small grant operational guidelines 2014

SMALL GRANT OPERATIONAL GUIDELINES 59

SMALL GRANT OPERATIONAL GUIDELINES2014

Government of NepalMinistry of Agricultural Development

Agriculture and Food Security Project (GAFSP TF 013719)

Funded by Implemented by Supervised by

MoAD and MoHP

SMALL GRANT OPERATIONAL GUIDELINES i

SMALL GRANT OPERATIONAL GUIDELINES

January 2014

Government of Nepal

Ministry of Agricultural Development

Agriculture and Food Security Project (GAFSP TF 013719)

SMALL GRANT OPERATIONAL GUIDELINESii

Number of Publica on: 300

Publisher : Agriculture and Food Security Project

Address : Agriculture and Food Security Project Project Management Offi ce, Gairidhara, Kathmandu Phone No: 0977-1-4004075/76 Fax No. : 0977-1-4004078 Website: www.afsp.gov.np

Printed at : Brindawa Chhapakhana, Ktm. Ph.: 9841331541

SMALL GRANT OPERATIONAL GUIDELINES iii

ABBREVIATIONS

AER Agro-Ecological RegionAFSP Agriculture and Food Security ProjectAP Appraisal PanelBCC Behavior Change Communication BG Benefi ciaries GroupsBMI Body Mass IndexCDO Chief District Offi cerCSO Civil Society OrganizationsCF Community FacilitatorCIP Country Investment PlanDADC District Agriculture Development CommitteeDADO District Agriculture Development Offi ceDESMC District Environment and Social Management CommitteeDFNC District Food and Nutrition Committee DFTQC Department of Food Technology and Quality ControlDHS Demographic Health SurveyDIME Development Impact Evaluation InitiativeDLS Department of Livestock ServicesDLSO District Livestock Services Offi ceDoA Department of AgricultureDoHS Department of Health ServicesDPCC District Project Coordination CommitteeDPSU District Project Support UnitEMF Environmental Management FrameworkFFS Farmer Field SchoolFG Farmers GroupGAFSP Global Agriculture and Food Security ProgramGDP Gross Domestic ProductsGEED Gender Equity and Environment DivisionGoN Government of Nepal GRM Grievance Redressal MechanismGESI Gender and Social InclusionHIMALI High Mountain Agribusiness and Livelihood ImprovementHVAP High Value Agriculture Project ISN Interim Strategy NoteIWRMP Irrigation and Water Resources Management ProjectIYCF Infant and Young Child Feeding

SMALL GRANT OPERATIONAL GUIDELINESiv

LDO Local Development Offi cerMDGs Millennium Development GoalsMNP Micronutrient Powder MoAD Ministry of Agricultural DevelopmentMoCPA Ministry of Cooperative and Poverty AlleviationMoFALD Ministry of Federal Affairs and Local DevelopmentMoHP Ministry of Health and PopulationM&E Monitoring and EvaluationMPPWTM Ministry of Physical Planning, Works and Transport ManagementNARC Nepal Agricultural Research CouncilNGO Non-Governmental OrganizationNLSS Nepal Living Standard Survey NPC National Planning CommissionNTFP Non-Timber Forest ProductsPAF Poverty Alleviation FundPD Project DirectorPDO Project Development ObjectivePESMC Project Environment and Social Management CommitteePIP Project Implementation PlanPMIS Project Management Information SystemPMU Project Management UnitPMT Project Management Team PSC Project Steering CommitteePTCC Project Technical Coordination CommitteeRDs Regional DirectoratesRPCC Regional Project Coordination CommitteeRPF Resettlement Policy FrameworkRPSU Regional Project Support UnitSA Social AssessmentSE Supervising EntitySGA Small Grant ApplicationSMF Social Management FrameworkSPFP Sub-Project Full ProposalTA Technical AssistanceUSAID United States Agency for International DevelopmentVAHW Village Animal Health WorkerVC Value ChainVDC Village Development Committee

SMALL GRANT OPERATIONAL GUIDELINES v

Table of Contents

I. INTRODUCTION 1

II. GUIDELINE FOR THE IMPLEMENTATION OF SMALL GRANTS 1

2.1 Geographic Coverage 2

2.2 Support Areas 2

2.3 Average Grant Ceiling 3

2.4 Multi-Donor Cost Sharing Provision 3

2.5 Cost Items Allowed to Cover 4

III. ELIGIBLE TARGET GROUPS 4

IV. SMALL GRANT ALLOCATION PROCEDURES 5

V. INSTITUTIONAL ARRANGEMENTS AND ROLES FOR THE IMPLEMENTATION OF SMALL GRANT 16

VI. PROCUREMENT MANAGEMENT OF SMALL GRANTS OPERATION 22

VII. FINANCIAL MANAGEMENT OF SMALL GRANTS OPERATION 24

VII. GRIEVANCES REDRESSAL MECHANISM 30

IX. LIMITATION OF THE GUIDELINE 30


Ι. INTRODUCTION

The Agriculture and Food Security Project (AFSP) will be implemented for fi ve years

(April 30, 2013 to March 31, 2018) to enhance food and nutritional security of the targeted communities in 19 districts of Mid Western and Far Western Development Regions of Nepal. Project emphasize on increased productivity

of crop and livestock followed by improvements in the intake of diversifi ed diets and

feeding/caring practices targeted to the pregnant and nursing women and children

below 2 years of age.

The project covers four components: (1) Technology Development and Adaptation;

(2) Technology Dissemination and Adoption; (3) Food and Nutritional Status

Enhancement and (4) Project Management. Among these, the components (2) and

(3) have made provisions for Small Grant support to the communities for fi nancing

investment in technologies and management practices of crops, livestock, grain banks

including promotion of simple technologies for home food processing, preservation

and reduction of women’s drudgery.

ΙΙ. GUIDELINE FOR THE IMPLEMENTATION OF SMALL GRANTS

This Guideline has been prepared to facilitate competitive disbursement of Small

Grants under the AFSP Grant Agreement signed between GoN and the World Bank.


It covers discussion on the eligibility criteria, procedures of preparing Sub-Project

Concept Note and Full Proposal including their selection criteria. Small grants cover

an investment of US $ 11.66 million (US $3.5 from World Bank and US $ 8.16 from

GoN) for the project period.

Four AFSP affi liated actors involved in implementing this Guideline will be: Project

Management Unit (PMU), Regional Project Support Unit (RPSU), District Agriculture

Development Committee (DADC) and District Project Support Unit (DPSU). The PMU

will review the need of making adjustments in the document based on its implementation

experience. In this regard, it will also reconcile efforts made by MoAD in harmonizing1

the fi nancial and technical norms including implementation modalities followed by

other ongoing projects and the regular programmes of MoAD funded under the GoN’s

regular fund.2However, changes to the document will follow a formal process that

includes seeking concurrence from the World Bank, who is a Trustee and Supervising

Entity of the Global Agriculture and Food Security Program (GAFSP).

II.1 Geographic Coverage

The Small Grant allocation will cover 19 hill and mountain districts of the Mid-Western3 and Far-Western4 Development Regions. Grants will be awarded on a competitive

basis. In order to ensure equal participation of all districts, the total allocation of US

$ 11.66 million has been divided among 19 districts with an average of US $ 613000

per district for the project period. The VDCs to be covered within this district-specifi c

allocation limit will be decided on the basis of phasing of activities planned by the PMU

in its Annual Action Plan.

II.2 Support Areas

The Small Grant will fi nance: (a) adoption of crop and livestock technologies

and management practices, especially those coming from component 1, and (b)

investments in community grain banks, and simple technologies for home processing

and preservations and for reducing drudgery and labor saving for women.. Potential

1 For example, the harmonized cost of FFS operation with the national IPM programme.2 Th is process will save considerable time required for taking approval of the fi nancial norms

from MOF. 3 Dailekh, Dolpa, Humla, Jajarkot, Jumla, Kalikot, Mugu, Pyuthan, Rolpa, Rukum, Salyan and Sur-

khet districts4 Achham, Baitadi, Bajhang, Bajura, Darchula, Dadeldhura and Doti districts


activities may include, but are not limited to the following:

Crop: Improvement of crop cultivation practices, multiplication of improved

seeds, integrated pest management, application of improved farm machineries

and equipment (e.g. power tiller, thresher etc.), construction of greenhouse/

plastic tunnels and agro-processing (e.g. pickle making, fruits and vegetables

drying, tomato pulp making etc.), homegrown products marketing, rustic store,

seed processing, and construction of the marketing shed.

Livestock: Improvement of animal breed, small scale diary, adoption of

improved animal raising practices, goat farming, para-vet services, chaff cutter

for the preparation of animal feed, hatchery, small-scale machinaries and animal

shed improvement and construction of the marketing shed.

Food and Nutritional Status Enhancement: Establishment and operation

of community Grain Bank, food preservation, installation of community grinder

(for the preparation of Sarbottam Pitho), improved cook stoves, installation of

community bio-gas plant and promotion of other small scale technologies for

reducing women's drudgery.

II.3 Average Grant Ceiling

Emphasis will be given to ensure participation of maximum number of households

from different VDCs in each district. The amount available per district is US $ 613,000.

Considering the fact that at least 10 VDCs will be covered in each district, the amount

available per VDC will be US $ 61,300. The size of grant allocation ceiling per applicant

will not exceed US $ 3,000 depending upon the nature of the approved proposal.

II.4 Multi-Donor Cost Sharing Provision

The Small Grant provision aims to enhance participation of greater number of Producer

Groups with small scale allocations to many than focusing with large scale allocations

for the few. However, it provides scope for resource sharing if the Small Grant alone

cannot cover the required cost provided they do not duplicate the allocation for the

same item.

The Small Grant also requires arrangement of matching fund from the Sub-Project

Applicants. Expected ratio of such matching fund will be 10% for the non-infrastructure

Sub-Project and 20% for the infrastructure Sub-Project.


II.5 Cost Items Allowed to Cover

The Small Grant support will cover both capital and recurrent expenditures. In

the recurrent cost, the materials cost and the cost of service fees will be included.

Incidental expenses can be covered under contingency cost for the items specifi ed in

the proposal. Maximum limit allowed for contingency cost should not exceed 5% of the

total budget.It will be a provisional cost applied for specifi ed items only.

If the Sub-Project requires adoption of mitigating measures to reduce the environmental

effects at an acceptable level, the cost involved for such items can be included in the

Sub-Project budgetary estimate.

The Small Grant will not cover the salary and allowances of Group members applying

for support. It will also exclude coverage of the pre-operative costs (such as the amount

spent for collection and submission of forms, preparation of the Sub-Project Concept

Note and Full Proposal). Similarly, the Small Grant amount will not be allowed to use

for purchase of the fi xed asset such as land except the farm machinery and equipment.

