import substitution. At least 50% of the total

number of households benefiting from APIF supported investments should be represented by poor,

near poor or women-headed households.

132. For each selected commodity, a VC Strategic Investment Plan (SIP) (Output 1) will be

prepared, including all envisaged activities within the VC. The SIP will list the potential types of

investments eligible for APIF support and each type of investment will be accompanied with a realistic

business model/financial analysis. Investments/upgrading not directly supported by the APIF output,

e.g. training of farmers, organizing farmers into groups, etc., will also be listed together with known co-

financiers and each type of investment will be accompanied with a business/model financial analysis.

The SIP will be used as the framework for calling entrepreneurs to express their interest for investing

in Bắc Kạn and Cao Bằng. Examples of potential VC development opportunities in Bắc Kạn and Cao

Bằng are detailed in Appendix 4, Annex 8. Experience from successful 3PAD investments in value

chains in Bắc Kạn is detailed in Appendix 3, Annex 2.

133. Only legally registered cooperative societies and companies of at least 24 months standing will

be eligible to apply. Entities that are the subject of bankruptcy, criminal investigation, fraud, corruption

or are in default of contractual agreements will be ineligible. APIF investments will be awarded on a

competitive basis for capital investments in civil works, equipment (processing, packaging, energy

generation or environment protection), transportation and marketing, related directly to the core

activity of the investor. The PPSCs will be responsible for adopting recommendations for APIF

investments, which will be subsequently approved by the Bắc Kạn and Cao Bằng PPCs. Poor people

income and jobs, value added products, and productivity and market access and gender equality will

be important criteria in investment proposal evaluation, together with commercial viability,

environment impact and cost effectiveness assessments. The APIF programme will be underpinned

by a technical, business management, accounting and Information Communication Technology (ICT)

capacity building program for District and Commune level businesses with a view to improving their

farmer service capacity, profitability and enterprise linkages, both at local level and to upstream quality

suppliers and markets. It is recommended that the provincial Enterprise Association mentors this

programme.

134. The CSSP will provide approximately USD 6.4 million (including co-financing) for APIF facility

financing, including USD 2.6 million in Bắc Kạn and USD 3.8 million in Cao Bằng. The APIF facility will

be established with IFAD co-financing up to 49% of total investment cost, with the remaining

investment being contributed by the benefitting business. Applications with higher levels of own

contribution will be assessed as more competitive. Up to 30% of APIF grants will be available for the





128

purchase of supporting services (business development services (BDS), legal, technical, marketing,

standards, farmer extension, etc.) for the planned commodity chain investment. Co-financing will start

at USD 15,000 as a minimum and reach up to USD 75,000 as the maximum. In cases where the

potential export/import substitution and social impact of the proposed Project is extremely high and/ or

the investment is pivotal for developing the respective commodity in Bắc Kạn and Cao Bằng, the

maximum APIF grant could, with IFAD approval, be up to USD 150,000. In case of production of new

raw material, the PPCO could recommend to the PPSC that trial production can be financed at a

smaller amount than USD 15 000, but otherwise follow the same requirement as the main stream

APIF. The in-kind contribution should not exceed 50% of total enterprise contribution (i.e. 50% of 51%

minimum enterprise contribution). The in-kind contribution must be supported by appropriated

documentation stating its value based on market evaluation undertaken by an independent authorized

entirety. The minimum 26% (of total investment) enterprise cash contribution for APIF investments

must be deposited into a designated APIF co-financing Account, held by the lead enterprise and

accounted for separately in their books of accounts. The cash contribution cannot be reduced over the

duration of the APIF grant period, however, the enterprise can expand this level using own resources

or other (equity and debt) funding. The CSSP will provide approximately USD 5 million (including co-

financing) for APIF facility financing. APIF supported investments in prioritized commodities must be

within Bắc Kạn and Cao Bằng, but could fall outside of the five nominated Project districts.

135. VC Selection. The two main criteria for selecting a VC for CSSP support are market demand

(within province, across provinces, regional and international) and a strong return to farmers with

minimal price volatility. This activity will also include identification of Lead Enterprises (LE) interested

to participate and under what conditions and identify level of interest among the target group including

the preparation of rapid partial budgets for the selected commodity/product. Promising investments

will, thereafter, undergo VC analysis including: (i) situation analysis; (ii) opportunities to upgrade;

(iii) constraints to upgrading; and (iv) recommendations on what can be done practically and what

instruments to use.

136. For each intervention supported by the CSSP, an impact analysis will be conducted including.:

(i) cost benefit analysis at both farm enterprise and household levels using with and without

investment scenarios; (ii) for medium term capital investments, the estimation of capital NPV and IRR;

(iii) full financial and economic analysis of investments by intermediary enterprises, including monthly

cash-flow/working capital analysis during the first years to avoid liquidity problems and development

of a small business plan; (iv) investments by LEs will be supported by a well-articulated business plan,

, which can also be used by the LE for implementation of the investment. The business plan will

including detailed financial and economic assessments and social and environmental impact

assessments and monthly cash flow/working capital analysis; (v) investment in business derived

social infrastructure –bridge, piece of strategic road, water supply, electricity, gas, water treatment etc.

should all be supported by a feasibility study and undergo financial and economic analysis; and (vi) an

economic multiplier impact assessment should be conducted for the selected VC.

137. Approved investments will develop an Action Facilitation Plan: this will include preparation of a

Gantt chart providing the time line for all activities to be supported by the respective Project e.g.

grants, credit guarantee, CDF etc. The chart will also identify responsible the party, place and time

and how it is measured.

138. APIF Implementation Arrangements. Legal entities eligible to apply for APIF include: (i) sole

Proprietor/individuals; (ii) cooperative societies/associations; (iii) partnership; and (iv) companies. As

part to the eligibility criteria, the aforementioned entities should be able to provide the documents

mention below.

Business License

Certificate of registration and extract from Registrar

Annual tax Return Report (2 years)

Capacity Document of Board of Coordinator, CEO, CFO, CTO





129

Memorandum and Article of Association

Permission for the AMD to collect information from trade partners.

139. None of the above entities shall be eligible for support under the following circumstances:

Having gone bankrupt or being liquidated; having its operations managed by courts; signing agreements with creditors, having its operational activities suspended; being subject to procedures concerning these matters or being in a condition due to a similar situation as per national laws or arrangements;

Being sentenced for offences related to their own business which cannot be appealed;

Being convicted of gross abuse related to business matter which can be confirmed by the AIU;

Non performing obligations related to the payment of social security contributions or tax payments in accordance with the legal provisions in Vietnam;

Being subject to an adjudication due to being involved in fraud, corruption, a criminal organization or other illegal activity which cannot be appealed;

140. The Lead Firm (LF) and/ or its implementing partner(s) contribution to the investment can be

made in cash and/ or in kind. However, the in-kind contribution should not exceed 50% of total LF

counterpart’s contribution. The in-kind contribution may include e.g.:

labour;

land use rights;

equipment, vehicles, building and other capital goods and/ or raw materials contributed to build up/ acquire such goods during the agreed Project timeframe

purchase and rent of land or existing buildings;

working capital.

141. The in-kind contribution must be supported by appropriated documentation stating its value.

The documentation must be based on market evaluation undertaken by an independent authorized

entirety who will be hired by PC to undertake the evaluation. In-kind assets directly related to the

investment with APIF support can be accepted if procured/user-rights has been obtained within 24

months from the time of submitting the concept note. In-Kind contribution cannot excide 70% of total

contribution by the LF.

142. The APIF will not accept the following assets neither as the LF’s contribution nor as

expenditures eligible for reimbursement:

leasing of equipment, land and facilities;

bank charges, cost of guarantees and similar charges;

value of intellectual property rights;

value of previously existing inventory used for the production of the Project goods and/ or services;

general costs involved of an investment Project proposal development/design (architects’, engineers’, consultants’ and general legal fees, costs of feasibility studies for preparing the Detailed Investment Proposal and costs for acquisition of patents and licenses, etc.).

143. The minimum 26% cash contribution has to be deposited into the designated LF/APIF co-

financing Accounts held by the LF and accounted for separately in the books of accounts of the LF.

The cash contribution cannot be reduced over the duration of the APIF agreement.

144. The APIF is separating investment items into Public Orientation (PO) and Company orientation

(CO). The APIF beneficiary can contribute maximum 30% of its total co-financing towards Public

Orientation investments. There is no limitation for the LF funding of PO activities. The PO investments

are those directly related to the suppliers of raw material and capacity building of rural households

and LF’s employees including:





130

documented Technical Advisory Service to rural households and training of rural households;

documented training of LF personnel

documented Provision of production credit in cash or in kind;

documented joint (LF and rural households) investment in intermediary produce collection and processing centres.

145. A total of 70% of APIF co-financing should be for CO investments. CO investments are capital

tied up in plant, equipment, rolling stock related directly to the core activity of the LF including:

civil works related to storage and processing of raw material;

processing and packaging equipment;

transportation related to collection of raw material from RHH and shipment of finished product;

equipment for energy generation for processing plant;

equipment related to environmental mitigation.

146. The investment supported by the APIF shall assist a minimum of 1 rural household per

USD 500 of co-financing e.g. total APIF co-financing of USD 50,000 should provide direct tangible

benefits to a minimum of 100 rural households including 40 poor, women headed or minority

households. The direct tangible benefit should be in the form of:

rural household sale of raw material to LF;

rural household receiving training and advisory service;

rural household receiving production credit;

rural household formed into cooperatives/associations jointly own intermediary processing/assembly facility for raw material.

Potential Risks and Mitigating Issue

Table 2: Activity 6.2: Potential Risks and Mitigating Issues

Potential Risks Likelihood Severity Mitigating Issues

Financial institutions may not

be ready to finance the

investments required in

various VC activities.

M M The support operations of CSSP

to reduce the investment risks

and the pro-active method

proposed for the implementation

of Activity 2.1.x are planned to

mitigate just this potential risk.





131

Annex 1. Template for Preparation of VC Strategic Investment Plan

Step One: Data Collection

1. The VC analysis team first conducts background research on the chosen commodity/crop by

reviewing websites and other secondary sources of information. During this phase, the team looks or

information such as:

Importance of commodity/crop to Bắc Kạn and Cao Bằng’s economy (percentage of GDP, employment in the sector, etc.)

Global end markets for commodity/crop (demand, trends, potential expansion)

Bắc Kạn and Cao Bằng’s position within the Vietnam and global commodity/crop market

Average size (Ha) of commodity/crop per HH in Bắc Kạn and Cao Bằng

Climatic conditions in Bắc Kạn and Cao Bằng for commodity/crop production

Trade data of import and exports on the commodity/crop in Bắc Kạn, Cao Bằng and Vie Nam at large.

2. After a thorough review of relevant secondary sources, the team conducts primary research in

Bắc Kạn and Cao Bằng through a combination of one or more of the following methods: interviews,

focus groups, surveys and observation. Through this process which takes approximately 1 weeks in

the field, the team gather more information on the VC including the actors (HH-farms, SMEs –

processors, input suppliers, advisors etc.), relationships between the actors of the chain and factors

affecting the competitiveness of the chain.

Step Two: VC Mapping

3. By using the information gathered during interviews as well as secondary research, the VC

analysis team develops the map of the commodity/crop sector in Bắc Kạn and Cao Bằng. VC

mapping enables the analysis team to visualize the flow of the product from conception to end

consumer through various actors, as well as the supporting markets and enabling environment

affecting the VC. The first step is to list all the functions and actors in the VC.

4. Who are the actors in the commodity/crop VC?

Input suppliers (companies who sell to, farmers' associations and to household- farmers)

Producers (households- smallholder farmers and Poor household-farmers)

Small-scale traders

Small-scale processors –local sale

Medium/large-scale processors-exporter sale

5. Functions may be performed by more than one actor, and each actor may perform more than

one function. What are the functions in the commodity/crop VC?

Input supply

Production

Trading

Processing

Exporting

Importing

6. Once they are identified, the functions and actors are placed in a matrix to show who does

what. List the functions along the side and the actors across the top and mark the boxes to indicate

which actors perform which functions. Once this table is complete, a map can be drawn showing how

the product moves from one actor to another and when it passes through the different functions.

Based on the map it is possible to establish the cost and margin make-up for each level the produce

passes through used as the base line for present distribution of cost and benefits among actors.





132

Step Three: Analysis of Opportunities and Constraints

7. The next step is to prepare a table like shown below, list the structural and dynamic factors in

the VC, and then briefly describe the current situation, opportunities, constraints and

recommendations for addressing the constraints including tangible How, Who and Financing.

Framework Situational

analysis

Opportunities

for Upgrading

Constraints to

Upgrading

Recommendation

for Upgrading

Constraints (How,

who and

financing)

Structural Elements of the VC

End market

Business

enabling

environment

(both soft and

hardware)

Vertical linkages

Horizontal

linkage

Supporting

markets

Dynamic of the VC

VC Governance

Inter-firm

Relationship

Step Four: Prepare Brief Sample Business Models for Each Recommended Upgrading

showing the expected Results of the Upgrading

8. This step included technical description of the upgrading, financial analysis, economic analysis

listing all the incremental estimated forecasts e.g. increased HH income, number of HH benefiting; job

creation; increased export; import substitution, etc.

9. This step should also include the preparation of a matrix showing the current cost and benefit

make-up and profit distribution along the VC and an evaluation of change in governance after

upgrading.

Step Five: Stakeholders Workshop

10. The stakeholder workshop brings together key actors from various levels in the VC to vet the

findings of the analysis and discuss if the chosen strategy for increasing VC competitiveness is valid.

NOTE: The SIP should be as precise and concise as possible max 15 pages





133

Annex 2. Terms of Reference for the Public sector market economy skills

training programme

INTRODUCTION

1. This activity will assist Bắc Kạn government officials to effectively support the provincial

government’s market oriented development strategy. The capacity building programme will

demystify market mechanisms and provide public servants with the skills and tools to

implement results-based planning, management, monitoring, reporting and learning within the

framework of a market-based economy. The primary target will be village leaders, elected

officials of People's Committees and People's Councils, Supervision Boards and technical

cadres and members of the mass organisations at commune and district levels;

CONTRACT OBJECTIVES & EXPECTED RESULTS

Overall objectives

2. To make provincial socio-economic development planning and service provision holistic,

participatory, climate adapted and market oriented.

Specific objective

3. The specific objective of the assignment is to establish a comprehensive cadre of commune

and district level public servants who are familiar with the core principles of market economics

and profitable business management.

Results to be achieved by the Consultant

4. The Consultant(s) will be required to design a concise, competency-based training program in

market economics and farm and business management, prepare relevant training material and

deliver a training programme for Bắc Kạn and Cao Bằng commune and district staff in multiple

locations in Bắc Kạn and Cao Bằng over multiple years

5. The Consultants will:

Provide a detailed workplan identifying all major deliverables and associated tasks and

their phasing. The plan should be produced using proprietary Project management

software and be in sufficient detail to clearly convey the scope of work that will be

performed.

Identify and specify the consultant resources required to implement the consultancy

including detailed descriptions of their competencies and functions;

Specify the Costs of implementing these terms of reference.

Other tasks

6. During the period of the contract, the Consultant shall carry out periodical trainee competency

assessments, participate in progress meetings with the client and prepare and meeting minutes

to be signed by both parties.

ASSUMPTION & RISKS

7. The following assumption are made:

That the Bắc Kạn government can identify and make available DPI staff who will be

trained as Trainers by the Consultant and will support the Consultant-led training

programme;

that the Bắc Kạn government is able to make available, on time, groups of commune and

district staff for participation in training courses.





134

Risks

8. The following risks are identified:

The Bắc Kạn government is unable to release staff in sufficient numbers or in a timely

manner for an efficient training programme;

The Project team does not have the appropriate skills and roles;

The proposed Project design is not functional;

The Project is not completed within the expected timeframe.

SCOPE OF THE WORK

9. The economic training program will transfer the following competencies:

An understanding the market economy and associated roles of government and the

private sector;

the economics of supply and demand and impact of market competitiveness;

the nature of public and private goods,

privatization,

the roles of capital, labour and international trade, and

the transition from a planned to a market economy.

The principles of business and farm management including risk management

10. Gender equality and environment management will be cross-cutting training targets. Staff will

also be trained in group organization and leadership, participatory planning, and results based

management including effective monitoring and evaluation (M&E) and reporting and feedback

to management decision making. Trainees will be introduced to the VC SIPs developed under

sub-component 1.1.

11. Training will focus initially on government staff within the Project communes and, thereafter, be

rolled out to all Bắc Kạn and Cao Bằng government staff at commune and district level.

Outcomes will be assessed through the measurement of trainee capacities during and post

training.

REQUIREMENTS

12. The Consultant is required to provide an experienced team of economic and business/farm

management experts, including:

A team leader with a post-graduate qualification in economics or business management

and extensive in introducing the principles of economics and/or business management to

students;

A number (to be specified by the Consultant) of graduate level economics and business

management trainers with teaching and tutoring experience;

Graduate specialists in gender and development, environment and development and

participatory M&E with teaching and tutoring experience.

An IT specialist to develop training material including its presentation on the web.

13. It is essential for the success of the consultancy that experts co-operate and consult with each

other and the client on a continuous basis in order to achieve the best possible outcome. The

technical proposal should include an explanation of how the consultant proposes to establish

and maintain teamwork.





135

REPORTS

Reporting requirements

14. All reports should follow the general reporting requirements to be agreed with the Client at

contract negotiations.

15. A Detailed workplan shall be submitted to the Client within 15 days from the date The Contract

is signed.

16. The Consultant shall submit the following technical reports:

No. Activity Output (Report Delivery)

1 Training needs assessment Needs Assessment Report

2 Preparation of training programme Detailed training manuals

3 Training implementation Periodic staff competency

assessments

17. A Final Report shall be prepared at the end of the contract. The settlement of the Final Invoice

is subject to acceptance of the Final Report. The Final Report should include:

A complete overview of all the activities implemented during the contract;

A summary of outputs, and the identification of any major problems, which may have

arisen during the performance of the contract; and

An assessment of the impact of the Project measured against the stated Project

objectives and the indicators of achievement.

All approval technical reports.

18. An electronic format of all reports shall be submitted to the Client written in Vietnamese.

MONITORING AND EVALUATION

19. Project monitoring and evaluation will be based upon periodic assessment of the progress of

the delivery of specified Project results against their targets, and the achievements of the

Project objectives. The nominated performance monitors are:

1. CSSP Project Coordinator

2. CSSP M&E Officer





136

Annex 3. An approach to Medium-term MOP-SEDP development at commune

level

MOP-SEDP Planning Process.

1. Following the principle of grassroots democracy, the commune planning is organized in a

participatory way. Especially in initial years, this requires a higher number of stake holder meetings

including:

a) First commune meeting for introduction of MOP-SEDP planning

b) First village meeting for introduction of MOP-SEDP planning

c) Village sub-groups for elaboration of market opportunity ideas (MOI), informed by the SIP

d) Second village meeting for agreement on village plan and priorities

e) Second commune meeting for preparation of a draft commune plan

f) working group for refinement of draft MOP-SEDP plan

g) Third village meeting for consultation on the draft commune plan

h) Third commune planning meeting for finalizing and ratifying the commune plan

Step 1: First commune meeting: Introduction to MOP-SEDP process

Time: ½ day

2. Organization: A one-day commune introduction meeting is held, chaired by CPC. The

workshop is facilitated by members of PPCO

3. The content of the meeting includes:

Introduction to the CSSP Project (if applicable)

Introduction to the concept of and tools for market oriented planning including MOI

Presentation of the participatory planning process

Agreement on the work agenda for planning exercises at village and commune level

4. Participants: From each village, one man and one woman (head of the village and of the

women union); from commune level: representatives from mass organizations, people’s council,

cooperatives, and other stake holder groups; and a representative from the PPCO.

Step 2: First village meeting: Introduction to MOP-SEDP planning

Time: 2 or 3 hours

5. Organization: A village introduction meeting is held, chaired by the village head, and

supported by the commune. At the end of the meeting, sub-groups are formed for elaborating MOIs.

The sub-groups will work individually in the time until the next village meeting.

6. Participants: All households are to be invited to the village meeting; at least 40% of

participants should be women, and a number of poor households proportional to the total poor

households in the village or higher. Participation in sub-groups is open to all households. Poor are

particularly encouraged to participate.

7. Content

Introduction to the CSSP Project (if applicable)

Introduction to the concept of and tools for market oriented planning including MOI; explaining the working agenda and steps for participatory MOP-SEDP planning

Brainstorming on business and market opportunities in the village

and how to elaborate MOI in sub-groups; splitting off into sub-groups





137

Step 3: Village sub-groups: Elaboration of MOIs

8. Time: individual time arrangement by sub-groups between the first and second village meeting

(time span of one week in between).

9. Organization: The sub-groups which have formed at the end of the last village meeting will

individually elaborate MOIs. The DVCMDO will provide facilitation services on demand to help sub-

groups in elaborating their MOIs.

10. Participants: Flexible number of sub-groups with flexible number of participants. This can

include existing groups like associations, clubs, saving and credit groups etc., or spontaneously

formed groups with common interests.

11. Content

Formation of sub-groups: Villagers are encouraged to form sub-groups according to common interests: cattle raising farmers, coconut growers, SCGs, CIGs, poor households, carpenters, etc. Groups might already exist like SCG, clubs etc. or be formed spontaneously at the end of the first village meeting. The number of sub-groups is not limited. Participation in the sub-groups is open to all households. Poor are especially encouraged to participate and to form their own sub-group.

Situation analysis and planning: each sub-group will analyse the current situation of their business and develop market opportunity ideas (MOI) on how to improve their existing business or how to develop new businesses. It follows five development areas: Planned results (long term objectives; vision); infrastructure; business and marketing; work force; and finance.

Focus on business development. While areas like infrastructure or labour force development (training) are usually included in most local plans, special attention is to be paid to the area of business development. The facilitator will specifically help the sub-groups to discuss guiding questions like follows:

Expanding existing business

o What products or services are you selling?

o Where do you sell your products?

o Are there other markets, may be in other provinces or export, where the commodity is traded?

o Who are your clients? How do the clients know about your business?

o Do you know what the customers’ demands and preferences are?

o How could you reach new customers?

Identifying new business opportunities (conduct a brainstorming exercise)

o What natural resources do you have in the village which could potentially be marketed (fruit trees, local vegetable, construction material, medical herbs etc.)

o What new ideas are there potentially for new businesses?

o What activities can promote existing and new businesses?

Examples:

o Formation of collaborative groups to gain stronger marketing position in input purchase or selling of products

o Establishing contacts with buyers; engaging in contract farming

o Attracting private investment or public private partnerships into the commune

o Study tour to other market places like super markets in bigger cities

o Study on market potential for new products or unused resources in the commune (like fruits and local vegetables)

o Road improvement for better transport

Village plan: the village management board and members of the sub-groups prepare one list of all the different MOIs.





138

Step 4: Second village meeting: Agreement on village plan and priorities

Time: 2 or 3 hours

12. Organization: A village meeting is organized (2…3 hours in the evening) chaired by the village

headman with assistance from CPC/VCMDO

13. Participants: All households are to be invited to the village meeting; at least 40% of

participants should be women, and a number of poor households proportional to the total poor

households in the village or higher.

14. Content:

Presentation of MOIs: the speaker of the sub-groups presents their MOIs

Discussion and amendment: the MOIs will be discussed by the whole village meeting and are subject to changes accordingly. All participants are encouraged to raise comments and also new additional ideas to be included.

Infrastructure:

Priority setting: Finally, the updated list of MOIs will be ranked according to the priorities of all participants. For each MOI, the participants vote (by raising hands or by secret polling) and the number of votes are recorded (total, man/women, poor/non-poor). There should be a clear focus on pro-poor and market orientation.

Ratification of the village plan: the ranked list of MOI presents the village plan. It will be ratified by the village meeting and signed by the head of the village.

Step 5: Second commune meeting: Preparation of draft MOP-SEDP plan

Time: 1 day

15. Organization: Chaired by the CPC, a one-day commune workshop is organized to collate all

MOIs and infrastructure requirements form the villages and to integrate them into a first draft

commune plan. 2 Pinboards, A0 paper and small paper cards are needed to properly facilitate the

collection and sorting of the different ideas.

16. Participants: From each village, one man and one woman (head of the village and of the

women union); from commune level: representatives from mass organizations, people’s council,

cooperatives, and other stake holder groups; and a representative from the PPCO.

17. Content

Compilation of marketing ideas: MOIs of all villages are exposed on A0 paper in the commune centre and participants are encouraged to study and discuss the proposals.

The facilitator helps the plenary to prepare a list of the MOIs of all villages on pin board. MOIs which are mentioned by several villages will be merged; overlapping ideas will be clustered and sorted.

The facilitator encourages the villagers to jointly think about new ideas, i.e. potential opportunities which are not yet pursued in the village.

The collection of MOIs are cleared up and transcribed to a clean list. MOIs are then discussed one after another in more detail. For this, the villagers rank the order in which to discuss the MOIs.

Joint elaboration of MOIs: On pin board ideas are then collected on how to improve the respective business in the commune. This includes activities for development of organization, infrastructure, business, work force, and finance. In an open discussion, all participants are encouraged to contribute their ideas, e.g. in writing on small paper cards.

Search for new business ideas: The facilitator conducts a brain storming exercise to encourage as well new and unusual business ideas (products of small quantities; local





139

specialities not yet marketed; products for niche markets – for smaller market segments but with potentially high gross margins etc.).

Infrastructure: MOIs often include as well infrastructure schemes, which then appear in the planning tables under Production and Business Plan.

Priorities: finally, the meeting again gives a voting which MOIs they consider more important. Criteria for the priority ranking are: pro-poor orientation; market orientation; the priority ranking is not necessarily the final one but should serve as orientation in case the requested IMPP support exceeds the ceiling.

Note: all MOIs are kept in a long list, even if they cannot be supported through the MOP-SEDP budget.

Step 6: Commune working group: Refinement of draft MOP-SEDP plan

Time: 1 to 2 weeks

18. Organization: For around 7 days, commune officials under the lead of the CPC will refine the

draft commune plan with support from VCMDO. In this time, the team also consults with enterprises

and other relevant organizations and VBARD etc.

19. Participants: CPC, PPCO, representatives for the poor.

20. Elaboration of Production and Business Plans by the commune working group

After the commune workshop, a commune working group will further elaborate on the MOIs proposed and ranked during the commune meeting.

Production and Business Plans: A range of activities is required to upgrade the MOIs to Production and Business Plans; this might include drawing conclusions from high-profile market studies, analysis of VCs, consultation with enterprises and organizations, estimation of cost and benefit of the planned interventions, and a closer analysis of the expected benefit for the poor, especially with regard to income from improved marketing, reduced production cost, improved employment situation etc. As these activities are time consuming, up to 6 working days are required for their careful completion.

The format for Production and Business Plans builds on a framework for local economic development with five development areas: Planned results (long term objectives; vision); infrastructure; business; work force; and finance. Situation analysis and planned activities for each Production and Business Plan will be analysed along the guiding questions in the five areas.

Focus on marketing. Among the five areas, the most important one to focus on is business development. Guiding questions to answer include:

o Where do you sell your products now? To whom? How much? To which price?

o What are the trading conditions? What might be the alternatives? How could the business be improved?

o Are there any ideas on new business and marketing opportunities?

o What advantages will there be in forming collaborative groups in terms of stronger market position?

o How could the proposed activities and business ideas be financed? What other options are there than the IFAD funded MOP-SEDP Budget; e.g. own contributions, private investment, linking with enterprises, public private partnership, credit, other funding agencies like NGOs, etc.?

The draft commune plan is then finalized following the format given in Annex 1.

21. Output: The draft MOP-SEDP plan contains 1) a narrative with situation analysis, plans, and

description of Production and Business Plans; 2) corresponding planning tables, and 3) an Annex with

all MOIs, including those which are not included in the MOP-SEDP plan.

22. Activities to be financed by CSSP need to meet the Project eligibility criteria.





140

Submission of draft commune plan to the villages

23. The draft MOP-SEDP plan will be submitted in copy to the villages for comments at least 10

days prior to the subsequent commune planning meeting. This time is required for village

representatives to consult with villagers and prepare comments, to clarify issues with higher levels or

bank and loan issues before going into the official commune planning workshop.

Step 7: Third village meeting for consultation on the draft MOP-SEDP plan

24. Organization and participants: the head of the village calls for a meeting either with all

households or only with a core group existing of the speaker of sub-groups of the first village meeting.

25. Content: reviewing the draft commune plan whether village priorities are properly reflected;

checking appropriateness of the draft plan for poverty reduction; agreeing on issues to be raised and

priorities and village interests to be defended by the village representatives during the forthcoming

official planning meeting in the commune.

Step 8: Third commune planning meeting for finalizing and ratifying MOP-SEDP plan

26. Organization: A one-day workshop is organized in the commune, chaired by the CPC and with

participation of all relevant stake holders for finalizing the MOP-SEDP plan. Invitations are to be sent

to all stake holders 10 days before the meeting at the latest.

27. Participants: Democratic representation from all relevant stake holder groups. From village

level: each one man and one woman (usually the head of the village and of the women union); from

commune level: representatives from mass organizations, people’s council, cooperatives, and other

stake holder groups; representatives for the poor.

28. The purpose of the meeting is to discuss and revise again the draft MOP-SEDP and to

democratically decide about the final version.

29. This participatory meeting is important to establish democratic legitimacy of the plan. The final

version of the MOP-SEDP plan will form the basis for subsequent allocation of funds for plan

implementation. The final version will be signed by: CPC, Commune Women Union, and the PPCO.





141





142

Annex 4. Terms of Reference for an International Forage Specialist.

Job Title: Forage and Seed Production Advisor

No. of positions: 1

Duration: 5 person months over 4 years

Recruitment: International

Reports to: Project Coordinator on operational matters and Coordinators DARD on

technical matters

Purpose

1. To strengthen the capacities of the PPCO and DARD/DoNRE/DoST to implement and oversee

a climate smart forage development programme, it is proposed to hire a Forage and Seed

Production Advisor for a period of 5 person months over 4 years. The location will be Bắc Kạn

and Cao Bằng, with at least 50% field travel. In collaboration with the CSSP TAG, the Forage

and Seed Advisor will:

Key Responsibilities and Duties of the International Technical Advisor

2. Maintaining a good understanding of the technological, operational, institutional and other

innovations and good international practices on forage and forage seed development in the

region and globally, the responsibilities include (but are not limited to) the following:

(a) Advise the PPCO on the logical and effective implementation of activities under

Sub-component 1.3. ─ Climate adapted technology tested and developed;

(b) Identify, nationally and internationally, available forage varieties with potential for

integration into smallholder farm cropping and livestock systems in Bắc Kạn and

Cao Bằng, including varieties suitable for forest land reinforcement;

(c) identify and support implementation of opportunities for improved pasture

management by smallholder farmers, both individually and through group action,

and propose investments for their realization;

(d) propose and support implementation of strategies for smallholder farmer and

farmer group conservation and storage of planted fodder;

(e) identify and support implementation of strategies for smallholder farmer-based

forage seed and vegetative material production to jump-start Project forage

interventions, including a view to the future commercialization of such strategies;

(f) assist the DARD to prepare a forage manual for use by technical support staff and

farmers;

(g) Identify the capacity building needs of different implementers and advise on how

these needs can be addressed to ensure their effectiveness in terms of Project

outcomes;

(h) Support the PPCO in developing appropriate strategies to inform potential partners

of available Project support under Sub-component 1.3;

(i) Advise the Project on the best learning options for study tours and exchange visits;

(j) Coach, mentor and train the DARD staff in all aspects of sustainable forage and

forage seed production in general and sub-component 1.3 implementation in

particular;

(k) Support DARD staff in a timely manner in the preparation of their contribution to

the Project APWB and annual procurement plan;

(l) Advise the CSSP on training opportunities and exposure opportunities;

(m) Support the PPCO and DARD to build collaboration with the private sector;





143

(n) Attend meetings/workshops under the Project and offer advice/technical opinion

with special focus on those that may affect Sub-component 1.3 performance;

(o) Advise the DARD on new developments about innovations in sustainable forage

and forage seed production and forage-based animal nutrition and best practices.

Qualifications for the International Technical Advisor

3. Formal academic qualification in agriculture or natural resource management with at least 10

years at a senior level in sustainable forage and forage seed production in a developing

country, including in S.E Asia. S/he should have extensive exposure to participatory processes

at smallholder level and in the regulation of forage genetic material. Experience with

institutional strengthening and/or innovation in agriculture and livestock agencies will be an

added advantage.

4. The person should be mature, team oriented professional with good analytical and good

communication – able to make easily understandable technical inputs on sustainable forage

and forage seed production and distribution. He/She should be able to strike rapport with

personnel at different levels, including policy makers, international organizations and other

stakeholders. A strong self-motivated individual working with no or minimal supervision and

able to travel to the rural areas and meet tight deadlines. The person should have excellent

skills in written and spoken English and be fully conversant with computer use.

Minimum Qualifications

MSc in agriculture or natural resource management or similar discipline;

At least 10 years of practical experience in sustainable forage and forage seed development, of

which at least 5 years working and living in developing countries;

Good understanding of livestock and forage production systems in developing countries and S.E.

Asia and Viet Nam in particular as well as extensive exposure to innovations;

Excellent knowledge of innovations (in forage species and production systems, including

sustainable seed production) worldwide.

Proposed Selection Criteria and Maximum Scores

No. Criterion Maximum score

1 MSc or higher qualification 10

2 Length and variety of practical experience in sustainable forage and forage

seed production at smallholder and commercial levels

20

3 Depth of familiarity with the respective core knowledge with respect to:

Sustainable forage production by smallholder farmers;

Sustainable production and distribution of forage seed and

vegetative planting material;

Practical experience in animal husbandry and nutrition;

Participatory development of forage and seed production

programmes in developing countries

20

20

10

10

4 Experience with Project management, in particular those funded by

International Finance Institutions 10

TOTAL 100





144

Annex 5. Terms of Reference for an International Senior Rural Finance Expert.

Job Title: Senior Rural Finance Expert

No. of

positions:

1

Duration: 5 person months over 5 years

Recruitment: International

Reports to: Project Coordinator on operational matters and Women’s Union on

technical matters

Purpose

1. The Project will internationally recruit a short-term Senior Rural Finance Expert to support the

effective implementation of the rural finance, competitive co-financing and business linkage

activities of CSSP.

Key Responsibilities and Duties of the International Technical Advisor:

2. The overall task of the Senior Rural Finance Expert is to support the implementation of the rural

finance, competitive co-financing and business linkage activities of CSSP so that the

development objectives of these activities are achieved. Within this overall objective, the

specific tasks of the Senior Rural Finance Expert include:

a) Review the Annual Work Plan & Budget of the WU for the SCG activities and support the

WU to ensure that all plans are properly designed, implemented and monitored

according to specified deadlines and within the allocated budgets.

b) Conduct a detailed review of the WU’s progress in the management of the SCG activities

and make practical recommendations on how to improve implementation performance.

c) Review the WU’s plans and progress in the transformation of the SCG network into

Social Fund and later to an MFI and recommend actions to be taken to ensure that

transformation progresses as envisioned in the CSSP design documents.

d) Assist with connecting the WU to appropriate institutions to ensure that its senior staff are

well informed about the SCG transformation process and the related regulations in Viet

Nam.

e) Review the progress of CSSP in its objective to leverage capital from the financial market

to focal agricultural community chains and directly negotiate with financial institutions, the

provincial guarantee fund, agro-companies and farmers’ organisation to promote

increased agro-financing operations in Bắc Kạn and Cao Bằng.

f) Assist the CSSP management in the planning and implementation for the Provincial

Agro-financing Workshops.

g) Review the progress in CSSP’s business linkage operations in general, and the

competitive co-financing support activities in particular, and make practical

recommendations on how to make the business linkage building more effective.

h) Assess the performance of the Rural Finance Specialist, the Rural Finance Officer and

the district-based VC and Market Development Officers and make recommendations on

how to further develop their working methods to achieve higher levels of agro-financing

and more effective business linkages in the CSSP supported commodity chains.

i) Assess the overall performance of the CIG competitive c0-financing scheme and make

recommendations for more appropriate working methods and scheme procedures.

j) Assist the CSSP management in establishing and operating of appropriate monitoring,

evaluation and reporting systems for rural finance and business linkage promotion

activities.

k) Carry out any other task determined by the Project Coordinator in support of the CSSP’s

rural finance and business linkage promotion operations.





145

Qualifications for the International Technical Advisor

3. The Senior Rural Finance Expert will hold a university in Business Management, Finance,

Economics or a related field. S/he will have a minimum of 15 years of work experience at

senior level of banking and rural finance operations and business promotion, with at least 10

years of senior level experience in commercial banks and registered MFIs in developing

country environments. Wide global exposure to modern ways of organising rural finance and

business promotion support is a critically important requirement for the successful candidate,

also including experience from similar types of development initiatives elsewhere in Viet Nam.

Sensitivity to gender issues and previous experience of working with women’s programmes in

Viet Nam will be additional merits for the position, as well as excellent oral and written

communication skills in English.


MSc in Business Management, Finance, Economics or a related field;

At least 15 years of work experience at senior level of banking and rural finance

operations and business promotion, with at least 10 years of senior level experience in

commercial banks and registered MFIs in developing country environments.;

Good understanding of microfinance systems in developing countries and S.E. Asia and

Viet Nam in particular;

Excellent knowledge of innovations (in banking and microfinance) worldwide.

Proposed Selection Criteria and Maximum Scores

No. Criterion Maximum score

1 MSc or higher qualification 10

2 Length and variety of practical experience in rural micro finance scheme

development

20

3 Depth of familiarity with the respective core knowledge with respect to:

The development of rural financial institutions, particularly

microfinance institutions;

Sustainable microfinance service delivery to smallholder farmers;

Experience is small and medium business development

Experience in working with women-led groups

20

20

10

10

4 Experience with Project management, in particular those funded by

International Finance Institutions 10

TOTAL 100





146

Annex 6: Suitability of forages for different uses

1. Information taken from: P.M. Horne & W.W. Stur. Developing forage technologies with smallholder farmers: how to select the best varieties to offer farmers in southeast Asia. Publication Code: MN062, ISBN: 1 86320 271 4, (1999). To be retrieved from: http://aciar.gov.au/publication/mn062 Table 1: Suitability of forages for different uses

WAYS OF GROWING AND USING FORAGES

Cu

t &

carr

y p

lots

Gra

zed

plo

ts

Liv

ing

fen

ce

s

Hed

gero

ws

Imp

roved

fa

llo

ws

Co

ver

cro

ps i

n a

nn

ual

cro

ps

Co

ver

cro

ps u

nd

er

trees

Gro

un

d c

overs

fo

r

ero

sio

n c

on

tro

l

Leg

um

e s

up

ple

men

tati

on

for

lon

g d

ry s

ea

so

n

Leg

um

e le

af

meal

(dri

ed

)

Grasses

Andropogon gayanus

Brachiaria brizantha

Brachiaria decumbens

Brachiaria humidicola

Brachiaria ruziziensis

Panicum maximum

Paspalum atratum

Pennisetum purpureum and hybrids

Setaria sphacelata

Legumes

Arachis pintoi

Calliandra calothyrsus

Centrosema macrocarpum

Centrosema pubescens

Desmanthus virgatus

Desmodium cinerea

Gliricidia sepium

Leucaena leucocephala

Stylosanthes guianensis

Warning - see notes in the section ‘Special considerations’

http://aciar.gov.au/publication/mn062





147

Table 2: Recommended forages for different climates and soils

CLIMATE SOIL FERTILITY AND ACIDITY

Wet

tro

pic

s w

ith

no

or

sh

ort

dry

seaso

n

Wet/

dry

tro

pic

s

wit

h lo

ng

dry

seaso

n

Co

ole

r tr

op

ics

(e.g

. h

igh

ele

vati

on

)

Fert

ile (

neu

tral to

mo

d. acid

so

ils)

Mo

dera

tely

fe

rtile

(neu

tral to

mo

d.

acid

so

ils)

Infe

rtile (

mo

de

rate

to e

xtr

em

e a

cid

so

ils)

Grasses

Andropogon gayanus

Brachiaria brizantha

Brachiaria decumbens

Brachiaria humidicola

Brachiaria ruziziensis

Panicum maximum

Paspalum atratum

Pennisetum purpureum and hybrids

Setaria sphacelata

Legumes

Arachis pintoi

Calliandra calothyrsus

Centrosema macrocarpum

Centrosema pubescens

Desmanthus virgatus

Desmodium cinerea

Gliricidia sepium

Leucaena leucocephala

Stylosanthes guianensis

= recommended = possible no stars = not recommended





148

Special considerations

1. In addition to the information presented in Tables 1 and 2, there are particular situations which require special consideration when selecting forages to offer farmers:

2. Forages for sheep, goats and young cattle: Warning -- do not feed Brachiaria brizantha, Brachiaria decumbens, Brachiaria mutica or Brachiaria ruziziensis to sheep, goats and young cattle. If fed large amounts, these animals can suffer from photosensitization which often results in death. Brachiaria humidicola can be fed to sheep, goats and young cattle but only in small quantities.

3. Forages for monogastric animals Warning -- Some species can be toxic to monogastric animals when fed in large amounts. Setaria sphacelata can be toxic for horses, since it contains oxalates. Leucaena leucocephala can be toxic to monogastric animals, since it contains the chemical compound mimosine. It is generally recommended that the diet of monogastric animals should contain no more than 10% of L. leucocephala. However, it can be fed in large amounts to ruminants (e.g. cattle and goats) since they are able to break down mimosine in the rumen.

4. Forages for shaded areas Most forage species will grow as well in lightly shaded areas (such as under old coconuts) as they do in open areas. Species which are often used for grazed plots in light to moderate shade are Brachiaria humidicola, Stenotaphrum secundatum and Arachis pintoi.

5. Farmers occasionally ask for forages to grow in heavily shaded areas. There are no species that will grow well in such situations, but some species are better adapted to surviving in moderate shade. Arachis pintoi, for example, can be used to cover the ground and suppress weeds in shaded areas, but they will not produce high yields. Other species that can survive in moderate shade are Centrosema pubescens, Centrosema macrocarpum, Paspalum atratum, Panicum maximum, Setaria sphacelata, Brachiaria brizantha, B. decumbens, B. humidicola and Stenotaphrum secundatum.

6. Forages for areas with a long dry season Forages need water to grow, keep cool, and to take up nutrients from the soil. While there are no miracle forages that are productive throughout a long dry season, some species are better adapted to dry environments than others (see Table 2). Some tree and shrub legumes, such as Leucaena leucocephala, have root systems that can reach moisture deep in the soil. This allows them to grow and retain their leaves longer into the dry season than other forages. Some grasses and herbaceous legumes, such as Andropogon gayanus and Stylosanthes hamata, are also able to maintain green leaf long into the dry season.

7. Forages for acid, infertile soils. All forages grow well on fertile or moderately fertile soils. Some forages, such as Pennisetum purpureum and hybrids, will only grow well on fertile soils.

8. Many of the forages recommended in this booklet will grow on infertile soils and some (such as Brachiaria humidicola and Stylosanthes guianensis) will grow even on very acid, infertile soils (see Table 2). However, no species will produce high yields on infertile soils unless manure or fertiliser is applied. On extremely infertile soils, forages may not contain enough nutrients for good animal growth.

9. Forages for very alkaline soils. Most forage species can grow in alkaline soils. Some are particularly suited to high-pH soils. These are Leucaena leucocephala, Desmanthus virgatus and Brachiaria humidicola. One species which does not grow well on very alkaline soils is Stylosanthes guianensis.

10. Forages for waterlogged soils Most forages will tolerate a few days of waterlogging but few can grow well in soils which are waterlogged for extended periods. Some forage species that can tolerate waterlogging better than others are Brachiaria mutica, Paspalum atratum, Setaria sphacelata, Brachiaria humidicola, Macroptilium gracile and Codariocalyx gyroides.

11. Forages for areas that are burnt regularly. Most forage grasses will tolerate burning as their growing points are close to the ground (eg. Brachiaria species). Most forage legumes have all their growing points high above ground and are easily killed by fire (eg. Stylosanthes guianensis, Centrosema pubescens). However, these legumes often regenerate from seed after fire. One legume which can survive even severe fires is Leucaena leucocephala.





