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Document of
The World Bank
FOR OFFICIAL USE ONLY
Report No: 66052-IN
PROJECT PAPER
ON A
PROPOSED ADDITIONAL CREDIT
IN THE AMOUNT OF SDR 32.6 MILLION
(US$50.00 MILLION EQUIVALENT)
TO THE
REPUBLIC OF INDIA
FOR A
ASSAM AGRICULTURAL COMPETITIVENESS PROJECT
February 3, 2012
Agriculture and Rural Development Unit
South Asia Sustainable Development Department
This document has a restricted distribution and may be used by recipients only in the
performance of their official duties. Its contents may not otherwise be disclosed without World
Bank authorization.
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ii
CURRENCY EQUIVALENTS
(Exchange Rate Effective December 31, 2011)
Currency Unit = INR
INR 50 = US$1
US$ 1 = SDR 1.5353
FISCAL YEAR
April 1 – March 31
ABBREVIATIONS AND ACRONYMS
AACP Assam Agricultural Competitiveness
AF Additional Financing
AH&VSD Animal Husbandry & Veterinary Services Department
ARIAS Assam Rural Infrastructure and Agricultural Services
ASG Agro Service Group
ATMA Agricultural Technology Management Agency
CAS Country Assistance Strategy
CIG Common Interest Group
DOEF Department of Environment and Forests
DOF Department of Fisheries
EMF Environmental Management Framework
EOP End of Project
ERR Economic Rate of Return
FMR Financial Management Report
FPO Farmer Producer Organization
GOA Government of Assam
GOI Government of India
IFR Interim Financial Report
M&E Monitoring and Evaluation
MIS Management Information System
PAD Project Appraisal Document
PCU Project Coordination Unit
PIP Project Implementation Plan
PWD Public Works Department
R&R Resettlement and Rehabilitation
SOE Statement of Expense
STW Shallow Tube Well
Vice President: Isabel Guerrero
Country Director: Roberto Zagha
Sector Director: John Henry Stein
Sector Manager: Simeon K. Ehui
Task Team Leader / Co-Task Team Leader: Manivannan Pathy / Bekzod Shamsiev
iii
INDIA
ASSAM AGRICULTURAL COMPETITIVENESS PROJECT
CONTENTS
Project Paper Data Sheet…………………………………………………………………..1
Project Paper………………………………………………………………………………3
I. Introduction………………………………………………………………………..3
II. Background and Rationale for Additional Financing……………………………..3
III. Proposed Changes.………………………………………………………………...7
IV. Appraisal Summary.…………..…………………………….……………………10
Annexes
1. Annex 1: Results Framework and Monitoring Indicators……..…………………14
2. Annex 2: Operational Risk Assessment Framework…………………….…….…20
1
COUNTRY
PROJECT NAME
ADDITIONAL FINANCING DATA SHEET
Basic Information - Additional Financing (AF)
Country Director: Roberto Zagha
Sector Director/Manager: John Henry
Stein / Simeon K. Ehui
Team Leader: Manivannan Pathy /
Bekzod Shamsiev
Project ID: P129686
Expected Effectiveness Date: April 15,
2012
Lending Instrument: Specific Investment
Loan
Additional Financing Type: Scaling Up
Sectors: General Agriculture / Agriculture
Markets, Extension & Research, Animal
Production, irrigation and drainage
Themes: Rural Services and Infrastructure, Rural
Markets, Rural Policies and Institutions, minor
irrigation and drainage
Environmental category: B
Expected Closing Date: March 15, 2015
Joint IFC: Not Applicable
Joint Level: Not Applicable
Basic Information - Original Project
Project ID: P084792 Environmental category: B
Project Name: Assam Agricultural
Competitiveness Project (AACP)
Closing Date: March, 15, 2012
Lending Instrument: Specific Investment Loan Joint IFC: Not Applicable
Joint Level: Not Applicable
AF Project Financing Data
[ ] Loan [X ] Credit [ ] Grant [ ] Guarantee [ ] Other:
Proposed terms:
AF Financing Plan (US $ m)
Source Total Amount (US $m)
Total Project Cost:
Cofinancing:
Borrower:
Beneficiaries
Total Bank Financing:
IBRD
IDA
New
Recommitted
76.27
NA
12.50
13.77
50.00 (IDA)
Client Information
Recipient: Republic of India
Responsible Agency: Assam Rural Infrastructure & Agricultural Services Society, Department of
Agriculture, Government of Assam
Contact Person: Mr. K.C. Samria, Commissioner & Secretary to Department of Agriculture
Telephone No.: +91-361-2332125
Fax No.: +91-361-2332564
Email: [email protected]
2
AF Estimated Disbursements (Bank FY/US$m)
FY 2012 2013 2014 2015
Annual 2.00 15.00 15.00 17.00
Cumulative 2.00 17.00 33.00 50.00
Project Development Objective and Description
Original project development objective: The project development objective (PDO) would remain the
same as in the original project: is to increase the productivity and market access of targeted farmers
and community groups. Key performance indicators (KPI) are increased yields of crops, fish and
livestock products complemented by an increase in the proportion of marketed surplus.