III. ELIGIBLE TARGET GROUPS

The Small Grant support will be provided to the Groups/coopertives but not to the

individual. The Groups which can access the support are: Crop Producer Group

(Cereals Production Group, Vegetables Production Group and Other Cash Crop

production Group), Livestock Producer Group (e.g. Poultry Group, Goat Raising

Group, Cattle Raising Group), Cooperative Society, Women Group, Small Scale Dairy

Group, Improved Seed Multiplication Group, Product Marketing Group and the Users

Group for Infrastructure Development.

The Groups to become eligible to apply for Small Grant should have met following

criteria:

Producers Group: Registered with DADO / DLSO

Cooperative: Registered under the Cooperative Act. It should have at least one

year’s working experience.

Mothers Group: Registered with Women Development Offi ce

Users Group: Registered with the VDC or DDC

Other Groups: Any other legally registered groups working for crop, livestock

and nutrition (e.g. PAF)


The groups fulfi lling above mentioned criteria can either be a Pre-existing Group or the

AFSP formed New Group (by the DADOs, DLSOs and DHOs). In view of the increasing

role of women in agriculture and nutrition, balance will be created by assigning priority

to support the Women's Group as necessary.

IV. SMALL GRANT ALLOCATION PROCEDURES

The eligible groups can apply for Small Grant support. In order to successfully

access and implement the Sub-Project under the Small Grant support, they should

encompass three major stages of screening: Submission of Sub-Project Concept Note

(SPCN), Submission of Full proposal upon approval of the SPCN, and Signing of

Implementation Agreement representing 11 Steps as follows:

Chart 1: Steps of Small Grant Award and Implementation of Sub-Projects

Steps FunctionsResponsible

Units

1. Sub-Project Concept Note (SPCN)

Step – ICall for the Sub-Project Concept Notes (SPCNs) and the dissemination of related information

PMU

Step – II

Distribution of SPCN Forms and orientation about the potential support areas; eligibility criteria, procedures, venue and the deadline for submission of Applications

PMU and DPSU (with the help of DADO, DLSO, DHO)

Step – III Collection and classifi cation of fi lled-in SPCNs (Crop; Livestock and Nutrition)

DPSU (with the help of DADO, DLSO, DHO)

Step – IV Assessment and selection of SPCN DPSU (with the help of DADO, DLSO, DHO)


2. Full Proposal (FP)

Step – VOrientation to successful PCN applicants about Full Proposal preparation outline and selection criteria

DPSU (with the help of DADO, DLSO, DHO)

Step – VI

Field verifi cation of the proposals (confi rmation of technical potential, fi nancial viability, managerial capacity and mitigating measures planned to counteract against the triggering of social and environmental risks)

DPSU with support of DADO, DLSO, DHO and Field Facilitators

Step – VII Screening of adverse environmental risk of the proposed Sub-Project

Environmental Expert Designated by DPSU

Step – VIII Endorsement of successful Sub-Project Proposals to the DADC

DPSU (with the help of DADO, DLSO)

3. Implementation Agreement

Step – IX Final selection of the Sub-Project Proposal DADC

Step – X Signing of the Implementation Agreement DADO/DLSO and Grant Recipient (DPSU to facilitate)

Step – XI Implementation, monitoring and reporting of the Sub-Project

Grant Recipient and DADO, DLSO(DPSU and DADC to review progress)

Step – I: Call for the Sub-Project Concept Notes (SPCNs) and the dissemination of related information

The PMU will prepare, adopt and disseminatethe Call for SPCN. Applications will be

invited from the potential Benefi ciary Groups. In order to facilitate this process, the

PMU will develop standardized SPCN Application Form by covering brief description

of the productive activities having the implementation potential (on technical, fi nancial

and managerial grounds). It should represent a concept, which can be elaborated

further in the form of a Full Proposal in the next stage, if selected. It should also


provide a summary to facilitate making a decision about whether the SPCN is worth

pursuing to a level of Full Proposal or not (See Attachment – I for the SPCN Application Form).

Besides preparation of the SPCN Application Form, the PMU should also prepare

related leafl ets and advertisement materials for wider adoption and dissemination of

the Small Grant provision. The advertisement materials should cover details about the

purpose of offering Small Grant, potential Applicants who are eligible for submitting

SPCNs, examples of the Sub-Projects that can be covered under the Small Grant

basket, basic requirements to be met in submitting the SPCN Applications, venue

for collecting SPCN Application Forms, date and location for orientation/training

about the SPCN submission procedures, addresses of the facilitators available for

consultation,venue for submitting the fi lled-in SPCN forms, deadline for submitting the

SPCN Application and criteria to be applied for the selection of submitted SPCNs.

Possible sources to be used for information dissemination about the Small Grant

supported SPCN would include: DADO, DLSO, DHO, Service Center (Agriculture/

Livestock) and VDC Level Facilitator. Similarly, the PMU should also make use of

available media sources such as newspaper, radio, television and website. The leafl ets

should also be circulated with SPCN outlines and the process to be followed from its

submission.

The applications for the SPCN will be called in the fi rst trimester. After signing of the

grant agreement between DADO, DLSO and DHO and Grant Receipent, the PMU

will release fund to respective districts for the implementation of sub-projects. Based

on experience of fi rst or second announcement frequency of calls for proposal will be

increased.

Step – II: Distribution of SPCN Forms and orientation about the potential support areas; eligibility criteria, procedures, venue and the deadline for submission of Applications

The PMU will provide orientation to the DPSU, DADO, DLSO, DHO, Service Center

and VDC Level Facilitator about the subjects of support.They will be made familiar

with the process to be followed in fi lling and submitting the SPCNs so that they can be

responsive to the queries of the potential Applicants.


The subject area of orientation will cover eligibility criteria for the Applicants, examples

of potential Sub-Projects, completeness of the application to be submitted, SPCN

forms collection venue, available facilitators for consultations, SPCN submission date

and venue, last date for the submission of application, criteria to be applied for SPCN

selection and role of different actors in facilitating the SPCN collection, assessment

and selection process.

Upon attending such orientation from the PMU, the DPSU, DADO, DLSO, DHO,

Service Center and VDC Level Facilitators on their part will then orient the potential

SPCN Applicants as necessary. They will also provide consultation service for them

and make fully familiar with the process to be followed in fi lling and submitting the

SPCNs.

The PMU will make sure that all facilitating units (DPSU, DADO, DLSO, DHO, Service

Center and VDC Level Facilitator) will have adequate number SPCN Request Forms

for distribution. The Forms should be distributed to all potential Applicants, who can

attend the orientation programme or not.

Step – III Collection and classifi cation of fi lled-in SPCNs (Crop; Livestock and Nutrition)

The Applicants should submit fi lled-in SPCN in two copies before the expiry of

specifi ed deadline. Together with the fi lled-in SPCN, the Applicant should also submit

the following:

• Document related to the registration of Group or Organization

• Copy of the Executive Committee Meeting minutes deciding submission of the

SPCN for the Small Grant

• Assurance of the Executive Committee about arranging matching resource

(cash or kind), as necessary

• Evidence (Letter of Intent or Contract) of the partial support agency or group

providing for the items included in the SPCN (as applicable)

• Profi le of the Group or Organization indicating members and existing resources


(e.g. physical facilities, human resource, bank balance and functions being

carried out currently). In the case of cooperative, they should submit audited

report of last fi scal year too.

The DPSU will collect the SPCNs submitted by the Applicants. All submissions should

be collected within the period of specifi ed deadline only. These collections will then

be classifi ed by the subject of support (crop, livestock and nutrition) to facilitate the

assessment.

Step – IV Assessment and selection of the SPCNs for Full Proposal Submission

The SPCN submitted by the Applicants will be collected by DPSU. It will then assess

each SPCN against the pre-set screening criteria such consistency of SPCN with the

AFSP support area (crop, livestock and nutrition), Sub-Project location falling under

the VDC included in the AFSP phasing plan, resource sharing commitment of the

collaborating partners (as applicable) and assurance of no duplicate claims on the

cost items related to the SPCN and answers provided to all 13 questions covered

in the SPCN Format (See Attachment – II for the Checklist Related to the Selection of SPCN). Based on these examinations, the DPSU will decide whether

the SPCN is worth pursuing for Full Proposal or not. The Applicants will be informed

accordingly.

Step – V Orientation about Full Proposal preparation outline and selection criteria

Like preparation of the SPCN Application Form, the PMU will also prepare the Full

Proposal Form before briefi ng takes place under this stage. The Form will cover an

outline for information details on expected results of the Sub-Project at different stages

and fi nally upon its completion. It will seek explanations on the activities to be followed

to reach expected outputs and outcomes. It will also provide room for information on

the role of collaborating partners (as applicable).

The Form will seek information on what problem the Sub-Project is going to overcome

with implementation of what types of activities. It will provide space for mentioning

the capital cost, working capital and staff cost to be arranged from different sources.


Besides the rooms provided to mention the cost, it will provide a place for quantifying

the value of benefi t to help assess the benefi t over cost. It will demand information on

the value gained as compared to current baseline situation.

The Form will also provide room for information about whether the Sub-Project leads

to the creation of any adverse social or environmental effect. If it indicates the potential

of any negative effect, it will provide further space to specify what mitigating measures

would be taken to keep them within a harmless level.

The Form will be concerned with the issue of information on operation and maintenance

of the proposed Sub-Project after termination of the Small Grant partnership. It will

also require indicating the provision about how periodic progress of the Sub-Project

will be reviewed by applying what indicators. Last but not the least, the Full Proposal

Applicants will also be required to mention why they think that their proposal should be

selected among other competitors (See Attachment – III for the Full Proposal Submission Form).

The DPSU will provide orientation to the qualifi ed Applicants about fi lling the Full

Proposal Form. It will walk through the Full Proposal outline with related sessions

for question and answer. It will cite examples of basic implementable norms for

successful Sub-Projects, as applicable. The verifi cation procedures and selection

criteria to be applied should also be explained. Facilitators should be designated to

offer consultative services to the Applicants as necessary. Their names and addresses

should be circulated. It should be followed by information about the date and venue for

the submission of fi lled-in Forms.

Step – VI Field verifi cation of the proposals (confi rmation of technical potential, fi nancial viability, managerial capacity and mitigating measures planned to counteract against the triggering of social and environmental risks)

The Sub-Project Proposals will be verifi ed by the DPSU designated DADO, DLSO, DHO

or Service Centre staff or the Field Facilitator at different locations. Such verifi cation

will take place to make sure that the information contained in the Proposal is realistic.

In order to do this, a Verifi cation Team of two persons will be formed. They will visit the

fi eld sites and interact with applicants, including some people in their surroundings.


The checklist for verifi cation will cover whether the applicant is clear about what is

intended to do by expecting what result from the Sub-Project. It will look into whether

the Sub-Project is suitable for implementation in the specifi ed location from technical,

economic and managerial perspectives. It will assess whether the applicant may

accomplish the Sub-Project within the specifi ed duration and estimated budget. The

applicant will be tested about how far it is clear on the Sub-Project activities and

whether there is any clarity about the responsibility sharing process among the actors

associated with the Sub-Project.

Making sure that the budget allocated for different cost items will not duplicate the cost

charged to the AFSP Small Grant will be another objective of verifi cation. Therefore, it

would be useful to take the applicant's commitment about this during the discussion.