149

Annex 7 Short-Term International Technical Assistance to Support the Design

of Strategic Plan for 2017-2021 for WDF in Bắc Kạn and Cao Bằng Provinces

Terms of Reference

A. Background for Assignment

WDF in Cao Bằng Province

1. The Women’s Development Fund (WDF) of the Women’s Union (WU) in Cao Bằng province

was established with support of the recently closed IFAD-supported DBRB project. This DBRP did not

originally include savings and credit group activities or activities with the WU. During its later years,

however, it issued small loans from Project funds to the members of CIGs. In 2013, this loan portfolio

(some USD 68,000) was transferred to WU management. Similarly, an additional USD 136,000 was

transferred as a grant to support the WU savings and credit operations. These formed the principal

capital base for the WU Social Fund, the establishment of which was authorised by the Cao Bằng

PPC in May 2014. The new fund, into which the CIG portfolio was merged, was called “Fund to

Overcome Poverty Together”, below referred to with the generic name WDF.

2. Today, the Cao Bằng WDF is still an infant institution. It operates with women’s savings and

credit groups (WSCG) in five districts and 13 communes. It has a total of 56 groups with 336

members. The total portfolio is around USD 218,000, with total savings at a low level of USD 17,000.

The average loan size is VND 14.4 million (USD 654), with the average savings at USD 52 per

member. As a positive development, the WDF has, with DBRP support: (i) designed an operations

manual and systems that include an Excel-based MIS system as well as basic but appropriate

governance and management structures; (ii) a 100% loan recovery record; and (iii) five full-time and

one part-time staff members. At the same time, as its operational income is still low, the WDF has no

branches in the districts, and all the field operations of the WDF are still conducted from its head office

in Cao Bằng City.

3. The newly established Cao Bằng WDF provides an institutional framework, based on which a

pro-poor financing network can be built to support the economic and social development of low-

income women. The WDF will, between 2017-2022, receive substantial operational and financial

support from the new IFAD-supported CSSP.

WDF in Bắc Kạn Province

4. The operations of the Women Union-managed women’s savings and credit groups are

relatively well developed in Bắc Kạn province. The operations of WU’s Social Fund, called the Women

Development Fund or the WDF, started on 10 June 2014. The WDF is a well-capitalised operation,

controlling on-lending funds of around USD 3 million, which almost totally originate from the closed

3PAD project sources. In addition to its provincial Head Office, the Fund has since January 2015

operated branches in Na Ri and Ba Be districts. In addition, it manages groups in Pac Nam and Ngan

Son districts from its Ba Be branch, and in Bach Thong district and Bắc Kạn city from the provincial

office. At the end of October 2015, the WDF operated in total with 134 groups and 1,755 members. Its

total outstanding portfolio was VND 14.5 billion (USD 660,000), with the total savings at a much lower

USD 14,800 level. The Fund has ambitious plans for expansion and greater impact, with a target of

reaching some 7,500 women/households by 2018.

5. The WDF in Bắc Kạn provides an institutional framework, based on which a pro-poor financing

network to support the economic and social development of low-income women can be built. The

WDF will receive in 2017-2022 substantial operational and financial support from the new IFAD-

supported CSSP.





150

From Social Funds to Registered MFIs

6. Vietnamese regulations require that savings and credit group networks must be initially

registered as Social Funds to be supervised by the provincial SBV. Later, when adequate capabilities

have been developed and operational and financial sustainability has been reached, these Social

Funds can be converted into MFIs, registered and fully supervised by the SBV. In both Bắc Kạn and

Cao Bằng, the first step of this transformation process has already been taken, with the establishment

of the WDFs as social funds. Their eventual conversion into a registered MFIs is planned to take

place towards the end of the CSSP implementation period. The significant CSSP investments in

capacity building and direct financial support to the WDF activities aim to ensure that the WDFs will be

able meet the MFI registration requirements by 2021-2022.

B. The Assignment

7. To guide its operations during the next five years, the WDFs in both provinces require a

comprehensive, practical and implementable Strategic Plan. Using the IFAD loan funds, CSSP will

recruit, for one month for each province, an international Senior Rural Finance Specialist to support

the WDF and WU management to develop this strategic plan for the WDF for the period 2017-2021.

The Strategic Plan will provide a roadmap for the WDF’s development, leading to its transformation

into a registered MFI towards the end of the planning period. As a process, the strategic planning

exercise in both provinces will need to include the following main phases:

mapping the overall potential for the WDF to develop in the operational environment of the province;

deciding on realistic targets for the WDF based on its key strengths and weaknesses;

deciding on business strategies in each key area of the operations that will help the WDF to achieve its potential, establish its competitive advantages and meet the needs of its clients

incorporating strategic decisions into financial projections to determine the impact of their implementation on the future financial position of the WDF.

8. Working in a participatory manner with the WDF, the specific tasks of the Senior Rural Finance

Specialist during this strategic planning process in each province will include:

review the regulatory framework for social funds and microfinance institutions in Viet Nam, with particular focus on MFI registration requirements;

review the microfinance market environment in the province;

conduct a detailed institutional review of the current operations of the WDF and its WSCG network, covering both the Head Office and the branches;

based on the above, conduct a strengths and weaknesses-assessment of the WDF;

working closely with the management of the WDF, define the core approaches and strategies of the WDF for 2017-2021, as well as the detailed sub-strategies for each area of the WDF operations;

convert each of the sub-strategies into implementable action plans, including the related incomes and costs;

incorporate strategic decisions into financial projections for 2017-2021

based on the financial projections, calculate all the relevant MFI indicators for the WDF for 2017-2021.

C. Output of Assignment

9. The output of the assignment in each province will be a comprehensive Strategic Plan for the

WDF for 2017-2021, including the financial projections, MFI indicators and detailed action plans

covering the operations of the WDF and its network of WSCGs.





151

D. Duration and Timing of Assignment

10. The contract of the Senior Rural Finance Specialist will be for 30 days. The mission is

scheduled preferably for November-December 2016 for Cao Bằng and for the first quarter of 2017 for

Bắc Kạn.

E. Qualification and Experience

11. The Senior Rural Finance Expert will hold a university degree in Business Management,

Finance, Economics or a related field, and preferably a post-graduate degree. S/he will have a

minimum of 15 years of work experience at senior level of banking and rural finance operations and

business promotion, with at least 10 years of senior level experience in commercial banks and

registered MFIs in developing country environments. Wide global exposure to modern ways of

organising rural finance operations is a critically important requirement for the successful candidate,

including experience from similar types of strategic planning tasks for microfinance operators

elsewhere in Viet Nam. Sensitivity to gender issues and previous experience of working with women’s

programmes in Viet Nam will be additional merits for the position, as well as excellent oral and written

communication skills in English.





152

Annex 8: Potential CSSP APIF investments

Agribusiness Profiles in Bac Kan and Cao Bang

Two initial agribusiness profiles are included here. Further profile documents are available in a

separate package produced by the PPB.

Khanh Ha Company

Commodity: Cassava powder

Location: Cao Bang province

Established: 22/6/2010

1. Short description of business. The Khanh Ha enterprise produces cassava starch,

processed from cassava root. The raw material is procured from smallholder farmers in Cao Bang,

Bac Kan, Lang Son, Tuyen Quang, and Bac Giang provinces. The processing facility is located in Cao

Bang province. Processed powder is sold to an enterprise in Lang Son province, for export to China.

Business model graph:

2. Markets. The cassava starch is sold to the Chinese markets. Market demand is very high and

price is stable and profitable both for the raw cassava and processed powder. Khanh Ha needs more

input materials from the farmers, and it can easily sell all of the processed starch. Khanh Ha sells to

an enterprise in Lang Son province (Quang Phat), which exports to China in high volumes. In the

future, Khanh Ha strategy is to connect directly with China buyers.

3. Current volume. In 2013 the Khanh Ha procured 20000 tons of raw cassava and produced

5000 tons of cassava starch. About 12000 tons is procured from Cao Bang, the rest from neighboring

provinces. In Cao Bang, estimated 8000 farmer households are engaged in the production.

4. Business facilities and potential growth. Khan Ha's processing capacity is to produce about

150 tons of starch per day. The harvest period among Khanh Ha suppliers is currently about three

months in October-December. The raw cassava needs to be processed within 72 hours after harvest,

causing a limitation to only 100 operational days for the processing facility. During the 100 days,

maximum production of the facility is 15000 tons of starch, but Khanh Ha only can use 30% of this

capacity due to limited volume and coordination of raw material supply. During the processing

months, the company employs 80 staff, out of which 20 are fully employed throughout the year.

5. In the coming time, the priority of Khanh Ha will be to improve its supply chain management to

fully utilize the existing processing capacity during the 100 days, and later also to increase the amount

of operational days. For the part of capital investment to the processing facility, this only includes

construction of a storage for the raw cassava to avoid losses in the starch content.

6. Supply growth opportunity. As mentioned, improvement of raw material supply is the key

success factor for Khanh Ha. Current issues include: (i) The amount of engaged farmers is significant,

however these usually only cultivate a small area of cassava, average 0.1 ha/household; (ii) Cassava

productivity in Cao Bang is very low, with current yields of about 10-15 tons /ha, while the potential of

optimized intensive farming is up to 40-50 tons/ha; and (iii) The farmers harvest timing is not yet

sufficiently coordinated for extended processing period.

Cassava

CIGs

Khanh Ha

Company

Coordination and support Cassava powder

Supply of raw cassava





153

7. Khanh Ha is already working with current and potential new suppliers to address the above

issues to improve its raw material supply. Currently Khanh Ha only has procurement arrangement to

1000 ha of farming land in Cao Bang, although processing capacity could cover 5000 ha with the

current productivity levels. The focus areas of Khanh Ha supply management include 55 communes

in the Cao Bang districts Hoa An, Thang An, Nguyen Binh and Trung Khanh, and potential for further

expansion is in districts Phuc Hoa and Quang Uyen. However, the enterprise lacks the capacity to

provide technical assistance to the required large amount of farmers. A public private collaboration to

engage and support cassava farmers has been initiated by the Cao Bang province, extension of

which will be very interesting for the enterprise.

8. Financial arrangements. The capital investment for the processing facility is about 5 million

USD, roughly half of which is financed by a bank loan and the rest by accumulated savings of the

business owners and their investment partners. Facility operating expenses for the 100 days active

period is about 300 000 USD, and maintenance and preparatory expenses during remaining 9 months

is about 150 000 USD. For the purchase of the raw material supply, Khanh Ha has not enough

working capital, but receives advance payments from the Lang Son trading company against a

discounted sales price. The financing of smallholder cassava investments is in by public subsidy (40%

of seed cost), by in-kind loans (fertilizer trader) and by informal capital flows. Khanh Ha has no

resources to support farmer investments.





154

Minh Be Agricultural Product

Exporting and Processing Company

Commodity: Ginger

Location: Bac Kan province

Established: Since year 1992

1. Description of business model. The Minh Be enterprise is specialized in collection and

trading of raw ginger, and support and coordination of farmer producer groups. The enterprise has a

dry storage and sorting facility in the Bac Kan province. Enterprise invests regularly in smallholder

ginger farms, supporting their production, with the economic interest of higher trading volumes. The

business model in graph:

2. Markets. Minh Be has two main market channels: majority sold to Hai Duong export company

in Hai Phong port city; and smaller part sold through four small traders Hanoi and HCMC. Market

demand is far beyond what Minh Be can satisfy, and the enterprise has plans of increasing its trading

volumes to 5000 tons in the coming year. The market demand is stable, however price is fluctuating

significantly, between 0.2 USD/kg and 1.5 USD/kg. According to the enterprise, the farmers are

making profit and want to do business also at the lowest prices.

3. Current volume. In 2013 the Minh Be purchased, sorted, packaged and sold 3000 tons of

ginger, out of which 2000 tons is produced by Bac Kan farmers, and 1000 tons in neighboring

provinces. The enterprise has long term business establishment and contracts with about 1500 Bac

Kan households, with total area of 150 ha in Na Ri and Ba Be districts. This business includes

continuous technical support, input provision, microcredit and savings service, and purchase of the

farmers’ output.

4. Business facilities and potential growth. The Minh Be has recently invested in an expanded

warehouse, drying facility and logistical infrastructure, allowing significantly increased volumes and

the potential for initiation of pre-processing activities. Total investment value including all in kind

contributions is about 500 000 USD, funding for which is by enterprise accumulated savings, by loans

from business partners, and by a APIF co-investment. Five staff are employed for the collection,

sorting and packaging of the ginger, for average 5-6 months of work in one year, each receiving

salary of 150.000 VND/day. Currently, the company will need to focus in maximizing the use of these

facilities, and has no plans of further capital investment.

5. Supply growth opportunity. Due to the high market demands and recent capital investment of

the Minh Be, the enterprise is working hard to promote for further farmer groups to engage in ginger

production, and provides the groups with required technical and input support. Also, those farmer

groups that are already engaged in ginger production are in need of support to improve their

productivity. Current yields in Bac Kan are about 7-10 kg of output by planting 1 kg of ginger seed.

The optimized production gives up to 17-20 kg output per 1 seed kg in Vietnam and reportedly even

30 kg in some high productivity fields in China. This signals the opportunity and also urgent need of

increased productivity for Bac Kan farmers. For both, extending the amount of farmers and increasing

the productivity, Minh Be is committed and interested in public private partnership. Required support

from public sector, to expand opportunities for the rural poor, includes investment in transport

Ginger

CIGs

Minh Be Company Seedlings and training Fresh ginger

Supply of fresh ginger





155

infrastructure, technical training and coordination of farmer groups, and support to farmers in their

requirement of initial investment capital.

6. Financial arrangements. Both the farmers and the enterprise are unable to access bank

lending due to lack of required collateral. The working capital financing of farmer and trading

operations is based on informal agreements between the value chain stakeholders. Minh Be

enterprise has long term commitment with the local farmers, and has developed relationship of trust

with farming communities and also with its trading partners outside the province. From cumulated

capital, Minh Be regularly advances seedlings and fertilizer to the farmers, with interest rate of 1% per

month. These loans are deducted from sales price at the time of harvest (after about 9 months

growing period). Also, at harvest time, many farmers leave their profit to the holding of Minh Be,

similarly receiving monthly interest rate of 1%. Minh Be sometimes also agrees to advanced good

deliveries with its small trading partners in Hanoi and HCMC, receiving payments 2-3 months after

trading, again with 1% interest rate. Total requirement of working capital for these operations by Minh

Be is about 100 000 USD. Risks are relatively high, due to lacking written contracts, however these

arrangements are beneficial for Minh Be because they enable increased engagement of farmer

households and trading in higher volumes.





156

Annex 9: ToR: Technical Assistance for Mainstreaming Climate Change Into

Public Sector Agricultural and Rural Development Planning and Investment.

1. Objective. Obtain high quality, multi-disciplinary, technical assistance from a technical

institution in Viet Nam with a demonstrated track record and success in supporting provincial

governments, to assist Bac Kan and Cao Bang provinces to:

update or strengthen their CAPs (2015-2020) as per MoNRE’s Decision

No. CV990/BTNMT-KTTVBDKH (24 March 2014);

implement MPI’s Decision No. 1485/KHDT (17 October 2013), requiring the integration of

climate change considerations into Socio-Economic Development Plans (SEDPs) at all

levels;

to mainstream climate change adaptation into public sector agricultural and rural

development planning and investment to ensure that local governments may take

appropriate action to implement climate adaptation and mitigation measures within their

jurisdictions; and

enhance their knowledge and understanding of the CAP, and how to use it to meet

national policy requirements through measures to integrate climate change into local

planning through improved capacity, updated provincial Climate Action Plans and,

mainstreaming into SEDP’s at all levels.

2. Specific Activities. Technical assistance will be provided:

in the conceptualization, design, implementation, assessment and validation and, finalization of

the following priority activities:

o assessment of current status of Provincial CAP implementation;

o development of maps of Provincial climate change risks & vulnerability;

o development of Provincial-level indicators for CC impact monitoring;

o down-scaling of provincial-level CAP to District-levels;

o district-level studies and mapping of climate change impact, vulnerability, risks and

CCAP priorities;

o district-level participatory diagnostics of commune-level CC impacts scale and

ongoing adaptation;

o integration of inputs from district and commune-level into the MOP-SEDP process;

o piloting and updating of a commune- level climate change planning instrument;

and

o development of a Climate-Adapted, Provincial MOP-SEDP (2021-2025)

in reviewing and making recommendations on technical terms-of-reference, consultant

outputs, technical reports and proposed strategies, especially:

o the review of existing methodologies for commune-level climate change planning;

o the proposed program for climate change awareness building for key institutional

actors;

o Value chain Strategic Investment Plans (SIPs) and value chain action plans

(VCAPs);

o the development of a district-level zoning methodology, based on commune-level

climate change adapted planning; and





157

o the content and focus of capacity building and technical workshops for addressing

climate change adapted planning integration into the MOP-SEDP processes at

commune and district-levels.

3. Institutional arrangements. The consultant will be responsible to the CSSP’s PPSCs for their

work program in each Province, and work under the direction of the relevant PPCO. The PPCOs will

be responsible to coordinate and harmonize the consultant’s work program in order to avoid conflicts

and maximize synergies. In each Province, the consultant will work directly with and advise the TAG.

4. Profile of successful candidate institution. The minimum requirements for selection will

include:

Capacity to provide multi-disciplinary technical assistance in areas of climate change

policy and planning at macro, meso and micro-scales; assessment of climate change

vulnerability and risk (biophysical and social) at sectoral, value-chain and production-

levels; community-based disaster risk management; and participatory assessments with

communities and ethnic minorities.

Demonstrated knowledge, successful experience and recognized expertise in supporting

CAP development and implementation at the Provincial-level in Viet Nam.

Extensive knowledge of best practices and experiences in Viet Nam with the

development and implementation of CAPs and of mainstreaming of climate change

adaptation in local level planning and SEDP processes.





158

Annex 10: Review of decentralised planning in Viet Nam

1. An Oxfam-led review60

of the reform of commune level socioeconomic planning using

participatory approaches has made a series of key recommendations, to which the SCCP will attempt

to respond, as detailed in the following table.

Oxfam Review Comment SCCP Proposed Intervention

A legal framework for annual socioeconomic

development planning and mid-term socio-

economic development planning (five year

plans) should be issued to the commune

level.

Legislation for annual and medium-term

MOP-SEDP will be approved in PY1.

At commune level, regulate the principles,

criteria, content and basic steps for reform

using a participatory approach, in a simple

and feasible manner

A specialist-led detailed assessment of

existing and Viet Nam best practice

commune level participatory planning will be

conducted with Provincial DPIs at Project

final design and integrated in the final design

report

Regulating the responsibilities of

stakeholders to promote the reform of

commune level planning, including: the

responsibilities of the commune level to

ensure people’s participation in commune

level planning; responsibilities of the district

level in supporting the commune, and

integration of commune level plan in the

district plan

The MOP-SEDP process already has

detailed procedures for people’s

participation in commune level planning,

including representation of women and poor

households, and will expand the MOP-SEDP

process to include the district level SEDP.

Instructions should be provided to aid the

development of a mid-term financial

framework at the commune level (5 years)

based on the mid-term commune level plan.

The 5-year mid-term MOP-SEDP will be a

feature of the SCCP supported intervention,

which will be underpinned by provincial level

legislation and supporting regulations.

Integrated instructions for all poverty

reduction projects and programs at the

central level (and more detailed instructions

at the provincial level) should be issued to

regulate the special mechanism for simple

and small scale infrastructure construction

projects.

IFAD already has a proven track-record for

community-driven small scale infrastructure

planning, implementation, operation and

management and will apply that experience

in developing supporting legislation,

regulations and instructions at provincial

level that could inform central level decisions

Regulate the minimum ratio (for example 30-

40%) of the total investment budget of

poverty reduction projects and programs that

should be delegated to the commune level

for simple and small scale infrastructure

construction.

Bắc Kạn and Cao Bằng already have

policies for devolving budget and planning

responsibility to commune level. The Project

will seek to include the recommended

percentage allocation in the MOP-SEDP

legislation.

Budget support: The maximum level of Under the MOP-SEDP approach, IFAD, in

60

Reforming commune level planning, decentralising investment decision making to the commune level and

empowering community towards sustainable poverty reduction: Synthesis report of pro-poor policy monitoring research

In Lao Cai, Hoa Binh, Nghe An, Quang Tri, Dak Nong, Ninh Thuan, Tra Vinh. Oxfam January 2015





159

budget support for each type of infrastructure

construction in each type of location

(disadvantaged communes and others)

should be regulated. The people in the

different localities should agree on their

contributions, either by labour or local

materials.

partnership with provincial governments,

already sets minimum levels community in-

kind contribution for infrastructure

development and is pursuing mechanisms to

make the allocation of this resource more

competitive, rewarding communities that

disburse efficiently and effectively and put in

place reliable operation and maintenance

systems.

Construction filing: The requirement for

economic – technical reports for simple and

small scale infrastructure construction

projects should be revoked, and replaced by

simple drawings description and cost

estimates.

The Project will work with provincial, district

and commune officials to achieve this

outcome.

Construction work should be done by the

village and community

Provinces implementing IFAD projects

already apply force account community

construction procedures. The Project will

strive to include this requirement in the

supporting legislation.

Regulations need to be issued on the

supervision, information transparency and

feedback mechanism for the Community

supervisory board/ people’s inspection, and

on the enhanced supervisory role of the

people at beneficiary locations.

The MOP-SEDP already empowers the

Community Supervision Board to take

responsibility for supervision of community-

based infrastructure

There needs to be guidance on the

regulation and evaluation of communes who

have been delegated investment decisions,

attached to a punishment/reward

mechanism. A post-investment evaluation

mechanism for infrastructure construction

under commune implementation should be

created.

This already occurs as a project based

activity under IFAD investment projects in

Viet Nam and will be institutionalised under

the SCCP.



Detailed design report

Appendix 5. Institutional aspects and implementation arrangements

160

Appendix 5: Institutional aspects and implementation arrangements

A Introduction

1. Bắc Kạn and Cao Bằng provinces will start implementation of CSSP with a distinct advantage, having implemented an earlier IFAD project, namely DBRP and 3PAD. These projects have left a strong positive assessment of its impact on the decentralization of project investment to commune and village levels, increasing the participation of beneficiaries and enhancing the ownership of local authorities, as well as promoting grass-root democracy in poverty reduction. These projects have also promoted market linkages and enhanced collaboration between farmers through savings and production groups.

2. The results from the DBRP and 3PAD demonstrated that the participatory approach and decentralization to commune and village level, as well as the pro-poor market-based approach, including socio-economic development planning at commune and district level was feasible and should be expanded. MOP_SEDP facilitates beneficiary, community and private sector service providers’ participation in the whole planning process, from needs identification, prioritization, planning, and implementation to monitoring and evaluation. The PPBs established by the Bắc Kạn and Cao Bằng PPCs have placed considerable emphasis on the success of the decentralized, market-based approach and expressed their strong support for the replication of this model for the strategic management of CSSP. At the same time, it was agreed during CSSP detailed design that the government staff in Bắc Kạn will require additional training in market economics and private sector development to move from participatory to the MOP-SEDP application in support of CSSP implementation.

3. The organizational and management structure proposed for CSSP is based on the lessons learnt under the previous project, which can be summarized as follows:

a) TORs specifying positions, roles and functions of the Project Steering Committees and Project Coordination Units at all levels and their reporting system are critically important to ensure the project implementation performance in its early stage;

b) Lack of participation of the private sectors in decision making processes, such as in meetings of the PPSCs and the PPCOs and planning workshops, led to poor effectiveness of the project’s efforts in development of VCs and private sector partnership;

c) Financial management mechanism and flow of funds for all outputs and activities should be clearly specified in the project design and project implementation manual (PIM);

d) Prescribed positions for project management units at all levels left little room for flexibility of decisions based on actual demand vs. human resource availability;

e) IFAD project management should not create different systems, parallel with the existing local institutional setup. This led to higher recurrent/overhead cost due to the establishment of many additional management boards with substantive numbers of full time and part-time staff requiring monthly salaries and allowances;

f) The complicated structure of outcomes, lead agencies and co-implementing agencies at the province level has slowed early project implementation due to unclear roles and responsibilities among provincial agencies;

g) The project capacity building interventions should focus on improving public services at the district and commune levels to ensure effective decentralization;

h) The project lacked sufficient tools to ensure performance accountability and competition amongst the project districts and communes;

i) Coordination and information sharing between IFAD projects and other donor-funded and NGO projects was not adequately managed and should be identified during the project formulation and negotiation;

j) Project M&E systems were quite robust in terms of generation of timely and sufficient data but remained weak as a management tool for planning, strategizing and implementation;





161

k) Poor cooperation/coordination among IFAD projects in the same region in terms of market linkages, VCs and private sector partnership should be addressed.

4. This annex outlines a Project management system that will meet the objectives of the Project through replication of the successful approaches generated by the DBRP and 3PAD, while incorporating the lessons learnt from this and other IFAD projects in Viet Nam.

B Project Strategic Management

5. In general, the Project will adopt similar implementation arrangements to those used for the previous IFAD project, incorporating the operational and managerial experience and lessons learned as detailed above., Outcome 3 – Project Management is designed to maximizing Project effectiveness and efficiency through the implementation of the following principles:

a) The Project management structure will adhere to the current structure of local institutions, building capacity to address poverty through market-based approaches, but these will now also incorporate climate-smart criteria to enable an effective response to the need for CC adaptation;

b) The Project will decentralize its resources to the commune and village levels while mobilising private participation and strengthening public market and VC development service providers;

c) The Project will focus its support in the identified 70 priority communes using the agreed criteria for selection;

d) Application of the “learning by doing” approach to introduce innovations to communes and promoting replication on increasingly larger scales when concepts are effectively proven;

e) Mainstreaming the participation of the private sector throughout the planning, implementation, monitoring and evaluation of the Project activities; and

f) Strict implementation of IFAD policies and guidelines in result-based Project management.

6. The proposed CSSP management and oversight is consistent with the Government regulatory framework for ODA management as specified in the Government’s Decree Number 131 issued in 2006 and the MPI Circular Number 03/2007. The PPCs, DPCs and CPCs will have overall responsibility for program management and coordination of all departments and other agencies at their respective levels for implementation of the Project.

7. Provincial Peoples Committee. According to Decree 131, at the province level, the Bắc Kạn and Cao Bằng PPCs will be the Project Coordination Agency (Co quan chu quan). The PPCs will establish a PPSC, which will assist the PPC in leading government agencies, mass organization, private sectors and communities at all levels to ensure achievement of the Project objectives.

8. In line with government regulations, the PPC is also the Project Owner (Chu dau tu). Oversight to ensure adherence to Government of Vietnam’s policies and norms and the IFAD Loan and Grant Agreements will be provided by the PPC. In accordance with the Circular 03/2007 of MPI on ODA Project management, the PPC will issue a Decision on the establishment of the PPCO, referred as Ban Quan Ly Du An under Decree 131. The PPCO reports to the PPC and acts on its behalf to ensure coordination among all the involved stakeholders, including the provincial agencies, districts, communes, the private sector and the NGOs. The PPCO, operationally and financially, manages the day-to-day implementation of the Project.

9. Provincial Project Steering Committee (PPSC). Bắc Kạn and Cao Bằng will each establish a PPSC. The PPSC is established by the PPC to inform the PPC on overall execution of Project implementation and ensure effective coordination/integration/cooperation among all government and donor-funded Projects. The PPSC will be led by the PPC Chairman (or a Vice-Chairman), comprised of Coordinators or Vice-Coordinators of concerned line-departments and Chairpersons of mass organizations and representatives from the private sector. The PPSC will inform the PPC on matters concerning the strategic management of the Project, including the decisions such as appointment of the PC and Deputy PC, approval of the PIM, annual work program and budget (AWPB), and other decisions related to the Project coordination, orientation and mobilization of resources. The PPSC will invite the Chairman of the Provincial Enterprise’s Association and two Coordinators of private companies that have significant cooperation with farmers in the Project area to join the PPSC. The





162

PPSC will need to ensure that CSSP experience be replicated under the national and provincial programmes and projects. The PPSC will meet on a quarterly basis to coordinate Project implementation, guide planning, review progress based on the information from the M&E system, make recommendations for any modifications of AWPB as needed, and ensure cooperation among agencies and levels for the coming quarter. (Detailed ToRs for the PPSC can be found in the Appendix 5, Annex 1)

10. Provincial Project Coordination Office (PPCO): Bắc Kạn and Cao Bằng will each establish a PPCO to assist the respective PPSC in coordination of the provincial agencies and in actual management of government’s and IFAD resources. The PPCOs will report directly to their respective PPSCs and act as an advisory body of the PPC and secretariat of the PPSC. The PPCO is established at the administrative level equal to a provincial department. The PPC Decision on the establishment of the PPCO and ToRs of the PPCO should ensure that the PPCO function on behalf of the Project Owner, the PPC. Furthermore, the PPC will ensure that the PPCO is to assist the PPSC in coordination of all line agencies, relevant donor funded initiatives and other stakeholders to implement the multi-sector integrated rural development Project.

11. The mandate of the PPCO will be to ensure: (i) coherence of the Project approaches and strategies, and integration among Project activities in order to produce the Project outcomes, outputs and impact; (ii) coordination and synergy of the co-implementing agencies (DARD, DoNRE, DPI, etc.) and technical service providers, and the district and commune level agencies, and grassroots communities; (iii) mobilization of resources from the private sector, mass organizations, professional associations, research institutes, technical units and non-government organizations; (iv) contracting of suitable service providers to undertake various forms of research, studies, technical assistance and training (co-implementing agencies will mostly manage these providers); (v) accountable management of IFAD and Government’s resources, including preparation of PIM, AWPB, procurement plan, selection of technical assistance and audit service providers, establishment and operation of M&E system, and other functions of the operational and financial management of the Project; and (vi) knowledge sharing and policy development, in collaboration with co-implementing agencies. ToRs for the PPCO are detailed in Appendix 5, Annex 2.

12. Each PPCO will include 25 staff as detailed in Table below.

Table 1. Key positions of Provincial Project Coordination Office

Position No.

Project Coordinator 1

Strategic Management Section

MOP-SEDP coordinator (Project Deputy Coordinator) 1

Gender specialist

Rural Finance Project Coordinator 1

Rural Finance Officer 1

Commodity and VC Project Coordinator 1

Community-based CCA and DRM Officer 1

Community Infrastructure Development Engineer 1

M&E and Knowledge Management Section

M&E/KM Coordinator 1

Financial and Administration Management Section

Chief Financial Officer/Chief Accountant – Head of Section 1

Accountant 2

Cashier 1

Chief Procurement Officer 1

Procurement Specialist 1

Administration Section

Administrative support officer 1

Interpreter 1

Security Officer/office support 1

Driver 3





163

Position No.

Total 20

(TORs of the major positions at the PPCO can be found in Appendix 4, Annex 3)

13. At each Project district and commune, the CSSP will employ the staff detailed in Table 6 below.

Table 2. Project support team at district and commune levels

District Level

MOP-SEDP Support Officer 1

Business Development Officer 1

M&E and KM Officer 1

Commune Level

Allowance for Chairperson 1

Allowance for Accountant 1

14. Project Coordinators (PC), who should have solid experience in working for a previous IFAD-supported Project/Project, will lead the PPCOs. It is recommended that the PCs be confirmed prior to Project final design, planned for April 2016. The PCs shall be fully involved in the Project design and negotiation to master the Project’s new approaches and receive proper training from IFAD on new policies and management skills. The PCs, as the Head of their respective PPCOs, will work full-time for the Project, and will have no additional responsibilities within any other provincial department. The major responsibilities of the PCs will be to ensure that the involved provincial agencies, districts, communes and villages carry out the Project activities in line with the Project approach, operating schedules and procedures. The PCs will be provided with adequate executive authorities and accountabilities through a Decision of their respective PPCs. The PCs will also act as Secretary of their PPSCs and will execute the PPSC decisions on its behalf. ToRs for key Project staff are detailed in Appendix 5, Annex 3.

Project Management at District Level

15. District Peoples’ Committee (DPC). At the district level, the DPC will be responsible for coordination of the Project activities and integration with the organizational structures and mandates of the line agencies and mass organizations at the district level. The DPC Chairperson (or Vice-Chairperson) will be appointed to be responsible for the coordination of Project activities with support of a District Support Team established by the Project. Under guidance of the DPC, and with technical support from DARD and other province departments, the District Planning and Finance Section (DPFS), District Agriculture and Rural Development Section, the District Agriculture Extension Station, the District Trade and Commerce Section, the District Plant Protection Station, the District Veterinary Station and the other concerned district sections will implement the Project with their institutional mandates. The CSSP will employ district technical advisors in numbers proportional to the number of underlying communes and level of Project support at commune level.

16. District Support Team (DST). To assist the DPC in coordinating Project activities the DST will be established directly under the DPC. The DST will not have Project management or implementation responsibilities since these will be assigned to the relevant district technical sections. The role of the DST will be to assist DPC in: (i) overall coordination of activities; (ii) M&E and supporting the DPC on compilation of reports; (iii) ensuring effective integration of capacity building activities; (iv) coordination of market and VC activities and management of the technical assistance activities; and (v) assisting the CPCs with Project implementation. The DST will be directed by the appointed DPC Chairperson or Vice-chairperson and consist of a fulltime District Coordination Assistant.

17. Project Management at Commune Level. The CPC will be accountable for the Project implementation at the commune level. The commune’s chairpersons, accountant and cashier will receive a Project management allowance in line with government policy. The Project will commence in the 30 selected communes in the first Project year. To the extent possible, Project implementation will be decentralized to the CPCs, which will receive substantial training to develop their capacities. The





164

MOP-SEDP process will guide Project implementation at Commune (and district) level, including incorporation of climate-adapted agriculture principles within VC development. At the village level the Project will utilize the VDB established under the NTP-NRD, building on the experience of similar structures under the 3PAD. The VDB is assigned to mobilize communities of the village in MOP-SEDP planning and implementation including an integrated approach to the selection of pro-poor VCs and livelihood support activities, infrastructure schemes implementation and maintenance, development of SCGs and CIGs and the other community initiatives. VDBs should have at least: 30% female membership and 30% membership from DoLISA registered poor households.

18. Village Development Boards: VDBs are the managers of CSSP infrastructure and service delivery sub-projects at village level. VDB establishment will follow NTP-NRD procedures, however, in Project communes, VDBs will include a minimum of 30% women and 30% DoLISA registered poor household representatives.

C. Project Contracting

19. As a general principle, CSSP will use output-based contracts as a basic tool for service delivery. An 'output based' contract is an agreement between the Project and a service provider which will be managed by the PPCO, CPC, or, for community level service delivery, the VDB, creating a relationship for the delivery of services or products. The driving force behind the contract is that it focuses deliverables in measurable terms, rather than checking that the activities have been undertaken, or assessing the service delivery methodologies. This signals a move from payments for inputs or activities (e.g. completing a training workshop) to payments for a tangible measurement of the results from such activity. For example, a tangible measure of a training program will be farmers applying some of the knowledge and skills attained on their farms to provide some measureable benefits.

20. The main advantages of output-based contracts are:

Simplicity in administration as payment is based on delivery of specific milestones and

milestone deliverables based on an agreed price, rather than on acquittal and

reconciliation of all expenditure receipts.

Risks of non-performance are reduced as if milestones are not delivered, no payment is

made.

Definition of milestones based on Project objectives and outputs makes measurement of

impact much easier.

21. The main difficulty of output based contracts is the increased effort required to define and agree the milestones, deliverables and price. Milestones have two parts (i) milestone definition and (ii) milestone deliverables. It is easier to define milestones and deliverables for infrastructure contracts than for service delivery contracts (especially “soft services” such as extension where impacts are dependent on the recipients of the service making a decision to change or adopt.

22. Output-based contracts are lump sum. There is agreement on price for service delivery and the contract specifies that price and payment schedules. For the contract owner the key task is to ensure value for money. Once this has been achieved almost all the risks are borne by the service provider. If the service provider can provide specified services at a lower price, then there is additional profit to be made. The reverse applies, however. if the service provider costs are higher than the agreed price (budget). An example of an output-based service delivery contract is detailed in of Appendix 5 Annex 4.

23. Service Providers will be required to self-monitor the implementation of their contracts. In general, this will require delivery of Milestone Reports by the service provider to trigger milestone payments and VDBs to inspect and provide assurance to the CPC that Project milestones and deliverables have been completed to an acceptable level. In doing this the VDB will sign a Statutory Declaration to the CPC that the VDB as Project manager is satisfied that the service provider has delivered the milestone deliverables to the standard required. The Statutory Declaration, signed by the VDB Chairperson and witnessed by 2 VDB members (at least one from a DoLISA registered poor household) provides the trigger for milestone payments.





165

24. Statutory Declarations for Milestone payments will be delivered to the CPC within two weeks of Milestone completion. Where delivery dates are delayed the VDB will advise the CPC of delays, reasons for delay, possible implications of delays and actions taken to ensure Milestones delivery.

25. Service Providers are responsible for evaluation of the benefits the investment (infrastructure and service delivery). The process is to establish baselines prior to the commencement of the Project and at the end of the Project the changes in relation to the baselines will be documented. Project Baselines and Project Validation Reports (comparing socio-economic baselines to end of Project status) will be payment milestones. Simple formats for baseline surveys of all Project beneficiaries will be developed as a template for infrastructure and service provider projects and trained District Agro-forestry Extension Station staff will assist Service Providers to tailor the standard template to their project. Service Providers may appoint (sub-contract) expertise (e.g. key farmers) to undertake baseline and Project completion socio-economic surveys.

26. Trained evaluators will conduct an impact evaluation of at least 15% of all service delivery sub-projects. Methodologies for impact evaluation will be developed by national extension specialists, but must include key evaluation criteria (relevance, effectiveness, efficiency, impact and sustainability). For service delivery contracts where financial information is available from baseline and end of Project surveys estimates of benefit ─ cost ratios should be attempted.

D Development and Training

Orientation Workshops and Training Sessions for Project Management Staff at all Levels:

27. Appendix 4 details key training workshops that will be held for management staff at all levels on Project management topics, including, AWPB preparation, M&E system and RIMS, and financial management and procurement. Orientation training sessions will also be held on the Project approach, outcomes and implementation methodology, community participation/social mobilization, targeting, selection criteria, socio-economic survey, market oriented development and the MOP-SEDP, resource and constraint analysis, livelihood analysis, participatory impact assessment, participatory development, financial and administrative decentralization, communication skills, gender, business and farm management, etc.

28. Staff Development and Training for the PPCO. The Project management faces three main challenges:

(i). Insufficient understanding of pro-poor market led development;

(ii). Limited capacity for developing and strengthening a pro-poor climate- and disaster risk-adapted management approach; and,

(iii). Limited awareness of SMEs and farmers and farmer’s groups in business planning and development.

29. The Project management therefore should, therefore:

(i). Invest in capacity building in the first year to build a solid foundation for effective market led development, especially for the district and commune levels;

(ii). Engage NGOs and private service providers to build up demonstration models in pilot communes and replicate them through a “learning-by-doing” process; and,

(iii). Draft user-friendly manual/guidelines at the initial stage to enable and promote wide use of Training of Trainers (TOT) methodology, including using key farmers, during implementation.





166

Annex 1 - Terms of Reference: Project Steering Committee

Project Steering Committee

1. Mandate: The PPSC is established by the PPC to ensure overall execution of the Project and effective coordination/cooperation among and coherent inclusion of the government agencies, mass organizations and the private sector. The PPC will serve as the decision maker for strategic management of the Project, such as appointment of the Project Coordinator and Deputy Project Coordinator and approval of the Project Implementation Manual (PIM), Annual Work Plan and Budget (AWPB), VC Strategic and Development Action Plans and other decisions related to the Project coordination, orientation and mobilization of resources.

2. Composition: The PPSC members shall include

Chairman of PPSC: Chairperson or Vice-Chairperson of the PPC

Member/Secretary: Project Coordinator,

Members:

Coordinator, Department of Planning & Investment

Coordinator, Department of Agriculture and Rural Development

Coordinator, Department of Finance

Coordinator, Department of Trade and Industry

Coordinator, Department of Labour, Invalid and Social Affairs

Chairwoman, Provincial Women’s Union

Chairperson, Provincial Farmers’ Union

Chairperson, Provincial Enterprise’s Association

Chairperson, District People’s Committees of the Project districts

Two representative Coordinators of agriculture business enterprises working in Project districts

3. Functions: The main responsibilities of the PPSC, to be duly notified through a Decision of the PPC, will be:

(i). Ensuring complementarity between the Project and other externally/internally financed Projects/programs and efficient use of Project funded financial and manpower resources;

(ii). Providing a supporting policy framework and guidelines for efficient Project implementation;

(iii). Soliciting/proposing new regulations and policies for PPC approval, where needed, to ensure implementation of the Project, especially in regard to the institutionalization of market-oriented decentralized participatory local socio-economic development planning and improvement of the enabling business environment for private sector engagement in agriculture and rural development;

(iv). Reviewing and approving annual work plans/budgets for the Project;

(v). Recruitment/appointment of the Project Coordinator and the Deputy Project Coordinator in accordance to their specified terms of reference;





167

(vi). Interfacing between PPCO and PPC on matters of policy formulation, revision and implementation, with a view to ensure effective implementation of the Project;

(vii). Ensuring effective cooperation and coordination among the provincial agencies, the PPCO, the DPCs and the CPCs and instilling a system of accountability for performance and proper use of resources at all levels;

(viii). Ensuring effective coordination and information sharing between CSSP and other Government’s and donor-funded programmes and Projects through annual review workshops and drawing upon and sharing of policy forums and communication facilities;

(ix). Conducting a results-based quarterly review meeting of the Project progress of the past quarter and approving the work plan and budget for the coming quarter, ensuring timely corrective action on management and implementation issues towards the Project objectives;

(x). Ensuring timely provision of counterpart funds, in line with Project needs as defined by annual work plans.

4. PPSC meetings: The PPSC will meet on a semester basis to coordinate Project implementation, guide planning, review progress based on the information from the M&E, make recommendations for any modifications of AWPB as needed, and ensure cooperation among agencies and levels for the coming semester.





168

Annex 2 - Terms of Reference: Project Coordination Office

Project Coordination Office

1. The Project Coordination Office (PPCO) is established to assist the PPSC in ensuring timely and effective coordination of Project implementing agencies and stakeholders. The mandate of the PPCO will be to ensure: (i) coherence of the Project approaches and strategies, and integration among Project outcomes and activities in order to produce the Project impacts, outcomes and outputs; (ii) coordination and synergy of the relevant government departments and other co-implementing agencies and technical service providers, and the district and commune level agencies, and grassroots communities; (iii) mobilization of resources from the private sector, mass organizations, professional associations, research institutes, technical centres and non-government organizations; (iv) accountable management of IFAD and Government’s resources, including preparation of a PIM, AWPB, procurement plan, selection of technical assistance and audit service providers, establishment and operation of M&E system, and other functions of the operational and financial management of the Project and (v) knowledge sharing and policy development interventions.

2. The main tasks of the PPCO include:

a) Annual planning and coordination. Together with the main implementing agencies, the PPCO will draw up an AWPB that reflects both the previous year’s achievements and performance and anticipated Project progress. It will consolidate the AWPB for submission to the PPSC and obtain prior IFAD comments. The PPCO will ensure coordination between other government agencies and externally financed Projects in the Project area

b) Targeting and Gender. In the planning and implementation of Project activities, the PPCO will ensure that the provincial agencies, DPCs and CPCs will maintain the focus on poor and near poor households and ethnic minorities and ensure that women have ample opportunities to participate in Project activities. PPCO will ensure gender is mainstreamed in all Project activities as detailed in the PIM, to be developed by the PPCO in the Project activation period

c) Capacity building. A series of provincial and district-level training workshops will be held on the following topics: market-led development, CBA and CBDRM, strategic planning and processes; using information and data; inclusive planning; and gender and ethnicity issues in planning. Bi-annual workshops will be held in each district with participation of commune representatives

d) Monitoring and Evaluation. The monitoring and evaluation unit in the PPCO will establish an appropriate M&E and MIS system and ensure implementation of IFAD RIMS procedures. Staff in the implementing agencies will be trained in the requirements for M&E.

e) Financial management. Designated Accounts will be opened and maintained in USD for IFAD payments at a commercial bank61 at provincial level and held by the PPCO on terms and conditions acceptable to the IFAD. The celling of Designated Account will be USD1 million. Withdrawal application procedure will be used to initiate a withdrawal and to replenish the designated account. Project accounts will be opened and maintained in local currency for IFAD payments at the same provincial commercial bank for disbursement and direct payment of goods and services during implementation phase.

f) Procurement. The PPCO will carry out all procurement according to the Government and IFAD Procurement Guidelines. It may delegate procurement to implementing agencies and, for community infrastructure, to communes that follow the local regulations on decentralization of investment ownership

g) Recruitment. In collaboration with the relevant implementing agencies, the PPCO will develop appropriate Terms of References for staff positions to be assigned to the PPCO

61

The bank will be chosen by the MoF based on the agreement between MoF and the State Bank





169

or the respective agencies and to be funded by the Project. It will organize a fair and transparent selection process and ensure IFAD concurrence for the candidates for the key positions

3. Apart from day-to-day Project management and coordination, the PPCO will organize: (i) baseline and corresponding impact surveys; (ii) regular monitoring activities and Project progress reporting; (iii) bi-annual workshops to involve all Project stakeholders in learning from the constant flow of management information, annual reporting exercise and recommending improvements; (iv) Project midterm review after two years of implementation; and (v) Project completion evaluation.