Revised project development objective: No change to the original project PDO
Project description: The proposed additional financing is intended to be allocated to scale up the three
components of the original project, namely Component A: Investment Grant Scheme; Component B:
Agricultural Services and Market Chain Development; and Component C: Infrastructure
Development.
Safeguard and Exception to Policies
Safeguard policies triggered:
Environmental Assessment (OP/BP 4.01)
Natural Habitats (OP/BP 4.04)
Forests (OP/BP 4.36)
Pest Management (OP 4.09)
Physical Cultural Resources (OP/BP 4.11)
Indigenous Peoples (OP/BP 4.10)
Involuntary Resettlement (OP/BP 4.12)
Safety of Dams (OP/BP 4.37)
Projects on International Waterways (OP/BP 7.50)
Projects in Disputed Areas (OP/BP 7.60)
[ X ]Yes [ ] No
[ X ]Yes [ ] No
[ X]Yes [ ] No
[ X ]Yes [ ] No
[ ]Yes [X] No
[ ]Yes [ X] No
[X]Yes [ ] No
[ ]Yes [ X] No
[ ]Yes [X ] No
[ ]Yes [ X ] No
Does the project require any waivers of Bank policies?
Have these been endorsed or approved by Bank management?
[ ] Yes [ X ] No
[ ] Yes [ ] No
Conditions and Legal Covenants:
Financing
Agreement
Reference:
Section IV B
Description of Condition/Covenant:
Notwithstanding the provisions of Part A of this Section, withdrawal
shall only be made for payments made under Category (1) once the
Association has received satisfactory evidence, that Assam has
duly made all Resettlement Payments due under the Original Project
in accordance with the provisions of the relevant social mitigation
and/or resettlement plan prepared under the Resettlement and
Rehabilitation Policy.
Date Due:
March 15,
2012
3
I. Introduction
1. This Project Paper seeks the approval of the Executive Directors to provide an additional
Credit in an amount of SDR 32.6 million (US$ 50.00 million equivalent) to the India: Assam
Agricultural Competitiveness Project (AACP) (Cr. 4013-IN).
2. The proposed Additional Financing (AF) will scale up the project’s impact and
development effectiveness through (i) promotion of policy initiatives that build synergies and
convergence with ongoing schemes of the Government of Assam (GOA) and the Government of
India (GOI); establishing a system for sustainable use of groundwater; and mainstreaming
project collaboration with the private sector; as well as (ii) scaling up investments in irrigation,
mechanization extension advice, rural haats and market access roads to increase production,
productivity and market access in selected districts. The proposed activities would help to scale
up the impact of the original project in districts where the demand for investment during the
original project was pronounced, support the delivery of agriculture and marketing services, rural
road connectivity, produce aggregation and development of farmer producer organizations in
these districts.
3. The proposed additional financing is consistent with the development objective of the
ongoing Assam Agricultural Competitiveness Project (AACP). No major changes are proposed
to the Project Development Objective, design or implementation arrangements of the original
project.