The verifi cation should also make sure whether the applicant would be able to provide

basic facilities committed in the Sub-Project Proposal form its side.

The Verifi cation Process should make sure that the implementation of the proposed

Sub-Project would not create any adverse effect on social environment. Accordingly,

it should examine if the Sub-Project is free from: encroachment of public space (e.g.

religious place, public inn, source of drinking water, Chautara etc.) or holds the chance

of creating negative effect on the livelihood of others (poor, Dalit and marginalized

people) in the surrounding. Similarly, it should examine whether its implementation

adds more drudgery on women (especially for those who are already overburdened

with work) or not. Likewise, looking at the potential risk of inter-community confl ict

emerging from the implementation of Sub-Project will be another subject area to be

examined. In the same manner, it should also examine whether the Sub-Project

would cause any loss of asset held by the non-participant (unless it is their voluntary

contribution).5Upon the verifi cation of all these, looking into the past history of the

Applicant about any default record will also be useful to assess their workability (See Attachment – IV for details on the Sub-Project Verifi cation Form).

The Verifi cation Process should also ensure no adverse effect on environment. For

this, the DPSU should engage an Environmental Expert for necessary assessment

of possible negative effects of the Sub-Project. Depending upon the need, such

5 NAFSP/MoAD (2012), Social Management Framework, Ministry of Agriculture Develop-ment, Kathmandu, July 2012


Environmental Expert will recommend the Sub-Project on the environmental ground

suggesting "no need" of adopting mitigating measures or the "need for adoption of

mitigating measures" with the design of Environment Management Plan. Such fi eld

verifi cation will be implemented under Step - VII.

Step – VII Screening of adverse environmental risk of the proposed Sub-Project

The national policies, laws and regulations of Nepal and also the policies of the World

Bank require that the projects do not cause adverse impact on environment while

attempting to enhance positive impact. In the event adverse environmental impacts

are likely to incur then mitigative measures should be undertaken to mitigate adverse

impact. In view of this, the Sub-Projects are to be divided into three categories upon

their environmental screening process:

Category - A Sub-Project: The Sub-Project creating signifi cant adverse

environmental impactwill be ineligible for funding. Examples of such Sub-Project

include:

• Sub-Project creating the risk of signifi cant loss or degradation of critical

natural habitats

• Sub-projects located in or dependent on the resources from legally

protected or offi cially proposed for protection or unprotected but area

known for high conservation values

• Sub-project using and/or dependent on the use of chemical pesticides

that fall in the World Health Organization (WHO) classes IA and IB and/

or banned in Nepal

• Sub-project located in sites of national or international signifi cance

such as World Heritage Sites, Ramsar Sites etc.

Such Sub-Project requires full-fl edge Environmental Impact Assessment (EIA) and

the design of Environmental Management Plan (EMP) covering description of the

Sub-Project activities, related environmental risks, mitigating measures required

to minimize the risk, monitoring of implemented measures and capacity to be built

for mitigation.


Category - B: The Sub-Project, which has the potential for creating adverse

environmental impact but is less harmful than the Category - A Sub-project will

be classifi ed as Category – B. Such Sub-Project requires Initial Environmental

Examination (IEE) for the assessment of possible environmental risk. It should

then be followed by the design of Environmental Management Plan (EMP).

Category - C: The Sub-Project which is likely to create minimal or no adverse

environmental impact falls under theCategory - C. For such Sub-Project, following an Environmental Code of Practice (ECoP) will be adequate.6

Given that most of the Small Grant supported Sub-Project will have its small scale,

with the possibility of creating little or no adverse effects on environment, most of them

will fall under Category – C. If any of them fall under the Category – B, they need to

follow environmental screening as discussed above.

The environmental effects are dependent on the nature of activities to be undertaken

by the Sub-Project. Therefore, the screening of effects should be made context-

specifi c. For example, in the case of crops it would be worth verifying whether the

Sub-Project has any risk of creating soil erosion, loss of productive land and drying of

water sources. It should ascertain whether there is a risk of applying greater dose of

pesticides and chemical fertilizers (beyond the acceptable limits).

In the case of livestock, it would be worth examining whether the Sub-Project is likely

to cause any loss of biodiversity due to uncontrolled grazing of the animals (e.g. the

animals eating young growing plants). It should make sure that the Sub-Project does

not involve the risk of encroaching forest areas beyond the scope covered under its

management plan. It should see if the animal plans affect the sanitary condition of the

area and pollutes water to a level posing risk to human health. Likewise, it should also

consider the extent of application of growth hormones for the animal (e.g. applied for

the acceleration of growth of goats). It should not meet the level that affects human

health. The verifi cation should also examine if the Sub-Project involves the risk of

transmitting disease to the existing animals (as new animals might bring new disease

in the village).

6 NAFSP/MoAD (2012), Environment Management Framework, Ministry of Agriculture Development, Kathmandu, July 2012


If the Sub-Project falls in the surrounding of National Park or Wildlife Conservation

area, it may require permission from these authorities concerned. The verifi cation

process should see if such permission has been obtained or it is a case not applicable

to the Sub-Project.

If the verifi cation fi nds that the Sub-project needs to develop an Environmental

Management Plan covering necessary mitigating measures, it should look into whether

the Plan refl ects adequate measures in line with the Environmental Code of Practice.

Some of the aspects related to this would be: examination of whether an approach is

followed for the integration of crop, livestock and soil conservation activities. It should

also see measures taken to minimize degradation of soil by looking into the options

such as: intercropping with legumes, conservation farming (e.g. zero tillage), organic

farming, green manure cultivation in the irrigated conditions etc. The measures for

minimizing adverse effects might also include plantation and use of fodder trees for

feeding the animals, adoption of the Sloping Agricultural Land Technology (SALT) to

cultivate steep slopes and application of lime for neutralization of the soil acidity.

Other subject areas of mitigating risks might include: waiting-period obliged harvest of

pesticide-sprayed vegetables and adoption of IPM technology for the control of pests

(See Attachment – V for details on the Environmental Verifi cation Form).The Environment Expert should make sure that the Environmental Management

Plan covers adequate measures to reduce the identifi ed risks to an acceptable level.

Based on this, he/she should take a decision about whether the Sub-Project should

be considered environmentally eligible for implementation or not. If the decision about

the Sub-Project is "not environmentally eligible for implementation", the Environment

Expert should mention the type of risks involved (including the inadequacies observed

in the Environment Management Plan, if any).

Step – VIII Endorsement of successful Sub-Project Proposals to the DADC

The DPSU (with the help of concerned DADO, DLSO and DHO) will examine all Sub-

Projects to see if they are implementable as it will endorse the eligible ones for fi nal

approval from DADC. In this regard, it will see whether the Sub-Project relates to the

support areas specifi ed for Small Grant (e.g. crop, livestock and nutrition) or not. It

will reconcile, if it has passed Field Verifi cation and Environmental Effects Screening


processes. It should cross-check whether the value of the Sub-Project benefi t exceeds

cost. It will prioritize the Sub-Projects that are likely to generate demonstration effects on

the non-participants too. The completeness of activities included in the implementation

plan (i.e. adequate number of activities specifi ed to deliver expected results) will be

another aspect to be examined. It will also examine if the proposed Sub-Project will fall

within the reach of the scope of technical services to be delivered by the district, Sub-

center and village level offi ces. Further, the Sub-Projects proposing maintenance plan

after the termination of Small Grant support should be preferred for endorsement (See Attachment – VI for details on the Criteria for Appraisal and Endorsement of Sub-Project Full Proposal). . .

Step – IX Final selection of the Sub-Project Proposal for implementation

Upon receiving the endorsed Sub-Project Proposals from the DPSU, the DADC will

examine their distribution by location and sector (crop, livestock and nutrition). It will

then assess how many of such proposals can be entertained within the available

budgetary limits. In view of these, it will approve the Sub-Projects by assigning

necessary priorities7, The list of selected and not selected proposals will then be

forward to DPSU. For the selected proposals, the DPSU will offi cially forward to

concerned DADO or DLSO for entering into an Implementation Agreement. In the

case of not-selected proposals, the applicants will be informed about the reason(s) for

no selection.

Upon receiving a fi nal list of selected and not-selected proposals, the DPSU will forward

information status about their proposals accordingly.For the selected applicants, who

have to sign the Implementation Agreement, the DPSU will make sure that they are

made fully familiar with the Terms and Conditions contained in the Implementation

Agreement (See Attachment – VII for details on the notice related to selected and non-selected Applicants).

Step – X Signing of the Implementation Agreement

Upon ensuring that the Applicant has fully understood the Terms and Conditions

7 Th e DADC is offi cially entrusted to approve the agriculture and livestock extension pro-grammes under the authority devolved by the MoAD.


of the Small Grant Sub-Project, the DPSU will facilitate signing of Implementation

Agreement between Small Grant Recipient and concerned DADO or DLSO with a

copy to be retained by each party (See Attachment – VIII for details on the Implementation Agreement Format).

Step – XI Implementation, monitoring and reporting of the Sub-Project

The Small Grant Recipient signing Implementation Agreement will be responsible

for undertaking the Sub-Project activities as specifi ed in the proposal and submit the

progress report trimesterly to the concerned DADO or DLSO. It will also monitor

trimester progress and submit report to the DPSU (See Attachment – IX for possible

indicators that can be applied for monitoring of the Small Grant supported Sub-

Projects).

The DPSU, on its part, will also monitor periodic progress accomplished by the Sub-

Projects. It will primarily focus on whether the tasks listed in the proposal have been

accomplished on time and within the estimated budgetary limits. It will also monitor

whether satisfactory has been made and also check if the remaining activities will be

completed with the remaining timeline and budgeted resource specifi ed. Monitoring of

environmental effect will be another aspect to be seen. It should make sure whether

the mitigating measures are adequately applied without allowing mitigating measures

to emerge beyond an acceptable limit. Last but not the least, the monitoring process

should assess whether intended results have been accomplished as envisaged or not.

V. INSTITUTIONAL ARRANGEMENTS AND ROLES FOR THE IMPLEMENTATION OF SMALL GRANT

The Global Agriculture and Food Security Program (GAFSP) Grant Agreement

signed between the Government of Nepal and World Bank has envisaged following

institutional arrangements for the execution of AFSP:

Project Steering Committee (PSC): The PSC will be chaired by the

Secretary, MoAD. It will be represented by other stakeholders concerned with

the implementation of AFSP. PSC will provide overall guidance and resolve

policy isssues.


Project Management Unit (PMU): The PMU will be headed by a Project

Director. It will be supported by other staff members, who will be responsible

for the implementation, coordination, monitoring,evaluation and reporting of

progress.

Project Technical Coordination Committee (PTCC): The PTCC will

be chaired by the Joint Secretary of MoAD. It will be represented by other

stakeholders directly concerned with the implementation of the project.It

will provide technical guidance and resolve technical issues and facilitate

coordination.