170

Annex 3 - Terms of Reference for Key Staff at PPCO

Project Coordinator

General scope of the position

1. The PC will coordinate Project management and ensure that implementation is realised according to the conditions of the loan agreement and based on the Project appraisal report. S/he needs to ensure effective and timely implementation of the Project, with special attention to providing overall inter-agency coordination and facilitation at various levels. Under the direction and supervision of the PPSC, the Project Coordinator coordinates the PPCO, provincial agencies, DPCs and the CPCs to ensure that the strategic outcomes of the Project are achieved. Particularly, the PC leads the PPCO to ensure the M&E requirements described are developed and implemented in a timely manner that represents the views of key stakeholders. S/he is also responsible for making sure there are sufficient and appropriate personnel with the right level of resources and other support needed to implement the Project.

2. In particular, the PC will serve as leader of the Project management team in order to achieve the following responsibilities: (i) Project Implementation Coordination; (ii) Financial/Asset Management; (iii) Contract Management; (iv) Personnel Management (v) Government Liaison/External Relations; and (vi) Knowledge Management and Policy Development.

Organizational relationships

3. The PC will be responsible for Project progress and will be accountable to the PPSC, the government ministries and relevant staff of IFAD. S/he will also be accountable to the Project stakeholders for Project progress, problems and improvements.

Responsibilities and tasks

Early implementation tasks:

a) Lead formulation of Project Implementation Manual (PIM) and other guidelines;

b) Assist the PPC in establishment of the Project Steering Committee;

c) Appoint key PPCO staff and supervise their activities;

d) Guide the establishment of administrative, accounting and Project-outcome M&E systems;

e) Coordinate training workshops on the Project strategy and approaches, AWPB and procurement for the first year with key stakeholders to ensure an updated and shared understanding of the Project strategy and information needs;

f) Ensure that an effective and participatory M&E system is established and effective.

Ongoing operational management tasks

a) Prepare the AWPB and revise the M&E plan and system by seeking stakeholder inputs in order to produce these plans with the full commitment of all the organizations involved in the Project. Present the AWPB and M&E plan to the relevant approval bodies in a timely manner for review and approval;

b) For each service provider contract, ensure that detailed specifications are prepared in a timely, objective, fair and transparent manner, including the M&E responsibilities and administration of terms and awards;

c) Ensure the holistic implementation of the Project, ensuring the Project outcomes and levels are seamlessly joined in the pursuit of market-led poverty alleviation amongst poor and minority households;

d) Make sure the business of the Project is conducted in an efficient manner by supervising and monitoring Project implementation. Ensure that timely decisions on corrective actions are made and implemented;

e) Direct and supervise the day-to-day operations of the Project, guided by the Project document and the AWPB, providing any necessary amendments to ensure smooth performance;

f) Mobilize relevant technical assistance in a timely manner, with clearly demarcated responsibilities that are based on the participatory and equity principles of the Project;





171

g) Assure that all contractual obligations are adhered to and make the necessary contacts and efforts to ensure implementation meets Project targets;

h) Regularly appraise staff and provide feedback and support to enable them to do their jobs.

Ongoing financial management tasks

a) Ensure that Project expenses are kept, consistent with Government and IFAD administrative and financial procedures and practices;

b) Ensure that Project suppliers and locally paid staff are paid promptly and adequately through liaison with Ministry of Finance and the IFAD Country Office finance staff;

c) Ensure that Project expenditure is being coded correctly and consistently (that is allocated to correct category and budget line) and that Project funds are used solely for the purposes for which they were granted and in accordance with relevant IFAD guidelines;

d) Establish an asset register for all assets purchased by or provided to the Project in line with standard IFAD policies;

e) Check the monthly Project financial report for accuracy and appropriateness. Regularly meet with the Finance Manager concerning financial reporting issues, errors, trends, payment delays and related matters;

f) Monitor expenditure on a monthly basis against the approved AWPB in order to prepare and send timely fund withdrawal applications to IFAD. Review expenditure projections to ensure that expenditure stays within budget. Significant actual or anticipated expenditure variances against the budget should be included in the monthly report to line management together with any recommendations for changes to the budget.

Communication

a) Develop close working relationships with all Project participants and stakeholders – including the primary stakeholders, line departments, private sector and NGOs – all parties required to establish a shared vision of the Project to achieve objectives;

b) Establish and maintain good working relations with the relevant government ministries, as well as other higher-level stakeholder groups;

c) Ensure easy public access to M&E reports and data and make sure they are widely distributed;

d) Submit required analytical reports on progress – including indications of planned actions and financial statements – on time and to the relevant bodies, with assistance from M&E staff;

e) Encourage staff to report frankly on fieldwork, highlighting problems and possible solutions plus lessons learned. Reward innovation in critical reflection and learning;

f) Ensure the planning of and participate in key reflection moments – in particular, the annual Project reviews;

g) Sign implementation agreements with the implementing partners, defining the modalities for implementation and M&E. Ensure that participatory M&E and learning initiatives are specified in terms consistent with the direction of the Project;

h) Control the budget and safeguard against Project funds and assets misuse;

i) Make all efforts to engage key stakeholders in important external evaluations to ensure an understanding of locally perceived impacts and problems;

j) See that all ad hoc evaluation studies needed to gain timely and relevant insights into emerging areas of concern are undertaken. Make sure the resulting data is shared with all those involved in decision making and follow up on the implementation of any decisions;

k) Support external missions in ways that foster a joint learning process that identifies how the Project could be improved further to achieve impact.

Knowledge sharing and Policy interventions





172

a) Consolidate a culture of lessons learning involving all Project staff and allocate specific responsibilities of knowledge management to Project staff, implementing agencies and Project stakeholders;

b) Ensure that the Project captures and share lessons learned through the M&E system, supervision and evaluation missions and periodic visits to sites;

c) Document, package and disseminate lessons frequently and not less than once every three months;

d) Facilitate exchange of experiences by supporting and coordinating participation in knowledge sharing workshops, teleconferences, development of IFAD Vietnam website and any other existing knowledge sharing network of IFAD at the regional and country level;

e) Identify and participate in additional networks, for example scientific or policy-based networks that may also yield lessons that can benefit Project implementation.

Selection Criteria

Core Competencies

a) People Skills: Ability to work independently and as a team player who demonstrates leadership and is able to support and train local and international staff and is able to work with ethnic minority communities in a sensitive and participatory manner;

b) Communication Skills: Well developed written and oral communication skills. Able to communicate clearly and sensitively with internal and external stakeholders as a representative of an IFAD Project. This includes effective negotiation and representation skills;

c) Integrity: Works with trustworthiness and integrity and has a clear commitment to poverty reduction of local communities;

d) Resilience/Adaptability and flexibility: Ability to operate effectively under extreme circumstances including stress, high security risks and harsh living conditions. Works and lives with a flexible, adaptable and resilient manner;

e) Awareness and sensitivity of self and others: Demonstrates awareness and sensitivity to gender and diversity. Has experience and the ability to live and work in diverse cultural contexts in a culturally appropriate manner;

f) Work style: Is well organized even within a fluid working environment and has a capacity for initiative and decision making with competent analytical and problem solving skills;

g) Readiness to work with people of all backgrounds without bias;

h) Ability to coach and mentor staff in a cross cultural environment.

Technical Competencies

a) Sound experience in working for IFAD Projects;

b) Ability to develop and foster external organizational relationships and applied representation skills;

c) Knowledge and skills: knowledge of Government and IFAD policies and procedures on gender, environment, corruption and general Project finance and administration management;

d) Have telecommunication skills and proficiency in information technology/ computer skills;

e) Written and spoken English language skills preferred.





173

Project Monitoring and Evaluation and Knowledge Management Officer

1. The Monitoring and Evaluation (M&E) system at the Project level has four objectives: (i) to monitor and evaluate results and impacts; (ii) to provide a basis for decision making on necessary amendments and improvements; (iii) to promote accountability for resource use; and (iv) to document, provide feedback on, and disseminate lessons learned.

2. Project monitoring and evaluation is conducted in accordance with established IFAD procedures and is undertaken by the Project management team at all levels. The Logical Framework matrix provides performance and impact indicators for Project implementation along with their corresponding means of verification. These, along with the objectives, procedures and tools described in the M&E plan presented in the Project appraisal report will form the basis on which the Project's M&E system will be built at the starting phase of the Project.

General scope of the job

3. The M&E officer is responsible for guiding the overall M&E strategy and implementation of related activities within the Project and Vis a Vis partners, plus providing timely and relevant information to the Project Coordinator, PPCO and Project stakeholders. This requires close coordination and communication with the Province Line Agencies, DPCs, CPCs, Project stakeholder groups, and field staff as well as consultants of external M&E-related missions.

4. Critical tasks for the M&E officer(s) include setting up the M&E system and ensuring it is implemented efficiently and effectively. The M&E system will be based on the Project log-frame and the Project M&E plan and will build as much as possible upon existing M&E mechanisms and systems among the Project stakeholders. The M&E officer will report directly to the Project Coordinator

Main tasks and responsibilities

5. Setting up the M&E system.

a) Develop the overall framework for Project M&E in accordance to the Project M&E plan;

b) Conduct a readiness assessment regarding M&E on what are the incentives at the system level, who are the beneficiaries;

c) Guide and coordinate the review of the Project log-frame including:

i. Provide technical advice for the revision of performance indicators;

ii. Ensure realistic intermediate and end-of-Project targets are defined;

iii. Conduct a baseline study (situation at Project start);

iv. Identify sources of data, collection methods, who collects data, how often, cost of collection and who analyses it;

v. Ensure all critical risks are identified.

d) Identify the core information needs of PPCO, the Project Steering Committee, IFAD and the Ministry of Planning and Investment;

e) Identify the requirements for collecting baseline data, prepare terms-of-reference for and arrange the conduct of a baseline survey, as required;

f) Clarify M&E responsibilities of different Project personnel;

g) Contribute to the development of the Annual Work Plan and Budget (AWPB), ensuring alignment with Project strategy, agreement on annual targets and inclusion of M&E activities in the work plan;

h) Prepare detailed M&E budget;

i) Prepare calendar of M&E activities;

j) Identify M&E technical assistance that the Project needs to contract and guide its recruitment.

6. Implementation of the M&E system

a) Oversee and execute M&E activities included in the AWPB, with particular focus on results and impacts as well as in lesson learning;

b) Based on the AWPB design the framework for the physical and process monitoring of Project activities;





174

c) Promote a results-based approach to monitoring and evaluation, emphasizing results and impacts;

d) Coordinate the preparation of all Project reports. Guide staff and executing partners in preparing their progress reports in accordance with approved reporting formats and ensure their timely submission. This includes quarterly progress reports, annual Project report, inception report, and ad-hoc technical reports;

e) Prepare consolidated progress reports for Project management including identification of problems, causes of potential bottlenecks in Project implementation, and providing specific recommendations;

f) Check that monitoring data are discussed in the appropriate forum (such as the review meetings of PPCO, the quarterly meeting of the Project Steering Committee) and in a timely fashion in terms of implications for future action. If necessary, create such discussion forums to fill any gaps;

g) Undertake regular visits to the field to support implementation of M&E and to identify where consolidations might be needed;

h) Foster participatory planning and monitoring by training and involving primary stakeholder groups in the M&E of activities;

i) Prepare M&E reports for annual supervision missions, mid-term review and final evaluation in accordance to IFAD guidance;

j) Facilitate, act as resource person, and join if required any external supervision and evaluation missions;

k) Monitor the follow up of evaluation recommendations;

l) Identify the need and draw up the TORs for specific Project studies. Recruit, guide and supervise consultants or organizations that are contracted to implement special surveys and studies required for evaluating Project outcomes and impacts;

m) Organize (and provide) refresher training in M&E for Project and implementing partner staff, local organizations and primary stakeholders with view of developing local M&E capacity;

7. Acting as Knowledge Management Officer

a) Design and implement a system to identify, analyse, document and disseminate lessons learned;

b) Consolidate a culture of lessons learning involving all Project staff and allocate specific responsibilities;

c) Ensure that TORs for consultants recruited by the Project also incorporate mechanisms to capture and share lessons learned through their inputs to the Project, and to ensure that the results are reflected in the reporting system described above;

d) Document, package and disseminate lessons frequently and not less than once every three months;

e) Facilitate exchange of experiences by supporting and coordinating Project participation in workshops and development of IFAD Vietnam website and any other existing network of local government and IFAD programme and Projects;

f) Identify and participate in additional networks, for example scientific or policy-based networks that may also yield lessons that can benefit Project implementation.

Qualifications and experience required

8. Suitable candidates should have a degree in a field related to development and/or management, experience in field research and statistics and at least several years of proven experience with:

a) The logical framework approach and other strategic planning approaches;

b) M&E methods and approaches (including quantitative, qualitative and participatory);

c) Planning, design and implementation of M&E systems;

d) Training in M&E development and implementation and/or facilitating learning-oriented analysis sessions of M&E data with multiple stakeholders;

e) Data and information analysis;





175

f) Report writing.

S/He should also have:

a) A solid understanding of public policies, development approaches with a focus on participatory processes, market economy management, and gender issues;

b) Familiarity with and a supportive attitude towards processes of strengthening local organizations and building local capacities for self-management;

c) Willingness to undertake regular field visits and interact with different stakeholders, especially primary stakeholders;

d) Experience in data processing and with computers;

e) Leadership qualities, personnel and team management (including mediation and conflict resolution);

f) English language skills preferred.

Desirable:

a) Knowledge of the focal area in which the Project operates;

b) Understanding of IFAD procedures/





176

Community-based Adaptation and Disaster Risk Management Officer

General

1. The Project will employ or second a staff member to be the Community-based Adaptation and Disaster Risk Management officer within the PPCO. He/she will be responsible for managing activities related to the coordination of climate based adaptation and disaster risk management planning and investment and in assisting drafting the CBA/DRM aspects of the Project AWPB.

Reporting

2. The officer will report to the Project Coordinator of the PPCO.

Responsibilities

3. The incumbent will be responsible to act as a crucial link within each PPCO (between the different specialists), as well as with implementing agencies and with the PPCO and PPSC for the other province. This will enable a more holistic understanding for Project staff and stakeholders on environmental and climatic and disaster risks in agricultural systems (e.g. CC adaptation, participatory action research, participatory scenario development, vulnerability mapping; disaster risk mitigation planning, etc.). Specifically, he/she will:

a) Be responsible for leading initiatives to develop effective engagement with other relevant agencies and projects providing CBA and DRM in the region;

b) Assist the DPI to ensure that there is a consistent and effective process for planning and implementation of CBA & DRM, and that there is actually a sustainable benefit accruing to implementing communities and individuals.

c) Provide and/or organise training and mentoring for the support staff at the district and commune levels on CBA & DRM within the MOP-SEDP planning process in the Project target communes and districts.

d) In collaboration with district and commune staff, assist communities to apply CBA and DRM analysis and planning activities including participatory action research, participatory scenario development, vulnerability mapping; disaster risk mitigation planning, etc.

e) Assist to incorporate the CBA & DRM MOP-SEDPs of the Project communes and districts into the Project AWPB.

f) Coordinate all CBA/DRM technical assistance inputs for the formulation of the planning and investment mechanisms and their replication and institutionalization in the provinces and the region.

g) Prepare and circulate various promotional material concerned with CBA/DRM activities.

h) Ensure that participation of women and members of ethnic minorities in the commune/district CBA & DRM planning process and that the gender equalities are mainstreamed in the implementation of the planning process.

i) Maintain a close planning and implementation link to the other officers in charge of the other Project outcomes, and ensure that CBA & DRM considerations are at the forefront of all Project activities.

j) Monitor implementation of the CBA and DRM activities of the Project communes; analyse the M&E data and prepare regular progress reports to the Project Coordinator, including proposals that aim at improving the implementation and impact of the activities.

k) Prepare regular and ad hoc reports on the progress of CBA and DRM, and the challenges and successes being achieved





177

MOP-SEDP Planning Officer

General

1. The Government will employ or second a staff member to be the Market-oriented Participatory SEDP Planning Officer (POs) within the PPCO. They will be responsible for managing activities related to the MOP-SEDP and drafting the Project AWPB.

Reporting

2. The PO will report to the Project Coordinator of the PPCO.

Responsibilities

3. The incumbents will be responsible for all planning activities under the Project including the Project AWPB. They will be guiding the commune MOP-SEDP process in the Project communes and ensuring that the bottom-up MOP-SEDPs are synthesized and consolidated at the district and province levels. Specifically, they will:

a) Be responsible for assisting the DPI in coordination of all concerned line agencies and the districts and communes to implement the activities of the Outcome 3

b) Supervise the support staff at the district and commune levels and coordinate with the staff of General Planning Section under DPI to organize the SEDP planning process in the Project target communes and districts.

c) Incorporate the MOP-SEDPs of the Project communes and districts into the Project AWPB; Assist the Project Coordinator in drafting the AWPB and its revisions for the PPSC and IFAD comments and endorsement.

d) Coordinate all technical assistance inputs for the formulation of the MOP-SEDP mechanism and its replication and institutionalization in the provinces and the region.

e) Ensure that participation of women and members of ethnic minorities in the commune/district MOP-SEDP planning process and that the gender equalities are mainstreamed in the implementation of the planning process.

f) Maintain a close planning and implementation link to the other officers in charge of the other Project outcomes.

g) Monitor implementation of the MOP-SEDPs of the Project communes; analyse the M&E data and prepare regular progress reports to the Project Coordinator, including proposals that aim at improving the implementation and impact of the MOP-SEDP activities. and

h) Coordinate with the PPCO Finance Manager to provide the technical support to the financial management and annual audits of the Project commune accounts.

Qualification

4. The incumbent will require 10 years’ experience in coordinating rural development planning activities, including the experience in promotion of market-based participatory SEDPs at the local level. A staff person seconded from the DPI or the finance/planning section at the DPC will be preferred.





178

Gender Specialist

Job Title: Gender specialist

Duration: Aligned to the Project duration

Recruitment: National

Contract: Two-year contract, with six months’ probation period, renewable based on agreed performance targets and deliverables

Reports to: Project Coordinator on administrative and technical matters

Purpose

2. The effective inclusion of village women in CSSP community-based participatory planning and programme implementation, in the effective and sustainable implementation of an improved climate adapted agriculture production, rural finance and agribusiness value chain development programme, and as entrepreneurs, is essential to Project success. This would require a significant shift in prevailing attitudes to women and development across a broad range of project stakeholders, from government to village level. To that end, the Project would support a robust gender development learning and action programme, requiring skilled specialist support.

General scope of the job

3. The Gender specialist is responsible for ensuring the Project implements a process of women’s empowerment including targeting poor women and woman headed households. This requires close coordination and communication with Project implementation agencies and other stakeholder groups, and field staff as well as consultants. The Gender specialist would report directly to the Project Coordinator

Main Responsibilities and Duties

(a) Building on background analysis and strategies outlined in the Project design report, detail the characteristics of target groups and gender issues in target areas to select appropriate climate change-adapted gender development approaches to implement under the Project;

(b) Based on the detailing of poverty and gender issues as mentioned above, identify challenges and propose solutions that may hinder the Project in meeting its gender and inclusion objectives and targets;

(c) Set up and initiate gender and inclusion strategies, mainly in preparing gender action plans and conducting gender awareness training during the initial implementation phase

(d) Together with the Project M&E officer, develop appropriate M&E indicators for climate change-adapted gender-sensitive results;

(e) Develop learning materials and tools- or adapt existing ones- in order to be able to run gender development learning events;

(f) Organize and deliver training of trainers events in Project areas on gender development;


(a) Ability to work in other languages used in the region would be an advantage

(b) A degree in social sciences or gender development

(c) At least 5 years of experience in working on poverty and gender issues and gender equality in development projects and programmes;

(d) proven ability and experience in working with ethnic minorities

(e) Sound experience in working for IFAD Projects;

(f) Sound knowledge of food and nutrition security at smallholder level in Viet Nam;

(g) Knowledge of ethnic people language and culture;

(h) Ability to develop and foster external organizational relationships and applied representation skills;

(i) Written and spoken English language skills would be useful





179

Commodity and VC Project Coordinator

1. The Project will employ a Commodity and VC Project Coordinator who will be directly responsible for managing Project activities under the Outcome 1 – Province-based participatory planning institutionalised. S/he could be seconded from the regular government service. In the likely absence of suitable candidates among government officers, however, the position will be filled by contracting a suitable candidate (recruitment through open advertisements).

Duration

2. The position will be for the full 5-year Project period. The contracted incumbents will be recruited for 2 years’ renewable for another 3 years.

Reporting

3. The Commodity and VC Project Coordinator Officers will report to the Project Coordinator.

Responsibilities

4. The Commodity and VC Project Coordinator will be responsible for facilitating the implementation of the second outcome – Increased public and private investment in sustainable commodity production and value addition. In particular, s/he will:

a) Coordinate all implementation activities of the Project outcome, including their timely inclusion in the Annual Work Plan and Budget (AWPB).

b) Coordinate the overall approach, work plan and all technical assistance inputs for the outcome with the international and national technical advisers.

c) Identify technical assistance institutions or consultants for development of commodity and VC tools and training materials.

d) Identify technical assistance institutions or consultants for conduct of pro-poor market and VC studies.

e) Organize the VC validation workshops and support for private sector implementation of the pro-poor market and VC development plans.

f) Ensure that all Project outcomes – MOP-SEDPs, VC development, climate adapted agriculture, credit and public and APIF infrastructure are holistically integrated to support VC development.

g) Identify private sector investors and facilitate approval of the associated commodity or VC development plans by the PPC.

h) Assist the private sector investors in implementation of the pro-poor market and VC development including coordination with concerned line agencies and technical service providers and other private sector actors.

i) Support and facilitate the provision of direct financial and business development service for all Project-supported commodity and VC development activities.

j) Maintain the Project M&E system with regards to the outcomes and impacts of commodity and VC development to the poor.

k) Facilitate case studies and documentation of good practices in the pro-poor commodity and VCs.

Qualification

5. The incumbent will have sound knowledge of private sector and pro-poor market development, in particular of the agriculture commodity markets and VC approach. S/he will have good knowledge of regional private sector companies and financial institutions, especially in the agro-business industry. S/he should also have a sound background and experience in business development, financial analysis and vocational training. Good command of the English language will be an additional asset.





180

District Business Development Officer

1. The Project will employ a District Business Development Officer (BDO) in each of the districts of Bắc Kạn and Cao Bằng provinces covered by CSSP.

Duration and Location:

2. The BDO will be recruited for an initial period of two years, renewable for three years. Each selected BDO will be based in one of the districts covered by CSSP.

Reporting:

3. The BDO will report in the district to the Head of the Agricultural Section and in the province to the Coordinator of CSSP.

Responsibilities:

a) Carry the overall responsibility for achieving the objectives, outcomes and targets identified for the VC development, business linkage promotion and the competitive grants activities of CSSP at the district level.

b) Familiarise herself/himself in the CSSP approach and in the activities to be undertaken as part of business linkage promotion and the competitive grants schemes.

c) Assist in preparing the Annual Work Plan & Budget for the VC development and the competitive grant activity in the district and ensure that all plans are designed, implemented and monitored according to specified procedures and deadlines and within the allocated budgets.

d) Support commodity chain studies in the districts to be conducted during PY 1 by CSSP.

e) Familiarise farmers and their groups with business opportunities in the focal commodity chains of CSSP.

f) Assist other CSSP-related staff to assess the business relevance of the planned CSSP-supported infrastructure investments in beneficiary communes.

g) Liaise with the companies to identify their input requirements from the farming community.

h) Pro-actively build linkages between companies and farmers and their CIGs and cooperatives.

i) Assist CIGs and cooperatives in the preparation of applications for CSSP competitive co-financing.

j) Assist the Agricultural Section in the district to assess the applications for CSSP competitive co-financing applications.

k) Actively follow up the implementation of the CSSP-co-financed sub-projects in the villages.

l) Ensure gender mainstreaming in the outcome activities and track on a continuous basis the inclusion of women in the operations of the CIG co-financing and other business linkage operations.

m) Work closely with the RFS and the M&E Specialist in establishing and operating of a monitoring, evaluation and knowledge management system for the CIG operations.

n) Support the Supervision and Implementation Support Missions and the MTR and ensure compliance with their recommendations for the CIG co-financing and other business linkage operations of the Project

o) Carry out any other task determined by the Project Coordinator.

Qualification and Experience:

4. The BDO will hold a university or collage degree in Business Management, Economics, Agriculture, Social Sciences or other related fields. S/he will have a minimum of 5 years of work





181

experience in business development, company management, the financial sector development or a related field. The position will also entail demonstrated capacity in the planning and follow-up of Project activities, good analytical ability and writing skills, and capacity to interact with a wide range of private sector partners, especially private agro-companies, public sector representatives and most significantly smallholder farmers in rural Viet Nam. Sensitivity to gender issues and previous experience of working with women’s Projects will be additional merits for the position. At the start-up of CSSP operations, DVCMDOs will receive training by the Project on the planned business linkage promotion activities and the related competitive grants.





182

Rural Finance Officer

1. The Project will employ a Rural Finance Officer (RFO) for each CSSP provincial PCO who will be directly responsible for coordinating and supervising Project activities under Output 5 – Rural Finance Services Enhanced. S/he could be seconded from the finance service institutions. In the likely absence of suitable candidates among the local bank and mass organization officers, however, the position will be filled by recruitment through open advertisements.

Duration:

2. The RFP will be recruited for an initial period of two years, renewable for another three years.

Reporting:

3. The RFP will report to the Project Coordinator of CSSP.

Key Responsibilities:

a) Carry the overall responsibility for achieving the objectives, outcomes and targets identified for the CSSP Rural Finance Services Enhanced-activities.

b) Familiarise herself/himself with the CSSP approach and in the activities to be undertaken as part of the outcome and ensure that the outcome is implemented as envisaged.

c) Prepare, together with the Women’s Development Funds (WDF), the relevant implementation and subsidiary loan agreements required for the CSSP-supported activities instigated by the WDFs.

d) Prepare the Annual Work Plan & Budgets for Output 5 and ensure that all plans are properly designed, implemented and monitored according to specified deadlines and within the allocated budget.

e) Develop Project management guidelines, procedures and operating practices for Project execution, proactively manage changes in Project scope, identify potential constraints and devise contingency plans.

f) Prepare contracts and bidding documents in accordance with IFAD and Government requirements for the competitive procurement of services under the outcome activities.

g) Ensure gender mainstreaming in the outcome activities and track, on a continuous basis, the inclusion of women in the operations of the Rural Finance Services outcome.

h) Establish together with the M&E Officer a system of monitoring and data management for the Rural Finance Services outcome.

i) Identify how best to use the Technical Assistance budgeted for this output and to develop, with the WU, the TOR and most appropriate time schedules for the use of this assistance.

j) Provide support to IFAD Supervision and Implementation Support Missions and the MTR and ensure compliance with their recommendations for the Rural Finance Services outcome.

k) Carry out any other task

Qualification and Experience:

4. The Rural Finance Officer will hold a university degree in Business Management, Economics, Social Sciences or other related field. S/he will have a minimum of 5 years of work experience in the financial sector, preferably including experience with community-based financial services. The position will also entail demonstrated capacity to take on a leadership position with strong managerial skills, good analytical ability, good writing skills and capacity to manage people and interact with a wide range of private sector partners, public sector representatives and, most significantly, smallholder farmers in rural Viet Nam. Sensitivity to gender issues and previous experience of working with women’s Projects will be additional merits for the position, as well as oral and written communication skills in English.





183

Head of Finance and Administration

General

1. The Project will employ a Head of Finance and Administration Officer. S/he could be seconded from the regular government service.

Reporting

2. The Head of Finance and Administration will report to the Coordinator of the PPCO.

Responsibilities

3. S/he will be responsible for day-to-day administrative and financial management of the Project. In particular, s/he will:

a) Manage the PPCO office, including ensuring that office and communications equipment is in place and functioning.

b) Oversee the establishment of an acceptable computerized bookkeeping and accounting system and supervise the accounts/book keeping staff.

c) Provide monthly financial reports to the Project Coordinator, indicating financial performance of the Project compared with the annual work plan and budget;

d) Organize and oversee tendering and procurement.

e) Undertake financial management of contracts entered into by the Project.

f) Be responsible for the preparation of disbursement requests from IFAD, including the submission of all required documentation.

g) Be responsible for compiling the consolidated AWPB, incorporating the inputs of other PPCO officers.

h) Arrange for annual audits to be commissioned in a timely manner.

Qualification

4. S/he will be a qualified accountant or an administrator having strong public accountancy experience. S/he should have sound experience in financial management, preferably with internationally-funded development Projects. Good organisational skills and an understanding of office technology will also be necessary. A good command of the English language will be an important asset.





184

Annex 4. Example Service Delivery Sub-project

Objective: To successfully implement Community Re-afforestation for Disaster Risk

management in Commune Protected Forest Area

Project Timeframe: January 2015 – December 2016

Agreed Budget: Total Budget is VND 21 m (

Service Provider: Vinh Quang Commune, Hoang Su Phi District Re-afforestation CIG Group (Farmer

to Farmer Extension)

Potential Milestones, Deliverables and Payment Schedules:

Milestone Deliverable Payment62

Expected

Delivery

Contract Agreement Contract between CIG and Service Provider signed 2,000,000 15/1/2015

Project Baseline Participatory description by beneficiaries (village) of:

Existing physical and socio-economic status of community managed protection forest, including number and poverty levels of households, ethnic status existing land use practices and income generated from community forestry activities.

2,000,000 01/3/2015

Re-afforestation

Plans and Land

Allocation

Statutory Declaration from CIG Leader that:

Community Forest Plans and Guidelines are agreed by all CIG members

CIG members have Forest red Books with names of husband and wife

4,000,000 30/08/2015

Nursery Operational Nurseries* are established and selling planting material to CIG members and local communities

9,000,000 30/10/2015

Agro-forestry

Demonstrations

Statutory Declaration from CIG Leader that:

10ha of intensive agro-forestry+ with forage production for household livestock and acacia hybrids for large timber production established

2,000,000 30/08/2016

Project Validation Participatory description of benefits following project

completion (compared with baseline)

2,000,000 30/12/2016

TOTAL Contract Fee Paid to Service Provider 21,000,000

Notes: * costs for establishment of Nursery are from the CIG infrastructure funding stream

This contract demonstrates some key points about output based contracts for service delivery

projects:

The Owner is the CPC

The above contract includes contributions from project beneficiaries. CIGs are not required to contribute to the costs of improving knowledge and skills, but will be required to contribute if production inputs or small scale infrastructure (processing, value adding etc.) are approved. Where inputs are required the contract will specify the inputs and detail the milestone and deliverables required to ensure that the input costs are used for their intended purpose.

The contract is between the CIG and the Service Provider who is undertaking the training and skills attainment and is responsible for assisting the CIG with implementation of small scale infrastructure (nursery).

The contract manager is the Village/Community Development Board who will oversee project implementation

62

The cost of undertaking each milestone are examples only and the total contract and payment for each milestone

should be based on the cost/prices quoted by the preferred service provider





185

The implementer is the Service Provider who has responsibilities for self-monitoring the implementation with the CIG verifying and signing off those services have met expectations.

Evaluation is through a comparison between the baseline and Project validation. In service contracts the Service Provider is responsible for simple baseline surveys and Project validation. Assistance to do this will be provided by evaluators from the CPC or the District Agro-Forestry Extension Station.




Appendix 6. Planning, M&E and learning and knowledge management

186

Appendix 6: Planning, M&E and learning and knowledge management

Background

1. Beyond its role in data management and the monitoring and measuring of Project indicators,

results and impacts, the system for planning and M&E (P/M&E) of the proposed Project will be

developed as an integral part of the process of Project implementation. Among others, its purpose

will be to support dialogue and interaction between the various levels of government and actors who

are responsible for the governance of public investment and to facilitate participatory learning and

ownership of the Project at the local level. More specifically, the P/M&E system will be designed to:

(i) provide updated information on the goals, results, effects and impacts of the Project, (ii) support the

Project Steering Committees (PPSC) and Project management in making decisions about the

strategies, actions, and investments expenses that lead to achievement of the objectives,

(iii) strengthen the interrelationship of PPCO with the various strategic partners who will be involved in

implementation, (iv) be an instrument for strengthening the capacity of the participating communes,

communities, producer groups and enterprises for participating in and administering and managing

local development processes and investments in accordance with current policies and directives, and

(v) allow the development of spaces for learning, exchange of experiences, good practices and

dissemination of results. Thus, the system will also be closely linked to the Project’s broader agenda

for the management of knowledge.

2. The Project M&E system will track and verify the levels of achievement of Project outputs, the

associated outcomes, and the success in achieving the Project objective and its development goal.

These levels are all causally connected as set out in the Project Logical Framework, which provides

the framework that thus constitutes the structure for the Project M&E system. To a large extent, the

M&E system will be participatory and thus involve the supported communes in data collection and

management. The PPCO M&E/Knowledge Management Officer will assist the PPCO in the data

management in a standardised system, keep a central system to compile overall monitoring and

evaluation information, and conduct studies to measure overall impacts.

3. Beneficiary participation in Project monitoring will be ensured by involving the target groups,

with special effort made to include women and ethnic minorities by organizing the interviews at

suitable times and venue and applying appropriate interview techniques. Monitoring will include data

collection in forms of individual interviews, focus group discussion or case studies.

4. The proposed Project has a distinct advantage as regards the development of the P/M&E

systems as Bắc Kạn and Cao Bằng already have developed systems, a strong experiential base, and

significant institutional capital for its operation at all levels from the communes to the provincial and

within the PPCO. The DBRP and 3PAD were evaluated by IFAD as “satisfactory” in their project

management and P/M&E systems. At the same time, experience from these and other IFAD

projects/programmes has also indicated some areas where adjustments and/or strengthening under

the new Project will be desirable. These include:

a) a strong focus on training in planning skills and tools, especially for collection of information from participatory processes at local-levels, is desirable;

b) for full integration of market-orientation into the SEDP process and for integration of CBA and CBDRM, both for climate proofing of VCs and the commune/district SEDP, the planning cycles must be compatible with the SEDP planning processes that finalize at the end of June at the District-levels and mid-July at the commune-levels.

c) decentralized and participatory M&E processes that require tracking of a significant number of indicators does not function well or efficiently with part-time commune M&E staff. From this perspective, the reduced number of indicators in the IFAD logframe should increase monitoring accuracy.





187

d) PPCO M&E staff require advanced training on alternative methodologies (e.g., case studies, intensive interviews, others) and basic training on the livelihoods of rural households and the business operations of SMEs in the target areas in order to improve the accuracy of surveys and monitoring.

e) The Annual Outcome Survey (AOS) should be conducted on mid-year basis (from May to July) so that the results can be used in the development of the subsequent annual work plan.

f) The AOS cannot capture impacts in a detailed and comprehensive way. If resources allow, it is advisable to complement the AOS with qualitative instruments, targeted to priority themes/issues. For example, case studies to assess the impact of vocational training or Most Significant Changes and photo book tools to measure impact of newly constructed rural infrastructure.

Planning and Monitoring & Evaluation

5. The Planning and Monitoring & Evaluation system (P/M&E) will consist of the following

subsystems:

a) The linked Annual Work Program & Budget (AWPB) and annual MOP-SEDP planning subsystem, which uses as inputs the logical framework, operational plans, participatory assessments and socioeconomic development plans for the development of participating communities and organizations, and the Project’s exit strategy/plans for sustaining advances and outcomes after closing; Project

b) The monitoring subsystem, which will manage periodic reports, reports of field visits, progress reports, monthly meetings of the different Project implementation units, specific reports and information generated during supervision missions, and joint reviews of IFAD and the Government;

c) The evaluation subsystem, which is based on the baseline study and impact indicators (RIMS), internal and/or external evaluation reports and studies on Project outcomes and impacts, and the Project completion report and;

d) The learning subsystem, consisting of a systematic process oriented toward collective reflection by the Project actors on the experiences during the implementation of the Project in order to refine Project methodologies and approaches, exchange learning and knowledge, and generate new knowledge.

6. Table 1 below provides a brief summary of the system.





188

Table 1. Principal elements of Project planning, M&E, and learning system

Outcome/Output/

Principal Activities Planning M&E Learning


Output 1: Strategic Investment Plan

Identified Strategic Investment Plans guide the MOP-SEDP process and inform CIF, CIG , SCG and APIF investment processes

1) Identification of

commodity chains

offering economic

opportunity for Bắc Kạn

and Cao Bằng

1) Monitoring of integration of SIP

results in CSSP planning and

investment programmes

2) Annual Outcome Surveys

1) Systematization of VC analysis

software

2) Systematization of enterprise

financial and economic analysis

skills;

3) Dissemination: learning series,

technical guideline manuals, ToT,

technical training, learning events,

knowledge platforms/networks.

Output 2: Provincial climate change action plan

improved knowledge base and capacity among key institutional actors to integrate evidence-based, CC adaptation considerations into policy, strategy and public and private (VC) investments.

1) Updating provincial CC

adaptation strategies and

action plans

2) Provincial MOP-SEDP

2021-2025 is climate

adapted

1) Establish a Thematic Ad-hoc Group

(TAG) to conceptualize, orient and

monitor the technical content and focus

of the Project’s support.

2) National study tours to benchmark

provincial CC policy and strategies;

3) participatory diagnostics of

commune-level CC impacts, scale and

ongoing adaptation

1) district-level zoning methodology

developed;

2) commune-level CC planning

instruments piloted;

3) roll out of the climate adapted

MOP-SEDP planning process;

4) studies, analysis, training and

technical assistance inputs in

support of CC adaptation

5) forage technology for sustainable

hillside farming

Output 3: Climate-adapted, market-oriented socio-economic development plan

SEDP process is upgraded to be participatory climate adapted and market oriented, building off SIP analysis.

1) Annual and medium term

commune and district

MOP-SEDPs

2) AWPB process

3) Integration of CBA and

CBDRM plans into MOP-

SEDP at commune,

district and provincial

levels.

1) Monitor change in capacities at

government office and community

levels;

2) Commune/District-level participatory

M&E system

3) Baseline, Midterm Review,

Completion evaluations


5) Logframe & progress reporting

(quarterly/ annual/ final)

1) Development of a market-based

economics learning programme

2) Systematization of results

3) Dissemination: learning series,

technical guideline manuals, ToT,

technical training, learning events,

web-based publications, knowledge

platforms/networks.

4) Development of district MOP-

SEDP

5) Cross-visits (within/between

Provinces)

6) Institutionalization of competency-

based training

7) Test & validate annual and

medium-term MOP-SEDP;

systematization of results;

dissemination; legislation of

process.





189

Outcome/Output/



Output 4 Forest land and forest allocation

Forest land and forest use rights for 17,000 hectares of forest transferred to private households in Bắc Kạn

1) Development of

participatory forest land and

forest use allocation

procedures

1) Beneficiary surveys

2) Bắc Kạn DoNRE and DARD records

3) Bắc Kạn Annual SEDP


Completion evaluations`



(semester/ annual/ final)

1) Development of efficient

participatory forest land and forest

use planning and allocation

procedures including beneficiary co-

financing

2) Development of effective district

and commune-based systems for

monitoring soil erosion and forest

land and forest condition

Output 5: Common Interest Groups for climate adaptation


1) Development of CIG

outcome-based LF2F

service contracts

1) Establishment of LF2F

registration scheme


2) Annual SEDP






1) Development of certified,

sustainable LF2F services;

2) Aggregation of CIGs producing

common commodities into lager

associations and cooperatives;

3) Integration of CC adaptation into

infrastructure planning;


Output 6: Community infrastructure

Co-investment in climate adapted and market oriented infrastructure

1) Commune infrastructure

Project supervision boards

establishment;


4) Annual SEDP






1) Market-oriented investment

prioritisation

2) Community force account

infrastructure development and

operation and maintenance

Output 7: Rural financial services

Rural financial services developed for the rural poor

1) Development of credit

products for rural poor

2) Establishment of

registered MFI

3) Development of MFI

credit products

1) WSCG and WDF credit records;


3) Annual SEDP






1) Efficient progression toward MFI

registration;

2) WU governance of

independently managed MFI





190

Outcome/Output/


Output 8: Agribusiness Promotion Investment Fund

APIF co-financing for value adding enterprises and cooperatives

1) Financial and economic

analysis of APIF bid

proposals;

2) Development of

enterprise-supplier

relationships

1) Annual SEDP

2) AWPB process





6) Business environment surveys



1) Development of investor –

smallholder market relationships;

2) Building associations of input

suppliers;

3) Linking investors to commodity

and financial markets.

7. Logical framework. A principal guide for the implementation and monitoring of the programme

will be the logical framework. This will serve both to better ground the logical framework within the

local context as well as to promote ownership by the PPBs. The logical framework, targets and

indicators will be reviewed thoroughly during the midterm evaluation of the Project and, if necessary,

updated annually as part of the adaptive learning process based in the monitoring of the Project’s

implementation. The objective of having an ongoing review of the logical framework is to encourage

its use as a tool for Project management. Also the use of the logical framework should assist the

Project team to work more coherently towards the same goals and structure of results and impacts,

while providing Project management with a tool for ensuring the Project’s alignment with the strategic

priorities for CC adaptation and poverty reduction embodied in design and in accordance with national

and provincial policies, strategies and programs.

8. Alignment with national priorities. To ensure alignment and harmonization of the Project with

national priorities as per the agreements between the Government of Viet Nam (GoV) and IFAD

embodied in the Country strategic opportunities programme (COSOP) for 2012-2017, the Project

incorporates into design and the logical framework some of the targets for:

a) The NTP-NRD, specifically by (i) supporting the development of market options to help realize the new rural areas, (ii) creating the needed mindset change at the household level, and (iii) building capacity to carry out the envisaged commune planning activities; and

b) The NTP-RCC for 2009-2015, specifically by supporting (i) CC awareness enhancement and human resources training including PAR to strengthen CBA processes; and (ii) development and implementation of action plans to respond to CC (including mainstreaming community-based adaptation into the SEDP development and implementation processes at the Commune, District and Provincial-levels);

9. Planning. Project implementation will require the articulation of various public institutions

(government and line agencies), private entities, people’s and communities’ organizations and groups.

The annual planning processes is the means by which this articulation must be achieved and as such

requires building consensus around common objectives, constant communication and a flexible

decision-making structure. The two principal planning processes are the annual socioeconomic

development planning (SEDP) and the annual work program and budget planning.

10. SEDP. The SEDP is the principal planning process and instrument that government utilizes to

orient all public financing of relevance for the ARD sector. Through mainstreaming into the SEDP, the

potential exists to institutionalize pro-poor, market oriented and climate adapted development

approaches and see them replicated across the country. The integration of concerns for CC and

disaster risk management into the SEDP process are goals of the National CC Strategy and the NTP-

RCC. As yet, however, no official directives or guidelines from either MPI or MoNRE have been

promulgated to guide the provincial DPIs in doing so. This is not a limitation. Rather, it is an





191

opportunity for proactive engagement by the Project to assist both national and provincial government

to learn and develop an appropriate approach.