II. Background and Rationale for Additional Financing in the amount of US$ 50.00 million
Original Project Background and Design:
4. Government of India (GoI) received an IDA Credit of SDR105 million (equivalent to
about US$ 154 million) for the on-going project, which was approved by the Board on January
15, 2005 and became effective on February 24, 2005. The project development objective (PDO)
of the on-going AACP is to increase the productivity and market access of targeted farmers and
community groups. Key performance indicators (KPI) are increased yields of crops, fish and
livestock products complemented by an increase in the proportion of marketed surplus. Although
the over-riding objective is to stimulate growth of Assam’s agricultural economy, project
activities would be predominantly pro-poor, directed primarily at small and marginal
landholders, poor fishing communities and the landless.
5. Project takes a holistic approach to raising farmer incomes. The multiple components
include rural roads, irrigation, fisheries, livestock, dairy, mechanization, community forestry,
demand-driven extension, research, market information and investment in rural market places.
Project has also contributed to mainstream some of the best practices that were emerging from
the project (e.g. community procurement) into the operations of various schemes managed by
government departments.
4
Table 1: Key Project Data
Project AACP
Loan No 4013-IN
Board Date January 15, 2005
Effectiveness date February 24, 2005
Original closing date March 31, 2010
Revised closing date March 15, 2012
Project age
Original IDA Amount
Total Amount Disbursed
(as on Dec, 2011)
6 years and 10 months
SDR 105 million
SDR 83.01 million
Project’s implementation record and project performance:
6. The original project is on track to achieve the stated project development objectives. The
work on the Roads upgradation scheme is at 98%. The physical progress on 1000 Km road
rehabilitation scheme (i.e. gravel roads) is around 75%. The project has completed 87% of the
targeted investments in irrigation and has achieved the targets under the farm mechanization and
fisheries component. The M&E data indicates that (a) the high yields achieved in paddy,
vegetables, and fish is sustained; (b) marketable surplus are increasing; (c) cropping intensity are
continuing to improve in the years after the supply of the irrigation pumps; and (d) operational
hours for tractors and power tillers is increasing year on year.
7. AACP has directly mobilized more than 300,000 beneficiaries in more than 63,000
beneficiary groups across the fishery, agriculture, dairy, forestry, and livestock sectors.
Implementation and monitoring data demonstrate that project interventions are heavily skewed
toward the most disadvantaged; and the socioeconomic screening, targeting and beneficiary
mobilization process has allowed significant participation of small and marginal farmers, and the
landless. Of the more than 300,000 beneficiaries mobilized upto September 2011, 44% are
marginal farmers, 33% are small farmers and 22% are landless; as opposed to less than 1%
medium farmers1. More than 50% of the projects beneficiaries are Scheduled Castes (SC),
Scheduled Tribes (ST) and Other Backward Castes (OBC), and 20% are women. The AF will
continue its strong focus on small and marginal farmers, and landless, and strengthen the
participation of women and tribal groups in project interventions.
8. The AF will build on a very strong momentum in project implementation, despite a slow
start and low disbursement levels at the outset of the project. Over the last two years the project
implementation have seen further acceleration as the most of the issues hampering project
implementation in the early years of the project in most of the components and management
activities have been resolved. Original project performance after midterm review has been
strong, and is in full compliance with all covenants. The original project has thus far been rated
“Satisfactory” on its implementation and achievement of its development objectives. Given
improved project implementation capacity further simplification and streamlining in project
1 Small farmers own 1-2 ha of land, marginal farmers own 0.5-1 ha, landless own 0-0.5 ha and semi-medium
farmers own 2-4 ha of land.
5
implementation procedures is planned for additional financing. Additional actions and staffing
arrangements are foreseen for better safeguards compliance.
Table3: Project Performance
ISR Period: May 2010 Dec 2010 May 2011 Nov 2011
Progress towards achievement of PDO S S S S
Overall IP rating S S S S
Financial Management MS MS MS MS
Project Management S S S S
Counterpart Funding S S S S
Procurement S S S S
Monitoring & Evaluation MS MS S S
Overall Safeguard compliance MS MS MU MU
Rational for Additional Finance
9. The proposed Additional Financing (AF) is required to scale up the project’s impact and
development effectiveness through (i) promotion of policy initiatives that build synergies and
convergence with ongoing schemes of the Government of Assam (GOA) and the Government of
India (GOI); establishment a system for sustainable use of groundwater; and mainstreaming
project collaboration with the private sector; as well as (ii) enhancing investments in irrigation,
drainage, mechanization, extension advice, rural haats and market access roads to increase
production, productivity and market access in selected districts. The proposed activities would
help to scale up the impact of the original project in districts where the demand for investment
during the original project was pronounced support the delivery of agriculture and marketing
services, rural road connectivity, produce aggregation and development of farmer producer
organizations in these districts.