Regional Project Support Unit (RPSU): The RPSUs(one in the Mid-

Western Development Region based in Surkhet and another in the Far-Western

Development Region based in Dipayal) will be headed by the respective

Regional Directors of DoA as nominated by the MoAD. RPSUs will monitor and

review the implementation of sub-projects in the respective regions and provide

feedback to PMU.

District Agriculture Development Committee (DADC): The DADC will

be headed by the Local Development Offi cer (LDO) and DADO will work as its

Member-Secretary. It will also be represented by other line agencies, farmers

and other stakeholders. It will coordinate implementation of AFSP activities at

the district level.

District Project Support Unit (DPSU): The DPSU will be the responsible

unit for project implementation in each district. It will be headed by DADO or

DLSO as designated by the MOAD and supported by other technical staff

members related to the project activities.

The above mentioned committees and units, responsible for the implementation of

project, including the recipient actors such as cooperatives, farmer groups, farmers'

associations and other benefi ciary groups will play their respective roles in the

implementation of Small Grant support as follows:


Table 1: Role of Different Actors in Implementing Small Grant Support

SN Committee/Unit Roles

1. Project Steering Committee (PSC)

• Facilitate inter-agency cooperation and coordination • Oversee implemented activities • Provide policy guidance • Approve Annual Work Plans • Monitor implemented activities • Resolve outstanding issues (If any)

2. Project Management Unit (PMU)

• Disemminate the Small Grants Operations Guidelines to Regions, Districts, and VDC’s

• Develop Annual Plan for SG allocation • Circulate SG Implementation Guidelines to RPSU and

DPSU • Prepare and forward leafl ets (carrying information

about the purpose and process of accessing Small Grants) to the RPSU and DPSU

• Prepare and forward SPCN and FP forms to the RPSU and DPSU

• Inform RPSU and DPSU about the call for proposals with information dissemination package

• Obtain/receive the list of selected Sub-Project proposals from the DADC/DPSU

• Release budget to the districts for selected Sub-Projects

• Oversee overall implementation process • Direct RPSU and DPSU for effective implementation

of the SG Sub-Project (as necessary) • Establish coordination with the SG related line

agencies at the national level • Monitor implemented activities • Consolidate Sub-Project implementation reports

obtained from the DPSU/RPSU • Adjust SG support policies in view of the emerging

needs (if necessary) • Execute the decisions made by the PSC

3. Project Technical Coordination Committee (PTCC)

• Provide technical guidance • Suggest norms for project implementation


4. Regional Project Support Unit (RPSU)

• Ensure inter-agency cooperation and coordination • Monitor progress of the project activities in the districts • Facilitate integrated implementation of the project

activities • Provide support to the DPSU in implementation of

capacity building activities related to the SG funded Sub-Projects

• Establish coordination with related line agencies at the regional level

• Randomly sampled monitoring of implemented Sub-Projects

• Organize SG related lessons learning workshops and meetings (as necessary)

• Consolidate progress reports obtained from the DPSU • Execute the decisions made by RPCC • Implement directives issued by the PMU, PSC

5. District Agriculture Development Committee (DADC)

• Coordinate planning of district level crop, livestock and nutrition activities

• Examine DADO, DLSO and DHO forwarded SG applications upon submission from the DPSU

• Approve SGs meeting the AFSP criteria • Provide guidance for the activities to be implemented • Review district level progress

6. District Project Support Unit (DPSU)

• Facilitate implementation of project activities

• Disseminate information about the Call for Proposal to Service Centers, VDCs, DDC and related line agencies

• Circulate leafl ets (carrying information about the purpose and process of accessing Small Grants) and the SPCN and FP forms to the Service Centers and VDCs

• Conduct orientation programmes for SPCN and FP preparation

• Select SPCNs eligible for the submission of FP in view of the AFSP SG criteria

• Inform successful Applicants about the submission of FP

• Forward list of selected SPCNs to the PMU and RPSU

• Coordinate Service Providers and line departments to assist potential benefi ciaries to prepare proposals


• Coordinate Service Providers and line departments to support actual benefi ciaries to implement approved sub-projects as may be requested by benefi ciaries.

• Receive Sub-Project FP submitted by the qualifi ed Applicants Arrange fi eld verifi cation through the respective DADO/DLSO/DHO as per the nature of the FP to obtain further details on the Sub-Project proposal (FP) as necessary

• Screen Small Grant FPs in view of their fulfi llment of pre-set criteria

• Endorse successful FPs for fi nal approval from the DADC

• Obtain/receive the list of selected FPs from the DADC

• Send a copy of selected FP to the RPSU and PMU

• Call FP Applicants to sign the Implementation Agreements

• Explain Terms and Conditions (including implementation, monitoring and reporting requirements) of the Implementation Agreement to be signed

• Facilitate signing of Implementation Agreement between Small Grant Recipient and concerned DADO/ DLSO/DHO with a copy to be retained by each party

• Support technical groups in their assistance for preparation and implementation of the Sub-Project, as necessary

• Establish database covering the Sub-Project including their implementation results

• Establish Complaint Redressal Mechanism in each Sub-Project community in the district

• Monitor the implemented subproject in the fi led level

• Collect the progress report of subproject from DADO/DLSO/DHO trimesterly

• Compiled the received report and send to the RPSU.

• Execute decisions made by DADC

• Implement directives issued by the PMU and RPSU


7. District Agriculture Development Offi ce (DADO) / District Livestock Service Offi ce (DLSO)

• Supervise and monitor activities proposed by the DPSU for implementation at the VDC levels

• Conduct fi eld verifi cation of FP to obtain further details on the Sub-Project proposal (FP)

• Receive DADC endorsed FP from DPSU • Explain Terms and Conditions (including implementation,

monitoring and reporting requirements) of the Implementation Agreement to be signed) to the grant receipent

• Signing of Implementation Agreement between Small Grant Recipient with a copy to be retained by each party in presence of DPSU.Request PMU to release budget as per selected FPs

• Monitor the implemented project at VDC level • Receive the trimester report from grant receipent • Compile received report and send to the DPSU • Relese budget as per agreement and progress made. • Release budget installments for the DADC approved

Sub-Projects upon instruction issued from the DPSU • Provide technical service to the Sub-Project through

the DADO, DLSO, DHO and Service Centers8. District Health Offi ce

(DHO) • Assess SPCNs and proposals related to the nutrition

component • Supervise implementation of DADC approved activities • Conduct fi eld verifi cation of FP to obtain further details

on the Sub-Project proposal (FP) • Provide technical services • Receive DADC endorsed FP from DPSU • Explain Terms and Conditions (including implementation,

monitoring and reporting requirements) of the Implementation Agreement to be signed) to the grant receipent

• Signing of Implementation Agreement between Small Grant Recipient with a copy to be retained by each party in presence of DPSU.Request PMU to release budget as per selected FPs

• Monitor the implemented project at VDC level • Receive the trimester report from grant receipent • Compile received report and send to the DPSU • Relese budget as per agreement and progress made. • Assess progress of implemented Sub-Projects

9. Project Facilitator (One per VDC)

• Disseminate call • Distribute application forms • Help preparation of the proposals • Provide technical backstopping during implementation

of the Sub-Project


10. Intermediary NGO (If recruited for offering service for the mobilization of SG recipients)

• Assist the Benefi ciary Groups in preparing SPCN and FP

• Provide support to the Benefi ciary Groups in the management of SG sponsored Sub-Project

• Take other responsibilities for implementing the activities as governed by the Implementation Agreement signed with the DPSU

11. VDC Level Technicians (one Crop and one Livestock Technician for two VDCs)

• Disseminate information about the SPCN calls in their working area

• Distribution of SPCN and FP Application Forms • Assist in fi lling the Application Forms • Assist Sub-Project implementation groups in

accessing related institutional services • Provide backstopping support during implementation

of the Sub-Project12. Grant Recipients

(Cooperatives, Farmers' Associations and Other Benefi ciary Groups)

• Comply with the Terms and Conditions of Implementation Agreement.

• Implement technical feedback obtained from the DADO, DLSO, DHO and Service Centers on the Sub-Project as relevant.

• Keep fi nancial transaction records up to date • Submit periodic reports required by the

Implementation Agreement regularly

The MoAD and MoHP are expected to cooperate fully for implementation of the project

activities. To materialize this, they are supposed to provide necessary guidance and

set out respective roles, responsibilities and obligations.

VI. PROCUREMENT MANAGEMENT OF SMALL GRANTS OPERATION

These Guidelines are prepared for use by Farmer Groups/Cooperatives who receive

Small Grant from Agriculture and Food Security Project for the procurement of goods,

works and technical services.

1. Formation of Procurement Committee:

The Cooperatives/Farmer Groups receiving small grants under the Project

have to form a three member procurement committee. This Committee shall

include at least one female member as far as available. The formation process

is to be completed by the respective executive committees of Co-operatives

and farmer groups after recording the decision in the minutes of meeting.


2. Procurement process of Equipment and Machineries:

The Equipments and Machineries which is in the contract between the Project

and Grant Recipient with a value of Rs.25, 000.00 or less can be procured

directly from the market and has to be recorded in inventory Register and

certifi ed by the members of procurement committee to ensure the inventory

registration.

For the Procurement of equipment and machineries costing more than Rs.

25,000.00 and up to 300, 000.00 need to prepare a basic technical specifi cation,

get information on price and technical compliance of requirement with at least

three related shopkeepers if, available and if not with two and in case of not

availability of even two ensure compliance of technical requirement and record

this situation in the minutes of procurement committee meeting and procure

it from a single shop keeper. However, every supplier of equipments and

machineries must be registered for Value Added Tax (VAT) in related Inland

Revenue Offi ce.

3. Procurement of fertilizer, seeds and genetic materials:

For the procurement of fertilizer, seeds, genetic materials and similar type of

other materials may be purchased by negotiating from the farmers' groups/

cooperatives or private entities registered with an objective of doing business

in the commodities as above by recording this in the minutes of procurement

committee meeting and has to be recorded in inventory Register and certifi ed

by the members of procurement committee to ensure the inventory registration.

4. Procurement of works:

For the purpose of implementing any construction works (like construction

of marketing shed/ maintenance of plastic ponds, small irrigation cannels,

cattle/goat shed and poultry pen etc.) under the contract agreement between

the Project and Grant recipient, list out the items and activities fi rst for very

small value contract (i.e. less than NRs 25,000) or prepare quantity and cost

estimate of the civil works with value up to NRs 300,000 with the help of a civil

engineering technician. Cost estimates should be prepared on the basis of


GoN’s Approved District Rates for materials and labors. Such civil works can

be done either through contractors adopting procurement procedure as stated

in Para 2 above or through Force Account (Amanat). While procuring works

contract or implementing such works through Force Account, procurement

committee shall negotiate with the contractor, shopkeeper and labors,as

appropriate, to get best value for money.