11. As discussed above, IFAD-supported programmes have developed significant experience with

the MOP-SEDP process and the institutionalization of improved participatory approaches, introduction

of a market-orientation into local development planning and for climate proofing of VCs important to

the rural poor. The challenge for this Project will be to build upon and continue to strengthen the

market-orientation and VC climate proofing developed under prior projects while developing new tools

and methodologies

12. The preliminary framework for integration of CC concerns into SEDP planning development,

testing, validation and piloting of methodologies and instruments includes:

a) Commune-level: (i) participatory community vulnerability mapping (natural disaster, salinization, CC, etc.); (ii) application of mapping in production and investment (SEDP) planning, including identification of BMPs; (iii) joint NTP-NRD planning in communes where Project and NTP-NRD overlap; (iv) linkage of village level planning with commune-level zoning for vulnerability, risk, current and projected CC impacts to 2030; and (iv) SEDP planning and prioritization

b) VCs: adaptation and including use of the VC climate proofing tool;

c) District-level: aggregation of commune-level vulnerability zoning into district-level zoning tool for MOP-SEDP (incl. NTP-NRD & NTP-RCC) planning & prioritization;

d) Province-level: (i) DARD, DoNRE, and DPI collaboration on development and testing of commune and district methodologies for vulnerability mapping, zoning, and integration into the annual SEDP (incl. NTP-NRD & NTP-RCC); (ii) DARD/DoNRE update provincial-level CC Action Plans updated and incorporate priorities into Bắc Kạn and Cao Bằng’s MOP-SEDPs 2016-2020

13. Annual Work Program and Budget (AWPB). The AWPB details, on an annual basis, the

expected results of the Project at the level of output indicators (e.g., the number of people expected to

participate in Project-sponsored training initiatives, number of farmers adopting new saline tolerant

crop varieties, etc.). It is both the main information source for Project results and a principal tool for

orienting and coordinating the actions of the diverse institutions and actors responsible to deliver

products and services to the target beneficiaries. Its annual content is informed by the outputs from

the CC-adapted MOP-SEDP planning processes, the results from the evaluation of the prior year’s

implementation, and the Project’s overall goals and expected outcomes and impacts.

14. The basis for investment planning at the community level will be derived directly from the

existing SEDP process, which will initiate the preparation of investment plans for the public sector.

Communes will inform/channel potential private investor’s opportunities for investment support under

the Project, and prepare estimates for private sector activity financed by the Project. The specialist

PPCO staff will ensure that this commune-based planning process is genuinely representative and

inclusive. These PPCO officers will provide supervision to the support staff at the district and

commune levels and coordinate with the staff of the General Planning Section under the DPI to

organize the MOP-SEDP planning process in the Project target communes and districts.

15. The commune plans will be integrated into the district MOP-SEDP, with the support of staff of

the relevant District line agencies as determined in the MOP-SEDP legislation.

16. In the first year, the PPCO will also provide and coordinate training workshops on the Project

strategy and approaches, AWPB and procurement for key stakeholders. Specifically included in this

will be the strategy and approach for co-financing climate adapted and market oriented development.

This will ensure an accurate and shared understanding of the Project strategy and information needs.

17. The PO, working with the PPCO Coordinator and other PPCO staff, will incorporate the SEDPs

of the Project communes and districts into the Project AWPB. They will then assist the Project





192

Coordinator in drafting the AWPB and its revisions for the PPSC consideration and IFAD comments

and endorsement.

18. The PPCO will be responsible for the generation of plans not directly derived from the MOP-

SEDP process. This will include provision of specialist support and other specialist training, including

for climate adapted, market-led agriculture development, under Outcome 1, various forms of

Technical Assistance under Outcome 2, and the requirements for Project Management. The AWPB

will reflect both the previous year’s achievements and performance and anticipated Project progress.

The PPCO will be able to obtain guidance from the IFAD country office during the process of AWPB

formulation as required. They will also ensure coordination between other government agencies and

externally financed Projects in the Project area.

19. The draft AWPB will include a procurement plan (an initial eighteen-month plan and then

twelve-month plans for subsequent years), a detailed description of planned CSSP activities, and the

sources and use of funds. The Project will be ultimately responsible for preparing the draft AWPB in

an accurate and timely manner.

20. The draft AWPB will be submitted to the PPSC for its review and approval. The approved draft

AWPB will then be transmitted to IFAD for comments and no objection no later than sixty days before

the beginning of the relevant Project year. An Annual Stakeholder Review and Planning Workshops at

which Annual Performance Report findings and management implications will be discussed will

support the AWPB preparation process.

Monitoring and evaluation.

21. The objective for Project Monitoring and Evaluation (M&E) will be the on-going real-time

assessment of the processes employed in Project activities as well as their outcomes, outputs and

impact with respect to development goals and objectives. The M&E system will monitor performance

and assess the impact of the activities. Monitoring will focus on activities/inputs, outputs, outcomes,

performance and risks while evaluation will assess the relevance, efficiency, effectiveness and impact

on poverty reduction, business growth and environment, empowerment and partnership,

sustainability, replicability, lessons learned, and knowledge up-take, all within the context of the

requirements for successful climate-smart market-led development. The M&E system will cover both

the operational and financial aspects of the Project.

22. The M&E system will be (i) consistent with IFAD requirements (RIMS); (ii) facilitate near-real

time learning in support of evolutionary design, and (iii) apply participatory approaches to collect,

manage and analyse M&E data and report on outcomes and impacts. No significant issues with

development of the system are foreseen as the prior project has already substantially developed a

successful M&E system and it is expected that the M&E staff from the prior project will carry over to

the new Project.

23. The Project M&E system will be

designed to track and verify the levels of

achievement of Project outputs, the

associated outcomes, and the success in

achieving the Project objective and its

development goal. These levels are all

causally connected as set out in the

Project Logical Framework. To a large

extent, the M&E system will be

participatory, involving the supported

communes in data collection and

management. The M&E and Knowledge

Management Officers will assist the

PPCO in the data management in a

standardised system, keep a central

Monitoring the agri-business environment

The Project will apply independent surveys to

monitor change in the agri-business

environment in Bắc Kạn and Cao Bằng. Factors

to be monitored would include inter alia:

changes to the provincial legal and regulatory

framework; agri-business access to investment

capital; provincial and national support

measures and their application; the

administrative burden of business registration

and closure and obtaining land purchase and

construction permits; access to skilled labour;

and ease of inter-provincial trade.





193

system to compile overall monitoring and evaluation information, and conduct studies to measure

overall impacts.

24. The Strategic Management Section under the PPCO will be in charge of setting up and

operating a unified management information system (MIS) (building off the earlier 3PAD system),

establishing and ensuring the M&E function, reporting and Knowledge Management. To that end,

DEPOCEN (a local partner) in collaboration with IFPRI and IFAD HQ, have completed the “Manual

Guide for IFAD Funded Projects in Vietnam”. The manual provides the IFAD partners in Vietnam with

a knowledge guide and practices for M&E.

Management Information System (MIS):

25. A unified Project MIS will be built off historic 3PAD MIS efforts to provide a comprehensive

system of data collection, analysis and exchange. It will bring together physical and financial records

with the main purpose of informing management decisions on Project matters. Quantitative measures

of progress will be supplemented with qualitative information related to the acquisition of personal and

shared skills, group behaviour changes, target groups’ perception, awareness and attitudes. The MIS

will be the sole channel of Project monitoring material and form the basis of quarterly six-monthly and

annual reports.

26. In order to ensure a single and compatible system is implemented, the MIS will be set up

centrally at Project start-up and refinements will be introduced in the light of experience during the first

year. It will be based on the Logical Framework, which will be modified together with the MIS during

implementation to adjust the Project to changing circumstances. The preparation of reporting formats

for use by implementing agencies, particularly the participating communes, districts, and other

partners will be part of the overall design of the MIS.

Monitoring:

27. Monitoring will be an integral part of the Project coordination role. All staff will be involved in

strengthening Project progress and performance monitoring in their particular areas of responsibility.

A large part of the monitoring data will be collected and communicated by the participating

communes.

28. The monitoring will provide semi-annual and annual feedback on the extent to which the Project

is achieving its outputs, implementing the activities, identifying potential problems at an early stage

and proposing possible solutions. The accessibility of the Project to all sectors of the target

population, as well as the technical and financial efficiency will be monitored and possible

improvements suggested.

29. Monitoring indicators have been selected for each of the Project’s outcomes as detailed in the

second column of Logical Framework. Wherever relevant and possible, gender-specific data, ethnic

minority status and poverty data as classified by MOLIS) will be collected. Monitoring will be directed

to inform the indicators of Project outputs and outcomes set out in the Logical Framework. The

indicators listed in the second column of the Logical Framework have been selected bearing these

requirements in mind.

30. Involving the target groups will ensure beneficiary participation in Project monitoring and, when

possible, women, in data collection in forms of individual interviews, focus group discussion or case

studies.

31. Project training will be competency based. The performance of training activities will be monitored through pre and post training knowledge tests with a further test 6-12 months’ post training to determine knowledge retention and adoption. It will not be possible to monitor all training events at this level, however, random competency monitoring will be applied to all typologies of training events across the Project life.





194

Evaluation:

32. Project evaluation will be initiated and managed by the Strategic Management Section in two

major forms (i) impact evaluation and (ii) thematic evaluation. At the same time, the full reviews at

mid-term and at the conclusion of the Project will be conducted by IFAD and GoV. These two official

reviews are the Mid-term Review (MTR) and Project Completion Review (PCR).

33. Impact evaluation: The impact will be measured from the baseline data at mid-term and at

Project end. The Baseline Survey will be undertaken shortly after Project start-up to provide a platform

of information from which the follow-on surveys could reveal changes in the households' livelihoods.

Similarly, the Mid-term Review and the Project Completion Report surveys will be carried out just

before the MTR and towards the end of the Project, timed so that that their results will be available for

the MTR and PCR. These follow-on surveys will be carried out in the same manner as the Baseline

Survey. Ideally they will visit the same households so that developments in the course of Project

participation can be measured, and household members who have left the Project area as a result of

finding employment elsewhere will be captured as well. These three surveys will be carried out in

conformity with IFAD's RIMS reporting requirements (see below). They will use the standard RIMS

questionnaire form to collect key beneficiary data including household assets and base data used to

establish the prevalence of child malnutrition in participating households, with a few added questions

to reflect Project-specific impact data. The data will be processed by a simple custom software

package to be provided by IFAD.

34. As the Project will be establishing investments using business principles and business plans,

there is the opportunity to use data generated during the planning and operation of such investments

to provide for impact assessment. The intention is that the pre-programme baseline, the operational

data (profit and loss, return on investment, returns to labour etc.) will provide the impact assessment

at the micro-economic level. (See Monitoring Framework for detailed indicators).

35. The RIMS methodology will be modified to ensure capture of:

a) Changes in resilience at the household level;

b) the flow-on effects (jobs, knowledge, and transfer of technology) of Project activities to households not directly impacted by the Project; and,

c) the impact of changes in the external environment (macro-economic changes) that will impact on all households.

36. Thematic studies: The PPCO Strategic Management Section will contract or carry out

thematic impact studies that will look at the impact of activities under Project Outcomes. Such impact

assessment could include, inter alia, an analysis of the effectiveness of:

a) Community based adaptation and disaster risk management investments in producing stable, improved incomes for affected poor communities;

b) VC development models,

c) the Public and Private Partnership in poverty reduction,

d) the impact of micro credits to women,

e) the effectiveness of collective economic models,

f) the effect of SME development on the availability of jobs for the poor, and,

g) the poverty impact of commodity-specific market support activities.

37. The topics for these thematic studies will be identified in consultation with the PPCO during

Project implementation taking into account the NTP-NRD policies. The Monitoring Framework

provides the indicators, collection methods and the usage of the processed data.

38. Mid-term Review and Completion Review: IFAD and Government of Viet Nam will be

responsible for carrying out two full reviews of the Project achievements: the MTR during Project Year

3 and the completion review after Project completion. Key Questions to be answered during the

reviews on the basis of the indicators contained in the Logical Framework will include:





195

a) Have Project investments enabled coherent planning for climate-smart, market-led development?

b) Has Project targeting been successful?

c) Has the Project assisted the underemployed in getting jobs and have rural marketing links been forged effectively and sustainably?

d) Does the Project have the expected financial service outreach?

e) Has decentralised climate-smart, market-based planning been operated as an effective development tool?

f) Has the Project contributed good examples to the national policies related to climate-smart, market-led development within a rural development project?

g) How have changes in the external environment impacted on Project beneficiaries?

39. Progress Reporting: The PPCOs will be in charge of preparing six monthly and annual Project

progress reports. The implementing agencies will be required to provide their progress reports as an

input for PPCO to prepare the provincial reports that will be submitted to IFAD and Government in a

timely and accurate manner. These reports will include the narrative report as a harmonised source of

key data and ensure the trends are highlighted. The reports will record the financial and physical

progress against AWPB targets. The M&E and KM Officer will prepare a report on KM survey and

analytical work, with a tabular appendix showing the progress in each Province against the Project

indicators. The Strategic Management Section will be responsible only for the availability of data as

indicated in the Logical Framework. The availability of all other data in the appendix will be the

responsibility of the institutions, assisted by the PPCOs in the preparation of the standardised

reporting formats.

40. The PPCO Coordinator will be responsible for the preparation of six-monthly and annual

provincial progress reports for submission to the PPC, PPSC, and IFAD within a month from the end

of the reporting period.

41. The implementing agencies will - within 2 weeks from the end of the reporting period - submit

six-monthly progress reports to the PPCO as a condition for release of funds for the ensuing period.

CPCs and DPCs, will report on Project supported SEDP initiatives. The Women's Unions and others

will report directly to the PPCO.

42. Annual Results and Impact Reporting: The PPCO will report separately to IFAD on the

Project indicators that overlap with IFAD's RIMS. The information contained in these Annual Results

and Impact Reports will be drawn from the Project MIS, and set in relation to the targets contained in

this Report and those in the AWPBs.

43. Mid-Term Reports: The report will be prepared by the PPCO and comprise the assessment of

the efficiency as well as the Project achievements to-date, an analysis of the Project approach and

activities, and detailed proposals for the implementation of the second part of the Project.

44. Project Completion Report: At the end of the implementation period, a single comprehensive

Project Completion Report will be compiled by the PPCO. The Completion Report will follow the IFAD

guidelines and format for Project completion reports. The assessment criteria will include:

Participation of the target groups, the Project’s strategies and approaches, relevance, finance

management, efficiency, outputs delivery, effectiveness, impacts, sustainability, Innovation, up-

scalability and replicability.

Knowledge management. The Project’s knowledge management program will be an essential element for delivery of Project objectives, especially for CC related-learning. Two approaches will be taken: (i) a knowledge management program within the Project for purposes of supporting within and between Project learning and (ii) support for a broader program of knowledge management aimed at informing government decision-makers and influencing policy.

45. The “within Project” knowledge management activities will build upon the experience with the

prior project and support the PPCO to continue to carry out a program of (i) exchange visits to other

IFAD-funded provinces (ii) integration of Project learning into capacity building activities for the target





196

groups and into community meetings, training courses and workshops in the communes; (iii) sharing

of success stories through newspapers, television and with IFAD; (iv) “information corners” in Project

communes; (v) training of Project staff in communication skills and; (vi) maintenance of online

information services.

46. The data management system will ensure that all reporting is completed and that information,

reports and data are available in suitably accessible formats. Evidence based learning is an important

output and the knowledge management system, combined with the evaluations must generate these

evidence backed lessons. Lessons may be about approaches that both do and don’t work. In order to

manage the knowledge and information of the Project, the following activities will be conducted:

47. Documenting lessons learnt, best practices and cases of success: The Strategic Management

Service will collect all available relevant information to document lessons learnt, best practices and

cases of success. It could be based on information collected from: progress reports, meetings and

interviews, monitoring and evaluation reports, outputs evidence provided by targeted groups, market

and VC entities and other involved parties.

48. Developing and delivering a lessons learnt study: Based on the information collected along

Project implementation, the KM Officer will develop an end of Project Lessons Learnt Report,

analysing the documented lessons learnt, best practices and cases. It will be first submitted to IFAD,

and once feedback has been incorporated, if any, the report will be shared widely.

49. Development of material for dissemination: The Strategic Management Service will produce

communication materials summarizing some of the success stories to be distributed through

networks, and through policy dialogue. Based on analysis of the documented information, and the

reports, material for dissemination will be produced at the end of the Project; a mid-term Lessons

Learnt Report might also be developed. A short film about the Project combining before and after

footage will be shared with target groups, policy makers and other stakeholders. Recommendations

and actions for market and VC development will be developed.

50. For the broader knowledge management objectives, the Project’s community presence, experience and knowledge will be the basis for a systematic and structured learning and knowledge dissemination process for “pro-poor, climate adapted” agriculture and rural development. Among others, the goal will be to inform both Provincial-led implementation efforts and to bring “learning-from-the-field” into national policy discussions. For the former, supporting Provincial governments through learning is extremely important given the decentralization of fiscal resources and management responsibilities to them and their needs to learn in near-real time in order to improve practices, methodologies, efficiencies and outcomes. For the latter, at the national level there is significant unmet stakeholder demand for consultation on policy implementation and “learning-from-the-field” in support of leveraging of investment resources.

51. It will be challenging for individual provinces to significantly influence the national policy debate in areas concerning MOP-SEDP or APIF development, however, the collective knowledge of IFAD project experience in these fields in Viet Nam is substantial and will continue to grow. As such, the IFAD country office must play a role in bringing key Project staff at provincial level together to collate and evaluate Project outcomes and shape policy recommendations that can be carried forward to the national level. IFAD Viet Nam has been requested by the Minister MARD to assist with the development of governments APIF/APIF policy. It is also a member of a donor group that was recently formed to support DPI with the development of the MOP-SEDP approach. As such, IFAD Viet Nam is well placed to bring the collective experience of IFAD financed investments in Viet Nam into national policy and strategic planning discussion.

52. Finally, during implementation, the Project will support efforts to broaden the extension system through systematic development of farmer networks (to share knowledge on successful adaptation); LF2F extension approaches (to facilitate technology transfer); promotion and utilization of private service delivery including the use of outcome-based contracts, and; strengthening functional linkages between researchers and service centres and farmer networks to ensure the relevance of the research agendas.




Appendix 7. Financial management and disbursement arrangements

198

Appendix 7: Financial management and disbursement arrangements

1. Financial management. The PPCOs will be responsible and accountable to Government and

IFAD for the proper use of funds apportioned to it, in line with the respective legal agreements and

contractual arrangements for service providers. The PPCOs will provide detailed financial statements

of the operations, resources and expenditures related to the Project for each fiscal year, prepared in

accordance with standards and procedures acceptable to IFAD. The system of financial management

and the financial regulations of DBRP and 3PAD were reviewed. Financial Management Risk

Assessments of both DBRP 3PAD were conducted, and both were rated as having a "medium risk”.

Both Bắc Kạn and Cao Bằng provinces have substantial experience in managing externally financed

projects including those financed by IFAD, with generally good outcomes and accountability

frameworks. The trained and competent staff dealing with financial management from the DBRP and

3PAD are expected to assume the responsibility for CSSP, thus minimizing the risk of inappropriate

use of funds. The CSSP financial management assessment is detailed in Appendix 7, Annex 1.

2. The Government shall ensure that counterpart funds are provided in a timely manner,

particularly regarding instances where parallel financing arrangements are used. Failure to do so may

impede the efficiency and effectiveness of Project implementation.

3. Designated Account (DA): In accordance with the Financing Agreement and Section 4.04(d)

of the General Conditions, immediately after entry into force of the Financing Agreement, the GoV

shall open and thereafter maintain in a commercial bank accepted by IFAD, an accounts denominated

in US dollars for the purpose of financing the Project. The Designated Account will be operated by the

MoF and will be protected against set-off, seizure or attachment on terms and conditions proposed by

the Borrower and accepted by IFAD. The Borrower shall inform the Fund of the officials authorized to

operate the DA.

4. Project Accounts: The PPCOs shall open and maintain in their provincial treasuries an

account denominated in VND for Project operations, the “Project Account”. The Project Account shall

be funded and replenished as necessary from the resources held in the Designated Account, upon

request of the PPCO and in accordance with expenditures incurred under approved AWPBs. The

Project Coordinator shall be fully authorized to operate the relevant Project Account.

5. Initial Deposit into the Designated Account (Authorized Allocation): Upon the entry into force of

the IFAD loan and the Borrower’s request, IFAD will make a withdrawal of USD 3 million in the

aggregate, from the Loan Account on behalf of the Borrower and deposit such amount into the

Designated Account to carry out the Project.

6. The request for such deposit needs to submit related documents to IFAD, which include the

following:

a) Signature Specimen: Signature specimen of the authorized officials who are managing

the Designated Account must be confirmed by MoF with signature and submitted through

MoF to IFAD in the form acceptable to IFAD prior to requesting for the deposit.

b) Letter of Evidence: A “Letter of Evidence” issued by the Bank holding the Designated

Account must be submitted to IFAD before requesting for the deposit. The “Letter of

Evidence” should confirm the opening of the Designated Account, provide the account

number and address, and state the agreement for the operation of the account. The

“Letter of Evidence” should also indicate the “SWIFT” code for the bank in question.

c) Form 100: A “Form 100” needs to be filled in and properly signed and submitted to IFAD

for the request of initial deposit.

7. Replenishment to the Designated Account: IFAD will replenish the Designated Account upon

request. Withdrawal applications for replenishment to the Designated Account should be denominated





199

in US Dollars and should be submitted on a frequent basis, provided that the expenditure made during

the previous months is more than or equivalent to the Minimum Withdrawal Amounts, about 20% of

the initial advance.

8. The amounts withdrawn from the Designated Account in local currency should be converted

into USD using the prevailing exchange rate at the date of disbursing to the Project Accounts.

9. Each claim to IFAD for the replenishment of the Designated Account needs to include the

following documents and statements:

a) Form 100: A duly filled and signed “Form 100”;

b) Form 101 or 102;

c) Designated Account Reconciliation Statement: A properly filled “Designated Account

Reconciliation Statement;

d) Supporting documentation relevant for the eligible expenditures.

10. The SOE threshold for all expenditures pertaining to all categories is recommend to a ceiling

of USD 50 000.

11. Eligible Expenditure: The Financing shall be used exclusively to finance expenditures meeting

each of the following eligibility requirements:

a) The expenditure shall meet the reasonable cost of goods, works and services required

for the Project and covered by the relevant AWPBs and procured in conformity with the

Fund’s Procurement Guidelines;

b) The expenditure shall be incurred during the Project Implementation Period, except that

expenditures to meet the costs of winding up the Project may be incurred after the

Project Completion Date and before the Financing Closing Date;

c) The expenditure shall be incurred by a Project Party;

d) If the Agreement allocates the amount of the Financing to categories of Eligible

Expenditures and specifies the percentages of such Eligible Expenditures to be financed

by the Financing, the expenditure must relate to a category whose allocation has not

been depleted, and shall be eligible only up to the percentage applicable to such

category.

e) The expenditure shall be otherwise eligible in accordance with the terms of the Financing

Agreement.

12. Any payments to a person or an entity, or for any goods, works or services, if making or

receiving such payment constitutes a coercive, collusive, corrupt or fraudulent practice by any

representative of the Borrower/Recipient or any Project Party, shall not be eligible for financing by

IFAD.

13. Taxation: The proceeds of the financing may not be used to pay taxes. All taxes are to be

borne by the Government.

14. IFAD Policy on Anti-Corruption and Fraud: IFAD‘s policy to require that the staff of IFAD,

and (including beneficiaries of IFAD loans) as well as all bidders, suppliers, contractors and

consultants under IFAD-financed contracts observe the highest standard of ethics and integrity during

the procurement and execution of such contracts. Mechanisms for the whistle-blowers to access IFAD

systems are provided at the following link: http://www.ifad.org/governance/anticorruption/how.htm

15. Disbursement Procedures: There are four standard procedures that can be used to request

withdrawals from the Loan Account, which are as follows:

a) Procedure I: Advance withdrawal (replenishment of the designated account, using

imprest accounts or revolving funds with replenishment to a bank account(s) designated

to receive financing resources in advance). This modality is used to advance and/or

replenish funds to a bank account as designated by the borrower. IFAD may place a limit

http://www.ifad.org/governance/anticorruption/how.htm





200

on the amount to be advanced and/or replenished. Relevant details on the modality –

which is Project specific – are agreed between the borrower and IFAD, and detailed in

the Letter to the Borrower/recipient (LTB).

b) Procedure II: Reimbursement. This is applicable when eligible Project expenditures,

reimbursable under the financing, have been pre-financed by the borrower. Such

reimbursements are expected to be claimed no later than 90 calendar days from the date

of payment by the borrower.

c) Procedure III: Direct Payment. This modality is used for eligible Project expenditures to

be paid directly by IFAD, generally for large contracts, to suppliers, contractors,

consultants or third parties, as authorized by the borrower

d) Procedure IV: Special Commitment. This modality is used for eligible Project

expenditures related to items imported by Project implementing agencies under a letter

of credit requiring the issuance of guarantees for reimbursement to negotiating banks by

IFAD.

16. Specific disbursement procedure should be referred to The Loan Disbursement Handbook for

IFAD Directly Supervised Projects – Version 1.01

17. Budgeting. As noted the PPCO will be responsible for compilation of the consolidated annual

work plan and budget for the Project. Counterpart funds will be incorporated in the annual budget and

will be released annually. Previous experience indicates that government contributions are provided

as planned and in a timely manner.

18. Counterpart government contributions payments will be made from a Provincial Budget by

arrangement of provincial Department of Finance, and be used specifically for the Vietnamese

contributions to the Project. These contributions will be received annually/quarterly in accordance with

normal budget procedures.

19. Beneficiary Contribution: The PPCOs shall evolve a system to collect information in respect of

beneficiary contribution to the Project on a regular and on-going basis.

20. External audit. In line with section 9.03 of the General Conditions for Agricultural Development

Financing of IFAD, the consolidated financial statements of the Project including the use of the

counterpart funds relating to the Project will be audited by Independent Auditors who shall be

appointed based on a transparent and competitive selection process with an agreed TOR for the

Project audit assignment, which should be subject to a no-objection by IFAD. The auditors will audit

the Project consolidated financial statements annually and audit reports shall be submitted to IFAD

within six months of the end of the relevant financial reporting period. Following IFAD Guidelines on

Project Audits, the auditors shall provide separate opinions on the financial statements, SOEs and

DA. In particular, the Auditors shall review withdrawals from the Project Accounts at various levels on

the basis of SOEs, and provide an independent opinion on whether such expenditures fully comply

with expenditures eligible for IFAD disbursements. They shall also review the efficiency of the flow of

the funds and the delivery of counterpart financing. IFAD, as part of its supervision functions, will also

inspect Project Accounts to ensure their adherence to acceptable standards. The auditor shall provide

three separate opinions:

a) an opinion on the Project financial statements (PFSs);

b) an opinion on the use of the Designated Account (DA), including the initial advance,

replenishments, interest that may accrue on the outstanding balances, and the year-end

balances. In this, the audit shall examine: the eligibility of withdrawals from the DA

during the period under review; the operation of the DA in accordance with the financing

agreement and other instructions provided by IFAD; the adequacy of internal controls

within the Project appropriate for this disbursement mechanism; and the use of correct

exchange rates to convert local currency expenditures to the denominated currency of

the DA; and





201

c) an opinion on withdrawal applications, statements of expenditure (SOEs), and their

summary, used as the basis for submitting withdrawal applications. SOEs will be

carefully compared for eligibility with relevant financial agreements and the disbursement

letter, with reference to the Project design report for guidance when necessary. The

auditor’s opinion should deal with the adequacy of the procedures used by the Project for

preparing SOEs and should include a statement that amounts withdrawn from the Project

account on the basis of such SOEs were used for the purposes intended under the

agreement.

21. In addition, auditors shall provide a separate management letter addressing the adequacy of

the accounting and internal control systems of the Project, including compliance with the IFAD

Procurement Guidelines and such other matters as IFAD may request.

22. Procurement. Project procurement will follow the national procedures to the extent that they

are consistent with the IFAD Project Procurement Guidelines. To the extent possible, the procurement

of goods, civil works and consulting services shall be bulked into sizeable bids so as to permit optimal

use of competitive bidding. Procurements shall be documented for ex-post review by IFAD and for

audit purposes. Consolidated procurement plans covering a period of 18 months will be prepared as

part of the AWPBs and submitted to IFAD for “no objection” review, before commencement of

procurement. It should provide information of goods, works and services disaggregated into different

components, including: (i) description of goods, works or services to be procured; (ii) procurement

method; (iii) estimated unit cost for each item; (iv) estimated cost for each procurement; and (v)

review procedure (post or prior review by IFAD). A procurement plan for the first 18 months has been

prepared during the design completion mission, and is available in the Project Life File (Appendix 13).

23. In line with IFAD’s Project Procurement Guidelines, the following threshold recommended for

the Projects are subject to prior review by IFAD:

a) Award of any contract for goods and work estimated to cost USD 60 000 or more;

b) Award of any contract for consulting services estimated to cost USD 30 000 or more.

c) All contracts, with or without prior IFAD approval, shall be listed in the Register of

Contracts with the dates of approval. The Register shall be updated and submitted to the

IFAD on a six-monthly basis.

24. Contract Management is very critical to smooth and successful implementation of the Project.

CSSP should introduce the system to ensure the rights & duties of each party to contract are provided

to ensure delivery on time, with right quality and as per/ within budget. For an effective contract

administration, each contract should contain all pertinent deliverables, timing, deadlines, results-

oriented reporting and expected outcomes, with measurable indicators. The template of the Contract

Monitoring Form is available in the Procurement Handbook as well as IFAD‘s Loan Disbursement

Handbook. The contract monitoring form should be submitted to IFAD after each ―prior review

contract‖ has been signed and along with each Withdrawal Application for all contracts with ongoing

payments.

25. Financial Statements. The financial statements of the Project for each fiscal year should

consist of (i) yearly and cumulative statements of sources and application of funds, which should

disclose separately IFAD funds, GoV funds and beneficiary’s funds and (ii) the Balance Sheet which

should disclose bank and cash balances that agree with the statement of sources and application of

funds, fixed assets and liabilities; and (iii) yearly and cumulative SOEs by withdrawal application and

category of expenditures. CSSP shall prepare and deliver to IFAD such financial statements within

three months of the end of each Fiscal Year. The aforesaid statements duly audited should be

delivered to IFAD within six months of the end of each Fiscal Year.





202

Annex 1. CSSP Financial Management Assessment

Project # The Commercial Smallholder Support Project in Bắc

Kan and Cao Bằng provinces (CSSP)

Implementing Entity: Bac Kan and Cao Bang Provincial People's

Committee

Review completed by Nguyen Thu Hoai Date : 18 April 2016

I. SUMMARY

Risk Risk Risk Mitigating Measures incorporated

into Project Design

Residual

FM Risk

Inherent Risk

Country Level

National and EA environment M

Recent IFAD assessment based on the TI

corruption index and RSP score M

Project Level

The ability of PPCO to effectively coordinate

implementation.

M

Adequate staffing arrangements at PPCO

level.

Training/on the job training to be provided to

District/commune level to strengthen

accountability; fiduciary capacity.

Fiduciary capacity assessments to be

performed at district and commune level

before commencement of fund-flows.

Training to be provided by

PPCO/consultants; Needs-based support

from PPCO offices with budget preparation

and reporting.

L

Budgeting

PPCO is responsible for synthesis and

preparation of the AWPB. Weak coordination in

planning between the planning officer and

finance staff leads to difficulty in

implementation.

M

Expected to be addressed by PPCO

L

Accounting

Accounting staff recruited by the previous

project have sufficient skills and capacity to

perform the tasks.

The 3PAD and DBRP have an effective

computerized Financial Accounting System.

M

Chief accountants and accounting staff of the

previous project to be recruited for the

current one as they have experience and

good

Commune accounts to be recruited by the

Project and report to the PC, with one

account covering 3 communes.

capacity.

Use the same software of the 3PAD as it is

good and reliable.

L

Internal Controls

M

The project’s internal controls will be

designed to ensure effectiveness and

efficiency of operations, reliability of reporting

and compliance through dynamic processes.

Roles and responsibilities will be aligned to

project objectives. This will include elements

such as the control environment, risk

L





203

assessment, communication and monitoring

to ensure coherence with good governance

and the mutual accountability framework.

The project implementation manual (PIM)

including also FMM will detail the control

framework based on best practises. These

manuals should be endorsed by IFAD prior

to the first disbursement.

Regular IFAD supervision missions will help

ascertain level of compliance for internal

controls and procurement

Review of internal controls and procurement

will also be covered by annual audits

Funds Flow

Staff have experience with IFAD policies and

procedures and experience in handling IFAD

funded projects.

Delay may happens at district/commune level in

relation with the payment/withdrawal

applications

L

Flow of funds and disbursement

arrangements. Immediately after entry into

force of the Financing Agreement, there shall

be one Designated Account denominated in

US dollars to be opened for the IFAD loan.

The Designated Accounts will be maintained

by Ministry of Finance.

There shall be Project Accounts

denominated in VND opened in Bac Kan,

Cao Bang and maintained and operated by

the PPCO. The directors of the Project shall

be fully authorized to operate the relevant

Project Accounts. The PPCO and the

District/Commune/Implementing Agency

shall maintain separate Implementation

“Project Accounts” in local currency to

receive proceeds of the financing from the

counterpart funding. The PPCO will ensure

that funds received at each level are

transferred without delay.

L

Financial Reporting

PPCO has the capacity to supervise

District/Commune level and Implementing

Agency to submit timely and acceptable reports

for consolidation into quarterly/annually reports

for submission to IFAD.

M

Training to be provided to accounts staff on

GOV and IFAD procedures

Capacity building for District/Commune staff

Close monitoring of district progress &

financial reporting by PPCO offices

Template of reporting to be added in the

FMM

L

Auditing

L

Audit TOR will include all Project activities

and subjected to approve by IFAD L

Overall FM Risk M L





204

II. DETAIL

Topic Response

1. Organization and Staffing

1.1 Which entity is the LPA?

What is the entity’s legal status?

Provincial People's Committees

1.2 Will financial management of the project be the

responsibility of the LPA or be undertaken within the-

PIU/PPCO?

PPCO (Provincial Project Coordination

Office)

1.3 Has the entity implemented a donor financed project in the

past - if so, please provide details?

No

Staffing

1.4 What is the (proposed) organizational structure of the

accounting department?

At PPCO level: 5 full time staff inclusive

of 4 accountants and a procurement &

infrastructure officer. At commune level,

one part-time accountant to be

seconded to the project.

1.5 Identify the (proposed) accounts staff, including job title,

responsibilities, educational background and professional

experience.

The chief accountant has sufficient

finance management capacity and

experience working with IFAD funded

projects, preferably transferred from the

previous project. Four other offices will

have relevant experience and

qualifications, to be recruited upon

signing of the FA. Priority should be

given to those who worked on the

previous project.

1.6 Are written position descriptions that clearly define duties,

responsibilities, lines of supervision, and limits of authority

for all of the officers, managers, and staff?

Written position descriptions from CSSP

clearly defined duties and

responsibilities

1.7 Is the finance and accounts staff adequately qualified and

experienced?

Finance staff are qualified and

experienced

1.8 Are the project accounts and finance staff trained in IFAD

procedures?

Yes, these trainings are usually

conducted locally to continuously

update staff on IFAD and GOV

procedures at the CSSP.

1.9 Are any Finance Staff appointed on contract?

What is the duration of the contracts?

Indicate key positions not contracted yet, and the

estimated date of appointment

The chief accountant of Bac Kan is a

Government officer and has a contract

with the Government. The new staff

maybe from the Government or be

recruited from the market with contracts

for 2 years, renewable based on

performance.





205

Topic Response

1.10 What is training policy for the finance and accounting

staff?

An FM training on IFAD and GOV

procedures to be carried out ASAP

since the FA is signed.

During implementation, training is based

on needed and in consultation with

IFAD.

2. Budgeting

2.1 Who is responsible for preparation and approval of project

budgets?

The project budget procedures follow a

bottom up approach as decentralization

regulations:

- Commune level (CPC) - District level (DPC) - Provincial level (PPCO)

The PPCO will be responsible for the

consolidation and preparation of the

project budget. Project budget to be

submitted to IFAD for clearance and

then to PPC for approval.

2.2 Are project budgets prepared for all significant project

activities in sufficient detail to provide a meaningful tool

with which to monitor subsequent performance?

The existing government budgeting

process request for all the significant

activities to be presented in the AWPB.

Any additional activities are subjected to

approval. By using the GOV system, the

project AWPB is very details and can be

used as a meaningful tool for monitoring

and planning. Currently, there was lack

of coordination between planning office

with accounting office. As such the WP

usually are not doable

2.3 Are procedures in place to plan project activities, collect

information from the units in charge of the different

components, and prepare the budgets?

For the Project: AWPBs and activities

will form the basis for project planning.

The AWPB will consolidate plans and

budgets elaborated through a

participatory approach by partners,

stakeholders and beneficiaries. During

budget preparation each year for the

duration of the Project, the PPCO shall

ensure that the IFAD share of the

financing and the Government

contribution of the project is reflected in

budgets.





206

Topic Response

3 Funds Flow/Disbursement Arrangements

3.1 Does the Implementing Entity have previous experience of

using imprest fund and donor funding SOE procedures?

Were there any problems or issues encountered by project

staff in the operation of the imprest fund or SoE

procedures in the past?

YES

None reported by donors

3.2 Does the Implementing Entity have experience in the

management of disbursements from IFAD or other

donors?

Have there been the major problems in the past in receipt

of funds by the entity?

YES

NO

3.3 Does the entity have/need to develop capacity to manage

foreign exchange risks?

The design of the computerised system

is customised to record both local and

foreign currencies. The PPCO staff

need to improve the capacity to enable

to manage the foreign exchange risk

3.4 Are the beneficiaries required to contribute to project

costs?

How are payments made for the counterpart funds?

If counterpart funds are to be contributed in kind (in the

form of labour), are proper guidelines formulated to record

and value the labour contribution?

Yes, the beneficiaries are required to

contribute to the project cost and can be

in cash or in kind.

Counterpart funds will be transferred to the

project accounts in State Treasury system

based on the AWBP

3.5 Is part of the project implemented by communities or

NGOs?

Does the PIU have the necessary reporting and

monitoring features built into its systems to track the use

of project proceeds by such agencies?

NO

3.6 Describe (proposed) project funds flow arrangements;

(attach flow chart and explanation of the flow of funds from

IFAD, government and other financiers.

Attached

3.7 In which bank will the Imprest Account be opened? Will be determined by the MOF with

approval from IFAD





207

Topic Response

Internal Controls

4.1 Segregation of duties - are the following functional

responsibilities performed by different units or persons: (i)

authorization to execute a transaction; (ii) recording of the

transaction; and (iii) custody of assets involved in the

transaction?

The proposed organization chart of the

accounting department and

accountant’s job descriptions are

identified and include the segregation of

duties.

However, the internal control

environment of the 3 PAD was good but

DBRP was weak. The emphasis is on

the controlled processing of transactions

and the avoidance of overspending of

budget provision rather than broader

accountability for the effective use of

resources. The lack of linkage between

plans and budgets means that expected

results are not clearly defined

4.2 Are the functions of ordering, receiving, accounting for,

and paying for goods and services appropriately

segregated?

Yes, to be covered in FMM

4.3 Are bank reconciliations prepared by someone other than

those who make or approve payments?

Yes, to be covered in FMM

5. Accounting Systems, Policies and Procedures

5.1 Does the entity have an integrated accounting system that

allows for the proper recording of project financial

transactions, including the allocation of expenditures in

accordance with the respective components,

disbursement categories, and sources of funds? Will the

project use the entity accounting system?

CSSP will apply a double entries system

and uses accrual accounting. It is

requested that the CSSP needs to

develop an integrated accounting

system that allows for the proper

recording of project financial

transactions, including the allocation of

expenditures in accordance with the

respective components, disbursement

categories, and sources of funds

Recommended to use the ANA software

which all IFAD projects are using

5.2 Are controls in place concerning the preparation and

approval of transactions, ensuring that all transactions are

correctly made and adequately explained?

To be covered in FMM to ensure that

the control procedures of preparation and

approval of transactions are correctly made

and adequately explained.

5.3 Is the chart of accounts adequate to properly account for

and report on project activities and disbursement

categories?

The project will use the chart of accounts

regulated by the Government (decision

19/2006/QĐ-BTC), which is adequate to

properly account for and report on project

activities and disbursement categories

5.4 Can cost allocations to the various funding sources be

made accurately?

Software to be developed





208

Topic Response

5.5 Are the General Ledger and subsidiary ledgers reconciled

and in balance?

Yes

5.6 Are all accounting and supporting documents retained on

a permanent basis in a defined system that allows

authorized users easy access?

All original documentation to be

maintained at PPCO, District and

Commune level.

5.7 What is the basis of accounting (e.g., cash, accrual)? Accrual

5.8 What accounting standards are followed? Vietnamese Accounting Standards

5.9 Does the project have an adequate policies and

procedures manual to guide activities and ensure staff

accountability?

To be covered in FMM

5.10 Do procedures exist to ensure that only authorized

persons can alter or establish a new accounting principle,

policy or procedure to be used by the entity?


5.11 Is there a written policies and procedures manual covering

all routine project financial management activities?

Are manuals distributed to appropriate personnel?


Payments

5.12 Are all invoices stamped PAID, dated, reviewed and

approved, and clearly marked for account code

assignment?


Cash and Bank

5.13 Does the organization maintain an adequate, up-to-date

cashbook, recording receipts and payments?

Yes

5.14 Are bank and cash reconciled on a monthly basis? Yes

5.15 Indicate names and positions of authorized signatories of

project bank accounts.

Designated account: MOF, Deputy

Director General, Department of Debt

management and external Finance

Project Account: Project Director and

Chief Accountant

Safeguard over Assets

5.16 Is there a Fixed Asset accounting system, with a Fixed

Asset Register, fully implemented - as part of an

integrated accounting system?

Is the system maintained up to date?

Fixed asset module of accounting

software

5.17 Are there periodic physical reconciliation of fixed assets

and stocks?

Will be included in FMM





209

Topic Response

Other

5.18 Has the project advised employees, beneficiaries and

other recipients to whom to report if they suspect fraud,

waste or misuse of project resources or property?

To be covered at start up/FMM

5.19 Do policies and procedures clearly define conflict of

interest and related party transactions (real and apparent)

and provide safeguards to protect the organization from

them?


5.20 Do controls exist for the preparation of the project payroll

and are changes to the payroll properly authorized?


6. Reporting and Monitoring

6.1 Does the reporting system need to be adapted to report on

the project components?

The reporting system needs to be

adapted to report both project

components and categories. This

requirement will be covered in the FMM

and ToR to develop the accounting

software. Currently, the software which

all other IFAD funded projects using can

provide report on both components and

categories.

6.2 Does the project have established financial management

reporting responsibilities that specify what reports are to

be prepared, what they are to contain, and the frequency

of production.?

To be covered FMM but the PPB

agreed on the list of PFS to be prepared

will be in accordance with Vietnamese

regulations and IFAD requirements.

6.3 What is the frequency of preparation of financial

statements? Are the reports prepared in a timely fashion

so as to useful to management for decision making?

Annual Timeliness to be included in the

FMM

6.4 Do the financial reports compare actual expenditures with

budgeted and programmed allocations?

To be covered in the FMM and ToR to

develop the software

6.5 Are financial reports prepared directly by the automated

accounting system or are they prepared by spreadsheets

or some other means?



6.6 (In case of need of consolidated financial statements) Is

the accounting system sufficiently equipped to ensure

proper consolidation of entities’ financial data?







210

Topic Response

Information Systems

6.7 Is the financial management system computerized? Accounting software will be used

6.8 Can the system produce the necessary project financial

reports?

YES

6.9 Is the staff adequately trained to maintain the system? YES at central level; training to be

provided at Districts/Communes level

6.10 Are adequate systems in place to “back up” financial

records


7. Internal Audit

7.1 Is there an internal audit department in the LPA? No

7.2 What are the qualifications and experience of internal

audit department staff?

N/A

7.3 To whom does the internal auditor report? N/A

7.4 Will the internal audit department include the project in its

work program?

N/A

7.5 Are actions taken on the internal audit findings? N/A

8. External Audit

8.1 Who is the external auditor of the entity? Independent audit company

8.2 Are there any delays in audit of the entity? When are the

audit reports issued?

No

8.3 Is the audit of the entity conducted according to the

International Standards on Auditing?

The audit of the entity is conducted in

accordance with the Vietnamese Standards

on Auditing and acceptable International

Standards on Auditing

8.4 Were there any major accountability issues brought out in the audit report of the past three years?

Were there any issues noted in prior audit reports related

to the operation of project imprest accounts or use of SOE

procedures?