10. Finance Plus: The additional financing will support consolidation of the activities
undertaken in original project, enhance the long term sustainability of sector institutions and
project outcomes, and as such provide for the Bank with a credible strategy in exiting from this
operation. This would be done through –
a) Mainstreaming management approaches and best practices acquired under the AACP in
to agricultural operations funded by GoA by strengthening the Assam Rural Infrastructure
and Agricultural Services (ARIAS) Society that implements the parent project; and by
applying the best practices developed under the AACP in managing and monitoring ongoing
agricultural schemes funded by GoA and Government of India (GoI). As a first step, ARIAS
Society would initiate mainstreaming AACP approaches through the GoI supported
Agriculture Technology Management Agency (ATMA)2 program, and based on the
experience gathered in managing this scheme, add other schemes progressively for
mainstreaming. This approach would result in better aligning the many different public
2 ATMA (Agricultural Technology Management Agency) fosters a decentralized, market-led extension system and
was implemented from 1999-2005 under the World Bank assisted National Agricultural Technology Project. Based
on the success of these pilots, GOI is supporting the scaling up of the ATMA method of extension nationally
6
agricultural schemes operated in the State with the aim to better exploit synergies, save
management costs and reduce inter-scheme competition. ARIAS Society will be designated
as the State Nodal Agency for the implementation of GoI ATMA; and the State Project
Director of ARIAS Society will also be designated as the State Nodal Officer responsible for
ATMA in Assam.
b) Establishing a system supporting sustainable groundwater use whereby investments in
shallow tube well irrigation are coupled with a comprehensive monitoring of groundwater
use. The AF will support setting up of automatic groundwater level measuring and recording
systems, and its on-going monitoring. This will enable the Department of Agriculture to take
a more strategic view on future shallow tube well (STW) programs, water recharge structures
and water demand measures such as micro-irrigation system. The groundwater monitoring
would specifically support setting-up the density of STW with respect to hydro-geological
regions and planning water related activities to balance recharge and discharge such as for
fishponds which work as water recharge structures, and agriculture based interventions to
better manage the water demand thereby leading to sustainable use of resources. The
Directorate of Geology and Mining or any other suitable agency will have the overall
responsibility of monitoring the groundwater program and would be involved in the analysis
of the data collected. Department of Agriculture will use this data to maintain the density of
STW within the permissible limits. GoA would designate the Directorate of Geology and
Mining or any other suitable agency for the Ground Water Monitoring Program.
c) Encourage collaboration with the private sector with the aim to promote investments in
agribusiness, foster backward and forward linkages across value chains for agricultural
products, and to provide alternative marketing channels for farmer groups established under
the AACP. The AF will continue to leverage the collaboration with agribusiness enterprises
for value chain development and market linkage; and with International Finance Corporation
(IFC) as a partner, the ARIAS Society will promote the establishment of Farmer Producer
Organizations (FPOs) and development of the SME agribusiness with support of the AF.
d) AF will assist ARIAS to strengthen the existing legal framework in the fisheries sector to
provide an enabling environment for the fishing communities to gain long-term leased access
to their local water bodies with the aim of achieving significantly higher income while also
sustainably managing these water bodies.
11. Scaling up of successful investments: The proposed AF will deepen original operation’s
development impacts in districts where the demand for investment during the original project
was pronounced, support the delivery of agriculture and marketing services, rural road
connectivity, produce aggregation and development of farmer producer organizations in these
districts. Investments will focus on increased crop production through a combination of
increased irrigated Boro rice production, crop diversification, improved extension advice,
expanded use of micro-nutrients, and opening out of additional production areas through
drainage.
a) Increase Agriculture Productivity (crop, fisheries and livestock) – provide additional funding
to agriculture productivity enhancing activities with proven impact and support selected new
7
activities which show a lot of promise. Such activities include: Shallow tube well, farm
mechanizations, fisheries, and livestock. To make stronger impact, additional activities will
be concentrated in selected districts with the highest agriculture growth potential;
b) Improve Market Access – expand project support to improving market access, both by
providing additional funding to successful activities and extension of the some of the
previously more geographically limited programs – state-wide. These activities would
include: support for institutional building through farmer producer organizations, rural haat
markets, expansion of the AACP’s ATMA’s philosophy and training programs to the rest of
the state; rural roads; and partnering with the private sector with IFC linkages.