5. Technical service/Advice:

During the implementation of sub projects, if grant recipient requires any

technical service/ advice can be done through direct negotiation with appropriate

service provider for an amount of up to Rs. 25,000.00

All procurement decisions of procurement committee as mentioned in Para 1-5

above must be endorsed by the executive committees of cooperatives/farmer

groups within three months period of such decision.

6. Documents to be submitted:

All the original documents related to the procurement proceedings have to

be submitted to respective District Agriculture Development Offi ce, District

Livestock Service Offi ce, District Health Offi ce after completion of sub projects.

Cooperatives may retain the original documents till the completion of audit

process. Before submitting to respective DADO, DLSO , DHO, it is necessary

to prepare a copy of all the documents so that the record remains with the

Grant recipient.

VII. FINANCIAL MANAGEMENT OF SMALL GRANTS OPERATION

1. Budget Allocation and Authority for Implementation of Approved Programs of Small Grants

• On the basis of approved annual budget with its AFSP small grant programs,

necessary budget allocation with authorization will be provided to the concerned

District Agriculture Development Offi ces/District Livestock Services Offi ces

through Department of Agriculture/Department of Livestock by the Ministry

of Agriculture Development for its implementation according to the prevailing

Financial Procedure, Act and Regulation and related Guidelines, etc.


2. Process of Disbursement or Release of Small Grants

• Upon fi nal selection of the Sub-Project proposal for implementation, the DPSU

will facilitate signing of implementation agreement between concerned District

Agriculture Development Offi ces/District Livestock Services Offi ces and Small

Grant Recipient with a copy of an original agreement document retained by each

party for its implementation.

• District Agriculture Development Offi ces/District Livestock Services Offi ces shall

disburse the agreed amount of small grant to the Benefi ciary Groups/Cooperatives

or Sub-Projects on installment basis. For this purpose, the implementing Benefi ciary

Group/Cooperative or Sub-Project needs to open an account with the Bank or

Finance Company licensed under the Nepal Rastra Bank with operating by joint

signatures of Sub-Project Manager and an authorized member of that Sub-Project.

Subsequently, on the basis of the application for the First Installment, the approved

fi rst installment amount will be disbursed by issuing an A/C Payee cheque in the

name of the Sub-Project.

• The amount of Second and Third installments shall be disbursed on the basis of

the work performance or progress of the Sub-Project.

• To get the amount of Second and Third installment, the Sub-Project is required to

submit an application for grant release with attachments of progress report of work

and the statement of income and expenditures in the prescribed format (Annex 2

&3). The submitted application for grant release and the attached progress report

and statements will be examined and checked along with physical examination by

the authorized personnel appointed by the District Agriculture Development Offi ce/

District Livestock Services offi ce and the installment amount will be disbursed on

the basis of his/her written recommendation.

• Small grant amount disbursed by the District Agriculture Development Offi ce /

District Livestock Service Offi ce shall be accounted and recorded in the books of

accounts prescribed by the Offi ce of the Auditor General (OAG) formats as per the

Acts and Rules of the Government of Nepal. They are also required to maintain

accounts and records separately in the prescribed formats or annexes with periodic

(monthly, trimester and annually or on completion) reporting to the AFSP on time.


3. Small Grant Expenditures and Book-keeping

• The Sub-Project will make expenditures of the small grant amount as per the

approved project proposal and according to the agreement. Small grant amount

expenses are ineligible in the following activities:

a) Land acquisition and Building Constructions,

b) Salary to the members of the Sub-Project,

c) Loan investment,

d) Retroactive expenses of the Sub-Project,

e) Procurement of second hand or used equipments,

• Received small grant amount shall not directly be expended without making entry

on books of accounts. (annex 1)

• Received grant amount should fi rstly be entered in the Income Accounts and then

after could be make expenses for the approved project proposal and the Sub-

Project should maintain a separate account of small grant implementation as per

the agreement. They should keep accounts based on Double Entry Book-Keeping

System. For each and every transaction needs to maintain Journal Entries with

entering and recording in Bank Cash Book and necessary Ledgers with the

attachments of bills, receipts, bank statements, and other supporting documents

properly with authentication and updated and transparent. By the demand of

Grant Provider, the World Bank and the stakeholders, the accounts and records

will be made available immediately to view and to check.

• As mentioned above, any certain Sub-Project Group defi cient the capacity of

maintaining the accounts of small grant implementation on the basis of Double

Entry Book-Keeping System with Ledgers, etc. to be identifi ed by DADO/DLSO/

DHO as exceptional group and allowed to keep or maintain the record in the

prescribed format annex 1 and 4 in lieu of Journal Vouchers, ledgers, bank

reconciliation, etc.

• The Sub-Project should maintain income and expenditure of the Benefi ciary

Contribution amount stated in the small grant agreement as per the above stated

accounting processes (annex 1). The valuation of the contribution of Small Grant

Recipient-in labour will be done on the basis of the approved district rate and

contribution in-kind will be done on the basis of the prevailing market rate.


4. Statements of Expenditure and Progress Reports:

• The Sub-Project should prepare and submit the monthly statement of expenditure

and progress reports of the small grant implementation as per the agreement

to the grant provider (District Agriculture Development Offi ce/District Livestock

Services Offi ce/District Health Offi ce) within the 7th date of next month. (annex 2

and 3)

• According to The Sub- Project agreement, the Benefi ciary Group/Cooperative

should prepare the statement of work completion/fi nal or annual income and

expenditure and the progress reports along with the records and supporting

documents of the small grant implementation and submit to the grant provider

within the 15 days of the date of work completion as mentioned below: (annex 2

to 3)

1) All the approved Journal Vouchers and attached invoices, bills, receipts

and other supplementary documents.

2) Signed and certifi ed Bank Cash Book with recording and entry of all

those approved Journal Vouchers, related Ledger, Accounts and relevant

records.

3) Statement of Bank Reconciliation and Bank Statement

4) Inventory Records

5) All other related documents of small grant implementation

But, the cooperative does not need to submit the documents as mentioned above

in (1), (2) and (3).

• Small grant executing district offi ces (DADO/DLSO/DHO) should prepare the

statements of small grant amount disbursement, compile & consolidate the

monthly/annually/completion statements of income and expenditures & progress

reports of Sub-Projects and submit to the Project Management Unit (PMU) of

AFSP within the stipulated time. (annex 5)

5. Auditing

(i) For Benefi ciary Groups:

DADO/DLSO/DHO should properly keep and maintain these received small grants


records and documents along with its accounts and records of the grant disbursement

maintained with DADO/DLSO/DHO and liable to present them to the internal auditor of

DTCO for internal auditing and the auditor of the OAG for fi nal auditing.

(ii) For Cooperative:

They should maintain separate accounts and records of small grant implementation

with supporting documents according to the grant agreement and liable to prepare

and submit the statement of monthly/ work completion/fi nal or annual income and

expenditure and the progress reports to the grant provider (District Agriculture

Development Offi ce/ District Livestock Services Offi ces/DHO) on stipulated time. All

the accounts and records regarding small grant implementation should be presented

for auditing by the registered auditor and compulsorily provide an audit report to the

grant provider within 3 months of expiry of fi scal year.

6. Publicize about the Program Implementation of the Sub-Project

• The program implementation done by the Sub-Project affects directly to the

community and so, the Sub-Project should publish in written about the program

implementation of small grant in the notice board visible to the people. The

notice should cover at least following information.

• Agriculture and Food Security Project (AFSP) executed Sub-Project

• Name and Address of Sub-Project

• Objectives

• Expected Achievements and Benefi ts

• Benefi ted Group and Numbers served

• Name of the chairperson of the Benefi ciary Group/Cooperative

• Total Cost

• Agreed or Received Grant Assistance from AFSP

• Benefi ciary contribution amount for implementation of Sub-Project.

• Time period of implementation of the Sub-Project (Commencement/Starting

and Completion Date).

7. Financial Discipline

• While monitoring the Sub-Project, the Small Grant Provider (District Agriculture

Development Offi ce/District Livestock Services Offi ce) shall withdraw the

implementation of such Sub-project and commence the investigation by


appointing an authorized investigator (may be in group investigation also) in

the following circumstances:

1. If the actual implementation of the approved project proposal is not

implementing according to the Small Grant Implementation Agreement and

the Guidelines;

2. If the work progress is very low and unacceptable than agreed;

3. Wrongly recording and reporting by the Sub-Project or Recipient;

4. Misuse or embezzlement of the fi nancial resources or expenses made

against the Guidelines;

5. Stakeholders’ complaints or information.

• In addition, as mentioned in the paragraph "IV Grievances Redressal

Mechanism" of the Small Grant Operational Guidelines, District Agriculture

Development Offi ce/District Livestock Services Offi ce/DHO should immediately

start the investigation action.

• After investigation of the Sub-project, such Sub- project could be re-implemented

or cancelled on the basis of the written report of the investigation. This decision

will be taken by the District Agriculture Development Offi ce/District Livestock

Services Offi ce/DHO. In case of cancellation, further grants will not be

disbursed and in the case of re-implementation, withheld grant amounts on the

basis of certifi cation of work completion will be disbursed with due attention in

the future performance.

• In case of cancellation with no further re-implementation of the Sub-Project, the

Bank account of that Sub-Project will be ceased with proceeding immediate

action to recover the disbursed grant amount to the district TSA according to

the prevailing laws and rules. Detail information regarding this case should be

submitted immediately to the AFSP.

• In the case of misuse or embezzlement of the disbursed grant amount against

the agreement, the responsible person of the Benefi ciary Group or Cooperative

handling should be liable for recovering that amount according to the prevailing

laws and rules.

8. Unspent Balance

The part of the released or disbursed unspent grant balance amount after the

completion of the Sub-Project should be returned back to the concerned District

Agriculture Development Offi ce/District Livestock Services Offi ce/DHO by a bank


cheque or deposited to the TSA of the District Treasury Comptroller Offi ce (DTCO)

before the closing or ending of the current fi scal year and DADO/DLSO/DHO is liable

to make adjustment accordingly on its books of account. Refunded amount will be

deducted from the reimbursable amount to be claimed from the World Bank.

9. Monitoring and Supervision

• District Agriculture Development Offi ce/District Livestock Services Offi ce/DHO

shall monitor and supervise the operating Sub-Projects regularly in the physical

progress, technical, fi nancial transactions and accounting aspects. Regional

Project Support Unit (RPSU) is also responsible for monitoring the fi nancial

management and progress status of the Sub-Projects implementing in the districts

under his region.

• As mentioned above, necessary technical support will be managed to provide to

the Sub-Project during the monitoring.

VIII GRIEVANCES REDRESSAL MECHANISM

The Global Agriculture and Food Security Program Grant Agreement require that the

DPSU in each district shall establish a Grievance Redressal Mechanism. The overall

grievance redressal mechanism established for the project will take care of any

grievances associated with sub-projects fi naced through small grants provisions. The

Compliace Offi cer designated by respective DADO/DLSO and DHO will handle any

grievances associated with small grant subproject and inform DPSU chief on actions

taken to resolve the issues.