No

8.5 Will the entity auditor audit the project accounts or will

another auditor be appointed to audit the project financial

statements?

Previous and ongoing IFAD funded projects

have shown that an independent auditing

firm was appointed to audit the project

financial statements

8.6 Has the project prepared acceptable terms of reference for

an annual project audit?

Will be prepared before negotiations




Appendix 8. Procurement

212

Appendix 8: Procurement

1. Project communes are now preparing for disbursement under the National Target Project for

New Rural Development (NTP-NRD). Direct contracting, however, is the dominant method for

procurement of works under the national programs for poverty reduction and rural development since

direct contracting could be applied for a work package with the estimated cost below VND 5 billion

according to the Vietnamese Procurement Law.

2. Procurement of goods, works and consulting services financed by IFAD under the CSSP will be

carried out in compliance with the IFAD’s Project Procurement Guidelines (as approved by IFAD in

September 2010 and which may be amended from time to time). The national procurement

procedures, processes and regulations under the Procurement Law could be applied to the extent that

are consistent with IFAD Project Procurement Guidelines.

3. The PPCOs shall submit to IFAD the Draft AWPB and the Procurement Plan covering the initial

eighteen (18) month period of Project implementation. This shall be updated to cover each

succeeding twelve (12) month period for review and no objection. Each procurement plan shall

include the proposed contracts, estimated costs and financings sources, methods of procurement,

related IFAD review procedures, time schedules, etc. as specified in the IFAD procurement format.

4. Procurement methods for work packages under the CSSP include (i) National Competitive

Bidding applied for work packages with estimated cost equivalent or exceeding USD 60,000; (ii) Local

Competitive Bidding applied for work packages with estimated cost less than USD 60,000;

(iii) Procurement with Community Participation or Force Account applied for infrastructure schemes

that can use intensive un-skilled labour and simple techniques such as cement concrete roads, lined

cannels, storages, etc. with the estimated cost less than USD 30,000; (iv) Direct Contracting could be

applied for very small work packages with estimated cost less than USD 5,000.

5. Procurement methods for goods packages under the CSSP include (i) National Competitive

Bidding applied for goods packages with estimated cost equivalent or exceeding USD 60,000;

(ii) National/ Local Shopping applied for goods packages with estimated cost less than USD 60,000;

(iii) Direct Contracting could be applied for very small goods packages with estimated cost less than

USD 5,000.

6. Methods for selecting consultants under the CSSP include (i) Quality and Cost Based Selection

applied for service packages with estimated cost equivalent or exceeding USD 30,000; (ii) Select

Based on Consultants’ Qualifications applied for service packages with estimated cost less than

USD 30,000; (iii) Single Source Selection could be applied only in exceptional circumstances and to

be approved by IFAD in the procurement plan.

7. Prior review thresholds. In accordance with IFAD Project Procurement Guidelines the following

shall be subject to prior review by IFAD: (i) any goods contract estimated to cost USD 60,000 or more;

(ii) any work contract estimated to cost USD 60,000 or more; and (iii) any consulting service contracts

estimated to cost USD 30,000 or more.





214

An indicative 18 months Procurement Plan (January 2017 to June 2018)63

63

See Excel file for details





215





216





217





218





219





220





221





222




Appendix 9. Project cost and financing

223

Appendix 9: Project cost and financing

Project costs

1 The main assumptions underlying the derivation of Project costs, estimated Project costs and

financing plan are:

a. The Project costs are based on April 2016 prices.

b. The proposed Project will be financed over a six-year period (2017-2022).

c. Inflation. Domestic inflation will be about 1.5% in 2016, with moderate inflation expected

to return by 2020. Rates of 3.2% and 4.8% domestic inflation have been applied to

Project years 1 and 2 respectively and 4.4% thereafter. Foreign inflation was set at 2%

p.a. over the Project period, based on the MUV (15) Index.

d. Exchange Rate. The Base Exchange rate for this analysis has been set at VND 22,400

to USD 1 as an official exchange rate prevailing in April 2016 (rounded).

e. The Project costs are presented in both VND and USD. Conversions from current

USD values into Dong use constant purchasing power exchange rates:

f. Taxes and Duties. There is value added tax (VAT) of 10% levied on all imported and

locally procured goods and services, except for agricultural outputs/inputs that are levied

at 5%. Vehicles have a tax of up to 50% depending on an engine power. International

technical assistance does not carry any taxes. For directly recruited local staff the Project

will cover the social insurance charges of 33.5%.

g. The Government will finance the cost of all taxes on goods and services procured under

the Project.

2 The total investment and incremental recurrent Project costs, including physical and price

contingencies, are estimated at about USD 73.6 million (VND 1,670 billion). Physical and price

contingencies make up about 2.0% of the total Project costs due to the fact that investments

associated with the infrastructure, credit financing and grants make up around 56% of the total Project

costs (expressed as a lump sum without physical or price contingencies) while training, technical

assistance and funding of Red Book allocation account for another 32% of total costs (no physical

contingencies are applied to these items). The foreign exchange component is estimated at

USD 8.4 million or about 11.5% of the total Project costs. Taxes and duties make up approximately

USD 1.5 million (2.0%). Project Management costs amount to USD 9.2 million (about 12.5% of the

total Project costs).

Project financing

3 An IFAD Loan of USD 42.5 million will finance 57.7% of total Project cost, including: 50.4% of

Outcome 1: Province-based participatory planning institutionalised outcome (USD 8.1 million); 62.5%

of Outcome 2: A greener agriculture future (USD 13.7 million); 66% of Outcome 3: Profitable farms

linked to finance and markets outcome (USD 42.1 million); and 22.3% of the Project Coordination

Component (USD 9.2 million). An IFAD grant of USD 0.5 million will support the NTP NRD National

Coordination Office.

4 Beneficiaries will contribute approximately USD 9.6 million (13.0%) as co-financing of the

community infrastructure (10%), CIG grant contracts (at least 50%), forest land and forest allocation

(up to 15%) as well as in the form of 51% of the APIF investments to be contributed by the benefitting

businesses.

5 The Government contribution will cover all taxes and duties on all Project inputs that involve

funding from the IFAD Loan/Grant and any other external source of funding associated with the IFAD

Loan/Grant (USD 1.5 million). In addition, the Government is expected to contribute from its budget

about USD 19.5 million (26.5% of total project costs) to cover staff salary costs, aspects of MOP-

SEDP implementation, its contribution to the issuance of forest land red books and the NTP-NRD

contribution to CIGs.





224

Annex 1: Summary Cost and Financing Tables

1. Components Project Cost Summary

2. Expenditure Accounts Project Cost Summary

3. Expenditure Accounts by Components – Totals including Contingencies (USD’000)

4. Expenditure Accounts by Components – Totals including Contingencies (VND Million)

5. Project Components by Year -- Totals Including Contingencies

6. Project Components by Year -- Investment/Recurrent Costs (USD’000)

7. Expenditure Accounts by Year -- Totals Including Contingencies

8. Expenditure Accounts Breakdown (USD’000)

9. Components by Financiers (USD’000)

10. Disbursement Accounts by Financiers (USD’000)

11. Expenditure Accounts by Financiers (USD’000)

12. Local/Foreign/Taxes by Financiers (USD’000)

13. Inflation and Exchange Rates

14. Project components by financier for Bắc Kạn Province

15. Project components by financier for Cao Bằng province

Annex 2: Detailed Cost Tables

Output 1: Strategic investment plan - Bắc Kạn and Cao Bằng provinces

Output 2.1: Climate change adaptation plan - Bắc Kạn province

Output 2.2: Climate change adaptation plan - Cao Bằng province

Output 3.1 Climate-informed, market-oriented participatory SEDP - Bắc Kạn province

Output 3.2 Climate-informed, market-oriented participatory SEDP - Cao Bằng province

Output 4 Forest land allocation and use - Bắc Kạn

Output 5.1 CIGs for climate adaptation - Bắc Kạn province

Output 5.2 CIGs for climate adaptation - Cao Bằng province

Output 6.1 Community infrastructure - Bắc Kạn province

Output 6.2 Community infrastructure - Cao Bằng province

Output 7.1: Rural financial services - Bắc Kạn province

Output 7.2: Rural financial services - Cao Bằng province

Output 8.1: Agribusiness Promotion Investment Fund - Bắc Kạn province

Output 8.2: Agribusiness Promotion Investment Fund - Cao Bằng province

Project Coordination Bắc Kạn province

Project Coordination Cao Bằng province





226

Annex 1: Summary Cost and Financing Tables

Table 1: Components Project Cost Summary

% % Total




1. Strategic Investment plan 3,136.0 - 3,136.0 140.0 - 140.0 - -

2. Climate change adaptation plan 27,325.8 - 27,325.8 1,219.9 - 1,219.9 - 2

3. Climate-informed, market oriented socio-economic plans 148,333.9 772.8 149,106.7 6,622.1 34.5 6,656.6 1 9

Subtotal Province-based participatory planning institutionalised 178,795.7 772.8 179,568.5 7,981.9 34.5 8,016.4 - 11


1. Forest land and forest allocation 56,872.3 - 56,872.3 2,538.9 - 2,538.9 - 4

2. CIGs for climate adaptation 204,485.7 39,977.5 244,463.3 9,128.8 1,784.7 10,913.5 16 15

Subtotal A greener agricultural future 261,358.0 39,977.5 301,335.6 11,667.8 1,784.7 13,452.5 13 19


1. Community infrastructure 548,799.8 124,306.8 673,106.6 24,500.0 5,549.4 30,049.4 18 41

2. Rural financial services 98,749.5 7,537.6 106,287.1 4,408.5 336.5 4,745.0 7 7

3. Agriculture Promotion Investment Fund 159,837.4 2,240.0 162,077.4 7,135.6 100.0 7,235.6 1 10

Subtotal Profitable farms linked to finance and markets 807,386.8 134,084.4 941,471.2 36,044.1 5,985.9 42,030.0 14 58

D. Programme Management 178,606.0 11,529.7 190,135.7 7,973.5 514.7 8,488.2 6 12

E. NTP NRD National Coordination Office Grant 11,200.0 - 11,200.0 500.0 - 500.0 - 1









227

Table 2: Expenditure Accounts Project Cost Summary

% % Total



I. Investment Costs

A. Civil Works

Civil Works 286.7 71.7 358.4 12.8 3.2 16.0 20 -

B. Equipment and materials 32,301.4 13,843.5 46,144.9 1,442.0 618.0 2,060.0 30 3

C. Vehicles 2,916.5 1,249.9 4,166.4 130.2 55.8 186.0 30 -

D. Consultancies

1. Technical Assistance

International Technical Assistance - 13,406.4 13,406.4 - 598.5 598.5 100 1

National Technical Assistance 40,673.9 - 40,673.9 1,815.8 - 1,815.8 - 3

Subtotal Technical Assistance 40,673.9 13,406.4 54,080.3 1,815.8 598.5 2,414.3 25 3

2. Research, Studies and Surveys 197,660.7 - 197,660.7 8,824.1 - 8,824.1 - 12

Subtotal Consultancies 238,334.6 13,406.4 251,741.0 10,639.9 598.5 11,238.4 5 16

E. Training 143,530.2 - 143,530.2 6,407.6 - 6,407.6 - 9

F. Grants

1. Community Infrastructure Investment Grants

Community Infrastructure Investment Grants 497,227.1 124,306.8 621,533.9 22,197.6 5,549.4 27,747.1 20 38

Comunity Infrastructure Design and Supervision 30,292.7 - 30,292.7 1,352.4 - 1,352.4 - 2

Subtotal Community Infrastructure Investment Grants 527,519.8 124,306.8 651,826.6 23,550.0 5,549.4 29,099.4 19 40

3. CIG Investment Grants 119,168.0 29,792.0 148,960.0 5,320.0 1,330.0 6,650.0 20 9

4. APIF Investment Grant 140,533.1 - 140,533.1 6,273.8 - 6,273.8 - 9

Subtotal Grants 787,221.0 154,098.8 941,319.7 35,143.8 6,879.4 42,023.2 16 58

G. Credit

1. WDF financing fro on-lending 84,000.3 - 84,000.3 3,750.0 - 3,750.0 - 5

Total Investment Costs 1,288,590.7 182,670.3 1,471,261.0 57,526.4 8,154.9 65,681.3 12 91

II. Recurrent Costs

A. Salaries and allowances /a 80,438.4 - 80,438.4 3,591.0 - 3,591.0 - 5

B. Operating costs

1. Operation and Maintenance 5,816.8 1,454.2 7,271.0 259.7 64.9 324.6 20 -

2. Other Operating Costs 62,500.5 2,240.0 64,740.5 2,790.2 100.0 2,890.2 3 4

Subtotal Operating costs 68,317.3 3,694.2 72,011.5 3,049.9 164.9 3,214.8 5 4

Total Recurrent Costs 148,755.7 3,694.2 152,449.9 6,640.9 164.9 6,805.8 2 9





_________________________________

\a Includes social charges (33.5%). Income tax is considered as a personal responsibility but would be arranged centrally from the PCU.





228

Table 3: Expenditure Accounts by Components – Totals including Contingencies (VND million)

Province-based participatory planning Profitable farms linked to finance and

institutionalised A greener agricultural markets

Climate Climate-informed, future Agriculture NTP NRD

Strategic change market oriented Forest land CIGs for Rural Promotion National

Investment adaptation socio-economic and forest climate Community financial Investment Programme Coordination

plan plan plans allocation adaptation infrastructure services Fund Management Office Grant Total

I. Investment Costs

A. Civil Works

Civil Works - - - - - - 364.1 - - - 364.1

B. Equipment and materials - - - - 21,536.7 - 1,583.9 - 30,738.3 - 53,859.0

C. Vehicles - - - - - - 4,255.0 - - - 4,255.0

D. Consultancies


International Technical Assistance - - 795.7 - 4,961.9 - 6,862.9 2,395.9 - - 15,016.5

National Technical Assistance - 5,488.0 784.0 - 9,161.6 - 201.6 17,153.9 7,884.8 - 40,673.9

Subtotal Technical Assistance - 5,488.0 1,579.7 - 14,123.5 - 7,064.5 19,549.9 7,884.8 - 55,690.4

2. Research, Studies and Surveys 2,688.0 10,440.6 114,074.2 50,745.9 8,512.0 - - - - 11,200.0 197,660.7

Subtotal Consultancies 2,688.0 15,928.6 115,653.9 50,745.9 22,635.5 - 7,064.5 19,549.9 7,884.8 11,200.0 253,351.1

E. Training 455.2 12,603.0 36,637.8 6,609.6 59,456.6 23,121.5 9,980.9 2,396.6 5,143.4 - 156,404.6

F. Grants


Community Infrastructure Investment Grants - - - - - 621,533.9 - - - - 621,533.9

Comunity Infrastructure Design and Supervision - - - - - 30,292.7 - - - - 30,292.7

Subtotal Community Infrastructure Investment Grants - - - - - 651,826.6 - - - - 651,826.6

3. CIG Investment Grants - - - - 148,960.0 - - - - - 148,960.0

4. APIF Investment Grant - - - - - - - 140,533.1 - - 140,533.1

Subtotal Grants - - - - 148,960.0 651,826.6 - 140,533.1 - - 941,319.7

G. Credit

1. WDF financing fro on-lending - - - - - - 84,000.3 - - - 84,000.3

Total Investment Costs 3,143.2 28,531.6 152,291.7 57,355.4 252,588.9 674,948.2 107,248.8 162,479.5 43,766.6 11,200.0 1,493,553.8

II. Recurrent Costs

A. Salaries and allowances /a - - - - - - - - 90,753.3 - 90,753.3

B. Operating costs

1. Operation and Maintenance - - - - - - - - 8,537.2 - 8,537.2

2. Other Operating Costs - - - - - - 1,233.2 - 75,983.7 - 77,216.9

Subtotal Operating costs - - - - - - 1,233.2 - 84,520.9 - 85,754.1

Total Recurrent Costs - - - - - - 1,233.2 - 175,274.2 - 176,507.3

Total PROJECT COSTS 3,143.2 28,531.6 152,291.7 57,355.4 252,588.9 674,948.2 108,482.0 162,479.5 219,040.7 11,200.0 1,670,061.2

Taxes 268.8 1,044.1 11,407.4 5,074.6 3,004.9 - 2,445.6 - 11,267.0 - 34,512.4

Foreign Exchange - - 795.7 - 41,214.9 124,306.8 8,687.4 2,395.9 13,517.7 - 190,918.5

_________________________________






229

Table 4: Expenditure Accounts by Components – Totals including Contingencies (USD’000)

Province-based participatory planning A greener agricultural Profitable farms linked to finance

institutionalised future and markets

Climate Climate-informed, Agriculture NTP NRD

Strategic change market oriented Forest land CIGs for Rural Promotion National

Investment adaptation socio-economic and forest climate Community financial Investment Programme Coordination

plan plan plans allocation adaptation infrastructure services Fund Management Office Grant Total

I. Investment Costs

A. Civil Works

Civil Works - - - - - - 16.2 - - - 16.2

B. Equipment and materials - - - - 914.1 - 69.6 - 1,293.7 - 2,277.4

C. Vehicles - - - - - - 188.3 - - - 188.3

D. Consultancies


International Technical Assistance - - 35.1 - 213.7 - 280.0 103.5 - - 632.2

National Technical Assistance - 245.0 35.0 - 409.0 - 9.0 765.8 352.0 - 1,815.8

Subtotal Technical Assistance - 245.0 70.1 - 622.7 - 289.0 869.3 352.0 - 2,448.0

2. Research, Studies and Surveys 120.0 466.1 5,092.6 2,265.4 380.0 - - - - 500.0 8,824.1

Subtotal Consultancies 120.0 711.1 5,162.7 2,265.4 1,002.7 - 289.0 869.3 352.0 500.0 11,272.1

E. Training 20.2 534.5 1,562.9 284.3 2,544.3 990.2 427.9 101.2 221.9 - 6,687.4

F. Grants


Community Infrastructure Investment Grants - - - - - 27,747.1 - - - - 27,747.1

Comunity Infrastructure Design and Supervision - - - - - 1,352.4 - - - - 1,352.4

Subtotal Community Infrastructure Investment Grants - - - - - 29,099.4 - - - - 29,099.4

3. CIG Investment Grants - - - - 6,650.0 - - - - - 6,650.0

4. APIF Investment Grant - - - - - - - 6,273.8 - - 6,273.8

Subtotal Grants - - - - 6,650.0 29,099.4 - 6,273.8 - - 42,023.2

G. Credit

1. WDF financing fro on-lending - - - - - - 3,750.0 - - - 3,750.0

Total Investment Costs 140.2 1,245.6 6,725.6 2,549.7 11,111.1 30,089.6 4,741.0 7,244.3 1,867.6 500.0 66,214.7

II. Recurrent Costs

A. Salaries and allowances /a - - - - - - - - 3,806.8 - 3,806.8

B. Operating costs

1. Operation and Maintenance - - - - - - - - 359.8 - 359.8

2. Other Operating Costs - - - - - - 53.9 - 3,170.6 - 3,224.5

Subtotal Operating costs - - - - - - 53.9 - 3,530.4 - 3,584.2

Total Recurrent Costs - - - - - - 53.9 - 7,337.1 - 7,391.0

Total PROJECT COSTS 140.2 1,245.6 6,725.6 2,549.7 11,111.1 30,089.6 4,794.9 7,244.3 9,204.8 500.0 73,605.7

Taxes 12.0 46.6 509.3 226.5 129.4 - 108.1 - 471.7 - 1,503.6

Foreign Exchange - - 35.1 - 1,817.9 5,549.4 360.6 103.5 567.3 - 8,433.7

_________________________________






230

Table 5: Project Components by Year -- Totals Including Contingencies

Totals Including Contingencies (VND Million) Totals Including Contingencies (US$ '000)

2017 2018 2019 2020 2021 2022 Total 2017 2018 2019 2020 2021 2022 Total


1. Strategic Investment plan 3,143.2 - - - - - 3,143.2 140.2 - - - - - 140.2

2. Climate change adaptation plan 6,914.5 6,652.9 2,944.8 2,335.4 8,941.3 742.7 28,531.6 308.0 294.0 126.3 97.4 389.6 30.3 1,245.6

3. Climate-informed, market oriented socio-economic plans 15,010.1 19,606.3 42,629.7 45,329.8 14,857.9 14,857.9 152,291.7 668.4 867.4 1,874.7 1,988.4 663.3 663.3 6,725.6

Subtotal Province-based participatory planning institutionalised 25,067.8 26,259.2 45,574.6 47,665.2 23,799.3 15,600.6 183,966.5 1,116.6 1,161.5 2,001.0 2,085.8 1,052.9 693.6 8,111.3


1. Forest land and forest allocation 7,589.0 17,058.2 12,426.3 4,838.4 10,035.2 5,408.3 57,355.4 338.7 758.5 547.1 216.0 448.0 241.4 2,549.7

2. CIGs for climate adaptation 48,929.0 91,210.4 77,656.3 23,939.8 6,356.7 4,496.6 252,588.9 2,180.2 4,044.1 3,423.9 1,004.3 270.8 187.7 11,111.1

Subtotal A greener agricultural future 56,518.0 108,268.6 90,082.6 28,778.2 16,391.9 9,904.9 309,944.3 2,518.9 4,802.6 3,971.0 1,220.3 718.8 429.2 13,660.8


1. Community infrastructure 98,631.7 206,894.3 211,945.8 150,756.4 3,360.0 3,360.0 674,948.2 4,402.0 9,231.0 9,442.8 6,713.8 150.0 150.0 30,089.6

2. Rural financial services 21,668.9 39,253.7 24,113.3 10,481.1 10,711.1 2,253.9 108,482.0 965.2 1,745.9 1,072.5 461.7 460.4 89.2 4,794.9

3. Agriculture Promotion Investment Fund 16,906.8 30,968.0 41,543.8 46,519.7 26,541.2 - 162,479.5 754.5 1,381.3 1,852.2 2,073.2 1,183.1 - 7,244.3

Subtotal Profitable farms linked to finance and markets 137,207.3 277,115.9 277,602.9 207,757.2 40,612.4 5,613.9 945,909.7 6,121.7 12,358.3 12,367.5 9,248.7 1,793.5 239.2 42,128.8

D. Programme Management 36,143.3 34,707.6 36,175.2 36,799.9 38,387.6 36,827.1 219,040.7 1,604.8 1,511.3 1,538.8 1,528.2 1,558.1 1,463.5 9,204.8

E. NTP NRD National Coordination Office Grant 5,600.0 5,600.0 - - - - 11,200.0 250.0 250.0 - - - - 500.0

Total PROJECT COSTS 260,536.5 451,951.3 449,435.3 321,000.5 119,191.1 67,946.5 1,670,061.2 11,611.9 20,083.6 19,878.3 14,083.0 5,123.3 2,825.5 73,605.7





231

Table 6: Project Components by Year -- Investment/Recurrent Costs (USD’000)

Totals Including Contingencies

2017 2018 2019 2020 2021 2022 Total


1. Strategic Investment plan

Investment Costs 140.2 - - - - - 140.2

2. Climate change adaptation plan

Investment Costs 308.0 294.0 126.3 97.4 389.6 30.3 1,245.6

3. Climate-informed, market oriented socio-economic plans

Investment Costs 668.4 867.4 1,874.7 1,988.4 663.3 663.3 6,725.6

Subtotal Province-based participatory planning institutionalised 1,116.6 1,161.5 2,001.0 2,085.8 1,052.9 693.6 8,111.3


1. Forest land and forest allocation


2. CIGs for climate adaptation

Investment Costs 2,180.2 4,044.1 3,423.9 1,004.3 270.8 187.7 11,111.1

Subtotal A greener agricultural future 2,518.9 4,802.6 3,971.0 1,220.3 718.8 429.2 13,660.8


1. Community infrastructure

Investment Costs 4,402.0 9,231.0 9,442.8 6,713.8 150.0 150.0 30,089.6

2. Rural financial services

Investment Costs 954.6 1,702.6 1,072.5 461.7 460.4 89.2 4,741.0

Recurrent Costs 10.6 43.3 - - - - 53.9

Subtotal Rural financial services 965.2 1,745.9 1,072.5 461.7 460.4 89.2 4,794.9

3. Agriculture Promotion Investment Fund

Investment Costs 754.5 1,381.3 1,852.2 2,073.2 1,183.1 - 7,244.3

Subtotal Profitable farms linked to finance and markets 6,121.7 12,358.3 12,367.5 9,248.7 1,793.5 239.2 42,128.8

D. Programme Management


Recurrent Costs 1,068.8 1,230.2 1,254.8 1,279.9 1,305.5 1,197.7 7,337.1

Subtotal Programme Management 1,604.8 1,511.3 1,538.8 1,528.2 1,558.1 1,463.5 9,204.8

E. NTP NRD National Coordination Office Grant

Investment Costs 250.0 250.0 - - - - 500.0

Subtotal NTP NRD National Coordination Office Grant 250.0 250.0 - - - - 500.0

Total PROJECT COSTS 11,611.9 20,083.6 19,878.3 14,083.0 5,123.3 2,825.5 73,605.7

Total Investment Costs 10,532.5 18,810.1 18,623.5 12,803.1 3,817.8 1,627.8 66,214.7

Total Recurrent Costs 1,079.4 1,273.5 1,254.8 1,279.9 1,305.5 1,197.7 7,391.0





232

Table 7: Expenditure Accounts by Year -- Totals Including Contingencies

Totals Including Contingencies (VND Million) Totals Including Contingencies (US$ '000)

2017 2018 2019 2020 2021 2022 Total 2017 2018 2019 2020 2021 2022 Total

I. Investment Costs

A. Civil Works

Civil Works 364.1 - - - - - 364.1 16.2 - - - - - 16.2

B. Equipment and materials 10,540.7 12,039.1 9,813.7 6,849.4 7,150.7 7,465.4 53,859.0 467.8 523.9 416.5 284.0 289.7 295.5 2,277.4

C. Vehicles 3,686.9 568.1 - - - - 4,255.0 163.6 24.7 - - - - 188.3

D. Consultancies


International Technical Assistance 3,914.4 1,964.7 1,770.3 1,550.9 3,562.2 2,253.9 15,016.5 173.7 85.5 75.1 64.3 144.3 89.2 632.2

National Technical Assistance 9,072.0 7,324.8 8,601.6 7,929.6 5,953.9 1,792.0 40,673.9 405.0 327.0 384.0 354.0 265.8 80.0 1,815.8

Subtotal Technical Assistance 12,986.4 9,289.5 10,371.9 9,480.5 9,516.1 4,045.9 55,690.4 578.7 412.5 459.1 418.3 410.1 169.2 2,448.0

2. Research, Studies and Surveys 26,642.6 36,733.8 40,205.8 40,781.4 31,552.6 21,744.6 197,660.7 1,189.4 1,639.9 1,794.9 1,820.6 1,408.6 970.7 8,824.1

Subtotal Consultancies 39,629.0 46,023.3 50,577.7 50,262.0 41,068.7 25,790.5 253,351.1 1,768.1 2,052.4 2,254.0 2,238.9 1,818.7 1,139.9 11,272.1

E. Training 29,805.3 38,840.7 43,190.6 38,572.0 4,925.4 1,070.6 156,404.6 1,322.7 1,690.4 1,833.0 1,599.4 199.5 42.4 6,687.4

F. Grants


Community Infrastructure Investment Grants 89,600.0 192,640.0 193,760.0 138,813.9 3,360.0 3,360.0 621,533.9 4,000.0 8,600.0 8,650.0 6,197.1 150.0 150.0 27,747.1

Comunity Infrastructure Design and Supervision 4,480.0 9,520.0 9,520.0 6,772.7 - - 30,292.7 200.0 425.0 425.0 302.4 - - 1,352.4

Subtotal Community Infrastructure Investment Grants 94,080.0 202,160.0 203,280.0 145,586.6 3,360.0 3,360.0 651,826.6 4,200.0 9,025.0 9,075.0 6,499.4 150.0 150.0 29,099.4

3. CIG Investment Grants 31,360.0 62,720.0 54,880.0 - - - 148,960.0 1,400.0 2,800.0 2,450.0 - - - 6,650.0

4. APIF Investment Grant 13,440.0 26,880.0 35,840.0 40,320.0 24,053.1 - 140,533.1 600.0 1,200.0 1,600.0 1,800.0 1,073.8 - 6,273.8

Subtotal Grants 138,880.0 291,760.0 294,000.0 185,906.6 27,413.1 3,360.0 941,319.7 6,200.0 13,025.0 13,125.0 8,299.4 1,223.8 150.0 42,023.2

G. Credit

1. WDF financing fro on-lending 13,307.2 33,457.7 22,286.1 8,542.5 6,406.8 - 84,000.3 594.1 1,493.6 994.9 381.4 286.0 - 3,750.0

Total Investment Costs 236,213.2 422,688.9 419,868.1 290,132.4 86,964.8 37,686.4 1,493,553.8 10,532.5 18,810.1 18,623.5 12,803.1 3,817.8 1,627.8 66,214.7

II. Recurrent Costs

A. Salaries and allowances /a 14,076.5 14,641.4 15,314.2 15,988.0 16,691.5 14,041.7 90,753.3 624.7 637.2 649.9 662.9 676.2 555.8 3,806.8

B. Operating costs

1. Operation and Maintenance 2,081.4 1,180.6 1,234.9 1,289.2 1,345.9 1,405.2 8,537.2 92.4 51.4 52.4 53.5 54.5 55.6 359.8

2. Other Operating Costs 8,165.4 13,440.4 13,018.1 13,590.9 14,188.9 14,813.2 77,216.9 362.4 584.9 552.5 563.5 574.8 586.3 3,224.5

Subtotal Operating costs 10,246.7 14,621.0 14,253.0 14,880.1 15,534.8 16,218.4 85,754.1 454.7 636.3 604.9 617.0 629.3 641.9 3,584.2

Total Recurrent Costs 24,323.3 29,262.4 29,567.2 30,868.1 32,226.3 30,260.1 176,507.3 1,079.4 1,273.5 1,254.8 1,279.9 1,305.5 1,197.7 7,391.0

Total PROJECT COSTS 260,536.5 451,951.3 449,435.3 321,000.5 119,191.1 67,946.5 1,670,061.2 11,611.9 20,083.6 19,878.3 14,083.0 5,123.3 2,825.5 73,605.7

_________________________________






233

Table 8: Expenditure Accounts Breakdown (USD ‘000)

Physical

Cont.

Plus

Base Cost Physical Contingencies Price Contingencies Total Incl. Cont. Base Costs Price

Local Local Local Local + Price Cont. on

(Excl. Duties & For. (Excl. Duties & For. (Excl. Duties & (Excl. Duties & Cont. on Physical

For. Exch. Taxes) Taxes Total Exch. Taxes) Taxes Total Exch. Taxes) Taxes Total For. Exch. Taxes) Taxes Total Base Costs Cont.

I. Investment Costs

A. Civil Works

Civil Works 3.2 11.2 1.6 16.0 - - - - 0.0 0.1 0.0 0.2 3.2 11.3 1.6 16.2 16.2 -

B. Equipment and materials 618.0 1,236.0 206.0 2,060.0 30.9 61.8 10.3 103.0 34.3 68.6 11.4 114.4 683.2 1,366.4 227.7 2,277.4 2,169.0 108.4

C. Vehicles 55.8 37.2 93.0 186.0 - - - - 0.7 0.5 1.2 2.3 56.5 37.7 94.2 188.3 188.3 -

D. Consultancies


International Technical Assistance 598.5 - - 598.5 - - - - 33.7 - - 33.7 632.2 - - 632.2 632.2 -

National Technical Assistance - 1,815.8 - 1,815.8 - - - - - - - - - 1,815.8 - 1,815.8 1,815.8 -

Subtotal Technical Assistance 598.5 1,815.8 - 2,414.3 - - - - 33.7 - - 33.7 632.2 1,815.8 - 2,448.0 2,448.0 -

2. Research, Studies and Surveys - 7,991.7 832.4 8,824.1 - - - - - - - - - 7,991.7 832.4 8,824.1 8,824.1 -

Subtotal Consultancies 598.5 9,807.5 832.4 11,238.4 - - - - 33.7 - - 33.7 632.2 9,807.5 832.4 11,272.1 11,272.1 -

E. Training - 6,407.6 - 6,407.6 - - - - - 279.8 - 279.8 - 6,687.4 - 6,687.4 6,687.4 -

F. Grants


Community Infrastructure Investment Grants 5,549.4 22,197.6 - 27,747.1 - - - - - - - - 5,549.4 22,197.6 - 27,747.1 27,747.1 -

Comunity Infrastructure Design and Supervision - 1,352.4 - 1,352.4 - - - - - - - - - 1,352.4 - 1,352.4 1,352.4 -

Subtotal Community Infrastructure Investment Grants 5,549.4 23,550.0 - 29,099.4 - - - - - - - - 5,549.4 23,550.0 - 29,099.4 29,099.4 -

3. CIG Investment Grants 1,330.0 5,320.0 - 6,650.0 - - - - - - - - 1,330.0 5,320.0 - 6,650.0 6,650.0 -

4. APIF Investment Grant - 6,273.8 - 6,273.8 - - - - - - - - - 6,273.8 - 6,273.8 6,273.8 -

Subtotal Grants 6,879.4 35,143.8 - 42,023.2 - - - - - - - - 6,879.4 35,143.8 - 42,023.2 42,023.2 -

G. Credit

1. WDF financing fro on-lending - 3,750.0 - 3,750.0 - - - - - - - - - 3,750.0 - 3,750.0 3,750.0 -

Total Investment Costs 8,154.9 56,393.4 1,133.0 65,681.3 30.9 61.8 10.3 103.0 68.7 349.0 12.6 430.4 8,254.6 56,804.2 1,155.9 66,214.7 66,106.3 108.4

II. Recurrent Costs

A. Salaries and allowances /a - 3,591.0 - 3,591.0 - - - - - 215.8 - 215.8 - 3,806.8 - 3,806.8 3,806.8 -

B. Operating costs

1. Operation and Maintenance 64.9 227.2 32.5 324.6 3.2 11.4 1.6 16.2 3.8 13.3 1.9 18.9 72.0 251.8 36.0 359.8 342.6 17.1

2. Other Operating Costs 100.0 2,511.2 279.0 2,890.2 - 125.6 14.0 139.5 7.2 168.8 18.8 194.8 107.2 2,805.5 311.7 3,224.5 3,076.0 148.4

Subtotal Operating costs 164.9 2,738.4 311.5 3,214.8 3.2 136.9 15.6 155.7 11.0 182.0 20.6 213.7 179.2 3,057.4 347.7 3,584.2 3,418.7 165.6

Total Recurrent Costs 164.9 6,329.4 311.5 6,805.8 3.2 136.9 15.6 155.7 11.0 397.8 20.6 429.5 179.2 6,864.1 347.7 7,391.0 7,225.4 165.6

Total 8,319.8 62,722.8 1,444.5 72,487.1 34.1 198.7 25.9 258.7 79.7 746.9 33.3 859.9 8,433.7 63,668.3 1,503.6 73,605.7 73,331.7 274.0

_________________________________






234

Table 9: Components by Financiers (USD’000)

Local




1. Strategic Investment plan 128.2 91.4 - - 12.0 8.6 - - - - 140.2 0.2 - 128.2 12.0

2. Climate change adaptation plan 954.6 76.6 - - 46.6 3.7 244.4 19.6 - - 1,245.6 1.7 - 1,199.0 46.6

3. Climate-informed, market oriented socio-economic plans 3,006.4 44.7 - - 509.3 7.6 3,210.0 47.7 - - 6,725.6 9.1 35.1 6,181.2 509.3

Subtotal Province-based participatory planning institutionalised 4,089.1 50.4 - - 567.9 7.0 3,454.3 42.6 - - 8,111.3 11.0 35.1 7,508.4 567.9


1. Forest land and forest allocation 1,626.2 63.8 - - 226.5 8.9 464.6 18.2 232.3 9.1 2,549.7 3.5 - 2,323.2 226.5

2. CIGs for climate adaptation 6,916.7 62.3 - - 129.4 1.2 740.0 6.7 3,325.0 29.9 11,111.1 15.1 1,817.9 9,163.8 129.4

Subtotal A greener agricultural future 8,542.9 62.5 - - 356.0 2.6 1,204.6 8.8 3,557.3 26.0 13,660.8 18.6 1,817.9 11,487.0 356.0


1. Community infrastructure 19,130.8 63.6 - - - - 8,114.1 27.0 2,844.7 9.5 30,089.6 40.9 5,549.4 24,540.2 -

2. Rural financial services 4,638.3 96.7 - - 108.1 2.3 48.5 1.0 - - 4,794.9 6.5 360.6 4,326.2 108.1

3. Agriculture Promotion Investment Fund 4,044.7 55.8 - - - - - - 3,199.6 44.2 7,244.3 9.8 103.5 7,140.8 -

Subtotal Profitable farms linked to finance and markets 27,813.7 66.0 - - 108.1 0.3 8,162.6 19.4 6,044.3 14.3 42,128.8 57.2 6,013.5 36,007.2 108.1

D. Programme Management 2,054.3 22.3 - - 471.7 5.1 6,678.8 72.6 - - 9,204.8 12.5 567.3 8,165.8 471.7

E. NTP NRD National Coordination Office Grant - - 500.0 100.0 - - - - - - 500.0 0.7 - 500.0 -






235

Table 10: Disbursement Accounts by Financiers (USD‘000)

Local



A. Civil Works

Civil Works 14.5 90.0 - - 1.6 10.0 - - - - 16.2 - 3.2 11.3 1.6

Subtotal Civil Works 14.5 90.0 - - 1.6 10.0 - - - - 16.2 - 3.2 11.3 1.6

B. Equipment and materials 1,227.0 90.0 - - 136.3 10.0 - - - - 1,363.3 1.9 409.0 818.0 136.3

C. Vehicles 94.2 50.0 - - 94.2 50.0 - - - - 188.3 0.3 56.5 37.7 94.2

D. Consultancies

1. Technical Assistance 1,775.3 97.3 - - - - 50.0 2.7 - - 1,825.3 2.5 418.5 1,406.8 -

2. Research and Studies 2,342.8 37.3 500.0 8.0 577.9 9.2 2,858.0 45.5 - - 6,278.7 8.5 - 5,700.8 577.9

Subtotal Consultancies 4,118.1 50.8 500.0 6.2 577.9 7.1 2,908.0 35.9 - - 8,104.0 11.0 418.5 7,107.6 577.9

E. Training 3,312.5 85.8 - - - - 546.3 14.2 - - 3,858.8 5.2 - 3,858.8 -

F. Grants

1. Community Infrastructure Investment Grant

Community Infrastructure Investment Grants 16,788.2 60.5 - - - - 8,114.1 29.2 2,844.7 10.3 27,747.1 37.7 5,549.4 22,197.6 -

Community Infrastructure Design and Supervision 1,352.4 100.0 - - - - - - - - 1,352.4 1.8 - 1,352.4 -

Subtotal Community Infrastructure Investment Grant 18,140.6 62.3 - - - - 8,114.1 27.9 2,844.7 9.8 29,099.4 39.5 5,549.4 23,550.0 -

2. CIG Investment Grants 6,826.7 62.0 - - 119.4 1.1 740.0 6.7 3,325.0 30.2 11,011.1 15.0 1,817.9 9,073.8 119.4

3. Forest land allocation 1,626.2 63.8 - - 226.5 8.9 464.6 18.2 232.3 9.1 2,549.7 3.5 - 2,323.2 226.5

4. APIF Grants 3,074.2 49.0 - - - - - - 3,199.6 51.0 6,273.8 8.5 - 6,273.8 -

Subtotal Grants 29,667.7 60.6 - - 346.0 0.7 9,318.7 19.0 9,601.7 19.6 48,934.0 66.5 7,367.3 41,220.8 346.0

G. Credit

1. WDF Financing for on-lending 3,750.0 100.0 - - - - - - - - 3,750.0 5.1 - 3,750.0 -

Subtotal Credit 3,750.0 100.0 - - - - - - - - 3,750.0 5.1 - 3,750.0 -

H. Operating costs - - - - 347.7 9.7 3,236.5 90.3 - - 3,584.2 4.9 179.2 3,057.4 347.7

I. Salaries and alowances 316.0 8.3 - - - - 3,490.8 91.7 - - 3,806.8 5.2 - 3,806.8 -






236

Table 11: Expenditure Accounts by Financiers (USD’000)

(VND Billion) (US$ '000)

Local Local

IFAD Loan IFAD Grant GOV Taxes GOV Beneficiaries Total For. (Excl. Duties & IFAD Loan IFAD Grant GOV Taxes GOV Beneficiaries Total (Excl. Duties &

Amount % Amount % Amount % Amount % Amount % Amount % Exch. Taxes) Taxes Amount % Amount % Amount % Amount % Amount % Amount % For. Exch. Taxes) Taxes

I. Investment Costs

A. Civil Works

Civil Works 0.3 90.0 - - 0.0 10.0 - - - - 0.4 - 0.1 0.3 0.0 14.5 90.0 - - 1.6 10.0 - - - - 16.2 - 3.2 11.3 1.6

B. Equipment and materials 48.5 90.0 - - 5.4 10.0 - - - - 53.9 3.2 16.2 32.3 5.4 2,049.7 90.0 - - 227.7 10.0 - - - - 2,277.4 3.1 683.2 1,366.4 227.7

C. Vehicles 2.1 50.0 - - 2.1 50.0 - - - - 4.3 0.3 1.3 0.9 2.1 94.2 50.0 - - 94.2 50.0 - - - - 188.3 0.3 56.5 37.7 94.2

D. Consultancies


International Technical Assistance 15.0 100.0 - - - - - - - - 15.0 0.9 15.0 - - 632.2 100.0 - - - - - - - - 632.2 0.9 632.2 - -

National Technical Assistance 37.9 93.1 - - -0.0 - 2.8 6.9 - - 40.7 2.4 - 40.7 - 1,690.8 93.1 - - - - 125.0 6.9 - - 1,815.8 2.5 - 1,815.8 -

Subtotal Technical Assistance 52.9 95.0 - - -0.0 - 2.8 5.0 - - 55.7 3.3 15.0 40.7 - 2,323.0 94.9 - - - - 125.0 5.1 - - 2,448.0 3.3 632.2 1,815.8 -

2. Research, Studies and Surveys 90.1 45.6 11.2 5.7 18.6 9.4 73.2 37.0 4.6 2.3 197.7 11.8 - 179.0 18.6 4,022.1 45.6 500.0 5.7 832.4 9.4 3,265.8 37.0 203.9 2.3 8,824.1 12.0 - 7,991.7 832.4

Subtotal Consultancies 143.0 56.4 11.2 4.4 18.6 7.4 76.0 30.0 4.6 1.8 253.4 15.2 15.0 219.7 18.6 6,345.0 56.3 500.0 4.4 832.4 7.4 3,390.8 30.1 203.9 1.8 11,272.1 15.3 632.2 9,807.5 832.4

E. Training 141.6 90.5 - - 0.0 - 14.1 9.0 0.7 0.4 156.4 9.4 - 156.4 - 6,055.8 90.6 - - - - 603.2 9.0 28.4 0.4 6,687.4 9.1 - 6,687.4 -

F. Grants


Community Infrastructure Investment Grants 376.1 60.5 - - - - 181.8 29.2 63.7 10.3 621.5 37.2 124.3 497.2 - 16,788.2 60.5 - - - - 8,114.1 29.2 2,844.7 10.3 27,747.1 37.7 5,549.4 22,197.6 -

Comunity Infrastructure Design and Supervision 30.3 100.0 - - - - - - - - 30.3 1.8 - 30.3 - 1,352.4 100.0 - - - - - - - - 1,352.4 1.8 - 1,352.4 -

Subtotal Community Infrastructure Investment Grants 406.3 62.3 - - - - 181.8 27.9 63.7 9.8 651.8 39.0 124.3 527.5 - 18,140.6 62.3 - - - - 8,114.1 27.9 2,844.7 9.8 29,099.4 39.5 5,549.4 23,550.0 -

3. CIG Investment Grants 59.6 40.0 - - - - 14.9 10.0 74.5 50.0 149.0 8.9 29.8 119.2 - 2,660.0 40.0 - - - - 665.0 10.0 3,325.0 50.0 6,650.0 9.0 1,330.0 5,320.0 -