12. Relationship to CAS: The proposed additional financing activities, as described above,
are consistent with the India Country Assistance Strategy (2009-2012) which calls for achieving
rapid, inclusive growth by expanding agriculture productivity and ensuring sustainable
development through improved natural resources management (particularly water).
III. Proposed Changes
13. The Project Development Objective, design and institutional arrangements would remain
the same as the original project except fine-tuning some aspects of the of the original project.
The Additional Financing would use the same approach and strategy of community driven
development. The proposed additional financing is intended to be allocated to scale up the three
components of the original project, namely Component A: Investment Grant Scheme;
Component B: Agricultural Services and Market Chain Development; and Component C:
Infrastructure Development.
a) Investment Grant Scheme: this component would promote income generating farm
investments by small farmer groups in irrigation, mechanization and fish ponds, and
community investments in micro-watershed drainage and community tank and beel (open
water bodies / Oxbow lake) fisheries. The Additional Finance would finance civil works and
equipment; farmer group and community group mobilization by NGOs; the matching grant
portion of investment costs; extension and training activities and associated incremental
operating costs. Specific investments would include –
o Groundwater monitoring: As per international norms, density of water level and water
quality monitoring stations will be established. This will include installation of
piezometers, digital water-level recorders and water quality sensors (at selected
locations) coupled with telemetric stations. The telemetric system will allow
monitoring at required frequency; Directorate of Geology and Mining or any other
suitable agency will have the overall responsibility for groundwater monitoring
program and would be involved in the analysis of the data collected. The directorate
will be strengthened with modeling facilities for proper groundwater assessment; and
the data will be shared with concerned agencies such as department of Agriculture
who will use it for planning the investment and particularly decide the density of
STW with respect to geological regions.
o Irrigation development would involve formation of 30,000 irrigation groups of 3-5
farmers acquiring Shallow Tube Wells (STW) to irrigate about 75,000 hectares;
o Farm mechanization activities would foster formation of about 900 Agro Service
8
Groups (ASG) made up of 10-20 small farmers acquiring tractors, for own use and
provision of custom hiring service;
o Fish production activities would assist small and marginal farmers to rehabilitate
existing farm ponds covering 800 ha; community groups to undertake similar
development of 300 ha of community owned tanks; and community beel groups to
develop 700 ha of beels; and
o Micro-watershed drainage activities would assist flood plain communities restore
natural drainage lines and reduce annual water logging and crop loss on 15,000 ha.
b) Agricultural Services and Market Chain Development: to address the constraints of
inadequate market linked technology transfer; and absence of producer organizations with
links to markets, this component would support
o Consolidating the ATMA institutions promoted by AACP (in 12 districts) and GOA /
GOI (14 districts) and further strengthen these advisory services by making them
more market oriented. All ATMAs of the state will be brought under the supervision,
monitoring and management under ARIAS Society and the proposed additional
financing will provide necessary support for undertaking this activity. ARIAS Society
shall be designated as the State Nodal Agency for the implementation of GOI ATMA
and may open a separate bank account for the receipt of GOI funds. The State Project
Director of ARIAS Society shall also be designated as the State Nodal Officer for the
implementation of GOI ATMA. ATMA support would include strengthening staff
capacity to deliver marketing extension, preparation of training materials, provision
of need based information technology and other equipment and the establishment of
farmer information and advisory centers and development of Assamese script SMSs
and introduce two-way SMS –based interaction between the line department and with
farmers;
o Under the livestock (dairy, pig, goat) project would support to improve productivity
and market access of targeted farmers and community groups and this would include
procurement of superior parent stock, husbandry and marketing; outsourcing of AI
services to private sector service provider and formation marketing groups; and
o Project will also support those members of agriculture, fisheries and livestock groups
that are undertaking productive activities to form Farmer Producer Organizations.