IX LIMITATION OF THE GUIDELINE

The Small Grant Guideline is prepared for implementation in accordance with the

GAFSP Grant Agreement signed between the Government of Nepal and the World

Bank. Therefore, this Small Grant Guideline shall not take any action which would

have the effect of assigning, amending, abrogating or waiving such document without

the prior written consent of the World Bank. In the event of a confl ict between the

provisions of the GAFSP Grant Agreement or the Project Implementation Plan arises

with the Small Grant Guidelines, the provisions of the GAFSP Grant Agreement shall

prevail.


Attachments


Attachment - I

Agriculture and Food Security Project

Format for the Sub-Project Concept Note (SPCN) Application

1. Nameof the Sub-Project

2. Objective of the Sub-Project

3. Requested area of support

□ Crop□ Livestock□ Nutrition (Small Technology, Drudgery Reduction

Activities,Grain Bank etc.)4. Description of activities

5. Requesting Group / Organization

Name: Address:

District: VDC/Municipality: Ward No and Tole: Telephone:

6. Collaborator(s) / Partners, if any

Partners providing technical service and resources (as applicable)

Name: Partnership role:Name: Partnership role:

7. Sub-Project Location District: VDC/Municipality: Ward No and Tole of the Sub-Project area:


Expected number and type of benefi ciaries:

Type of Benefi ciary

Dalit Janajati BCTS Madheshi Muslim Others Total

M F M F M F M F M F M F M F

Direct

Indirect

Total

8. Number and Type of Benefi ciaries

9. Duration of the Sub-Project

Expected Start Date of the Sub-Project: Proposed Completion Date:Total Duration (In Months):

10. Tentative Cost and Expected Sources

SG Expected:

Recipient Group's/Organization's Contributions:

Other Partner's Contribution (if applicable):

Total Budget (NRs):

11. Facilities available for the Sub-Project (Description of existing facilities useful to undertake the Sub-Project work)

12.Sub-Project Cost (Estimated budget and funding sources) (In NRs.)

Cost Items Small Grant Expected Recipient Group's Contribution

Total

a. Capital investment (construction of building, shed, purchase of equipment etc.)

b. Working capital (inputs, raw materials, skilled labour to be hired for technical service etc.)

c. Contingency (5% for the items covered under (a) and (b)


Total (a+b+c)

13. Additional information justifying importance and potential of the Sub-Project (Do not repeat the points covered already. If there is nothing to add, write none)

14. It is certifi ed that all information provided by us in the application form is true. We hereby authorize DADC/DPSU to verify the statements, as necessary. If they fi nd an evidence of supply of any false information in connection with details provided in this form, we understand that it will be a subject to cancellation of our sub-project request.

Signature:

Name:

Designation: Date:


Attachment - II

Agriculture and Food Security ProjectChecklist for Selection of the Sub-Project Concept Note (SPCN)

(To be used by DPSU)

SN ChecklistFulfi llment of the Criteria

Yes No NA

1 SPCN Application received on the due date

2 SPCN completed per the prescribed format

3 SPCN consistent to the AFSP support area (crop, livestock and nutrition)

4 SPCN related to the VDC included in the AFSP phasing plan

5 SPCN submitted by the registered group or organization

6 Group or Organization’s minute indicating consensus to submit SPCN for Small Grant

7 Collaborator’s commitment to implement the Sub-Project on cost-sharing basis (Letter of Intent or Contract), as applicable

8 Assurance about no duplication of resources obtained from other sources for the cost items claimed

9 Answers provided to all 13 questions covered in the SPCN format

10 Attachment of the supporting documents as follows:

10.1 Group registration document

10.2 Copy of Executive Committee Meeting minutes deciding submission of SPCN for the Small Grant

10.3 Assurance of the Executive Committee about arranging matching resource (cash or kind), as appropriate

10.4 Evidence (Letter of Intent or Contract) of the partial support obtained from other source(s) for the items included in the SPCN (as applicable)


10.5 Profi le indicating members and other resources (e.g. physical facilities, human resource, bank balance, functions being carried out currently and annual turnover in the case of cooperative)

Remarks (if any):

Decision: Recommended for Full Proposal Development □ Yes □ No

Signature:

_______________________

Name:

Designation: Coordinator, DPSU

Date:

Signature:

_______________________

Name:

Designation: Member, DPSU

Date:

Signature:

_____________________

Name:


Date:

Note: The DPSU coordinator will designate two members from DADO or DLSO and DHO depending upon the nature of SPCN.


Attachment - III


Format for the Submission of Sub-Project Full Proposal

1. Title of the Sub-Project

………………

2. Objective of the Sub-Project

What will be accomplished by the Sub-Project upon its completion?

3. Requested Area of support

□ Crop □ Livestock □ Nutrition

4. Location of the sub-project

District: VDC/Municipality: Ward No and Tole of the Sub-Project area:

5. Total duration of the Sub-Project

Expected Start Date of the Sub-Project: Proposed Completion Date:Total Duration (In Months):

6. Description of activities and expected output and outcome (Describe what activity will be implemented to generate which result in fi rst six months, 2nd six months and so on until the end of the project. There can be more than one activities associated with one result).

SN Activity

Expected Results

1st Six Months 2nd Six Months3rd Six Months

Upon Completion of the Sub-Project

i.

ii.

iii.

iv.

v.


Note: Please add another Table if more space needed

7. Responsibility of the collaborating partners (as applicable)

SN Name of the collaborator providing technical and/or other services with benefi t

sharing condition

Activities Covered

i.

Ii,

iii.

8. Description of current problems (e.g. small cropped area, low production, poor access to input, small number of livestock, low productivity, low marketed surplus of crops/animal products etc.)

9. Activities planned to undertake the task (i.e. the plans to overcome identifi ed problems)

9.1 Problems 9.2 Activities planned


10. Cost of the Sub-Project and related funding sources

Cost Items AFSP Small Grant

Recipient Group

Other Donor Total

10.1 Capital Cost

10.1.1

10.1.2

10.1.3

10.1.4

10.1.5

10.2 Working capital

10.2.1

10.2.2

10.2.3

10.2.4

10.2.5

10.3. Staff cost

10.4 Contingency 5% (for the items covered)

Total

11. Benefi t from implementation of the Sub-Project

Benefi t UnitBaseline (What do they have now?)

After the Project (What do they accomplish upon completion of the Sub-

Project?)

Estimated Value of

Benefi t (In NRs.)

i.

ii.

iii.

iv.

v.


12. Total No. of benefi ciaries expected ………….

13. Assurance about no adverse effect on “social environment” from the Sub-Project

SN EffectsResponse

Yes No NA

i. The Sub-Project does not negatively affect the use of other public space (e.g. religious place, public inn, source of drinking water, Chautara etc.)

□ □ □

ii. The Sub-Project has no chance of creating adverse effect on the livelihood of other poor, Dalit and marginalized people in the surrounding

□ □ □

iii. The Sub-Project does not add drudgery on women, who are already overburdened with work

□ □ □

iv. The Sub-Project will not be a cause for inter-community confl ict upon its implementation □ □ □v. The Sub-Project will cause no loss of assets held by others (unless it is their voluntary

contribution)□ □ □

15. Assurance about no adverse effect on “environment” from the Sub-Project

SN EffectsResponse

Yes No NA

i. The Sub-Project does not cause soil erosion □ □ □

ii. The Sub-Project does not affect water quality □ □ □

iii. The Sub-Project does not use excessive dose of pesticides (i.e. beyond an acceptable limit)

□ □ □

iv. The Sub-Project does not use excessive dose of chemical fertilizers (i.e. beyond an acceptable limit)

□ □ □

v. The Sub-Project does not involve the risk of uncontrolled grazing of animals leading to the loss of biodiversity (e.g. the animals eating young growing plants)

□ □ □

vi. The Sub-Project does not involve the risk of drying of water source being used by the community

□ □ □

vii. The Sub-Project does not deteriorate sanitary condition posing risk to human health □ □ □

viii. The Sub-Project does not involve the risk on human health posed by the increased use of hormones/ antibiotics in animal

□ □ □

ix. The Sub-Project is not located in the area requiring Government’s permission for implementation (e.g. the Department of National Park or the Wildlife Conservation)

□ □ □

14. Social Management Plan to mitigate adverse effects on “social environment” (applicable only if the response between i – v is "No")

SN Likely Adverse Effect Mitigating Measure(s) Planned

i.

ii.

iii.

iv.

v.


16. Environmental Management Plan to mitigate adverse effects on “environment” (applicable only if the response between i – ix is "No")

Response

Yes No NA

i. Integrated agriculture, livestock and soil conservation approach will be followed □ □ □ii. The risk of soil degradation will be controlled through: □ □ □

Intercropping with legumes □ □ □Adoption of conservation farming technique (e.g. zero tillage, as possible)Adoption of organic farming practice

iii. Avoid application of chemicals for the harvest of fi shiv. Follow adequate pre-harvesting waiting period before selling the pesticide sprayed

vegetables□ □ □

v. Adoption of IPM technology for the control of pest in agriculture □ □ □vi. Avoid/ Reduce use of hormone and antibiotics in animals (for food safty) □ □ □vii. Others (Specify) □ □ □viii. Others (Specify) □ □ □ix. Others (Specify) □ □ □

17 Operation and maintenance plan for the proposed Sub-Project (mention how it will be maintained after the completion of the Small Grant support and also describe who will do what)

18 What indicators will be applied to measure progress accomplished after implementation of the Sub-Project?

i.ii.iii.iv.v.

19 Why this Sub-Project should be selected among other competing Applicants in your view?SNReason(s) i.ii.iii.

20 It is certifi ed that all information provided by us in the application form is true. We hereby authorize DADC/DPSU to verify the statements, as necessary. If they fi nd an evidence of supply of any false information in connection with details provided in this form, we understand that it will be a subject to cancellation of our sub-project request.

Signature: :

Name: Designation: District: VDC/Municipality: Ward No and Tole: Telephone: Date


Attachment - IV


Checklist for the Field Verifi cation of Sub-Project Proposal

SN Checklist Fulfi llment of the CriteriaYes No NA

1. Is the Applicant clear about objectives and expected results (output and outcomes) of the Sub-Project?

□ □ □

2. Is the Sub-Project technically suitable for the specifi ed geographic area?

□ □ □

3. Is the Sub-Project economically viable (Does estimated benefi t exceed the cost)?

□ □ □

4. Is the Sub-Project manageable by the Group/Organization (Are adequate provisions made to engage skilled persons)?

□ □ □

5.. Are activities proposed for the Sub-Project suffi cient to achieve expected results?

□ □ □

6. Are planned activities achievable within the specifi ed budgetary limit proposed ( Are all facilities/activities required for implementation budgeted for)?

□ □ □

7. Are planned activities achievable within the specifi ed time limit proposed?

□ □ □

8. Is implementation plan of the Sub-Project clear about sharing of responsibilities?

□ □ □

9. Is it clear that the Small Grant provided will not duplicate the allocation with other sources for the same budgetary item?