4. APIF Investment Grant 68.9 49.0 - - - - - - 71.7 51.0 140.5 8.4 - 140.5 - 3,074.2 49.0 - - - - - - 3,199.6 51.0 6,273.8 8.5 - 6,273.8 -

Subtotal Grants 534.8 56.8 - - - - 196.7 20.9 209.9 22.3 941.3 56.4 154.1 787.2 - 23,874.7 56.8 - - - - 8,779.1 20.9 9,369.3 22.3 42,023.2 57.1 6,879.4 35,143.8 -

G. Credit

1. WDF financing fro on-lending 84.0 100.0 - - - - - - - - 84.0 5.0 - 84.0 - 3,750.0 100.0 - - - - - - - - 3,750.0 5.1 - 3,750.0 -

Total Investment Costs 954.3 63.9 11.2 0.7 26.2 1.8 286.7 19.2 215.1 14.4 1,493.6 89.4 186.6 1,280.7 26.2 42,184.0 63.7 500.0 0.8 1,155.9 1.7 12,773.1 19.3 9,601.7 14.5 66,214.7 90.0 8,254.6 56,804.2 1,155.9

II. Recurrent Costs

A. Salaries and allowances /a 7.5 8.2 - - - - 83.3 91.8 - - 90.8 5.4 - 90.8 - 316.0 8.3 - - - - 3,490.8 91.7 - - 3,806.8 5.2 - 3,806.8 -

B. Operating costs

1. Operation and Maintenance - - - - 0.9 10.0 7.7 90.0 - - 8.5 0.5 1.7 6.0 0.9 - - - - 36.0 10.0 323.8 90.0 - - 359.8 0.5 72.0 251.8 36.0

2. Other Operating Costs - - - - 7.5 9.7 69.8 90.3 - - 77.2 4.6 2.6 67.2 7.5 - - - - 311.7 9.7 2,912.8 90.3 - - 3,224.5 4.4 107.2 2,805.5 311.7

Subtotal Operating costs - - - - 8.3 9.7 77.4 90.3 - - 85.8 5.1 4.3 73.1 8.3 - - - - 347.7 9.7 3,236.5 90.3 - - 3,584.2 4.9 179.2 3,057.4 347.7

Total Recurrent Costs 7.5 4.2 - - 8.3 4.7 160.7 91.1 - - 176.5 10.6 4.3 163.9 8.3 316.0 4.3 - - 347.7 4.7 6,727.3 91.0 - - 7,391.0 10.0 179.2 6,864.1 347.7

Total PROJECT COSTS 961.8 57.6 11.2 0.7 34.5 2.1 447.5 26.8 215.1 12.9 1,670.1 100.0 190.9 1,444.6 34.5 42,500.0 57.7 500.0 0.7 1,503.6 2.0 19,500.4 26.5 9,601.7 13.0 73,605.7 100.0 8,433.7 63,668.3 1,503.6

_________________________________






237

Table 12: Local/Foreign/Taxes by Financiers (USD’000)

IFAD Loan IFAD Grant GOV Taxes GOV Beneficiaries Total

Amount % Amount % Amount % Amount % Amount % Amount %

I. Foreign 5,264.8 62.4 - - 0.0 - 1,935.0 22.9 1,233.9 14.6 8,433.7 11.5

II. Local (Excl. Taxes) 37,235.2 58.5 500.0 0.8 -0.0 - 17,565.4 27.6 8,367.7 13.1 63,668.3 86.5

III. Taxes - - - - 1,503.6 100.0 - - - - 1,503.6 2.0

Total Project 42,500.0 57.7 500.0 0.7 1,503.6 2.0 19,500.4 26.5 9,601.7 13.0 73,605.7 100.0





238

Table 13: Inflation and Exchange Rates

Up to

Up to Project

Negotiation Start 2017 2018 2019 2020 2021 2022

Inflation (in %'s) /a

ALL

Annual rates

Local 0.0 0.0 3.2 4.8 4.4 4.4 4.4 4.4

Foreign 0.0 0.0 2.0 2.0 2.0 2.0 2.0 2.0

Compounded rates

Local 0.0 0.0 1.6 5.7 10.5 15.4 20.5 25.8

Foreign 0.0 0.0 1.0 3.0 5.1 7.2 9.3 11.5

ZERO

Annual rates

Local 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Foreign 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Compounded rates

Local 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Foreign 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Exchange rates (Local/Foreign) /b

ALL

Rates actually used 22,400.0 22,400.0 22,533.1 22,977.7 23,562.3 24,116.7 24,684.2 25,265.0

Constant purchasing parity rates 22,400.0 22,400.0 22,533.1 22,977.7 23,562.3 24,116.7 24,684.2 25,265.0

% deviation 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

ZERO

Rates actually used 22,400.0 22,400.0 22,400.0 22,400.0 22,400.0 22,400.0 22,400.0 22,400.0

Constant purchasing parity rates 22,400.0 22,400.0 22,400.0 22,400.0 22,400.0 22,400.0 22,400.0 22,400.0

% deviation 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

_________________________________

\a Yearly values are within Each Project Year

\b Yearly values are at Project Year Midpoints





239

Table 14: CSSP components by financiers – Bac Kan province

Local



A. Civil Works

Civil Works 14.5 90.0 - - 1.6 10.0 - - - - 16.2 - 3.2 11.3 1.6

Subtotal Civil Works 14.5 90.0 - - 1.6 10.0 - - - - 16.2 - 3.2 11.3 1.6

B. Equipment and materials 595.5 90.0 - - 66.2 10.0 - - - - 661.7 1.8 198.5 397.0 66.2

C. Vehicles 44.9 50.0 - - 44.9 50.0 - - - - 89.9 0.2 27.0 18.0 44.9

D. Consultancies

1. Technical Assistance 880.2 96.9 - - - - 28.0 3.1 - - 908.2 2.5 209.3 698.9 -

2. Research and Studies 1,032.1 41.2 - - 250.2 10.0 1,220.0 48.8 - - 2,502.3 7.0 - 2,252.0 250.2

Subtotal Consultancies 1,912.2 56.1 - - 250.2 7.3 1,248.0 36.6 - - 3,410.4 9.5 209.3 2,950.9 250.2

E. Training 1,731.2 87.4 - - - - 249.6 12.6 - - 1,980.8 5.5 - 1,980.8 -

F. Grants



Community Infrastructure Design and Supervision 638.0 100.0 - - - - - - - - 638.0 1.8 - 638.0 -


2. CIG Investment Grants 3,343.5 62.7 - - 59.7 1.1 352.5 6.6 1,575.0 29.5 5,330.7 14.8 874.0 4,397.0 59.7

3. Forest land allocation 1,626.2 63.8 - - 226.5 8.9 464.6 18.2 232.3 9.1 2,549.7 7.1 - 2,323.2 226.5

4. APIF Grants 1,470.0 49.0 - - - - - - 1,530.0 51.0 3,000.0 8.3 - 3,000.0 -

Subtotal Grants 15,293.6 61.2 - - 286.3 1.1 4,645.1 18.6 4,753.3 19.0 24,978.2 69.4 3,565.9 21,126.0 286.3

G. Credit


Subtotal Credit 1,500.0 100.0 - - - - - - - - 1,500.0 4.2 - 1,500.0 -



Total PROJECT COSTS 21,250.0 59.1 - - 786.4 2.2 9,176.3 25.5 4,753.3 13.2 35,966.0 100.0 4,093.5 31,086.1 786.4





240

Table 15: CSSP components by financiers – Cao Bang province

Local



A. Civil Works

B. Equipment and materials 631.5 90.0 - - 70.2 10.0 - - - - 701.6 1.9 210.5 421.0 70.2

C. Vehicles 49.2 50.0 - - 49.2 50.0 - - - - 98.5 0.3 29.5 19.7 49.2

D. Consultancies

1. Technical Assistance 895.2 97.6 - - - - 22.0 2.4 - - 917.2 2.5 209.3 707.9 -

2. Research and Studies 1,310.8 40.0 - - 327.6 10.0 1,638.0 50.0 - - 3,276.5 8.8 - 2,948.8 327.6

Subtotal Consultancies 2,205.9 52.6 - - 327.6 7.8 1,660.0 39.6 - - 4,193.6 11.3 209.3 3,656.7 327.6

E. Training 1,581.3 84.2 - - - - 296.7 15.8 - - 1,878.0 5.1 - 1,878.0 -

F. Grants



Community Infrastructure Design and Supervision 714.4 100.0 - - - - - - - - 714.4 1.9 - 714.4 -


2. CIG Investment Grants 3,483.2 61.3 - - 59.7 1.1 387.5 6.8 1,750.0 30.8 5,680.4 15.3 943.9 4,676.8 59.7

4. APIF Grants 1,604.2 49.0 - - - - - - 1,669.6 51.0 3,273.8 8.8 - 3,273.8 -

Subtotal Grants 14,374.1 60.0 - - 59.7 0.2 4,673.7 19.5 4,848.4 20.2 23,955.8 64.5 3,801.4 20,094.8 59.7

G. Credit


Subtotal Credit 2,250.0 100.0 - - - - - - - - 2,250.0 6.1 - 2,250.0 -



Total PROJECT COSTS 21,250.0 57.2 - - 717.2 1.9 10,324.1 27.8 4,848.4 13.1 37,139.7 100.0 4,340.2 32,082.3 717.2





241

Annex 2: Detailed Cost Tables

Table 1. Output 1: Strategic investment plan - Bac Kan and Cao Bang Unit

Detailed Costs Quantities Cost Totals Including Contingencies (US$ '000)

Unit 2017 2018 2019 2020 2021 2022 Total (US$) 2017 2018 2019 2020 2021 2022 Total

I. Investment Costs

A. Bac Kan

SIP preparation /a lumpsum 60.0 - - - - - 60.0

Training in use of SIP analysis lumpsum 10.1 - - - - - 10.1

Subtotal Bac Kan 70.1 - - - - - 70.1

B. Cao Bang

SIP preparation /b lumpsum 60.0 - - - - - 60.0

Training in use of SIP analysis lumpsum 10.1 - - - - - 10.1

Subtotal Cao Bang 70.1 - - - - - 70.1

Total 140.2 - - - - - 140.2

_________________________________

\a SIP should be reviewed in PY4

\b SIP should be reviewed in PY4





242

Table 2. Output 2: Climate change adaptation plan - Bac Kan

Detailed Costs Quantities Unit Cost Totals Including Contingencies (US$ '000)


I. Investment Costs

A. Assessment of Climate Change impact and development of CCA approaches

Study tour of advanced CAP Provinces & lead CCA technical institutions lumpsum 1 - - - - - 1 6.000 6.1 - - - - - 6.1

Assessment of Provincial CCAP implementation and monitoring indicator development each 1 - - - - - 1 10.000 10.0 - - - - - 10.0

Project District studies/mapping of CC impact, vulnerability, risks, CAP priorities each 2 - - - 2 - 4 14.450 28.9 - - - 28.9 - 57.8

Support for non-project District studies/mapping of CC impact, vulnerability, risks, CAP priorities lumpsum - 1 - - 1 - 2 30.000 - 30.0 - - 30.0 - 60.0

Project District-level participatory diagnostic of commune-level CC impacts scale & ongoing adaptation lumpsum 4 - - - 4 - 8 5.000 20.0 - - - 20.0 - 40.0

Support to non-project District-level participatory diagnostic of commune-level CC impacts scale & ongoing adaptation lumpsum - 1 - - 1 - 2 30.000 - 30.0 - - 30.0 - 60.0

Commune-level identification of vulnerable areas, production systems, and populations pers-month 1.5 - - - 1 - 2.5 3.000 4.5 - - - 3.0 - 7.5

Formation of CC Integration Thematic Ad-hoc Group (TAG) lumpsum 1 - - - 0.5 - 1.5 3.500 3.5 - - - 1.8 - 5.3

Review, existing methodologies for commune-level CC planning pers-month 1 - - - 1 - 2 3.000 3.0 - - - 3.0 - 6.0

Technical workshops for CC integration into SEDP at commune and district-levels each 1 - - - 1 - 2 1.500 1.5 - - - 1.6 - 3.2

District-level diagnostic of ongoing adaptation /a pers-month 3 - - - 3 - 6 3.000 9.0 - - - 9.0 - 18.0

Development District-level zoning methodology, based on commune CC planning pers-month 1.5 - - - 0.5 - 2 3.000 4.5 - - - 1.5 - 6.0

Piloting & updating of commune-level, CBDRM-based methodology pers-month 1.5 - - - 1.5 - 3 3.000 4.5 - - - 4.5 - 9.0

CC Integration TAG progress reviews (meetings/field visits) pers-month 1 - - - 0.5 - 1.5 1.000 1.0 - - - 0.5 - 1.6

Development Provincial-level methodology for integration into sectoral SEDPs of commune & district vulnerability mapping & zoning pers-month - 2 - - - - 2 3.000 - 6.0 - - - - 6.0

Key stakeholder progress review & evaluation workshop pers-month 1 1 1 1 1 1 6 3.000 3.0 3.1 3.2 3.2 3.3 3.3 19.1

Update of Provincial Climate Change Action Plan pers-month 1.6666 - - - - - 1.6666 3.000 5.0 - - - - - 5.0

Development Provincial Climate Change Action Plan 2021-2025 pers-month - - - - 4 - 4 3.000 - - - - 12.0 - 12.0

Dissemination Provincial CAP - publications, brochures, newspaper, radio programmes, etc. per-annum 1 1 1 1 - - 4 3.000 3.0 3.1 3.2 3.2 - - 12.5

Climate change risks, vulnerabilities and adaption needs awareness building for decision makers per-annum 1 1 1 1 1 0.5 5.5 6.000 6.1 6.2 6.3 6.4 6.6 3.3 34.9

Cross-visits, District & Commune staff each 1 1.5 1 1 1 - 5.5 2.500 2.5 3.9 2.6 2.7 2.7 - 14.4

Technical assistance contract with national, lead CCA technical institution to support process lumpsum 3 2 3 1 2 0.5 11.5 3.000 9.1 6.2 9.5 3.2 6.6 1.7 36.2

Development of training materials and methodological guides for CCA in key value chains and WSCG lending pers-month - 2 1 - - - 3 3.000 - 6.0 3.0 - - - 9.0

Training of trainers for CCA in key value chains and WSCG lending pers-month - 2 2 - - - 4 3.000 - 6.0 6.0 - - - 12.0

Subtotal Assessment of Climate Change impact and development of CCA approaches 125.2 100.4 33.7 18.8 165.0 8.4 451.4

B. Dissemination of results and integration of climate change into SEDP planning process

Development District-level zoning methodology, based on commune CC planning pers-month 0.5 0.5 - - - - 1 3.000 1.5 1.5 - - - - 3.0

Development of training materials & methodological guides pers-month 1 2 - - - - 3 3.000 3.0 6.0 - - - - 9.0

Training of trainers pers-month 1 2 - - - - 3 7.475 7.5 15.4 - - - - 23.0

Dissemination - publications, brochures, newspaper, radio programs, etc. per-annum 1 1 1 1 1 - 5 3.000 3.0 3.1 3.2 3.2 3.3 - 15.8

Cross-visits, District, Commune and VDB staff/members each 1 1.5 2.5 2.5 2.5 - 10 5.000 5.1 7.7 13.1 13.4 13.7 - 53.0

Field visits/study tours for DPI planning staff each 1 1 1 1 1 - 5 2.000 2.0 2.1 2.1 2.1 2.2 - 10.5

Training courses for commune and district staff and key provincial-level technical staff per-annum 1 1 1 1 1 0.5 5.5 5.000 5.1 5.2 5.3 5.4 5.5 2.8 29.1

Publication of results (web-based publication, journals) each 1.2 1.2 1.2 1.2 - - 4.8 500 0.6 0.6 0.6 0.6 - - 2.5

Support to community PES agreements lumpsum - 4.0 4.0 4.0 4.0 4.0 20.0

Subtotal Dissemination of results and integration of climate change into SEDP planning process 27.8 45.5 28.3 28.8 28.6 6.8 165.8

Total 153.0 146.0 62.0 47.5 193.6 15.2 617.2

_________________________________

\a Incl. down-scaling of Provincial-level medium-term climate change impact scenarios & identification of vulnerable areas, production systems, and populations





243

Table 3. Output 2: Climate change adaptation plan - Cao Bang



I. Investment Costs

A. Assessment of Climate Change impact and development of CCA approaches

Study tour of advanced CAP Provinces & lead CCA technical institutions lumpsum 1 - - - - - 1 6.000 6.1 - - - - - 6.1

Assessment of Provincial CCAP implementation and monitoring indicator development each 1 - - - - - 1 10.000 10.0 - - - - - 10.0

Project District studies/mapping of CC impact, vulnerability, risks, CAP priorities each 2 - - - 2 - 4 14.450 28.9 - - - 28.9 - 57.8

Support for non-project District studies/mapping of CC impact, vulnerability, risks, CAP priorities lumpsum - 1 - - 1 - 2 30.000 - 30.0 - - 30.0 - 60.0

Project District-level participatory diagnostic of commune-level CC impacts scale & ongoing adaptation lumpsum 4 - - - 4 - 8 5.000 20.0 - - - 20.0 - 40.0

Support to non-project District-level participatory diagnostic of commune-level CC impacts scale & ongoing adaptation lumpsum - 1 - - 1 - 2 30.000 - 30.0 - - 30.0 - 60.0

Commune-level identification of vulnerable areas, production systems, and populations pers-month 1.5 - - - 1 - 2.5 3.000 4.5 - - - 3.0 - 7.5

Formation of CC Integration Thematic Ad-hoc Group (TAG) lumpsum 1 - - - 0.5 - 1.5 3.500 3.5 - - - 1.8 - 5.3

Review, existing methodologies for commune-level CC planning pers-month 1 - - - 1 - 2 3.000 3.0 - - - 3.0 - 6.0

Technical workshops for CC integration into SEDP at commune and district-levels each 1 - - - 1 - 2 1.500 1.5 - - - 1.6 - 3.2

District-level diagnostic of ongoing adaptation /a pers-month 3 - - - 3 - 6 3.000 9.0 - - - 9.0 - 18.0

Development District-level zoning methodology, based on commune CC planning pers-month 1.5 - - - 0.5 - 2 3.000 4.5 - - - 1.5 - 6.0

Piloting & updating of commune-level, CBDRM-based methodology pers-month 1.5 - - - 1.5 - 3 3.000 4.5 - - - 4.5 - 9.0

CC Integration TAG progress reviews (meetings/field visits) pers-month 1 - - - 0.5 - 1.5 1.000 1.0 - - - 0.5 - 1.6

Development Provincial-level methodology for integration into sectoral SEDPs of commune & district vulnerability mapping & zoning pers-month - 2 - - - - 2 3.000 - 6.0 - - - - 6.0

Key stakeholder progress review & evaluation workshop pers-month 1 1 1 1 1 1 6 3.000 3.0 3.1 3.2 3.2 3.3 3.3 19.1

Update of Provincial Climate Change Action Plan pers-month 1.6666 - - - - - 1.6666 3.000 5.0 - - - - - 5.0

Development Provincial Climate Change Action Plan 2021-2025 pers-month - - - - 4 - 4 3.000 - - - - 12.0 - 12.0

Dissemination Provincial CAP - publications, brochures, newspaper, radio programmes, etc. per-annum 1 1 1 1 - - 4 3.000 3.0 3.1 3.2 3.2 - - 12.5

Climate change risks, vulnerabilities and adaption needs awareness building for decision makers per-annum 1 1 1 1 1 0.5 5.5 6.000 6.1 6.2 6.3 6.4 6.6 3.3 34.9

Cross-visits, District & Commune staff each 1 1.5 1 1 1 - 5.5 2.500 2.5 3.9 2.6 2.7 2.7 - 14.4

Technical assistance contract with national, lead CCA technical institution to support process lumpsum 3 2 3 1 2 0.5 11.5 3.000 9.1 6.2 9.5 3.2 6.6 1.7 36.2

Development of training materials and methodological guides for CCA in key value chains and WSCG lending pers-month - 2 1 - - - 3 3.000 - 6.0 3.0 - - - 9.0

Training of trainers for CCA in key value chains and WSCG lending pers-month - 2 2 - - - 4 3.000 - 6.0 6.0 - - - 12.0

Subtotal Assessment of Climate Change impact and development of CCA approaches 125.2 100.4 33.7 18.8 165.0 8.4 451.4

B. Dissemination of results and integration of climate change into SEDP planning process

Development District-level zoning methodology, based on commune CC planning pers-month 0.5 0.5 - - - - 1 3.000 1.5 1.5 - - - - 3.0

Development of training materials & methodological guides pers-month 1 2 - - - - 3 3.000 3.0 6.0 - - - - 9.0

Training of trainers pers-month 1 2 - - - - 3 7.500 7.6 15.5 - - - - 23.0

Cross-visits, District, Commune and VDB staff/members each 1 1.5 2.5 2.5 2.5 - 10 5.200 5.3 8.0 13.7 13.9 14.2 - 55.1

Dissemination - publications, brochures, newspaper, radio programs, etc. per-annum 1 1 1 1 1 - 5 3.715 3.8 3.8 3.9 4.0 4.1 - 19.5

Field visits/study tours for DPI planning staff each 1 1 1 1 1 - 5 3.000 3.0 3.1 3.2 3.2 3.3 - 15.8

Training courses for commune and district staff and key provincial-level technical staff per-annum 1 1 1 1 1 0.5 5.5 5.000 5.1 5.2 5.3 5.4 5.5 2.8 29.1

Publication of results (web-based publication, journals) each 1.2 1.2 1.2 1.2 - - 4.8 500 0.6 0.6 0.6 0.6 - - 2.5

Support to community PES agreements lumpsum - 4.0 4.0 4.0 4.0 4.0 20.0

Subtotal Dissemination of results and integration of climate change into SEDP planning process 29.8 47.7 30.6 31.1 31.0 6.8 177.0

Total 155.0 148.1 64.3 49.9 196.0 15.2 628.4

_________________________________

\a Incl. down-scaling of Provincial-level medium-term climate change impact scenarios & identification of vulnerable areas, production systems, and populations





244

Table 4. Output 3: Climate-informed, market-oriented socio-economic development plans - Bac Kan



I. Investment Costs

A. MOP-SEDP capacity established provincial level

National MoSEDP study tour for key provincial planners and political school staff lumpsum 14.7 - - - - - 14.7

Drafting of provincial MoSEDP decree lumpsum 4.0 - - - - - 4.0

Training of trainers for district and commune MoSEDP implementatoion course 1 1 - - - - 2 14.000 14.1 14.4 - - - - 28.6

Commune level market economy training (Bac Kan) /a course 15 20 40 37 - - 112 5.000 75.8 103.0 210.2 198.3 - - 587.2

Subtotal MOP-SEDP capacity established provincial level 108.6 117.4 210.2 198.3 - - 634.5

B. Core Project Commune & Village Participatory SEDP w/climate change integration

Promotional campaign/awareness raising for local officials & groups /b per-annum 2 2 3 - - - 7 4.300 8.7 8.9 13.6 - - - 31.1

Twinning of non-project communes in the MoSEDP planning process session - 10 40 32 - - 82 1.000 - 10.3 42.0 34.3 - - 86.6

Training of commune & village staff/facilitators /c course 15 20 40 37 - - 112 800 12.1 16.5 33.6 31.7 - - 94.0

Training of District staff course 2 2 3 - - - 7 2.000 4.0 4.1 6.3 - - - 14.5

Village/Commune rapid rural appraisal /d w/shop 60 60 120 96 - - 336 400 24.2 24.7 50.4 41.2 - - 140.6

Subtotal Core Project Commune & Village Participatory SEDP w/climate change integration 49.1 64.5 146.0 107.2 - - 366.7

C. Training of Trainers in MOP-SEDP Planning

International TA pers-month 0.5 0.25 - - - - 0.75 23.000 11.6 5.9 - - - - 17.5

National TA pers-month 3 3 3 - - - 9 1.500 4.5 4.5 4.5 - - - 13.5

Training sessions course 1 1 1 - - - 3 8.000 8.1 8.2 8.4 - - - 24.7

Subtotal Training of Trainers in MOP-SEDP Planning 24.2 18.7 12.9 - - - 55.8

D. MOP-SEDP Implementation

1. Village level PRA /e meeting 225 300 600 555 - - 1,680 400 90.0 120.0 240.0 222.0 - - 672.0

2. Medium-term MOP-SEDP development

District level /f meeting 2 2 3 - - - 7 700 1.4 1.4 2.1 - - - 4.9

Commune level /g meeting 15 20 40 37 - - 112 450 6.8 9.0 18.0 16.7 - - 50.4

Village level /h meeting 225 300 600 555 - - 1,680 220 49.5 66.0 132.0 122.1 - - 369.6

Subtotal Medium-term MOP-SEDP development 57.7 76.4 152.1 138.8 - - 424.9

3. Annual MOP-SEDP review

District level meeting 2 4 7 7 7 7 34 450 0.9 1.8 3.2 3.2 3.2 3.2 15.3

Commune level meeting 15 35 75 112 112 112 461 300 4.5 10.5 22.5 33.6 33.6 33.6 138.3

Village level meeting 225 525 1,200 1,680 1,680 1,680 6,990 130 29.3 68.3 156.0 218.4 218.4 218.4 908.7

Subtotal Annual MOP-SEDP review 34.7 80.6 181.7 255.2 255.2 255.2 1,062.3

Subtotal MOP-SEDP Implementation 182.3 277.0 573.8 615.9 255.2 255.2 2,159.2

Total 364.2 477.5 942.8 921.4 255.2 255.2 3,216.2

_________________________________

\a Implemented at district level and including key district staff

\b Each course covers one district

\c Includes 10 non-Programme communes in PY2

\d Assumes 15 villages per commune with RRA at micro-catchment level covering 5 villages

\e One off planning session on year of project entry

\f Assumes 3-year medium-term MOP-SEDPs

\g Assumes 3-year medium-term MOP-SEDPs

\h Assumes 15 villages per commune and 5-year medium-term MOP-SEDPs





245

Table 5. Output 3: Climate-informed, market-oriented socio-economic development plans - Cao Bang



I. Investment Costs

A. MOP-SEDP capacity established provincial level

National MOP-SEDP study tour for key provincial planners and political school staff lumpsum 7.6 - - - - - 7.6

Drafting of provincial MOP-SEDP decree lumpsum 4.0 - - - - - 4.0

Training of trainers for district and commune MoSEDP implementatoion course 1 1 - - - - 2 7.500 7.6 7.7 - - - - 15.3

Subtotal MOP-SEDP capacity established provincial level 19.2 7.7 - - - - 26.9

B. Core Project Commune & Village Participatory SEDP w/climate change integration

Promotional campaign/awareness raising for local officials & groups /a per-annum 2 2 4 4 - - 12 5.000 10.1 10.3 21.0 21.4 - - 62.9

Twinning of non-project communes in the MOP-SEDP planning process session - 10 60 78 - - 148 500 - 5.2 31.5 41.8 - - 78.5

Training of commune & village staff/facilitators course 15 20 70 74 - - 179 250 3.8 5.2 18.4 19.8 - - 47.2

Training of District staff course 2 2 4 4 - - 12 2.000 4.0 4.1 8.4 8.6 - - 25.1

Village/Commune rapid rural appraisal /b w/shop 120 120 180 117 - - 537 500 60.6 61.8 94.6 62.7 - - 279.7

Subtotal Core Project Commune & Village Participatory SEDP w/climate change integration 78.5 86.5 173.9 154.3 - - 493.3

C. Training of Trainers in MOP-SEDP Planning

International TA pers-month 0.5 0.25 - - - - 0.75 23.000 11.6 5.9 - - - - 17.5


Training sessions course 1 1 1 - - - 3 8.000 8.1 8.2 8.4 - - - 24.7

Subtotal Training of Trainers in MOP-SEDP Planning 24.2 18.7 12.9 - - - 55.8

D. MOP-SEDP Implementation

1. Village level PRA /c meeting 225 300 600 555 - - 1,680 400 90.0 120.0 240.0 222.0 - - 672.0

2. Medium-term MOO-SEDP development

District level /d meeting 2 2 4 4 - - 12 700 1.4 1.4 2.8 2.8 - - 8.4

Commune level /e meeting 15 20 70 79 - - 184 450 6.8 9.0 31.5 35.6 - - 82.8

Village level /f meeting 225 300 1,050 1,110 - - 2,685 220 49.5 66.0 231.0 244.2 - - 590.7

Subtotal Medium-term MOO-SEDP development 57.7 76.4 265.3 282.6 - - 681.9

3. Annual MOP-SEDP review

District level meeting 2 4 8 12 12 12 50 450 0.9 1.8 3.6 5.4 5.4 5.4 22.5

Commune level meeting 15 35 105 179 179 179 692 300 4.5 10.5 31.5 53.7 53.7 53.7 207.6

Village level meeting 225 525 1,575 2,685 2,685 2,685 10,380 130 29.3 68.3 204.8 349.1 349.1 349.1 1,349.4

Subtotal Annual MOP-SEDP review 34.7 80.6 239.9 408.2 408.2 408.2 1,579.5

Subtotal MOP-SEDP Implementation 182.3 277.0 745.2 912.7 408.2 408.2 2,933.4

Total 304.2 389.9 932.0 1,067.0 408.2 408.2 3,509.4

_________________________________

\a One course per district

\b Assumes average of 15 villages per commune. RRA done with village micro-watershed clusters. Assumes 5 villages per cluster

\c One off planning session on year of project entry

\d Assumes medium-term MOP-SEDP every 5 years

\e Assumes medium-term MOP-SEDP completed every 5 years

\f Assumes 15 villages per commune and 5-year medium-term MOP-SEDP





246

Table 6. Output 4: Forest land allocation and use - Bac Kan /a Unit

Detailed Costs Quantities Cost Totals Including Contingencies (US$ '000)


I. Investment Costs

A. Forest land and forest use allocation

1. Community-based participatory forest land and use allocation

Community-based PFLAU training at district and commune level /b course 2.2 - - - - - 2.2 6.000 13.3 - - - - - 13.3

Build DoNRE capacity to map and allocate forest resorce. /c lumpsum 5.4 10.3 - - - - 15.7

Participatory forest land and forest and use allocation /d commune - 15 20 - - - 35 7.000 - 108.2 147.1 - - - 255.3

Subtotal Community-based participatory forest land and use allocation 18.7 118.5 147.1 - - - 284.3

2. Issuance of forest land use certificates /e hectare 4,000 8,000 5,000 - - - 17,000 80 320.0 640.0 400.0 - - - 1,360.0

3. Issuance of forest use certificates /f hectare - - - 2,700 5,600 3,018 11,318 80 - - - 216.0 448.0 241.4 905.4

Total 338.7 758.5 547.1 216.0 448.0 241.4 2,549.7

_________________________________

\a 10% community contribution in kind

\b Participatory forest land allocation and use (PFLAU)

\c Strenthen DoNRE GIS-based forest resource mapping and survey capacity.

\d Series of community decision meetings on forest land allocation at Programme commune/village levels

\e Includes USD10/ha for DARD and DoNRE assessment of the site for management plan

\f USD80/ha for the issuance of forest use certificates. Assume 10% beneficiary contribution and 30% of forest land use rights owners will not seek forest use rights certificates To be implemented following mid-term review when the benefit of forest use

certi





247

Table 7. Output 5:CIGs for climate adaptation - Bac Kan



I. Investment Costs

A. Farmer Interest Groups (CIG) established

Farmer group/Mass Organization awareness training on commodity production & CC adaptation /a each 15 20 15 20 - - 70 15.000 227.3 309.1 236.4 321.5 - - 1,094.3

Farmer common interest group contracts /b per-annum 200 400 300 - - - 900 3.500 700.0 1,400.0 1,050.0 - - - 3,150.0

Subtotal Farmer Interest Groups (CIG) established 927.3 1,709.1 1,286.4 321.5 - - 4,244.3

B. Vocational training delivered

1. Farm household technology and farming as a business training

a. Farm and business management TOT

International TA pers-month 0.5 0.25 0.25 - - - 1 23.000 11.6 5.9 6.0 - - - 23.6


Training of master trainers cours /c course 1 1 1 - - - 3 10.000 10.1 10.3 10.5 - - - 30.9

Training of trainers course /d course - 1 - 1 - - 2 10.000 - 10.3 - 10.7 - - 21.0

Training of F2F specialists /e course - 1 1 1 1 - 4 10.000 - 10.3 10.5 10.7 10.9 - 42.5

Preparation of a farm business manual /f lumpsum - 10.0 - 10.0 - 10.0 30.0

Subtotal Farm and business management TOT 23.2 48.3 28.6 31.4 10.9 10.0 152.5

b. FU training and certification of F2F trainers /g per-annum 1 1 1 1 1 - 5 25.000 25.0 25.0 25.0 25.0 25.0 - 125.0

Subtotal Farm household technology and farming as a business training 48.2 73.3 53.6 56.4 35.9 10.0 277.5

C. Monitoring of forest land /h

1. DARD and DoNRE monitoring of forest land per-annum - 35 35 35 35 35 175 800 - 28.0 28.0 28.0 28.0 28.0 140.0

D. Forage development

1. Forage systems technical assistance

International TA pers-month 1 1 1 1 - - 4 20.000 20.2 20.6 21.0 21.4 - - 83.3

National forage systems specialist pers-month 3 3 3 3 3 - 15 3.000 9.0 9.0 9.0 9.0 9.0 - 45.0

Subtotal Forage systems technical assistance 29.2 29.6 30.0 30.4 9.0 - 128.3

2. Development of forage production extension information lumpsum 5.1 5.2 5.3 - - - 15.5

3. Seed importation and local procurement

Initial forage seed procurement lumpsum 2 5 3 - - - 10 25.000 53.0 135.2 82.8 - - - 271.0

Seed procurement from participating farmers tons - 5 10 15 15 15 60 2.000 - 10.8 22.1 33.8 34.4 35.1 136.2

Subtotal Seed importation and local procurement 53.0 146.0 104.8 33.8 34.4 35.1 407.2

4. Seed VCU/DUS testing

National Centre for Plant Testing Services /i lumpsum 2.5 5.0 5.0 5.0 5.0 2.5 25.0

VCU testing of new varieties by provincial institutions /j lumpsum 2.5 5.0 5.0 5.0 5.0 2.5 25.0

Subtotal Seed VCU/DUS testing 5.0 10.0 10.0 10.0 10.0 5.0 50.0

5. Vegetative reproduction

Contract production thousands 10 25 25 25 25 25 135 50 0.5 1.4 1.4 1.4 1.4 1.5 7.6

Distribution thousands 0.1 0.1 0.1 0.1 0.1 0.1 0.8

Subtotal Vegetative reproduction 0.6 1.5 1.5 1.5 1.6 1.6 8.3

6. Forage seed production training

Regional study tours tours 1 1 - - - - 2 5.000 5.1 5.2 - - - - 10.2

National stakeholder workshop for start-up & review w/shop 1 1 1 1 1 1 6 2.500 2.5 2.6 2.6 2.7 2.7 2.8 15.9

Prov/district workshops for local start-up/review w/shop 1 2 2 2 - - 7 2.000 2.0 4.1 4.2 4.3 - - 14.6

Exchange visits field technicians visits 4 4 4 4 4 - 20 600 2.4 2.5 2.5 2.6 2.6 - 12.6

Exchange visits farmer reps visits 5 10 10 10 10 10 55 250 1.3 2.6 2.6 2.7 2.7 2.8 14.7

Subtotal Forage seed production training 13.3 16.9 12.0 12.2 8.1 5.6 68.0

7. Forage programme field equipment

Miscellaneous field equipment for District staff set 4 - - - - - 4 2.000 8.5 - - - - - 8.5

8. Management of planting materials

Seed scarification and fumigation Ton - 0.4 0.9 1.4 1.4 1.4 5.4

Seed storage Ton - 0.5 1.1 1.7 1.7 1.8 6.8

Seed packaging and labelling Ton - 0.6 1.3 2.0 2.1 2.1 8.2

Seed distribution Ton - 1.0 2.1 3.2 3.2 3.3 12.7

Subtotal anagement of planting materials - 2.6 5.4 8.2 8.4 8.6 33.2

Subtotal Forage development 114.6 211.8 169.0 96.2 71.5 55.9 718.9

Total 1,090.1 2,022.2 1,536.9 502.2 135.4 93.9 5,380.7

_________________________________

\a Biennial CCA training and extension programme per Programme commune.

\b Up to USD 3,500 each and about two per village. Government contribution through Programme 147

\c Three week training course

\d Three Training of Trainers (ToT) specialist in each provincial Farmers Union (FU)

\e 30 F2F farm business management specialist in each province. Fifteen per course with refresher training after one year

\f The farm business manual will detail livestock and crop budgets and good husbandry practices and be updated biennially

\g FU managed F2F trainer technical and pedagogical skill upgrading leading to certification as F@F advisers.

\h District DoNRE/DARD jont monitoring of forest land condition on annual basis

\i NCPT will support SCCP seed testing and registration process.

\j New forage varieties approved for importation subject to successful testing value for cultivation ans use (VCU) testing.





248

Table 8. Output 5:CIGs for climate adaptation - Cao Bang



I. Investment Costs

A. Farmer Interest Groups (CIG) established

Farmer group/Mass Organization awareness training on commodity production & CC adaptation /a each 15 20 15 20 - - 70 15.000 227.3 309.1 236.4 321.5 - - 1,094.3

Farmer common interest group contracts /b per-annum 200 400 400 - - - 1,000 3.500 700.0 1,400.0 1,400.0 - - - 3,500.0

Subtotal Farmer Interest Groups (CIG) established 927.3 1,709.1 1,636.4 321.5 - - 4,594.3

B. Vocational training delivered

1. Farm household technology and farming as a business training

a. Farm and business management TOT

International TA pers-month 0.5 0.25 0.25 - - - 1 23.000 11.6 5.9 6.0 - - - 23.6


Training of master trainers cours /c course 1 1 1 - - - 3 10.000 10.1 10.3 10.5 - - - 30.9

Training of trainers course /d course - 1 - 1 - - 2 10.000 - 10.3 - 10.7 - - 21.0

Training of F2F specialists /e course - 1 1 1 1 - 4 10.000 - 10.3 10.5 10.7 10.9 - 42.5

Preparation of a farm business manual /f lumpsum - 10.0 - 10.0 - 10.0 30.0

Subtotal Farm and business management TOT 23.2 48.3 28.6 31.4 10.9 10.0 152.5

b. FU training and certification of F2F trainers /g per-annum 1 1 1 1 1 - 5 25.000 25.0 25.0 25.0 25.0 25.0 - 125.0

Subtotal Farm household technology and farming as a business training 48.2 73.3 53.6 56.4 35.9 10.0 277.5

C. Monitoring of forest land /h

1. DARD and DoNRE monitoring of forest land per-annum - 35 35 35 35 35 175 800 - 28.0 28.0 28.0 28.0 28.0 140.0

D. Forage development

1. Forage systems technical assistance

International TA pers-month 1 1 1 1 - - 4 20.000 20.2 20.6 21.0 21.4 - - 83.3

National forage systems specialist pers-month 3 3 3 3 3 - 15 3.000 9.0 9.0 9.0 9.0 9.0 - 45.0

Subtotal Forage systems technical assistance 29.2 29.6 30.0 30.4 9.0 - 128.3

2. Development of forage production extension information lumpsum 5.1 5.2 5.3 - - - 15.5

3. Seed importation and local procurement

Initial forage seed procurement lumpsum 2 4.99 3 - - - 9.99 25.000 53.0 134.9 82.8 - - - 270.7

Seed procurement from participating farmers tons - 5 10 15 15 15 60 2.000 - 10.8 22.1 33.8 34.4 35.1 136.2

Subtotal Seed importation and local procurement 53.0 145.8 104.8 33.8 34.4 35.1 406.9

4. Seed VCU/DUS testing

National Centre for Plant Testing Services /i lumpsum 2.5 5.0 5.0 5.0 5.0 2.5 25.0

VCU testing of new varieties by provincial institutions /j lumpsum 2.5 5.0 5.0 5.0 5.0 2.5 25.0

Subtotal Seed VCU/DUS testing 5.0 10.0 10.0 10.0 10.0 5.0 50.0

5. Vegetative reproduction

Contract production thousands 10 25 25 25 25 25 135 50 0.5 1.4 1.4 1.4 1.4 1.5 7.6

Distribution thousands 0.1 0.1 0.1 0.1 0.1 0.1 0.8

Subtotal Vegetative reproduction 0.6 1.5 1.5 1.5 1.6 1.6 8.3

6. Forage seed production training

Regional study tours tours 1 1 - - - - 2 5.000 5.1 5.2 - - - - 10.2

National stakeholder workshop for start-up & review w/shop 1 1 1 1 1 1 6 2.500 2.5 2.6 2.6 2.7 2.7 2.8 15.9

Prov/district workshops for local start-up/review w/shop 1 2 2 2 - - 7 2.000 2.0 4.1 4.2 4.3 - - 14.6

Exchange visits field technicians visits 4 4 4 4 4 - 20 600 2.4 2.5 2.5 2.6 2.6 - 12.6

Exchange visits farmer reps visits 5 10 10 10 10 10 55 250 1.3 2.6 2.6 2.7 2.7 2.8 14.7

Subtotal Forage seed production training 13.3 16.9 12.0 12.2 8.1 5.6 68.0

7. Forage programme field equipment

Miscellaneous field equipment for District staff set 4 - - - - - 4 2.000 8.5 - - - - - 8.5

8. Management of planting materials

Seed scarification and fumigation Ton - 0.4 0.9 1.4 1.4 1.4 5.4

Seed storage Ton - 0.5 1.1 1.7 1.7 1.8 6.8

Seed packaging and labelling Ton - 0.6 1.3 2.0 2.1 2.1 8.2

Seed distribution Ton - 1.0 2.1 3.2 3.2 3.3 12.7

Subtotal anagement of planting materials - 2.6 5.4 8.2 8.4 8.6 33.2

Subtotal Forage development 114.6 211.5 169.0 96.2 71.5 55.9 718.7

Total 1,090.1 2,021.9 1,886.9 502.2 135.4 93.9 5,730.4

_________________________________

\a Biennial CCA training and extension programme per Programme commune.

\b Up to USD 3,500 each and about two per village. Government contribution through Programme 147

\c Three week training course

\d Three Training of Trainers (ToT) specialist in each provincial Farmers Union (FU)

\e 30 F2F farm business management specialist in each province. Fifteen per course with refresher training after one year

\f The farm business manual will detail livestock and crop budgets and good husbandry practices and be updated biennially

\g FU managed F2F trainer technical and pedagogical skill upgrading leading to certification as F@F advisers.

\h District DoNRE/DARD jont monitoring of forest land condition on annual basis

\i NCPT will support SCCP seed testing and registration process.

\j New forage varieties approved for importation subject to successful testing value for cultivation ans use (VCU) testing.





249

Table 9. Output 6: Community infrastructure - Bac Kan



I. Investment Costs /a

A. Community infrastructure developed

Community infrastructure grants /b lump sum 2,000.0 4,100.0 4,100.0 2,559.8 - - 12,759.8

Payment for Environment Services PES) grants /c lumpsum - 100.0 150.0 150.0 150.0 150.0 700.0

Design and supervision (5%) lumpsum 100.0 205.0 205.0 128.0 - - 638.0

Youth-targeted vocational training programmes /d per-annum 2 2 3 - - - 7 50.000 101.0 103.0 157.6 - - - 361.6

Total 2,201.0 4,508.0 4,612.6 2,837.8 150.0 150.0 14,459.4

_________________________________

\a Operational costs linked to this component are budgeted under the Programme Management component.

\b Up to USD 400,000 per commune, phased over three years. Financing: IFAD 60%; Beneficiaries 10%; GOV 30%.

\c 20% in kind beneficiary contribution

\d One training package per district





250

Table 10. Output 6: Community infrastructure - Cao Bang




A. Community infrastructure developed

Community infrastructure grants /b lump sum 2,000.0 4,400.0 4,400.0 3,487.3 - - 14,287.3

Design and supervision (5%) lumpsum 100.0 220.0 220.0 174.4 - - 714.4

Youth-targeted vocational training programmes /c per-annum 2 2 4 4 - - 12 50.000 101.0 103.0 210.2 214.4 - - 628.5

Total 2,201.0 4,723.0 4,830.2 3,876.0 - - 15,630.2

_________________________________


\b Up to USD 400,000 per commune, phased over three years. Financing: IFAD 60%; Beneficiaries 10%; GOV 30%.