□ □ □

10. Has the Sub-Project adequate potential to access basic facilities required for implementation?

□ □ □

11. Has the Sub-Project any chance of encroaching public space (e.g. religious place, public inn, source of drinking water, Chautara etc.)?

□ □ □

12. Has the Sub-Project any chance of creating adverse effect on livelihood of other poor, Dalit and marginalized people in the surrounding?

□ □ □

13. Has the Sub-Project any chance of adding drudgery on women (who are already overburdened with work)?

□ □ □

14. Has the Sub-Project any risk of creating inter-community confl ict upon its implementation?

□ □ □

15. Does the Sub-Project cause any loss of assets held by others (unless it is their voluntary contribution)?

□ □ □


16. Has the Sub-Project prepared Social Management Plan to mitigate the likely adverse effects identifi ed, so far (applicable, only if the response is "Yes" for the item no 11 - 15)

□ □ □

17. Is the Social Management Plan adequate to prevent the identifi ed risks?

□ □ □

18. Was the Sub-Project Applicant a defaulter of any other project in the past (check with other people in the Applicant's surroundings)

□ □ □

19. Does the Sub-Project fall into the category of projects requiring verifi cation of adverse environmental effects, if any?

□ □ □

Other Remarks (if any):

Decision after verifi cation:

Decision Tick-OffThe Sub-Project is eligible for implementation under its present condition □The Sub-Project is eligible for implementation if it can successfully pass the “environmental screening” criteria

□

The Sub-Project is not eligible for implementation □

If the Sub-Project is "not eligible for implementation" give reason(s) why?

___________________________________________________________________

___________________________________________________________________

___________________________________________________________________

___________________________________________________________________

Signature: _______________________Name:Designation: Verifying Offi cer (1)Field Verifi cation Date:

Signature: ______________________Name:Designation: Verifying Offi cer (2)Field Verifi cation Date:


Attachment - V


Checklist for the Verifi cation of Adverse Environmental Effects, If Any

SN Checklist Fulfi llment of the CriteriaYes No NA

1. The Sub-Project does not cause any soil erosion □ □ □2. The Sub-Project does not lose any productive land □ □ □3. The Sub-Project will not be a reason for spoiling existing water

quality□ □ □

4. The Sub-Project is not likely to use pesticide doses beyond an acceptable limit

□ □ □

5. The Sub-Project is not likely to use chemical fertilizer doses beyond an acceptable limit

□ □ □

6. The Sub-Project will not cause the loss of biodiversity due to uncontrolled grazing of the animals (e.g. the animals eating young growing plants)

□ □ □

7. The Sub-Project does not dry out water source being utilized by others in the community

□ □ □

8. The Sub-Project is not likely to worsen the sanitary condition at the level of posing risk to human health

□ □ □

9. The Sub-Project is not likely to use of animal growth hormones (e.g. applied for the acceleration of growth of goats) at the level of posing risk to human health

□ □ □

10. The Sub-Project does not have the risk of encroaching forest areas

□ □ □

11. The Sub-Project does not involve the risk of transmitting disease to the animals in the surroundings (as new animals might bring new disease in the village)

□ □ □

12. The Sub-Project does not require any permission from the Government’s Department of National Park and Wildlife Conservation (because of its location in their surrounding); If required, whether such permission has been obtained already for the implementation of activities

□ □ □

13. Others (Specify additional aspects not covered above that might justify no adverse effect of the Sub-Project on the ”environment”)13.1 □ □ □13.2 □ □ □13.3 □ □ □13.4 □ □ □


13.5 □ □ □

14. Has the Sub-Project prepared Environmental Management Plan to mitigate the likely adverse effects identifi ed, so far (applicable, only if the response is "No" for the item no 1 - 13)

□ □ □

15. Do suggested mitigating measures of the Environmental Management Plan represent following aspects of the Environmental Code of Practice?

15.1 Integration of agriculture, livestock and soil conservation (as applicable)

□ □ □

15.2 Soil degradation minimized through:

15.2.1 Intercropping with legumes □ □ □

15.2.2 Conservation farming (e.g. zero tillage, as possible)

□ □ □

15.2.3 Organic farming □ □ □

15.2.4 Green manure cultivation under irrigated condition

□ □ □

15.2.5 Plantation and use of fodder trees for feeding the animals

□ □ □

15.2.6 Steep slopes farming under the Sloping Agricultural Land Technology (SALT)

□ □ □

15.2.7 Neutralization of soil acidity through the application of lime

□ □ □

15.3 No application of chemicals for the harvest of fi sh □ □ □

15.4 Application of adequate waiting period for the harvest and sale of pesticide sprayed vegetables in the market

□ □ □

15.5 Application of IPM technology to control the pest in agriculture

□ □ □

15.6 Reduced application of growth hormone in the animals (e.g. goats)

□ □ □

15.7 Others (Specify)

15.7.1 □ □ □

15.7.2 □ □ □

15.7.3 □ □ □

15.7.4 □ □ □

15.7.5 □ □ □

16. Is the Environmental Management Plan adequate to prevent the identifi ed risks?

□ □ □


17. Other Remarks (If any)

Decision after verifi cation:

Decision Tick-Off

The Sub-Project is environmentally eligible for implementation □

The Sub-Project is not environmentally eligible for implementation □

If the Sub-Project is "not environmentally eligible for implementation" give reason(s) why?

___________________________________________________________________

___________________________________________________________________

___________________________________________________________________

Signature: _______________________Name:Designation: Member, DESMC nominated by DPSUField Verifi cation Date:

Signature: ______________________Name:Designation: Certifying Offi cer, DPSU Field Verifi cation Date:


Attachment - VI


Criteria for Appraisal and Endorsement of Sub-Project Full Proposal (To be used by DPSU)

Title of the Sub-Project: Project Code: ………………

District: Location of the Sub-Project: ………..

1. Sub-Project related to the AFSP’s specifi ed support area (crop, livestock and nutrition)

□ Yes □ No

Comment(s), if any:

2. Value of Sub-Project benefi ts exceeds the cost □ Yes □ NoComment(s), if any:

3. Sub-Project likely to generate demonstration effects on other non-participants

□ Yes □ No

Comment(s), if any:

4. Completeness of activities mentioned in the implementation plan (i.e. adequate number of activities specifi ed to deliver expected results)

□ Yes □ No

Comment(s), if any:

5. Sub-Project endorsed by the Field Verifi cation Team □ Yes □ NoComment(s), if any:


6. Sub-Project cleared for “no adverse effect on environment”

□ Yes □ No

Comment(s), if any:

7. Sub-Project within the reach of technical services to be delivered by the district, Sub-center and village level offi ces

□ Yes □ No

Comment(s), if any:

8. Sub-Project proposed with maintenance plan after termination of the Small Grant support

□ Yes □ No

Comment(s), if any:

9. Any other remarks (Specify):

Decision:

Selected/Not-selected Tick-Off

Selected for signing the Implementation Agreement □

Not selected □

If not selected, give reason(s) why?

Signature:

_______________________Name:Designation: Coordinator, DPSU Date:

Signature:

_______________________Name:Designation: Member, DPSU Date:

Signature:

_______________________Name:Designation: Member, DPSU Date:


Attachment - VII


Notice to the Applicants about Selection Status of the Sub-Project Proposals

(To be used by DPSU)

The Applicant has been informed about “no selection” of their Proposal (with reasons for “no selection”) □ Yes □ No

The Applicant has been informed about the “selection” of their proposal and asked to come for signing an Agreement

□ Yes □ No

The Applicant is made fully familiar with the Terms and Conditions of the Agreement (e.g. opening of a Bank Account with Matching Fund to meet the contributions from their side prior to signing of the Agreement, discussing monitoring indicators and forwarding periodic reports)

□ Yes □ No

Signature: _______________________

Name:

Designation: Coordinator, DPSU

Date:

Signature: _______________________

Name:


Date:


Attachment - VIII

Government of NepalMinistry of Agricutural Development


Small Grant Implementation Agreement

This Agreement (hereinafter called "Agreement") is made on the …[date]….. day of the month of …[month]….. 20 [year]…, between, on the one hand, Agriculture and Food Security Project (AFSP) (hereinafter called "AFSP") and, on the other hand "…[Recipient Name]……………………………….. " (here in after called "Grant Recipient").

Name of the Sub-Project: Title:

Address:

Sub-Project Identifi cation Number/Code:

1. The Project Proposal submitted by the ……… (name of the Benefi ciary Group/Organization) to AFSP for funding support has been approved by the DADC. It led to subsequent negotiation of the Terms and Conditions agreed between the DLSO/DADO/DHO and the Sub-Project Benefi ciary/Contact Person, hereinafter called as the "Sub-Project".

2. The following entities bound by this Agreement are hereinafter referred to as “Parties”. They are:

Parties

Small Grant Provider Small Grant Recipient

________________________Name:Designation: DLSO/DADO/DHO/AFSP

………………………………. [SP title and address]……………………………………..

________________________________________Name: Designation: Sub-Project ManagerSub-Project: … Name of the Sub-Project

Ι. Duration of the Sub-Project:

3. The Project fi nanced through this Agreement shall be implemented for a period of …… months. Under special circumstances, when both Parties commonly agree to change duration of the Agreement, its duration can be prolonged or shortened with written consent through an addendum to this Agreement. Unless and until such change takes place the start and completion date of the Agreement will be as follows:

Start Date: ……………. DD/MM/YY


Completion Date: ……………. DD/MM/YY

ΙΙ. Project Amount

4. Estimated budget for the Sub-project is NRs. ……………….. Of this, …..% will be provided as the Small Grant, while the remaining ……% will be contributed by the recipient.

Budget of the Sub-Project

AFSP Small Grant NRs ………………….

Support of other donor (if applicable) NRs ………………….

Recipient's contribution NRs ………………….

Total NRs. ………………ΙΙΙ. Implementation Arrangements

5. The Small Grant provided under this Agreement shall be used only for the specifi ed Sub-Project objectives. The utilization will be compatible to the Terms and Conditions stipulated in the Small Grant Guideline.

6. The Grant Recipient should open a Sub-Project Account at the Bank and fi nancial institution registered in Nepal Rastra Bank and provide details to DADO/DLSO/DHO for the deposit of approved Grant.

7. The Small Grant Recipient is required to ensure that the amount received will not be subject to confi scation, compensation, allotment or seizure.

8. The Accounts and Ledgers related to the fi nancial operation of the Sub-Project should be maintained according to the universally accepted double-entry bookkeeping standard and should be backed with the evidences of necessary support documents.

9. The Small Grant Recipient will be liable for proper utilization of the Grant in accordance with the Agreement. If the Grant amount is found totally or partially applied in the purpose other than the one stated for the Sub-Project, the Sub-Project Support Recipient will be required to replenish the Small Grant Amount to the DLSO/DADO/DHO.

10. The fi nancial, procurement, disbursement, monitoring and administration procedures should be followed as described in the Sub-Project Proposal and under the Terms and Conditions of this Agreement unless specifi ed otherwise and amended with the Agreement between both parties in writing.