\c One training package per district





251

Table 11. Output 7: Rural financial services - Bac Kan



I. Investment Costs

A. WDF Capacity Development

International TA for WDF /a pers-month 1.15 - - - - - 1.15 20.000 23.2 - - - - - 23.2

Microfinance Management Course /b person 8 8 8 - - - 24 350 2.8 2.9 2.9 - - - 8.7

Training courses for WDF staff in WDF/SCG methodology /c w/shop 1 1 - - - - 2 5.400 5.5 5.6 - - - - 11.0

Staff exchange programme with other WDFs /d lumpsum 1 1 - - - - 2 3.000 3.0 3.1 - - - - 6.1

Training for WU provincial and district staff /e w/shop 1 1 - - - - 2 2.500 2.5 2.6 - - - - 5.1

Training for commune and village WU staff /f w/shop 6 - - - - - 6 1.600 9.7 - - - - - 9.7

Equipment for provincial WDF /g set 1 - - - - - 1 5.000 5.3 - - - - - 5.3

Equipment for WDF district offices /h set 1 - - - - - 1 9.000 9.5 - - - - - 9.5

4-WD vehicle for WDF /i unit 1 - - - - - 1 65.000 65.7 - - - - - 65.7

Motorbikes for district branches of WDF /j unit 6 - - - - - 6 4.000 24.2 - - - - - 24.2

Social Fund offices at district level lumpsum 0.4 - - - - - 0.4 40.000 16.2 - - - - - 16.2

Subtotal WDF Capacity Development 167.7 14.1 2.9 - - - 184.7

B. Establishment of new SCGs

Village mobilisation meetings /k meeting 80 67 - - - - 147 100 8.1 6.9 - - - - 15.0

Printing of information leaflets /l lumpsum 1 - - - - - 1 5.000 5.1 - - - - - 5.1

Training of group leaders /m w/shop 4 4 - - - - 8 2.000 8.1 8.2 - - - - 16.3

Follow-up courses for group leaders /n w/shop - 4 4 - - - 8 1.000 - 4.1 4.2 - - - 8.3

Training of CSCG members /o w/shop 80 67 - - - - 147 50 4.0 3.5 - - - - 7.5

BDS course for CSCG members /p w/shop - 30 30 30 - - 90 750 - 23.2 23.6 24.1 - - 70.9

Seed on-lending capital for WDF /q lumpsum/group 80 147 67 - - - 294 5.102 408.2 750.0 341.8 - - - 1,500.0

Subtotal Establishment of new SCGs 433.4 795.9 369.7 24.1 - - 1,623.1

C. Pre-Transformation Support to WU

International TA for Business Plan 2021-2023 /r lumpsum - - - - 1.3 - 1.3 20.000 - - - - 28.4 - 28.4

Transformation support /s lumpsum - - - - 1 1 2 40.000 - - - - 43.7 44.6 88.3

Subtotal Pre-Transformation Support to WU - - - - 72.2 44.6 116.8

Total 601.1 810.0 372.6 24.1 72.2 44.6 1,924.6

_________________________________

\a One-month international TA to support the design of Strategic Plan 2017-2022 for the WDF, lumpsum covering all costs.

\b Training courses on microfinance for WDF management at Vietnam Misrofinance Working Group, Ha Noi, consisting of various types of microfinance modules.

\c One week course at provincial level for WDF management and operational staff in province and districts, based on new Strategy and Manuals; second course in 2018 a refresher course and a start-up course

\d Allocation for costs of staff exchange operations with other, more mature WDFs; costs cover mainly travel and DSAs.

\e 4-day training course at province for WU provincial and district staff on WDF approach and procedures.

\f Training at district for commune and village WU staff on WDF approach and procedures, 4-day course

\g For the WDF provincial office, a set covering A/C, 2 photocopiers/printers, 1 computer, calculators, furniture and minor office equipment.

\h For WDF district offices, a set covering equipment for 1 full new branch, and 1 photocopier and 2 laptops for Na Ri and Ba Be branch each.

\i One standard 4-W-D vehicle for the WDF Provincial Office, to support the management and follow-up of the Fund operations in the province.

\j 2 motorbikes for each WDF district offices for implementation of the CSCG activities.

\k 1-day mobilisation meeting in each village, in which a CSCG will be established, total 147 villages/groups. Costs cover the travel expenses of the WDF/WU district and commune staff.

\l 5,000 information leaflets on the WDF method and products, to be printed at USD 5,000, to be distributed in village mobilisation meetings.

\m 3-day courses at district level for all group leaders, around 25 per course, before group member training. Budget covers travel, lunches, teas, venues etc. Trainers from the WDF/WU.

\n 1.5-day re-fresher courses at district level for all group leaders, around 25 per course. Budget covers travel, lunches, teas, venues etc. Trainers from the WDF/WU.

\o Basic course for members at group level on WDF/CSCG methodology and small business management. As provided by the WU staff, the only programme costs related to DSAs of the travelling WDF/WU staff, based on government rates.

\p 2-day business development courses, with value chain/climate change adaptation focus, at commune level, one per commune per year, each covering 25 trainees, total coverage 2,200 members, budget covering travel, accommodation, meals, trainers fees and

venue

\q Seed on-lending capital for each established group based on average allocation of USD 10,204 per group of average 15 members (allowing an average loan of VND 15 million per member). Disbursements from the MoF subsidiary credit to WDF: 50% during the

establ

\r One month international TA to support the design of the 3-year Business Plan for the new MFI for 2021-2023. This document is the key Attachment required by the State Bank of Vietnam for an MFI registration application.

\s Lumpsum allocation to support the transformation of the WDF into a registered microfinance institution. Actual support activities to be defined later as the transformation process progresses. Can include both TA and especially improvements in the

branches





252

Table 12. Output 7: Rural financial services - Cao Bang



I. Investment Costs


International TA for WDF /a pers-month 1.15 - - - - - 1.15 20.000 23.2 - - - - - 23.2

National TA for WDF /b pers-month 3 - - - - - 3 3.000 9.0 - - - - - 9.0

Microfinance Management Course /c lumpsum 1 - - - - - 1 10.000 10.1 - - - - - 10.1

Training courses for WDF staff in WDF/SCG methodology /d w/shop 1 1 - - - - 2 5.400 5.5 5.6 - - - - 11.0

Staff exchange programme with other WDFs /e lumpsum 1 1 1 - - - 3 3.000 3.0 3.1 3.2 - - - 9.3

Loan management software /f set - 1 - - - - 1 20.000 - 21.6 - - - - 21.6

Equipment for provincial WDF /g set 1 3 - - - - 4 4.000 4.2 13.0 - - - - 17.2

Equipment for WDF district offices /h set 5 - - - - - 5 3.000 15.9 - - - - - 15.9

4-WD vehicle for WDF /i unit 1 - - - - - 1 65.000 65.7 - - - - - 65.7

Motorbikes for district branches of WDF /j unit 2 6 - - - - 8 4.000 8.1 24.7 - - - - 32.8

Subtotal WDF Capacity Development 144.7 68.0 3.2 - - - 215.8

B. Establishment of new SCGs

Village mobilisation meetings /k meeting 78 234 40 120 - - 472 100 7.9 24.1 4.2 12.9 - - 49.0

Printing of information leaflets /l lumpsum 1 - - - - - 1 5.000 5.1 - - - - - 5.1

Training of group leaders /m w/shop 3 9 2 5 - - 19 2.000 6.1 18.5 4.2 10.7 - - 39.5

Follow-up courses for group leaders /n w/shop - 3 9 2 5 - 19 1.000 - 3.1 9.5 2.1 5.5 - 20.2

Training of CSCG members /o w/shop 78 234 40 120 - - 472 50 3.9 12.1 2.1 6.4 - - 24.5

BDS course for CSCG members /p w/shop - 30 30 30 30 - 120 750 - 23.2 23.6 24.1 24.6 - 95.5

Seed on-lending capital for WDF /q lumpsum/group 39 156 137 80 60 - 472 4.767 185.9 743.7 653.1 381.4 286.0 - 2,250.0

Subtotal Establishment of new SCGs 208.8 824.6 696.7 437.6 316.1 - 2,483.9

C. Pre-Transformation Support to WU

International TA for Business Plan 2021-2023 /r lumpsum - - - - 1.3 - 1.3 20.000 - - - - 28.4 - 28.4

Transformation support /s lumpsum - - - - 1 1 2 40.000 - - - - 43.7 44.6 88.3

Subtotal Pre-Transformation Support to WU - - - - 72.2 44.6 116.8

Total Investment Costs 353.5 892.6 699.8 437.6 388.2 44.6 2,816.5

II. Recurrent Costs


Operational support to WDF /t lumpsum 1 4 - - - - 5 10.000 10.6 43.3 - - - - 53.9

Total Recurrent Costs 10.6 43.3 - - - - 53.9

Total 364.1 935.9 699.8 437.6 388.2 44.6 2,870.3

_________________________________

\a One-month international TA to support the design of Strategic Plan 2017-2022 for the WDF, lumpsum covering all costs.

\b Local TA to update the WDF operations and related manuals to be in line with the new Strategic Plan; budget includes the fee, travel and DSAs.

\c One-week course on best practices and microfinance management by Vietnam Microfinance Working Group, for Management Council, Control Board and senior management of WDF.

\d One week course at provincial level for WDF management and operational staff in province and districts, based on new Strategy and Manuals; second course in 2018 a refresher course and a start-up course

\e Allocation for costs of staff exchange operations with other, more mature WDFs; costs cover mainly travel and DSAs.

\f Procurement of accounting and loan management software; based on specifications, experiences and budgets from more mature WDFs.

\g For the WDF provincial office, a set covering A/C, 2 photocopiers/printers, 1 computer, calculators, furniture and minor office equipment.

\h For WDF district offices, a set covering 3 computers, a printer, furniture, cabinets, calculators, and minor office equipment.

\i One standard 4-W-D vehicle for the WDF Provincial Office, to support the management and follow-up of the Fund operations in the province.

\j 2 motorbikes for each WDF district offices for implementation of the CSCG activities.

\k 1-day mobilisation meeting in each village, in which a CSCG will be established, total 472 villages/groups. Costs cover the travel expenses of the WDF/WU district and commune staff.

\l 5,000 information leaflets on the WDF method and products, to be printed at USD 5,000, to be distributed in village mobilisation meetings.

\m 3-day courses at district level for all group leaders, around 25 per course, before group member training. Budget covers travel, lunches, teas, venues etc. Trainers from the WDF/WU.

\n 1,5-day re-fresher courses at district level for all group leaders, around 25 per course. Budget covers travel, lunches, teas, venues etc. Trainers from the WDF/WU.

\o Basic course for members at group level on WDF/CSCG methodology and small business management. As provided by the WU staff, the only programme costs related to DSAs of the travelling WDF/WU staff, based on government rates.

\p 2-day business development courses, with value chain/climate change adaptation focus, at commune level, one per commune per year, each covering 25 trainees, total coverage 3,000 members, budget covering travel, accommodation, meals, trainers fees and

venue

\q Seed lending capital for each established group based on average allocation of USD 4,767 per group (allowing an average loan of VND 15 million per member). Disbursements from the MoF subsidiary credit to WDF: 50% during the establishment year of each

group

\r One month international TA to support the design of the 3-year Business Plan for the new MFI for 2021-2023. This document is the key Attachment required by the State Bank of Vietnam for an MFI registration application.

\s Lumpsum allocation to support the transformation of the WDF into a registered microfinance institution. Actual support activities to be defined later as the transformation process progresses. Can include both TA and especially improvements in the

branches

\t Initial operational support to cover salaries of the WDF district branches (Branch Manager, Credit Officer, Accountant) for 2 years for the first branch and for one year for the next 3 branches.





253

Table 13. Output 8: Agribusiness competitiveness fund - Bac Kan




A. Value Chain business development

International TA pers-month 1 0.5 0.5 0.5 - - 2.5 20.000 20.2 10.3 10.5 10.7 - - 51.7

National TA pers-month 6 6 6 6 - - 24 3.000 18.0 18.0 18.0 18.0 - - 72.0

TA in support of APIF grant beneficiary business development planning lumpsum 5.0 10.0 20.0 20.0 - - 55.0

Business management training /b course - 1 1 1 1 - 4 8.000 - 8.2 8.4 8.6 8.7 - 34.0

Subtotal Value Chain business development 43.2 46.5 56.9 57.3 8.7 - 212.7

B. Co-financing value chain investments

Entrepreneur briefings on co-financed value chain investment each 2 2 2 2 - - 8 2.000 4.0 4.1 4.2 4.3 - - 16.7

APIF Investments /c lumpsum 300.0 600.0 800.0 800.0 500.0 - 3,000.0

Design and Supervision lumpsum 30.0 40.0 65.0 75.0 45.9 - 255.9

Subtotal Co-financing value chain investments 334.0 644.1 869.2 879.3 545.9 - 3,272.6

Total 377.2 690.7 926.1 936.6 554.6 - 3,485.2

_________________________________


\b Structured annual two week courses for PPP business managers

\c Grants up to USD 75,000 per enterprise.





254

Table 14. Output 8: Agribusiness competitiveness fund - Cao Bang




A. Value Chain business development

International TA pers-month 1 0.5 0.5 0.5 - - 2.5 20.000 20.2 10.3 10.5 10.7 - - 51.7

National TA pers-month 6 6 6 6 - - 24 3.000 18.0 18.0 18.0 18.0 - - 72.0

TA in support of APIF grant beneficiary business development planning lumpsum 5.0 10.0 20.0 20.0 - - 55.0

Business management training /b course - 1 1 1 1 - 4 8.000 - 8.2 8.4 8.6 8.7 - 34.0

Subtotal Value Chain business development 43.2 46.5 56.9 57.3 8.7 - 212.7

B. Co-financing value chain investments

Entrepreneur briefings on co-financed value chain investment each 2 2 2 2 - - 8 2.000 4.0 4.1 4.2 4.3 - - 16.7

APIF Investments /c lumpsum 300.0 600.0 800.0 1,000.0 573.8 - 3,273.8

Design and Supervision lumpsum 30.0 40.0 65.0 75.0 45.9 - 255.9

Subtotal Co-financing value chain investments 334.0 644.1 869.2 1,079.3 619.7 - 3,546.4

Total 377.2 690.7 926.1 1,136.6 628.4 - 3,759.0

_________________________________


\b Structured annual two week courses for PPP business managers

\c Grants up to USD 75,000 per enterprise.





255

Table 15. Project Coordination - Bac Kan



I. Investment Costs

A. Office equipment /a

Province level set 1 - - - - - 1 70.000 74.2 - - - - - 74.2

District level set 4 - - - - - 4 7.000 29.7 - - - - - 29.7

Commune level set 15 35 35 35 35 35 190 2.500 39.8 94.6 96.5 98.5 100.4 102.5 532.3

Subtotal Office equipment 143.7 94.6 96.5 98.5 100.4 102.5 636.3

B. Upgrading accounting/MIS

Installation of upgraded accounting system lumpsum 10.6 - - - - - 10.6

Development of Programme MIS /b lumpsum 10.0 - - - - - 10.0

Subtotal Upgrading accounting/MIS 20.6 - - - - - 20.6

C. Technical Assistance, Studies and Workshops

PIM preparation lumpsum 10.0 - - - - - 10.0

Environment and Social Management Plan lumpsum 10.0 - - - - - 10.0

Start-up workshop w/shop 1 - - - - - 1 7.400 7.5 - - - - - 7.5

Annual review and planning workshop w/shop - 1 1 1 1 1 5 4.000 - 4.1 4.2 4.3 4.4 4.5 21.4

Knowledge Management-Publications per-annum - 5.2 5.3 5.4 5.5 - 21.2

PCU staff training /c lumpsum 40.4 20.6 - - - - 61.0

Baseline Survey /d lumpsum 1 - - - - - 1 30.000 30.0 - - - - - 30.0

Technical Advisory Group /e per-annum 2 2 2 2 2 2 12 3.000 6.0 6.0 6.0 6.0 6.0 6.0 36.0

Ad-hoc Studies and Assistances lumpsum - 1 1 1 1 - 4 10.000 - 10.0 10.0 10.0 10.0 - 40.0

Mid-term Review lumpsum - - 1 - - - 1 20.000 - - 20.0 - - - 20.0

Final Impact Survey lumpsum - - - - - 1 1 20.000 - - - - - 20.0 20.0

Subtotal Technical Assistance, Studies and Workshops 103.9 45.9 45.5 25.6 25.8 30.5 277.2

Total Investment Costs 268.2 140.5 142.0 124.1 126.3 132.9 934.0

II. Recurrent Costs

A. Salaries

1. Province level

Project Coordinator pers-month 12 12 12 12 12 12 72 700 8.5 8.7 8.8 9.0 9.2 9.4 53.5

Deputy Project Coordinator pers-month 12 12 12 12 12 12 72 650 7.9 8.0 8.2 8.4 8.5 8.7 49.7

Procurement Manager pers-month 12 12 12 12 12 12 72 600 7.3 7.4 7.6 7.7 7.9 8.0 45.9

Financial Manager pers-month 12 12 12 12 12 12 72 600 7.3 7.4 7.6 7.7 7.9 8.0 45.9

Procurement Specialist pers-month 12 12 12 12 12 12 72 550 6.7 6.8 6.9 7.1 7.2 7.4 42.0

Accountant pers-month 24 24 24 24 24 24 144 600 14.5 14.8 15.1 15.4 15.7 16.1 91.7

MOP-SEDP Coordinator pers-month 12 12 12 12 12 12 72 600 7.3 7.4 7.6 7.7 7.9 8.0 45.9

Value Chain Coordinator pers-month 12 12 12 12 12 12 72 550 6.7 6.8 6.9 7.1 7.2 7.4 42.0

Community-based CCA and DRM Officer pers-month 12 12 12 12 12 12 72 550 6.7 6.8 6.9 7.1 7.2 7.4 42.0

Rural Finance Programme Coordinator pers-month 12 12 12 12 12 12 72 600 7.3 7.4 7.6 7.7 7.9 8.0 45.9

Rural Finance Officer pers-month 12 12 12 12 12 12 72 500 6.1 6.2 6.3 6.4 6.6 6.7 38.2

Engineer pers-month 12 12 12 12 12 12 72 600 7.3 7.4 7.6 7.7 7.9 8.0 45.9

Monitoring and Evaluation/KM Manager pers-month 12 12 12 12 12 12 72 600 7.3 7.4 7.6 7.7 7.9 8.0 45.9

Cashier pers-month 12 12 12 12 12 12 72 450 5.5 5.6 5.7 5.8 5.9 6.0 34.4

Translator pers-month 24 24 24 24 24 24 144 550 13.3 13.6 13.9 14.1 14.4 14.7 84.1

Admin Support Staff pers-month 12 12 12 12 12 12 72 300 3.6 3.7 3.8 3.9 3.9 4.0 22.9

Driver pers-month 36 36 36 36 36 36 216 350 12.7 13.0 13.2 13.5 13.8 14.1 80.3

Subtotal Province level 135.7 138.5 141.2 144.1 146.9 149.9 856.3





256

Table 15 (continued)

2. District level

MOP-SEDP Support Officer pers-month 48 48 48 48 48 48 288 450 21.8 22.3 22.7 23.2 23.6 24.1 137.6

Business Development Officer pers-month 48 48 48 48 48 48 288 450 21.8 22.3 22.7 23.2 23.6 24.1 137.6

Monitoring and Evaluation Officer/KM pers-month 48 48 48 48 48 48 288 450 21.8 22.3 22.7 23.2 23.6 24.1 137.6

Commune accountant /f pers-month 60.12 60.12 60.12 60.12 60.12 - 300.6 500 30.4 31.0 31.6 32.2 32.9 - 158.0

Subtotal District level 95.8 97.7 99.7 101.7 103.7 72.3 570.9

3. Commune level

Commune management budget /g lumpsum 30.3 30.9 31.5 32.2 32.8 - 157.7

Subtotal Salaries 261.9 267.1 272.4 277.9 283.4 222.1 1,584.8

B. DSA (local travel) lumpsum 1 1 1 1 1 1 6 50.000 50.5 51.5 52.5 53.6 54.7 55.8 318.6

C. Operation and Maintenance

1. Province level

Vehicle O&M /h per-annum 31.8 16.2 16.6 16.9 17.2 17.6 116.3

Office equipment O&M per-annum 14.4 9.5 9.7 9.8 10.0 10.2 63.6


D. Other Operating Costs

1. Province level

Office Utilities per-annum 1 1 1 1 1 1 6 6.000 6.4 6.5 6.6 6.8 6.9 7.0 40.1

International travel per-annum - 1 1 1 1 1 5 10.000 - 10.3 10.5 10.7 10.9 11.2 53.6

Banking Services per-annum 1 1 1 1 1 1 6 3.600 3.8 3.9 4.0 4.1 4.1 4.2 24.1

Audit per-annum 1 1 1 1 1 1 6 15.000 15.9 16.2 16.6 16.9 17.2 17.6 100.3

Telecommunication per-annum 1 1 1 1 1 1 6 18.000 19.1 19.5 19.9 20.3 20.7 21.1 120.4

Stationery per-annum 1 1 1 1 1 1 6 6.000 6.4 6.5 6.6 6.8 6.9 7.0 40.1

PSC meetings per-annum 1 1 1 1 1 1 6 2.000 2.1 2.2 2.2 2.3 2.3 2.3 13.4

Programme M&E /i per-annum 5.3 5.4 5.5 5.6 5.7 5.9 33.4

Other /j per-annum 1 1 1 1 1 1 6 23.000 24.4 24.9 25.4 25.9 26.4 26.9 153.9


2. District level per-annum 4 4 4 4 4 4 24 5.000 21.2 21.6 22.1 22.5 23.0 23.4 133.8

3. Commune level per-annum 15 35 35 35 35 35 190 2.500 39.8 94.6 96.5 98.5 100.4 102.5 532.3

Subtotal Other Operating Costs 144.3 211.6 215.8 220.2 224.6 229.1 1,245.6

Total Recurrent Costs 502.9 555.9 567.0 578.4 589.9 534.7 3,328.8

Total 771.0 696.4 709.0 702.5 716.2 667.7 4,262.8

_________________________________

\a For computers, printers, copy machines and furniture.

\b To be based on 3PAD MIS work and developed jointly by both provinces.

\c Including intensive English courses.

\d Including RIMS (IFAD monitoring system).

\e To cover cost of twice yearly 2 day joint provincial TAG meeting of up to 12 specialists to review project reports and technical progress and advise project management

\f Ten Programme employed commune accountants will be based at district or commune level and each will cover 3 communes.

\g Commune allocated, based on level of participation of commune staff

\h The unit cost covers the annual O&M costs of the vehicle including petrol, insurance, spare parts, servicing, repairing and parking.

\i For M&E data collection and management at province, district, commune and village level, supported by specific impact and technical studies that are separately financed.

\j Includes copying service, media, web, representation, etc.





257

Table 16. Project Coordination - Cao Bang



I. Investment Costs

A. Office equipment /a

Province level set 1 - - - - - 1 70.000 74.2 - - - - - 74.2

District level set 4 - - - - - 4 7.000 29.7 - - - - - 29.7

Commune level set 15 35 35 35 35 35 190 2.500 39.8 94.6 96.5 98.5 100.4 102.5 532.3

Subtotal Office equipment 143.7 94.6 96.5 98.5 100.4 102.5 636.3

B. Upgrading accounting/MIS

Installation of upgraded accounting system lumpsum 10.6 - - - - - 10.6

Development of Programme MIS /b lumpsum 10.0 - - - - - 10.0

Subtotal Upgrading accounting/MIS 20.6 - - - - - 20.6

C. Technical Assistance, Studies and Workshops

PIM preparation lumpsum 10.0 - - - - - 10.0

Environment and Social management Plan lumpsum 10.0 - - - - - 10.0

Start-up workshop w/shop 1 - - - - - 1 7.000 7.1 - - - - - 7.1

Annual review and planning workshop w/shop - 1 1 1 1 1 5 4.000 - 4.1 4.2 4.3 4.4 4.5 21.4

Knowledge Management-Publications per-annum - 5.2 5.3 5.4 5.5 - 21.2

PCU staff training /c lumpsum 40.4 20.6 - - - - 61.0

Baseline Survey /d lumpsum 1 - - - - - 1 30.000 30.0 - - - - - 30.0

Technical Advisory Group /e per-annum 2 2 2 2 2 2 12 3.000 6.0 6.0 6.0 6.0 6.0 6.0 36.0

Ad-hoc Studies and Assistances lumpsum - 1 1 1 1 - 4 10.000 - 10.0 10.0 10.0 10.0 - 40.0

Mid-term Review lumpsum - - 1 - - - 1 20.000 - - 20.0 - - - 20.0

Final Impact Survey lumpsum - - - - - 1 1 20.000 - - - - - 20.0 20.0

Subtotal Technical Assistance, Studies and Workshops 103.5 45.9 45.5 25.6 25.8 30.5 276.7

Total Investment Costs 267.8 140.5 142.0 124.1 126.3 132.9 933.6

II. Recurrent Costs

A. Salaries

1. Province level

Project Coordinator pers-month 12 12 12 12 12 12 72 700 8.5 8.7 8.8 9.0 9.2 9.4 53.5

Advisor to Project Coordinator pers-month 12 12 12 12 12 12 72 650 7.9 8.0 8.2 8.4 8.5 8.7 49.7

Procurement Manager pers-month 12 12 12 12 12 12 72 600 7.3 7.4 7.6 7.7 7.9 8.0 45.9

Financial Manager pers-month 12 12 12 12 12 12 72 600 7.3 7.4 7.6 7.7 7.9 8.0 45.9

Procurement Specialist pers-month 12 12 12 12 12 12 72 550 6.7 6.8 6.9 7.1 7.2 7.4 42.0

Accountant pers-month 24 24 24 24 24 24 144 600 14.5 14.8 15.1 15.4 15.7 16.1 91.7

MOP-SEDP Coordinator pers-month 12 12 12 12 12 12 72 600 7.3 7.4 7.6 7.7 7.9 8.0 45.9

Value Chain Coordinator pers-month 12 12 12 12 12 12 72 550 6.7 6.8 6.9 7.1 7.2 7.4 42.0

Community-based CCA and DRM Officer pers-month 12 12 12 12 12 12 72 550 6.7 6.8 6.9 7.1 7.2 7.4 42.0

Rural Finance Programme Coordinator pers-month 12 12 12 12 12 12 72 600 7.3 7.4 7.6 7.7 7.9 8.0 45.9

Rural Finance Officer pers-month 12 12 12 12 12 12 72 500 6.1 6.2 6.3 6.4 6.6 6.7 38.2

Engineer pers-month 12 12 12 12 12 12 72 600 7.3 7.4 7.6 7.7 7.9 8.0 45.9

Monitoring and Evaluation/KM Manager pers-month 12 12 12 12 12 12 72 600 7.3 7.4 7.6 7.7 7.9 8.0 45.9

Cashier pers-month 12 12 12 12 12 12 72 450 5.5 5.6 5.7 5.8 5.9 6.0 34.4

Translator pers-month 24 24 24 24 24 24 144 550 13.3 13.6 13.9 14.1 14.4 14.7 84.1

Admin Support Staff pers-month 12 12 12 12 12 12 72 300 3.6 3.7 3.8 3.9 3.9 4.0 22.9

Driver pers-month 36 36 36 36 36 36 216 350 12.7 13.0 13.2 13.5 13.8 14.1 80.3






258

(Table 16 continued)

2. District level

MOP-SEDP Support Officer pers-month 48 48 48 48 48 48 288 450 21.8 22.3 22.7 23.2 23.6 24.1 137.6

Business Development Officer pers-month 48 48 48 48 48 48 288 450 21.8 22.3 22.7 23.2 23.6 24.1 137.6

Monitoring and Evaluation Officer/KM pers-month 48 48 48 48 48 48 288 450 21.8 22.3 22.7 23.2 23.6 24.1 137.6

Commune accountant /f pers-month 60.12 60.12 60.12 60.12 60.12 - 300.6 500 30.4 31.0 31.6 32.2 32.9 - 158.0

Subtotal District level 95.8 97.7 99.7 101.7 103.7 72.3 570.9

3. Commune level

Commune management budget /g lumpsum 30.3 30.9 31.5 32.2 32.8 - 157.7

Subtotal Salaries 261.9 267.1 272.4 277.9 283.4 222.1 1,584.8

B. DSA (local travel) lumpsum 1 1 1 1 1 1 6 50.000 50.5 51.5 52.5 53.6 54.7 55.8 318.6

C. Operation and Maintenance

1. Province level

Vehicle O&M /h per-annum 31.8 16.2 16.6 16.9 17.2 17.6 116.3

Office equipment O&M per-annum 14.4 9.5 9.7 9.8 10.0 10.2 63.6


D. Other Operating Costs

1. Province level

Office Utilities per-annum 1 1 1 1 1 1 6 6.000 6.4 6.5 6.6 6.8 6.9 7.0 40.1

International travel per-annum - 1 1 1 1 1 5 10.000 - 10.3 10.5 10.7 10.9 11.2 53.6

Banking Services per-annum 1 1 1 1 1 1 6 3.600 3.8 3.9 4.0 4.1 4.1 4.2 24.1

Audit per-annum 1 1 1 1 1 1 6 15.000 15.9 16.2 16.6 16.9 17.2 17.6 100.3

Telecommunication per-annum 1 1 1 1 1 1 6 18.000 19.1 19.5 19.9 20.3 20.7 21.1 120.4

Stationery per-annum 1 1 1 1 1 1 6 6.000 6.4 6.5 6.6 6.8 6.9 7.0 40.1

PPSC meetings per-annum 2 2 2 2 2 2 12 2.000 4.2 4.3 4.4 4.5 4.6 4.7 26.8

Programme M&E /i per-annum 5.3 5.4 5.5 5.6 5.7 5.9 33.4

Other /j per-annum 1 1 1 1 1 1 6 23.000 24.4 24.9 25.4 25.9 26.4 26.9 153.9


2. District level per-annum 4 4 4 4 4 4 24 10.000 42.4 43.3 44.1 45.0 45.9 46.8 267.6

3. Commune level per-annum 15 35 35 35 35 35 190 5.000 79.5 189.3 193.1 196.9 200.9 204.9 1,064.7

Subtotal Other Operating Costs 207.4 330.1 336.7 343.4 350.3 357.3 1,925.1

Total Recurrent Costs 566.0 674.3 687.8 701.6 715.6 663.0 4,008.3

Total 833.7 814.9 829.8 825.7 841.9 795.9 4,941.9

_________________________________

\a For computers, printers, copy machines and furniture.

\b To be based on 3PAD MIS work and developed jointly by both provinces.

\c Including intensive English courses.

\d Including RIMS (IFAD monitoring system).

\e To cover cost of twice yearly 2 day joint provincial TAG meeting of up to 12 specialists to review project reports and technical progress and advise project management

\f Ten Programme employed commune accountants will be based at district or commune level and each will cover 3 communes.

\g Commune allocated, based on level of participation of commune staff

\h The unit cost covers the annual O&M costs of the vehicle including petrol, insurance, spare parts, servicing, repairing and parking.

\i For M&E data collection and management at province, district, commune and village level, supported by specific impact and technical studies that are separately financed.

\j Includes copying service, media, web, representation, etc.




Appendix 10. Economic and Financial Analysis

259

Appendix 10: Economic and Financial Analysis

EFA Summary Pages

Table A: Overview of Financial Analysis of Crop, Livestock, Forestry Production and Processing Models

Models used in Analysis Province Unit Production period Net profit per production period

(VND '000) Return to total labour per person day

(VND'000)



BK 2 cow 6 months 6,492 16,142 149% 144 359 149%

H'mong Cow fattening /a CB 2 cow 3 months 6,117 22,737 272% 204 253 24%


BK 5 porker 8 months 1,609 6,457 301% 32 129 301%

CB 5 porker 10 months 3,454 4,487 30% 55 72 30%

Crossbred Pig (fattening) BK 5 porker 4 months 1,091 4,139 279% 36 138 279% Crossbred Pig (breeding) BK 1 sow 1 year 7,501 11,785 57% 150 236 57%

Chicken BK 200 head 6 months 12,554 15,775 26% 126 158 26%

Crop Production

Annual

Rice - lowland su /b local BK 1 ha 4 months 42,310 51,048 21% 230 473 106%


wi /c local BK 1 ha 4 months 29,710 41,823 41% 161 387 140%


Rice – upland su /b local BK 1 ha 4 months 40,585 45,421 12% 221 421 91%

CB 1 ha 4 months 12,929 20,829 61% 82 140 70%

wi /c local BK 1 ha 4 months 30,565 38,498 26% 166 356 115% hybrid BK 1 ha 4 months 19,621 26,788 37% 109 165 52%

Maize – upland

CB 1 ha 4 months 14,775 21,643 46% 95 180 89% Maize - lowland BK 1 ha 4 months 10,271 19,226 87% 68 141 106%

Canna

BK 1,000 m2 10 months 5,142 7,480 45% 147 241 64%

CB 1,000 m2 10 months 4,952 8,774 77% 141 283 100%

Peanut

CB 1,000 m2 3.5 months 1,291 2,316 79% 92 154 67% Ginger

BK 1,000 m2 10 months 15,012 28,301 89% 500 943 89%

CB 1,000 m2 10 months 14,983 21,950 46% 456 616 35% Black Agar

CB 1,000 m2 10 months 9,383 11,883 27% 200 253 27%

Sugarcane

CB 1,000 m2 9 months 1,650 2,318 40% 122 143 17% Potato

BK 1,000 m2 3 months 1,947 3,447 77% 93 164 77%

Cassava

CB 1 ha 10 months 7,669 14,503 89% 111 160 44% Soybean CB 1,000 m2 3 months 652 1,703 161% 72 170 135%

Fodder VA06

CB 1,000 m2 9 months 2,168 3,583 65% 108 138 27% Fodder Mulato 2 BK 1,000 m2 1 year /d 6,680 9,394 41% 84 104 25%

Investment costs (VND million) Financial Internal Rate of Return


Perennial Crop Production Green Tea (Shan) BK 1 ha 20 years 24.7 36.1 11.4 17.2% 24.9% 7.7% Tangerine CB 1 ha 20 years 82.6 106.7 24.1 19.1% 37.3% 18.2% Plum BK 1 ha 10 years 47.8 45.5 -2.3 26.8% 45.3% 18.5% Banana BK 1 ha 8 years 31.9 36.2 4.3 22.3% 36.6% 14.3%

Forest Production Magnolia conifer BK 1 ha 10 years 23.9 23.9 0 3.6% 12.0% 8.4% Acacia BK 1 ha 10 years /e 17.0 13.3 -4 1.7% 27.1% 25.4% CB 1 ha 9 years /e 41.1 58.1 17 13.7% 22.0% 8.3%

Processing

Glass noodle

CB HH enterprise 1 year 38 72.2 33 23.7% 47.0% 23.3%

Tea BK Cooperative 1 year 62.3 182.1 120 23.5% 38.1% 14.6% Peanut CB HH enterprise 1 year 1,050 1,300 250 18.9% 37.0% 18.1% Cassava CB Med. enterprise 1 year 92,000 112,000 20,000 12.3% 15.8% 3.5% Wood processing (peel) BK Small enterpr. 1 year 395 955 560 15.6% 33.5% 17.9% BK Med. enterprise 1 year 1,500 1,700 200 21.3% 39.5% 18.2%

FWOP = future without Project; WP = with Project \a WP increased to 4 cows. \b Summer-autumn; \c Winter-spring. \d Production period 6 years; \e WP reduced to 8 years.





260

Table B: Project Cost and Indicators in Logical Framework

Total Project Costs (USD m): 77.75 IFAD (USD m): 43.00 GOV (USD m): 21.08 Beneficiaries (USD m): 13.67

Beneficiaries /a People: 147,000 Households: 33,000 Districts: 8 (19) /b

Cost per beneficiary 529 USD / person 2,356 USD / household Communes: 70 (179+112) /b

Outcomes/Components and Cost in USD m (% of total)

Outcome indicators Output indicators


8.11 (10.4%)

At least 80% of provincial communes and districts prepare medium-term climate-adapted MOP-SEDPs.

At least 10 new commodity-based VC SIPs prepared.


Project provinces have the legislative base, guidelines, tools and staff capacity for district and commune MOP-SEDP implementation.


17.64 (22.7%)

At least 20,000 farm households (66% of Project beneficiaries) sustainably adopting two or more climate change adaptation technology or practices.

Forest land and forest use rights for 17,000 hectares of forest transferred to private households in Bắc Kạn.



42.30 (54.4%)

SCGs maintain a minimum annual saving rate growth of at least 15% over base-year savings and < 5% non-performing loans in their portfolios.

Of USD 40 million invested in commodity-targeted, climate- adapted infrastructure, commodity production and enterprises development in Project communes, at least 70% of investments show an IRR > 10%.



At least 12 CIG-linked enterprise applications for APIF funding approved in each province.

Project Management 9.20 (11.8%)

NTP NRD National Coordination Office Grant

0.5 (0.6%)

\a See calculation in Appendix 2, Table 1. \b Districts/communes directly supported under Outcome 2 (Total number of districts/communes benefiting from Outcome 1 – all districts/communes in Bắc Kạn and Cao Bằng). In addition, in two communes in Bạch Thông district in Bắc Kạn province the Project will support the development of tangerine value chains.





261

Table C1: Financial Analysis Main Assumptions (see Table A for financial outcomes and production period)

Models used in Analysis Province Unit Unit of output

Units of output per production period (number)

Price per unit of output (VND'000)



BK 2 cow head 2 2 0% 25,000 30,000 20%

H'mong Cow fattening CB 2 cow head 2 4 100% 25,000 30,000 20%


BK 5 porker kg 240 294 23% 55 55 0%

CB 5 porker kg 259 270 4% 50 55 10%

Crossbred Pig (fattening) BK 5 porker kg 365 441 21% 40 40 0% Crossbred Pig (breeding) BK 1 sow kg 259 342 32% 55 55 0%

Chicken BK 200 head kg 342 392 15% 80 80 0%

Crop Production

Annual

Rice - lowland su /a local BK 1 ha kg 4,200 4,550 8% 16.0 16.0 0%

hybrid CB 1 ha kg 5,600 7,200 29% 6.5 7.5 15%

wi /b local BK 1 ha kg 4,200 4,900 17% 13.0 13.0 0%

hybrid CB 1 ha kg 5,200 6,400 23% 6.5 7.5 15%

Rice – upland su /a local BK 1 ha kg 3,500 3,850 10% 16.0 16.0 0%

CB 1 ha kg 4,000 5,000 25% 6.5 7.5 15%

wi /b local BK 1 ha kg 3,500 4,200 20% 13.0 13.0 0% hybrid BK 1 ha kg 3,640 4,550 25% 10.0 10.0 0%

Maize – upland

CB 1 ha kg 4,200 5,500 31% 7.0 7.5 7% Maize - lowland BK 1 ha kg 4,200 6,000 43% 6.0 6.0 0%

Canna

BK 1,000 m2 kg 6,000 7,500 25% 1.2 1.3 8%

CB 1,000 m2 kg 5,300 7,700 45% 1.9 1.9 0%

Peanut

CB 1,000 m2 kg 140 205 46% 20.0 20.5 2% Ginger

BK 1,000 m2 kg 1,150 1,850 61% 20.0 20.0 0%

CB 1,000 m2 kg 1,700 2,200 29% 15.0 15.0 0% Black Agar

CB 1,000 m2 kg 500 600 20% 25.0 25.0 0%

Sugarcane

CB 1,000 m2 kg 6,500 7,000 8% 0.9 1.0 11% Potato

BK 1,000 m2 kg 1,100 1,400 27% 5.0 5.0 0%

Cassava

CB 1 Ha kg 9,500 17,640 86% 1.4 1.4 0% Soybean CB 1,000 m2 kg 110 170 55% 16.0 17.5 9%

Fodder VA06

CB 1,000 m2 kg 6,000 8,000 33% 0.8 0.8 0% Fodder Mulato 2 BK 1,000 m2 kg 11,000 15,000 36% 0.9 0.9 0%

Perennial Crop Production Green Tea (Shan) BK 1 ha kg 2,500 4,000 60% 15.0 18.0 20% Tangerine CB 1 ha kg 27,500 32,500 18% 10.0 14.0 40% Plum BK 1 ha kg 13,000 20,000 54% 15.0 15.0 0% Banana BK 1 ha kg 28,000 32,000 14% 2.5 3.0 20%

Forest Production Magnolia conifer /c BK 1 ha m3 90 25 -72% 600 400 -33% Acacia /c BK 1 ha m3 80 95 19% 400 500 25% Acacia CB 1 ha m3 178 235 32% 1,300 1,500 15%

Processing

Glass noodle

CB kg 1,814 125% 62 65 5% 23.3% Tea BK Cooperative kg 2,100 3,150 50% 160 200 25% Peanut CB HH enterprise kg 30,000 80,000 167% 32 32 0% Cassava CB Med. enterprise kg 7,000,000 9,800,000 40% 8 8 0% Wood processing (peel) BK Small enterpr. m3 1,814 2,592 43% 2,200 2,310 5% BK Med. enterprise m3 4,480 5,760 29% 2,200 5,760 162%

FWOP = future without Project; WP = with Project. \a Summer-autumn; \b Winter-spring. \c WP output excludes additional thinning. Table C2: Economic Analysis Main Assumptions

Parameter Value Remarks Official Exchange Rate 22,400 USD1=VND (May 2016)

Shadow Exchange Rate 22,400

Standard Conversion Factor

1.0 As commonly applied in recent project designs in Vietnam. As appropriate, financial costs are converted into economic costs by removing taxes and subsidies.

Value Added Tax 10% Included in Project costs as applicable but deducted from Project costs in Economic Analysis.

Labour Conversion Factor (Opportunity Cost of Family Labour)

70%-80% As percentage of cost of hired labour. Given the large variations depending on the season, location and alternative income opportunities, a standard labour conversion factor is not feasible. For the Economic Analysis all family labour is valued at its estimated opportunity costs.

Discount Rate /c 9% Equals assumed 6% annual long-term average GDP growth rate in Vietnam + 3% for elasticity of marginal utility of consumption (World Bank Viet Nam).





262

Table D: Beneficiaries and Phasing


5. CIGs for climate CIGs new 400 800 700 0 0 0


members new 4,800 9,600 8,400 0 0 0

cumulative 4,800 14,400 22,800 22,800 22,800 22,800


cumulative 79 309 479 559 619 619

members new 873 2,195 1,462 560 420 0

cumulative 873 3,068 4,529 5,089 5,509 5,509




cumulative 2 9 23 36 43 43

VC supply New 600 2,200 4,200 3,816 2,000 0


6. Community


cumulative 67 202 343 446 446 446

villages new 67 135 141 103 0 0

cumulative 67 202 343 446 446 446

HH new 3,365 6,730 7,066 5,148 0 0

cumulative 3,365 10,095 17,161 22,310 22,310 22,310

people new 15,142 30,285 31,799 23,168 0 0

cumulative 15,142 45,427 77,226 100,394 100,394 100,394


cumulative 76 229 389 505 505 505

ha new 457 915 961 700 0 0

cumulative 457 1,372 2,333 3,033 3,033 3,033

HH new 4,920 9,839 10,331 7,527 0 0

cumulative 4,920 14,759 25,091 32,618 32,618 32,618




cumulative 2,667 8,000 11,333 11,333 11,333 11,333







263

Table E: Project Economic Cash Flow (USD ’000)

Year Project costs

/a

Incremental Net Benefits by Outputs /b

Total net incremental

benefits Forest Land Allocation

Community development

Rural Financial Services

Agribusiness Promotion Investment

Fund (APIF)

Community Infrastructure

Community Interest

Groups /c

1 -4,368 -295 -4,200 -1,625 -642 -420 -11,550 2 -5,432 -590 -8,158 -2,980 -1,472 -1,201 -19,834 3 -5,871 -369 -6,545 -2,255 -556 -2,086 -17,681 4 -5,546 -194 -1,297 510 293 -1,499 -7,734 5 -4,151 -403 7,426 1,035 528 964 5,400 6 -2,265 -217 8,512 1,140 911 1,257 9,337 7

0 8,964 1,140 911 1,352 12,367

8

0 8,964 1,140 911 1,352 12,367 9

502 8,964 1,140 911 1,352 12,869

10

1,505 8,964 1,140 911 1,352 13,872 11

2,132 8,964 1,140 911 1,352 14,499

12

2,132 8,964 1,140 911 1,352 14,499 13

2,132 8,964 1,140 911 1,352 14,499

14

2,132 8,964 1,140 911 1,352 14,499 15

2,132 8,964 1,140 911 1,352 14,499

16

2,132 8,964 1,140 911 1,352 14,499 17

2,132 8,964 1,140 911 1,352 14,499

18

2,132 8,964 1,140 911 1,352 14,499 19

2,132 8,964 1,140 911 1,352 14,499

20

2,132 8,964 1,140 911 1,352 14,499

NPV at 9% USD million 5.06 34.83 1.27 3.07 3.58 26.72

EIRR USD million 24.7% 26.8% 11.7% 21.6% 18.7% 14.8%

\a Only costs not included in Incremental Net Benefits by Output: Mainly Outcome 1 and Project Management costs. \b Outputs for which economic benefits have been quantified. Including related economic output costs. \c 50% of total costs of farmer group/Mass Organization awareness training on commodity production & CC adaptation deducted

Table F: Project Economic Outcome and Sensitivity Analysis


ENPV (USD‘000)

Base Case 14.8% 26,718


Project Costs


Benefits delayed by


13.2% 20,817 + 20% 11.8% 14,917

Base Case

- 20% - 40%


11.2% 9,573 7.1% -7,572




12.5% 17,266

10.7% 8,595

9.1% 640



11.0% 9,639

+ 10% - 10% 2 years 8.2% -4,066


3 years 6.7% -11,289

+ 20% - 20% 3 years 4.8% -23,091

Switching Values /b

Costs + 45% 9.0% 0 Benefits - 31% 9.0% 0






264

INTRODUCTION

1. This Appendix describes the assumptions and results of the Economic and Financial Analyses (EFA) of the Project. The main objective of the Economic Analysis (EA) was to establish whether the Project is justified from the point of view of the national economy. However, it should be noted that the CSSP does not lend itself to the traditional EA of development projects, as it is demand- and market-driven and it is not possible to determine ex-ante for which types of eligible commodities and economic activities farmers and enterprises will request Project support, which technologies and business practices they will actually choose, and what types of community infrastructures will be funded. It should be emphasized that numerous potential Project benefits have been identified that have not been quantified in monetary terms (see Annex 1 Tables A-1–A-3). A sensitivity analysis has been conducted to assess the impact of changes in main parameters affecting the economic outcome of the Project as a result of the risks that have been identified in the Project’s risk analysis. The Financial Analysis (FA) was undertaken on the basis of representative models for crop, livestock and forestry production and related processing enterprises to assess the impact of Project interventions on net farm/enterprise income, as well as on the financial sustainability of the farms and enterprises that are likely to be supported by the Project. The findings of the analyses are summarized below. More details are provided in the EFA Annex A Tables in the Project Life File.

2. The EFA is linked to the Project’s Logical Framework and its outcome indicators. It is therefore expected that the EFA will be periodically updated as an integral part of the Project’s M&E system and as an input into the Project evaluation at mid-term and completion stage. Decisions on Project support to investments in farming systems, enterprises and community infrastructures will be based on sound EFA, specifically as part of the preparation of SIPs as well as on the investment proposals that are required for the application for competitive business grants (CBGs). In that regard, under Output 1 the PPCO Commodity and VC Development teams, supported by international technical assistance, will build capacity in DPI and DARD to conduct EFA of commodity and associated VCs. This EFA will be key to preparing commodity-based VC Strategic Investment Plans (SIP) in each province which will be integrated into commune and district MOP-SEDPs. Details for incorporating EFA in Project implementation will be provided in the PIM. Consequently, adequate financial and human resources for EFA during implementation have been included in the Project design.

B. Project Area and Beneficiaries

3. The Project will primarily support development in 35 communes in Ba Bể, Na Rì, Ngân Sơn and Pác Nặm districts in Bắc Kạn province and 35 communes in Hà Quảng, Nguyên Bình, Thạch An and Thông Nông districts in Cao Bằng province. In two communes in Bạch Thông district in Bắc Kạn province the Project will support the development of tangerine value chains. The selection of participating communes at final Project design will be based on, inter alia, (i) poverty rate; (ii) vulnerability to natural disaster; (iii) commitment of leadership; and (iv) potential for development of pro-poor VCs. The selected communes will include better market-linked communes as well as communes that are more remote, but that can be joined-up through VC development. Ethnic minorities form a large proportion of the population in all Project districts and about 95% of the total population in the Project area.

4. The Project target groups are: (i) rural poor households with land and labour, including household enterprises; (ii) unskilled employed rural people; (iii) rural people lacking production land but having business acumen and desire; and, (iv) key farmers who have the skills to promote commercial agricultural production. Women and female-headed and ethnic minority households will be prioritised among the aforementioned target groups. The Project proposes specific measures to ensure women’s participation in relevant activities, including minimum participation rates.

5. Other key Project beneficiaries include: (i) government officials empowered to support market-led growth; and, (ii) private market and VC agri-businesses that find common interest in promoting viable pro-poor products and services. The Project will also generate flow-on benefits to the entire rural population of the provinces through: (i) the institutionalization of a climate-adapted MOP-SEDP process; (ii) an updated and devolved CC strategy and action plan; (iii) better access to climate adapted agriculture technology and credit; and (iv) institutional strengthening leading to more climate informed and market-oriented planning.





265

C. Project Benefits

6. The Project is expected to generate substantial net incremental benefits for poor farmers and rural entrepreneurs engaged in the supported commodity chains throughout the provinces and result in improved poverty reduction in the Project communes

64. The primary benefits from the Project will

come from: (i) increased crop, forest and livestock productivity and production that is more resilient to climate change impacts, resulting from adoption of climate-smart agriculture technologies, as well as improved access to better and more affordable inputs and their application; (ii) increased proportion of marketed farm produce, resulting from improved market linkages and outlets; (iii) reduced losses during production, processing and transportation of produce through innovative technology and improved rural infrastructure; (iv) enhanced value addition along the value chain and improved quality of products resulting in higher producer prices; (v) enhanced access to longer-term credit and to co-financing for productive investments; (vi) increased employment either for hired or family labour for both on-farm and off-farm activities; and (vii) increased government tax revenues.

7. It is expected that by the end of the Project at least 72,000 people in 16,000 poor and near-poor households will be lifted out of poverty, while 30,000 poor, near-poor and non-poor households supported by the Project will have at least a 20% increase in household assets. This will be achieved through a combination of capacity building, technology transfer and credit access, supported by upgraded community infrastructure and co-financing of innovative investment in their farming operations. These include about 23,000 CIG members, 5,500 WSCG

65 members as well as

households that will benefit from APIF investments, enterprise-based vocational training and farm-based extension provided by the Project. Furthermore, up to 35,000 households in the 70 Project communes will benefit from at least one community infrastructure investment, particularly market access roads and irrigation development, including at least 17,600 poor and near poor households (see Table D and Appendix 2, Annex 4, Tables 1 and 2 for details).

8. The increased income and employment will result in increased demand for goods and services in the rural areas in Bắc Kạn and Cao Bằng, which is expected to generate additional income and employment effects, and further increase government tax revenues. The increased agricultural output will increase national production, and thereby contribute to growth in overall GDP and national food security. In addition, foreign exchange earnings/savings are expected from increases in exports (mainly timber, medicinal plants, ginger and spices) and a reduction in imports (mainly timber).

9. Major institutional benefits expected from the Project are: (i) at least 1,900 CIGs and 1,000 newly established WSCGs as well as farmers’ cooperatives supported by the Project are effectively serving their members; (ii) staff capacity at provincial and district level is built for preparation of SIPs and market economy management; and (iii) all Bắc Kạn and Cao Bằng districts and communes are implementing an institutionalised climate adapted MOP-SEDP processes.

10. The main social and environmental benefits expected from the Project are: (i) reduced vulnerability and increased resilience to climate change and disaster impacts, resulting from the implementation of climate-adapted MOP-SEDP at district and commune level; (ii) increased participation of women and the poor in decision making at local level; (iii) reduced environmental degradation and conserved natural resource base for sustainable livelihoods of present and future generations; and (iv) environmentally friendly agronomic practices, energy-efficient processing and safe disposal of agro-industrial waste products. An overview of the potential Project benefits is provided in Annex Tables A-1–A-3.

D. Financial analysis

11. The FA is based on illustrative models for annual crops (21), tree crops and forestry (9), animal production (7) and processing enterprises (6) which have been identified for the main commodity chains that are likely to be supported by the Project. The commodity chains have been selected on the basis of a preliminary analysis of the market demand, constraints, opportunities and their potential

64

It is expected that poverty reduction in Project communes at the end of the Project will be at least 20% above the

average non-Project provincial commune rate. 65

Including 4,000 women that are mobilised into around 260 WSCGs in Bắc Kạn, financed through residual revolving

funds from the former 3PAD.





266

to contribute to poverty reduction in Bắc Kạn and Cao Bằng66

. Data have been compiled by the Bắc Kạn and Cao Bằng PPBs from two main sources: (i) value chain analyses prepared in 2014/15 for the identified priority commodity chains; and (ii) additional data collection by the detailed and final design mission and the two PPBs between October 2015 and April 2016. For each model, three scenarios were analysed as appropriate: (i) the “present-without Project” (WOP) scenario; (ii) the “future-without Project” (FWOP) scenario; and (iii) the “future-with Project” (FWP) scenario. The templates used for livestock and annual crops present – for one production cycle - a standard gross margin analysis as well as calculation of net profit (depreciation and cost of capital deducted) and return to labour (total and family). Furthermore, the investment costs including required working capital (if applicable) are presented. A simplified version of this template is already used by other IFAD- funded projects in Viet Nam. (see Annex 1, Table A-4).

12. Discounted Cash Flow (DCF) analyses have been prepared for perennial crops, forestry and processing enterprises which exclude depreciation, comparing the FWP with the FWOP scenario and calculating net incremental benefits. Summary Tables A and C present the main financial parameters. Detailed enterprise budgets are presented in the Economic and Financial Analysis Annex A in the Project Life File.

13. The FA shows the potential for significant increases in net profits, return to labour and return on investment resulting from the Project. Decisions on Project support to investments in farming systems and enterprises will be based on sound FA, specifically for (i) investment proposals for Agribusiness Promotion Investment Fund (APIF) co-financing; and (ii) business plans for investments by CIGs and, as appropriate, by WSCG members. The financial enterprise budgets prepared together with the PPB and DARD staff in the two provinces provide the basis for the assumptions made for the Economic Analysis of the Project.

14. It should be noted that, in the FA, family labour has been quantified but not valued. However, the calculation of return to family labour (net profit per family labour day) provides an indication of the ability of a household to pay for hired labour instead of using family labour (in case family labour is not available, e.g. because of household size or health reasons)

67. Specifically, the one-page enterprise

budget templates developed provide the main elements for the planning and assessment of the financial viability of enterprises (production and processing), as they: (i) compare the WOP, FWOP and FWP scenarios; (ii) provide a brief overview of the production system including the key production parameters, farmer organization, investments and marketing channel; (iii) calculate main financial performance measures; and (iv) calculate the investment costs including required working capital (if applicable) and annual depreciation.

15. It is envisaged that the methodology applied during Project design will provide the building blocks for a thorough VC analysis for the main VCs to be supported by the Project, as well as for the above mentioned FA that will be carried out during implementation (after some modification as required)

68. In that regard, the Project will develop capacity of PPCO and relevant staff from DARD,

DPI and DOF under Output 1 for EFA of commodity and associated VCs as an input into the preparation of commodity-based VC SIPs for integration into commune and district MOP-SEDPs.

E. Economic Analysis

16. As stated above, given the demand- and market-driven nature of the Project it is not possible to determine ex-ante the types of investments that will be made by farmers and entrepreneurs within the eligible commodity chains and which community infrastructures will be implemented. Therefore, it was felt that developing comprehensive household models would not be feasible, given the large diversity of households and activities these households are engaged in. In this context, the common approach to EA as a “natural continuum of the FA”, simply by using shadow prices and aggregating household models would not be very meaningful and the basis of such aggregation would be difficult to justify.

66

Priority commodity chains identified and analysed during Project design include: timber, ginger, tangerine, canna,

peanut, black agar, banana, h’mong cow and black pig production. 67

If the return to family labour is above the cost of hired labour, households could pay for hired labour instead of using

family labour and still make a profit. 68

The templates build on the templates prepared during the design of the IFAD-supported Ha Giang Commodity-

oriented Poverty Reduction Project which are presently used during implementation.





267

17. First, the diversity of the agro-ecological and farming systems in the Project area combined with the variety of Project interventions and impacts means that any analysis based on aggregation of illustrative household/farming system models would be a highly generalised approximation.

18. Second, the estimation of economic values for outputs and inputs in situations where traded items’ border prices and domestic handling costs can vary considerably is difficult. Considering the above points and the many assumptions made regarding performance/success/ adoption of the models analysed, the effects of any adjustments of financial prices will be negligible in comparison.

19. Nevertheless, the FA models provide the basis for estimating what returns on investment would be realistic under the various interventions supported under Outcomes 2 and 3. The EA includes representative models for rural road and irrigation scheme construction/rehabilitation supported under Output 6 and is based on conservative assumptions regarding outreach, adoption and success rate . It should be noted that potential benefits from Outcome 1: Province-based participatory planning institutionalised have not been quantified separately as (i) this component will contribute to realizing the benefits expected from Outcomes 2 and 3 ; and (ii) it is difficult to quantify in economic terms additional benefits resulting from the activities supported, specifically (i) provincial CCA plan and investment Project preparation; and (ii) climate-informed, market-oriented socio-economic development planning. No economic benefits have been calculated for the Project coordination component which is a precondition for Project implementation and achieving Outcomes 1, 2 and 3. However, the economic costs of all Project components have been included in the overall Project EA.

20. Economic costs and assumptions made. The financial Project costs have been converted to economic costs, which exclude taxes and duties and price contingencies, using the COSTAB software (see EFA Annex D). The analysis was carried out for a 20-year period, including the six-year Project implementation period. The economic analysis was undertaken in 2015 constant prices, and a discount rate of nine per cent was used (see Table C2). The Vietnamese Dong (VND) was used as the unit of account and the official exchange rate of VND 22,400 to USD 1.0 (May 2016) was applied when converting to USD.

21. Economic benefits. The estimated economic benefits from the farm, enterprise and infrastructure investments were derived from the FA presented above by valuing the physical input and output quantities in terms of their respective economic prices. The EFA Annex C provides details of Project outreach assumptions and parameters for the economic analysis which are summarized below.

22. Development of community infrastructure (CIF). Based on experience from 3PAD and DBRP

project implementation, the following distribution of community infrastructure investments has been assumed: (i) roads 60: per cent; (ii) irrigation schemes: 30 per cent; (iii) water and sanitation: 5 per cent; and (iv) others (e.g. markets, public warehouses, yards, electrification): 5 per cent (see Annex Table A-5). An overview of the expected benefits from road development is provided in Table A-3 while Table A-8 summarizes the cost-benefit analysis of the four road models in each province. Specific assumptions with regard to (i) increases in cropped area, productivity, producer prices, marketed output, and (ii) reductions in losses are presented in Annex B in the Project Life File. On the basis of actual costs of road construction under 3PAD and DBRP projects for each of the road types identified the economic internal rate of return (EIRR) over a useful life of 10 years (or 20 years – see figures in brackets) ranges from 10 per cent (17 per cent) for upland concrete road construction (Cao Bằng) to 32 per cent (35 per cent) for lowland soil road construction (Bắc Kạn).

23. Table A-9 summarizes the cost-benefit analysis for typical 6-ha upland and lowland irrigation schemes in both provinces. The EIRR over a period of 20 years, ranges from 30 percent for upland schemes (Cao Bằng) to 46 percent for lowland scheme (Bắc Kạn). The remaining 10 percent of the CIF budget are expected to be used for other community investments, including water and sanitation, markets and storage facilities. While such investments will all have significant economic benefits, given the uncertainty with regard to the type of investment requested and a lack of data, no attempt has been made to quantify the benefits from these investments in monetary terms. It should be noted that EA will be a key element in the feasibility study required for each community infrastructure financed by the Project. Overall, the estimated EIRR of investments in community infrastructure under the Project amounts to 26.8 percent.





268

24. Support to Common Interest Groups (CIGs). It is not possible to predict which types of CIGs will request Project support and which ones will actually receive funding. For the expected CIG investment of USD 6.65 million (including 50 percent grant) by 1,900 CIGs, based on the available farm and enterprise budgets and conservative assumptions regarding returns on investment, taking into account a phased Project support and other costs directly related to the establishment of CIGs, the EIRR of support to CIGs under Output 5 amounts to 11.7 per cent. (See Annex C for details).

25. Support to Women Savings and Credit Groups (WSCGs). The economic benefits from this activity have been calculated on the basis of the following assumptions: (i) the Project will provide on-lending capital to a total number of 620 WSCG groups as follows: Bắc Kạn – 294 groups, average 15 members per group, USD 5,102 per group; Cao Bằng – 472 groups, average 7 members per group, USD 4,767 per group); (ii) the average loans size is USD 680 and the average loan period 12 months; (iii) interest rate is 0.9% per month without grace period; (iv) loan recovery rate is 98%. In many provinces in Viet Nam, 100 percent in-time recovery by WSCGs is reached, including Bắc Kạn and Cao Bằng in the past. It is assumed that the total volume of loans disbursed per cycle will remain constant, even if the loan recovery rate of previous cycles is below 100 per cent. This is a conservative assumption as SCGs will be expected to maintain a minimum annual saving rate growth of 10 per cent; (v) 70 percent of the loans will be used for small stock (pigs, chicken) while 20 per cent will be for crop production and 10 percent for trading activities; (vi) Return on investment per annum has been estimated at 25 per cent for small stock, 30 per cent for crops and 35 per cent for trading activities, which is a rather conservative assumption given the representative enterprise budgets and experience from other projects in Viet Nam (interest payment already included in budgets); (vii) all interest earned is used for, and fully covers, group and WDF operational costs. Therefore, no additional costs for operation of the WSCG on-lending programme have been added; (viii) A loan disbursement efficiency rate of 90 per cent has been assumed, i.e. the rate of the available funds that are actually disbursed at any given time. Taking into account the cost of establishment of new WSCGs, the EIRR of the SCG support amounts to 21.6 per cent over 20 years.

26. Issuance of forest land Pink Books. To support the equitable (across wealth and gender groups) ownership and efficient use of production forest in Bắc Kạn and Cao Bằng, as well as to facilitate poor household access to credit from financial institutions, the Project will, on a cost-sharing basis with GoV (IFAD 50 per cent/Government 50 per cent), finance the issuance of forest land Red Books. It is expected that about 8,500 poor and near poor households in Bắc Kạn and 2,500 poor and near poor households in Cao Bằng will each receive, on average, 1.5 ha of production land. Beneficiary households will be able to use the Pink Books as collateral for bank loans and it is assumed that farmers will invest in improved forest production, resulting in an average increase of annual Gross Margin (GM) per ha of 50 per cent of the increase that has been estimated possible under improved forest production (see Timber Production Enterprise Models). Based on a phasing of Pink Book issuance over four years and assuming that the incremental GM will only be realized after the first production cycle, the EIRR of this activity for a 20-year period has been calculated at 24.7 per cent.

27. Co-financing of Public-Private Partnership (APIF). The APIF investments actually co-financed by the Project within the framework of the VC SIPs and MOP-SEDPs will depend on the selection of lead agri-business enterprises and household enterprises on the basis of investment proposals required to access Project co-financing. A number of successful enterprises already operate in Bắc Kạn and Cao Bằng that generate investment and job opportunities for poor rural households which have been analysed (e.g. ginger production, processing and trading, cannas starch and vermicelli production, timber, peanut and cassava processing; see Summary Tables A and C, EFA Annexes A and C). The enterprises analysed show high potential for increased profitability with additional investment and technical support under the Project. Based on this analysis, it has been assumed that the average ERR of investments in APIF is 21.5 per cent over a 20-year period. Taking into account a phased Project implementation and related value chain development support costs, the overall EIRR of support to APIF under the Project amounts to 18.7 per cent.

28. Economic viability and sensitivity analysis. Taking into account the total economic Project costs, the economic internal rate of return (EIRR) of the Project for the base case is 14.8 per cent. The net present value (NPV), discounted at nine percent is VND 598.5 billion (USD 26.72 million) and the Benefit/Cost Ratio 1.5. Table 1 presents the main risks that have been identified in the Project’s risk analysis and may affect the economic outcome of the Project. A sensitivity analysis has been





269

conducted to assess the potential impact of these risks resulting in (i) reduced benefits; (ii) increased costs; and/or (iii) delayed benefits. Table 2 provides an overview of the various scenarios of the sensitivity analysis. An increase in Project costs by 10 per cent will reduce the EIRR to 13.2 per cent, while a decrease in overall Project benefits by 20 per cent will result in an EIRR of 11.2 per cent. Considering the possibility of a combination of 20 per cent reduction in incremental benefits with a two-year delay in benefits, the EIRR is reduced to 8.0 per cent. The switching values show that the Project will remain economically viable if benefits decreased by 31 per cent or Project costs increased by 45 per cent.





270

Table 1: Overview of Main Project Risks affecting Project Economic Outcome

Risk category Risk Likelihood/

severity

Potential impact reflected in sensitivity analysis

Reduced benefits

Increased costs

Delayed benefits

Economy and Market Risks

External shocks to macro economy. M/H X X X

Increase cost of inputs. L/H X X

Reduced producer prices. L/H X

Reduced demand. L/H X

Institutional Risks

Provincial government cannot integrate commune level NTP funding into the MOP-SEDP process (due to lack of MPI direction).

M/M X X

Community infrastructure investments are not directed to areas of highest financial and economic benefit.

M/M X

Technical coordination is not responsive to the grassroots level needs.

L/H X

Ineffective inter-institutional cooperation & dialogue on development issues means financing is not disbursed in a timely manner to support field implementation.

M/M X

Inadequate skills base amongst local service providers. H/H X X

Financial service providers unwilling to support Project investments.

L/H X X

Climate Risks

Climate-change and disaster impacts. M/H X X

L = low; M = medium; H = high.

See Main Report Table 1 for additional risks identified and risk mitigation measures included in Project design.

Table 2: Project Economic Outcome and Sensitivity Analysis


ENPV (USD‘000)

Base Case 14.8% 26,718


Project Costs


Benefits delayed by


13.2% 20,817 + 20% 11.8% 14,917

Base Case

- 20% - 40%


11.2% 9,573 7.1% -7,572




12.5% 17,266

10.7% 8,595

9.1% 640



11.0% 9,639

+ 10% - 10% 2 years 8.2% -4,066


3 years 6.7% -11,289

+ 20% - 20% 3 years 4.8% -23,091

Switching Values /b

Costs + 45% 9.0% 0 Benefits - 31% 9.0% 0






271

F. Conclusions

29. On the basis of conservative assumptions, and given the fact that many potential benefits that are expected from the Project have not been quantified in economic terms, the Project can be justified on economic grounds. It should be kept in mind that not all potential economic benefits (for example, environmental benefits; other direct and indirect benefits of community infrastructure; and additional direct benefits from Outcome 1 have been included in the analysis. Furthermore, the likely multiplier effects mentioned above have not been quantified. Therefore, it is safe to assume that the estimated economic benefits are on the low side of the potential economic returns that can be expected when the Project is implemented.





272

Annex 1: Financial analysis tables

Table A-1: Overview of Potential Project Impacts on Communities, Economy, Government Budget,

Institutions, Labour Market and the Environment

Table A-2: Overview of Potential Project Benefits by Value Chain Actor

Table A-3: Overview of Potential Project Benefits from Rehabilitation/Construction of Rural Roads

Table A-4: Structure of Enterprise Budgets - Crop, Livestock, Forestry Production and Processing

Table A-5: Estimated share of total infrastructure by type

Table A-6: Indicative distribution of road investments

Table A-7: Indicative distribution of irrigation investments

Table A-8: Community Infrastructure - Summary of Cost-Benefit Analysis of Rural Roads

Table A-9: Community Infrastructure - Summary of Cost Benefit Analysis of Irrigation Schemes

Economic and Financial Analysis: Annexes in the Project Life File

Annex A: Financial Crop, Forest and Livestock Budgets (Production and Processing)

Annex B: Community Infrastructure Models

Annex C: Project Outreach Assumptions and Parameters for Economic Analysis

Annex D: Economic Project Costs

Annex E: Project Economic Analysis and Sensitivity Analysis





273

Table A-1: Overview of Potential Project Impacts on Communities, Economy, Government

Budget, Institutions, Labour Market and the Environment

Impact Area Main Potential Impacts

Rural Communities

Reduced poverty;

Reduced vulnerability and increased resilience to climate change and disaster impacts;

Improved access to markets and services;

Increased participation of women and the poor in decision making at local level.

Rural/National

Economy

Increased output, income and employment, resulting in increased demand for goods and services and generating additional income and employment effects;

Foreign exchange earnings/savings. /a

Government

Budget Incremental tax revenues from increased economic activities;

Increased Provincial recurrent budget for staff and O&M (Project life only).

Institutions Improved capacity, efficiency and effectiveness.

Labour Market Increased and “fair work” on and off-farm employment opportunities;

Improved skills of workforce;

Increased workplace safety (through various certification schemes).

Environment

Reduced environmental degradation and conserved natural resource base for sustainable livelihoods of present and future generations.

Environmentally friendly agronomic practices, energy-efficient processing and safe disposal of agro-industrial waste products.

\a Resulting from an increase in exports and/or a reduction in imports.

Table A-2: Overview of Potential Project Benefits by Value Chain Actor

Value Chain Actor Main Potential Benefits

Input Suppliers /a

Increased market/demand for goods;

Reduced transaction costs.

Increased value addition and income.

Service Providers/b

Increased market/demand for services /c;


Increased income.

Producers (incl. individuals,

CIGs, SCGs, cooperatives)

Improved access to inputs, services, markets and information;

Reduced climate risks due to climate-smart agricultural technologies and practices;

Increased production and/or productivity - reduced cost per unit of output;

Reduced losses;

Improved product quality/increased producer prices;

Enhanced market opportunities and increased proportion of marketed farm output;

Economies of scale and strengthened position in market (e.g. cooperatives, contracts);

Enhanced access to longer-term credit and co-financing;


Increased productivity, value addition and income.

Processors (incl. individuals,

CIGs, cooperatives, enterprises)

Improved access to inputs, services, markets and information;

Increased output and/or productivity/reduced cost per unit of output;

Reduced losses;

Improved product quality/increased output prices;

Enhanced market opportunities and increased volumes processed and marketed;

Enhanced access to longer-term credit and co-financing;


Increased productivity, value addition and income.

Traders (incl. collectors, transporters) /d

Increased supply of products;

Enhanced market opportunities and increased volumes traded;


Increased income.

Marketers (wholesalers,

retailers, exporters)

Increased supply of products;

Enhanced market opportunities and increased volumes marketed;


Increased income.

Consumers Reduced consumer prices;

Increased availability of commodities of better quality;

Improved food safety.

\a E.g. equipment, seeds, fertilizer and agro-chemicals (not directly targeted by project). \b E.g. technical/advisory, business development, financial and veterinary services. Not strictly value chain actors but part of

enabling environment. \c Including increased demand as a result of improved quality of the services. \d May also act higher up in the value chain.





274

Table A-3: Overview of Potential Project Benefits from Rehabilitation/Construction of Rural

Roads

Benefits Resulting from Included in

CSSP EFA

Increased marketed output and

volumes of transported

produce

Improved access to markets due to improved accessibility throughout the year.

Improved access of (larger) vehicles. YES

Changed patterns of

production/increased area

Introduction/expansion of higher value crops (e.g. fruits, vegetables, organic tea)

which become financially viable due to improved market access and reduced

losses. Increased cultivated area of existing crops.

YES

Increased agricultural

productivity

Increased availability and reduced cost of inputs. YES

Increased access to support services, including extension. YES

Increase of livestock

production

Better access to inputs and markets. YES

Increased producer prices (i) Reduced transport costs; (ii) higher quality of produce due to timely

transportation and reduced quality losses during transport; (iii) better access to

markets.

YES

Reduced losses /a Accessibility throughout the year and reduced transport time; faster access to

markets. YES

Reduced transport costs Use of vehicles and motorbikes instead of transport on foot or by horse/buffalo.

Reduced fuel and O&M cost of vehicles and motorbikes. NO

Reduced travel time Reduced time by vehicles on the road. Travel by vehicles and motorbikes

instead of travel on foot. NO

Increased profits for vehicle

operators

Reduction in vehicle operation and maintenance costs. NO

Time savings. NO

Opportunities for increased business (volumes transported). NO

Reduced market distortions Improved position of farmers in markets due to (i) better access to market/price

information; (ii) opportunities to link with different traders, reduced risk of

monopsony.

NO

Employment opportunities (i) Jobs created in road construction/maintenance; (ii) better access to job

opportunities close to/along road; (iii) increased petty trade along road. NO

Social benefits Improved access to potable water, sanitation (/b), health-care centres, schools,

and information. NO

\a On-farm before transport and during transport. Community infrastructure/CIG investments in improved storage would also contribute to this benefit. \b May be included in community infrastructure development.





275

Table A-4: Structure of Enterprise Budgets - Crop, Livestock, Forestry Production and Processing (see different templates for each type of enterprise)

The One-Page Enterprise Budget Template provides main elements for the planning and assessment of the financial viability of enterprises (production and processing). Specifically, it:

=> provides an overview of the production system including the key production parameters, farmer organization, investments and marketing channel.

=> compares the Present (P), Future Without Project (FWOP) and Future With Project (FWP) scenarios;

=> calculates main financial performance measures, including Gross Margin and Net Profit;

=> calculates the investment costs including required working capital (if applicable) and annual depreciation.

The enterprise budget will be part of the investment proposal required for the application for competitive business grants under the Project. It will be complemented by (i) a financing plan; (ii) cash flow analysis; and (iii) multi-periodic cost-benefit analysis (as appropriate).

Furthermore, the enterprise budgets will provide an input into the value chain analyses carried out during Project implementation for each the main value chains to be supported by the Project.

Calculation of Financial Performance Measures - Per Production Period and Unit specified

Output Output

minus Intermediate Inputs

= Value Added minus Total Variable Costs (incl. Hired Labour)

minus Wages and Salaries (incl. Hired Labour)

= Gross Margin = Gross Margin

minus Interest Charges minus Interest Charges

minus Taxes

minus Taxes

= Gross Profit = Gross Profit

minus Depreciation minus Depreciation

= Net Profit = Net Profit

Return to family labour (per person day) = Net Profit / number of family labour days

Return to total labour (per person day) = (Net Profit + cost of hired labour) /

total number of labour days (hired and family)

Return on Investment = Revenue - Total Cost [incl. Depreciation]) / Total Cost

= Net Profit / Total Cost

Calculation of Investment Costs and Annual Depreciation

Investment costs include the following main categories (as appropriate):

Buildings/structures;

Equipment/machinery;

Establishment of plantation;

Livestock;

Working capital for first production cycle (e.g. inputs, hired labour).

The annual depreciation of a fixed assets is calculated by the "straight line depreciation method". => Depreciation = (Investment Cost - Residual Value*) / Useful Life

* Assumed to be zero for the purpose of this analysis.

Use of Enterprise Budgets for Economic Analysis

1 Change financial prices to economic prices. => Use of import/export parity prices, shadow wage rate, standard conversion factor (as appropriate); removal of

taxes/subsidies.

2 Use of incremental Gross Margin [With Project (WP) - Without Project (WOP)]. => Taxes excluded (taxes are transfer payments and therefore no economic costs).

=> Depreciation excluded (economic analysis includes cost of replacement of fixed assets in the year incurred).

3 Deduct cost of family labour valued at opportunity cost.





276

Table A-5: Estimated share of total infrastructure by type

(% of total community infrastructure investments)

Bac Kan

Cao Bang

For analysis

Road 60% 60% 60%

Irrigation scheme 30% 25% 30%

Water/sanitation 5% 5% 5%

Others /a 5% 10% 5%

Total 100% 100% 100%

Table A-6: Indicative distribution of road investments (% of total road investments)

Road

Bac Kan Cao Bang For

analysis

Lowland New concrete 2m 30% 30% 30%

New Soil 2.5-3m 20% 20% 20%

Upland new concrete 2m 20% 20% 20%

new Soil 2.5-3m 30% 30% 30%

Total 100% 100% 100%

Table A-7: Indicative distribution of irrigation investments (% of total irrigation investments)

Scheme

Bac Kan Cao Bang For

analysis

Lowland - 6 ha new 30% 65% 50%

Upland - 6 ha new 70% 35% 50%

Total 100% 100% 100%





277

Table A-8: Community Infrastructure - Summary of Cost-Benefit Analysis of Rural Roads

Bac Kan

Lowland Upland

Concrete Soil Concrete Soil

Road length (km) 1 1 1 1

Number of villages reached 1 1 1 1

Village population reached

(households) 55 55 45 45

(people) 248 248 203 203

Construction cost per km

(VND'000) 956,168 776,289 886,411 826,765

(USD) 42,686 34,656 39,572 36,909

Construction cost per road (VND'000) 956,168 776,289 886,411 826,765

(USD) 42,686 34,656 39,572 36,909

Construction cost per household reached (VND'000) 8,692 17,385 14,114 19,698

(USD) 776 630 879 820

Cost-benefit analysis (economic costs) Period of analysis

Economic Internal Rate of Return (EIRR)

10 years 21.8% 32.0% 17.9% 30.5%

15 years 25.2% 34.4% 21.8% 33.1%

20 years 26.1% 34.9% 22.8% 33.6%

Cao Bang

Lowland Upland

Concrete Soil Concrete Soil

Road length (km) 1 1 1 1

Number of villages reached 1 1 1 1

Village population reached

(households) 50 50 50 50

(people) 225 225 225 225

Construction cost per km

(VND'000) 1,000,000 773,100 1,250,000 766,400

(USD) 44,643 34,513 55,804 34,214

Construction cost per road (VND'000) 1,000,000 773,100 1,250,000 766,400

(USD) 44,643 34,513 55,804 34,214

Construction cost per household reached (VND'000) 8,692 20,000 15,462 25,000

(USD) 893 690 1,116 684

Cost-benefit analysis (economic costs) Period of analysis

Economic Internal Rate of Return (EIRR)

10 years 16.9% 25.1% 10.6% 25.4%

15 years 21.0% 28.2% 15.5% 28.5%

20 years 22.1% 28.9% 17.0% 29.2%





278

Table A-9: Community Infrastructure - Summary of Cost Benefit Analysis of Irrigation

Schemes

Bac Kan Cao Bang

Lowland Upland Lowland Upland

Scheme area (ha) 6 6 6 6

Number of farmers cultivating land 100 100 150 19 Average area per farmer (m2) 600 400 3,158 2,857

Investment cost per ha (VND'000) 64,160 77,170 54,000 62,000 (USD) 2,864 3,445 2,411 2,768

Investment cost per scheme (VND'000) 384,960 463,020 324,000 372,000 (USD) 17,186 20,671 14,464 16,607

Cropping intensity before 183% 167% 100% 100% after 200% 200% 200% 200%

Gross margin (GM) per ha /a before (VND'000) 51,950 46,975 17,230 12,810 after

93,825 84,815 64,940 53,610

increment

41,875 37,840 47,710 40,800 81% 81% 277% 319%

Gross margin per scheme /a before (VND'000) 311,700 281,850 103,380 76,860 after

562,950 508,890 389,640 321,660

increment 251,250 227,040 286,260 244,800

Increm. GM per ha minus cost of O&M and depreciation /b 35,459 30,123 42,310 34,600

Production per scheme /a before (MT) 40.0 29.4 30.0 23.4 after

56.7 48.3 81.6 68.4

increment

16.7 18.9 51.6 45.0 42% 64% 172% 192%

Production per farmer /a before (kg) 400 196 1,579 1,114 after

567 322 4,295 3,257

increment 167 126 2,716 2,143

Economic Internal Rate of Return (EIRR) /c 46.7% 33.5% 43.0% 30.4%

\a Both crops.

\b O&M: 5% of investment cost p.a.; depreciation based on useful life of 20 years (5% p.a.).

\c Economic costs and family labour valued at opportunity cost.



Detailed Design Report

Appendix 11. Draft Project implementation manual

280

Appendix 11: Draft Project implementation manual

1. Based on the existing DBRP and 3PAD PIMs, and the IFAD Country manuals 0n Competitive

Small Grants and on Public-Private Partnerships, the PPCOs will, collectively, prepare a new PIM and

submit it to IFAD for review prior to Project start up. The revised PIM will have the following main

chapters.

2. PIM Table of Contents:

Province-based Participatory Planning Institutionalised

o Terms of Reference, manuals and training programs for key technical areas including

strategic investment planning, climate adapted participatory planning, and CC

adaptation strategy and plan.

A greener agriculture future

o Participatory forest land and forest allocation

A supporting manual based on 3PAD experience

o Farmer CIG

An IFAD Country office manual on Competitive Small Grants co-financing, will

form the basis of the CSSP CIG manual;

Procedures manual for district-managed forage seed and forage procurement

and distribution system

Profitable farms linked to finance and markets

o Community infrastructure co-financing;

o Terms of reference for the delivery of vocational skills training at village and

enterprise level;

o Public – Private Collaboration (APIF) implemented

An IFAD Country office manual on APIF co-financing, will form the basis of

the CSSP APIF manual;

o Savings and Credit Groups established and transformed into a MFI (building off PIM

notes prepared for other IFAD projects);

Project Management

o Financial Management and Disbursement Manual

o Procurement Manual and Procurement Plan

o Monitoring and Evaluation Manual

o Terms of Reference for Key Staff and Consultant Positions




Appendix 12. Compliance with IFAD policies

282

Appendix 12: Compliance with IFAD policies

Policy Strategic Objectives

IFAD

Strategic

Framework

2011-2015

The CSSP is strongly aligned with the overall objectives of IFAD to "work

for the rural poor to improve their food security, increase their incomes and

strengthen their resilience." The program takes into account key IFAD

policies and strategies relating to targeting, gender, land, ethnic peoples

and CC contributing to the overall objectives of the Strategic Framework

2011-2015 and in particular to: (i) a natural resource and economic asset

base for poor rural women and men that is more resilient to CC,

environmental degradation and market transformation; (ii) access for poor

rural women and men to services to reduce poverty, improve nutrition,

raise incomes and build resilience in a changing environment. The

program also contributes to objectives (iii) poor rural women and men and

their organizations able to influence policies and institutions that affect

their livelihoods and; (iv) enabling institutional and policy environments to

support agricultural production and the full range of enterprise

development and related non-farm activities. Key policy orientation

includes natural resources – land, water, energy and biodiversity; CC

adaptation; improved agricultural technologies and effective production

services; integration of poor rural people within VCs; and technical skills

development.

Viet Nam

COSOP 2011

-2017

The Country Strategic Opportunities Project (COSOP), which is aligned

with the policies and strategies of GoV, has three main strategic

objectives, to which the CSSP is closely aligned: (i) Enable poor rural

provinces to carry out market-led, pro-poor rural Development. This

objective is satisfied through the provincial approach using the market-

oriented SEDP and the VC Approach; (ii) Improve access of poor rural

people – particularly women – to commodity and labour markets. This

objective is satisfied through the targeting methodology, ensuring

representation of the poor in planning forums and a range of pro-poor

engagement products, particularly those involving provision of rural

financial services; and(iii) Enhance the capacity of poor rural households

to adapt to CC. This objective is satisfied through the outcome employed

to finance CC adaptation. All of these target group characteristics are

consistent with IFAD policy. Additional, CSSP builds on the new GoV NTP-

NRD, NTP-SPR and NTP-RCC.

Environmental

Natural

Resource

Management

(ENRM)

Policy

CSSP supports the primary and secondary objective of this policy by

promoting sustainable upland agriculture and forestry production systems

resilient to CC. The program adheres to the following policy principles:

(i) increased investment in approaches providing multiple benefits for

sustainable intensification of agriculture: improved watershed / resilient

infrastructure; (ii) strengthening the governance of natural assets to the

rural poor through land ownership and community empowerment;

(iii) equality and empowerment of women and ethnic peoples in the

context of natural resource management and family nutrition; and

(iv) Improving access of poor rural communities in financing environmental

protection and the fight against CC.





283

IFAD’s CC

Strategy

Consistent with the goals, purpose and core principles of

IFAD’s Environmental Natural Resource Management (ENRM)

Policy the proposed program’s targets groups are largely poor,

ethnic minority households and communities in the uplands of

northeastern Viet Nam and sets out to address CC adaptation,

sustainable land management and poverty reduction in an

integrated fashion. The target group is disproportionately

poor and highly dependent on staple crops, traditional

agriculture and the natural resource base (e.g.,

NTFPs). Living in more remote areas, they have reduced

access to markets and supporting services and so have low

rates of agricultural investment and, in consequence, lower

productivity. They are also identified as being highly sensitive

to both CC and natural disaster impacts for all these same

reasons. In response, the Project supports actions for long-

term adaptation that address the drivers of vulnerability —

such as adaptation options that reduce poverty and increase

household resilience — and that integrate CC into

development planning and public and private (VC and

enterprise) investment.

IFAD’s Policy for

Gender equality

and Women's

empowerment

CSSP will systematically address issues of gender equality and

women's empowerment. It will help women and their organizations in

their advocacy for access to resources and knowledge. It will

strengthen the capacity of Project partners (national, local and

decentralized institutions, training centers, private sector providers and

national and international NGOs) to take into account issues of gender

equality and community empowerment. This is particularly considered

a difficult group to reach and therefore will be subject to special

attention.

IFAD’s Policy for

indigenous

people

The approach to the non Kinh ethnic groups is consistent with IFAD’s

policy on ethnic minorities. The target populations in the uplands

consist mainly of diverse ethnic groups, not from the Kinh ethnic

majority. Cultural differences will dictate the approach adopted, as well

as different poverty levels. Local languages will be used in all village

meeting, planning and extension sessions. District teams responsible

for implementation will reflect gender balance, and their members will

have command of ethnic languages. Capacity building tools will be

developed in the languages of the main ethnic groups and take into

consideration cultural differences. Special efforts will be made to recruit

facilitators and LF2F extension agents speaking ethnic groups

languages and in mobilizing and mentoring students from the ethnic

schools.





284

IFAD’s Policy to

improve access

to Land and

security of

Tenure

Tenure insecurity is a major risk for the implementation of adaptation

measures to CC. CSSP will support the Participatory Forest Land

Allocation and Use (PFLAU) through co-finance for the issuance of

forest use right certificates. There is a close link between the way in

which natural resources are accessed and retained, and the way in

which they are managed. The better defined and more secure the

tenure or use rights, the more sustainably those resources are

managed. Yet, tackling land degradation, or sustainably exploiting

rangeland or fisheries resources, are also about improving

management and conservation technologies and practices. Two policy

objectives of IFAD are identified: (i) align with national priorities and

supporting strategies to reduce poverty and (ii) focus on empowerment

of action of the rural poor and their representative organizations.

IFAD’s

Knowledge

Management

Strategy

The CSSP is aligned with the Knowledge Management strategy,

especially in the following areas (i) strengthening the process of

knowledge sharing and learning; (ii) development of partnerships to

provide a broader base of knowledge sharing and learning and;

(iii) promotion of a dynamic platform for knowledge sharing and

learning. The Project will use (human and financial) resources to

enhance its impact by sharing knowledge and learning.




Appendix 13. Contents of the Project Life File

286

Appendix 13: Contents of the Project Life File

1. Completion report for the Bắc Kạn Public-private partnership for Agroforestry Development

2. Completion report for the Cao Bằng Doing Business with the Rural Poor Project

3. Aide memoire from Detailed Design Mission

4. Thematic reports from Bắc Kạn and Cao Bằng, including:

Thematic report on Agriculture and Rural Development

Thematic report on Forestry

Thematic report Poverty

Thematic report on Rural Credit and Finance

Thematic report on Industry and Trade

Thematic report on the Cooperative Alliance

Thematic report on the Farmer’s Union

Thematic report on Science and Technology

Thematic report on Ethnic People

District status reports

5. Bắc Kạn Initial Project Design Report

6. CSSP Pre-design Report

7. CSSP Social, Environmental and Climate Assessment Procedures Review Note

8. COSTAB file containing all detailed and summary Project cost tables

Documents

Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng · GGS Green growth strategy GHG Greenhouse gas GSO Government Statistical Office ... SEDS Socio-economic Development