11. Procurement of second-hand equipment for the Sub-Project will not be allowed under the Small Grant fi nancing.


12. The Small Grant Recipient, through the diligence of the Sub-Project Manager, shall maintain all equipment and goods acquired for the Sub-Project until its Completion Date. He/she will be responsible for preventing actions from any damage or misuse.

IV. Rights and Responsibilities of the Sub-project Manager

In carrying out the Sub-Project, the Sub-Project manager will undertake following responsibilities:

• Reasonably exercise the skills, care and diligence in accordance with the Schedules agreed upon;

• Comply with the provisions stated under the Government rules and regulations;• Follow professional codes of conduct;• Observe the PMU/DADC/DPSU and respective DADO/DLSO/DHO

recommendations;• Report periodic progress accomplished by the Sub-Project; • Be available for discussion with the DPSU/DADO/DLSO/DHO as necessary; • Provide access to inspection of progress and sharing of information to the PMU/

RPSU/DPSU and DADO/DLSO/DHO staff and the task specifi c Consultants hired by them; and

• Ensure implementation of the Sub-project under satisfactory conditions making best effort to achieve the AFSP objectives;

• The Grant Sub-project Manager will not change any person specifi ed for the Sub-Project prior to the consent of the DLSO/DADO/DHO in writing; and

• The Sub-project Manager will be liable for all actions or omissions related to the Sub-Project activities. He/she will be responsible for any loss or damage occurred as a consequence of his/her act or omission.

If the Sub-Project Manager cannot continue coordination and management of the Sub-project for any well-grounded reason, he/she should inform the DLSO/DADO/DHO with a new name proposed as his/her replacement. Upon receiving such notice, the DLSO/DADO/DHO should then approve the replacement as appropriate. Prior to the departure of the old Sub-Project Manager, he/she will be responsible to report details to the new comer about the stage and status of the activities performed and spending of the Small Grant, so far.

13. If the Small Grant Recipient fi nds that the AFSP objectives are not likely to be achieved through the implemented route of the Sub-Project and may need adjustments in the preferred route, the Sub-Project Manager should inform the DLSO/DADO/DHO in writing before it is too late. The concerned DLSO/DADO/DHO should infom to the DPSU before providing the approval letter. The DLSO/DADO/DHO should then provide necessary instruction for modifi cation and improvement in the approaches being followed in writing within a maximum period of 15 days. If there is disagreement between the Sub-Project Manager and DLSO/DADO/DHO about the observations made, the issue should then be forwarded to DPSU, RPSU and PMU for fi nal decision.

14. The PMU will disburse the agreed upon Small Grant to the Recipient through respective DADO/DLSO/DHO into three installments in view of the activities to be implemented as follows:


Activity Budget Activity Completion Date Installment

Signing of the agreement (First installment)

30%

Second installment 40%

Third installment 30%

Total 100%

Except for the fi rst installment, all other installments will be released only upon verifi cation and certifi cation of completed work by the offi cer designated by concerned DLSO/DADO/DHO . While releasing the installment, the Activity Schedule specifi ed in the Agreement will also be considered. For every proceeding installment, the Benefi ciary Recipient should provide certifi cation indicating satisfactory utilization of the obtained fund and the completion of envisaged piece of work under the preceding installment.

15. If the Small Grant Recipient fi nds any possibility of unexpected delay in the implementation of scheduled activities, it should request DLSO/DADO/DHO to permit an extension in advance. The DLSO/DADO/DHO may consider such request without any change in the budgetary allocations and also without hampering sequence of interdependencies of one activity with another. The DLSO/DADO/DHO should infom to the DPSU before providing the approval letter.

16. The Payment Schedule will correspond to the Activity Schedule. Payments will be triggered not only by successful completion but also by timely reporting and certifi cation of the completed tasks.

17. The concerned DLSO/DADO/DHO may terminate this Agreement by giving 15 day notice with reason(s) in writing to the Sub-Project Grant Recipient, if the DLSO/DADO/DHO fi nds that the Grant Recipient is unable to provide required services even with any other substitute arrangement. At such situation, the expenses incurred already will be paid on a pro-rata basis. Any balance remained with the Grant recipient should be returned to DLSO/DADO/DHO.

18. The Sub-Project will ensure that all environmental and social safeguards indicated in the Small Grant Guideline will be strictly followed.

19. This Agreement cannot assign or transfer the responsibilities through any other sub-contracting process to any other party without a written consent of the concerned to DLSO/DADO/DHO.

V. Confl ict of Interest


20. By signing this Agreement, the Sub-Project Receipent makes a legal declaration that he/she will not pay or transfer any portion of the Small Grant amount to his/her relatives or the fi rms owned by them.

VI. Communication Address

21. Any communication between the Grant Recipient and DADO/DLSO/DHO will be effective only if it is expressed in writing. The contact address for communication will be as follows:

Contact Details

Sub-Project Grant Recipient

DLSO/DADO/DHO (Small Grant Provider)

Name of the Sub-Project Manager

Name of the Sub-Project:

Address:

Phone /Fax /E-mail: Phone: Fax: E-mail:

Phone: Fax: E-mail:

VII. Effectiveness and Termination of the Agreement

22. The Agreement will be effective from the date of signing it by both DADO/DLSO/DHO and the Grant Recipient.

23. The Agreement will terminate upon completion of the Sub-Project in accordance with the Activity Schedule unless terminated earlier with any of the following reasons.

• One of the parties creates breach of any provision of the Agreement and is unable to fi nd a remedy for corrective action within 15 days from the date of notifi cation provided by another party concerned.

• Implementing Group/Organization declares bankruptcy or becomes insolvent. • If either of the parties defame the Sub-Project due to its serious misconduct• Request of the Grant Recipient to cancel the Agreement due to delayed fi nancing

for over 3 months.

24. In the case of cancellation of the Agreement, as a consequence of non-fulfi llment of assumed obligation indicated in it, the Grant Recipient should transfer its account balance to the respective DADO/DLSO/DHO within seven working days from the date of DPSU's notifi cation.

25. If the Agreement is terminated for any reason, the Sub-Project should cease to use confi dential information (if any) immediately.


26. In case of the termination of Agreement before the completion of Sub-Project, due to default by a third party (i.e. other than the DADO/DLSO/DHO and Grant Recipient), the respective DADO/DLSO/DHO will pay the value of materials and services ordered or performed by the Sub-Project already. For the remaining or uncommitted amounts (if any), they should be returned to the DADO/DLSO/DHO immediately. If the Grant Recipient does not pay within the specifi ed period and terms, the amount will be legally recovered through the enforcement of prevailing law.

ςΙΙΙ. Dispute Resolution

27. If any dispute arises between the Grant Recipient and the DADO/DLSO/DHO in relation to this Agreement, both parties concerned will attempt to negotiate in good faith and resolve the dispute amicably. If such effort does not work, it will then be referred to the competent Court in Nepal, and the law which governs this Agreement.

28. Any failure of the DADO/DLSO/DHO to enforce any provision of this Agreement shall not constitute a waiver of any rights to future enforcement.

IX. Force Majeure

29. The Grant Recipient will not be responsible for unexpected delays and failure of the performance in line with this Agreement, provided such failure is caused by the natural disasters (such as fi re, fl ood, explosion, lightning, windstorm, earthquake, subsidence of soil); government interference; and the civil uproar (e.g. war, riot, strike and labour disturbance).

X. XI. Final Disposition

30. The DADO/DLSO/DHO will engage the Grant Recipient to implement the Sub-Project as Independent Contractor on non-exclusive basis. Therefore, the DADO/DLSO/DHO will not be considered their associates. .

31. This Agreement includes the Terms and Conditions in writing. Therefore, no other oral or written commitment, understanding and representation of any kind are set out under this Agreement.

32. All notices under this Agreement shall be produced in writing and personally delivered, or sent by pre-paid post or by facsimile or e-mail to the address of the party to whom the notice has to be given.

33. Variations, waivers and modifi cations of this Agreement shall only be valid if done in writing and signed by or on behalf of the Grant Recipient and the DADO/DLSO/DHO.

34. The provisions of this Agreement relating to the responsibility of reporting, confi dentiality, intellectual property and publication will expire only after its termination upon completion of the Sub-Project task.


This Agreement has been signed on DD/MM/YY in two original copies, one for each of party mentioned below:

On behalf of the DADO/DLSO/DHO /AFSP: On behalf of the Sub-Project Small Grant Recipient:

________________________Signature:

__________________________Signature:

Name: Name:

Designation: Designation:

Date: DD/MM/YY Date: DD/MM/YY

Note: Attach relevant documents (e.g. summary of the proposal including Work Plan, Budget and Payment Schedule) in the Annex.

Office Seal Office Seal


A achment - IX


Monitoring Indicators for the Sub-Project Ac vi es Implemented under the Small Grant Support

Crop:• Improved variety seed produc on (quan fy kg. of the seed replaced) • Increased cropped area (quan fy addi onal area covered by the crop)• Increased produc vity (quan fy increase in the crop yield)• Increased volume of produc on (quan fy increase in the quan ty of produc on)• Cropped area applying improved management prac ces such as Integrated Pest Management

(IPM) technique (quan fy resul ng change observed in the propor on of harvest) • Cropped area using farm machinery (quan fy resul ng change observed in the cost of

produc on per unit of land and also the propor on of harvest) • Produc on resulted from the adapta on of greenhouse technology (quan fy produc vity

increased in off -season vegetables)• Number of micro-irriga on system built (quan fy addi onal cropped area covered by irriga on

and its eff ects on cropping intensity, produc vity and produc on volume)• Number of small scale storage facili es created (quan fy the products stored and reduced

post-harvest loss as applicable)

Livestock:• Number of improved breed animals raised, quality breeding animals made available for

distribu on(quan fy propor on of local animals replaced as its eff ect) • Increased produc vity (quan fy increase in the produc vity of animals)• Increased volume of produc on (quan fy increase in the quan ty of milk and meat produc on)• Increased access to animal health facili es (quan fy resul ng decrease in the rate of animal

death) • Number of animal sheds constructed, renovated(quan fy the number of animals raised under

the shed and their eff ect on animal care/health) • Number of small scale dairy established (quan fy milk processed by dairy and increased

number of farmers benefi ng from dairy) • Number of private veterinary service units established(quan fy the number of animal raising

households benefi ng from the veterinary service and the number of animals treated)• Number of households adp ng improved feeding prac ces, area under forage cul va on,

Nutri on and Women's Drudgery Reduc on: • Number of community grinders installed for the prepara on of Sarbo amPitho(quan fy the

number of women benefi ng from such installa on)• Number of metal bins distributed for the Grain Bank (quan fy the gains stored) • Number of grain Banks opera ng (number of households benefi ng)• Number of tools and equipment provided as technological support to reduce drudgery among

women (number of women benefi ng from such support; also quan fy the reproduc ve work burden reduced as a result of such support)

Number of community bio-gas plants installed (quan fy the number of households benefi ng from such support; also specify what eff ect they have created on women's engagement)


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