The project will provide technical and investment support for these institutions to
develop their productive activities and access profitable markets. Project support will
be available based on eligibility criteria that emphasize the demand and the capacity
of the FPOs.
c) Infrastructure Development: to improve rural market infrastructure thereby supporting
efforts towards increased crop production and diversification, to improve market connectivity
by expanding rural road network, and to provide marketing alternative for producers in the
project area, this component will support
o investments in rural roads (about 113 km), covering areas not covered by the PMGSY
in selected districts; demonstration of low-cost road construction and innovative
bridge designs in conjunction with better quality monitoring through independent
9
consultants. The low-cost construction technologies will be used to connect smaller
habitations and linking agriculture production with markets in a cost-effective manner
; and
o This subcomponent will improve basic infrastructure of about 25 wholesale haats
(markets) and about 30 retail haats (village markets) in selected districts where
agriculture production is concentrated. The AF will also support development of
model haats on a pilot basis in three districts.
14. Project cost: The exchange rate adjusted original credit amount for the original project is
US$ 164 million. Of this US$ 128 million has been utilized. As per the latest assessment of
GOA, a further US$ 11 million is likely to be utilized by the current credit closing date of March
15, 2012. Thus, there will be a credit saving of about US$ 25 million as of closing date of the
original credit. This saving is proposed to be utilized during the extended three year project
period, consequent to the proposed additional financing, to take up –scaled activities.
Project Costs3 by component
(In US$ million)
Component Original
project cost
Changes with
AF
Revised
project cost
1: Investment Grant Scheme 66.23 32.17 98.40
2: Agricultural Services and
Market Chain Development 32.22 11.39 44.61
3: Infrastructure Development 115.88 32.17 148.59
Total 214.33 76.27 290.60
Allocation of Additional Financing Credit proceeds by component
(In US$ million)
Component Original credit
allocation
Changes with
AF
Revised
credit
allocation
1: Investment Grant Scheme 23.13 14.72 37.85
2: Agricultural Services and
Market Chain Development 27.67 9.11 36.78
3: Infrastructure Development 103.20 26.17 128.54
Total 154.00 50.00 204.00
15. The implementation arrangements under the proposed additional financing would remain
the same as that of the original project. The ARIAS society will continue to be the Project
Coordination Unit (PCU) and will continue to monitor and coordinate the implementation of the
project. The relevant line Departments of GOA would act as implementing agencies for all
project activities falling within their area of responsibility: Departments of Agriculture (DOA);
Animal Husbandry and Veterinary (AH&VD); Fisheries (DOF); Environment and Forests
(DOEF); Dairy Development Directorate; and the Public Works Department (PWD).
Implementing agencies would make extensive use of NGOs, wherever farmer interest or
community groups are to be formed - following the pattern of the original project.
3 Project Cost includes the contribution from Beneficiaries, GOA and IDA Credit.
10
16. The proposed additional financing activities, as described above, are consistent with the
India Country Assistance Strategy (2009-2012) which calls for achieving rapid, inclusive growth
by expanding agriculture productivity and ensuring sustainable development through improved
natural resources management (particularly water).
17. Outcome indicators: The key outcome indicators would remain unchanged and while
there are changes in the intermediate results indicators. These are captured in the Annex 1
Results Framework. GOA is in the process of rolling out the Performance Management scheme
developed at the Union level in the next few months, for ensuring a greater accountability
mechanism. The scheme is formalized through Results Framework Documents to be drafted and
disclosed by departments. The task team will explore the possibility of ARIAS society helping
Department of Agriculture, GOA in drafting and operationalize the results framework during the
additional financing period.
18. The Closing Date for the original project would be extended; and the revised Closing
Date for both the original project and the additional financing would be March 15, 2015.
IV. Appraisal Summary
19. Economic Analysis: The AF proposes to enhance investments in irrigation,
mechanization, fisheries, extension advice, rural haats and rural roads to increase production,
productivity and market access in rural areas of selected districts. PAD projected ERR for the
original investments are 39.1% for agriculture and irrigation; 18.9% for rural roads; and 20.7%
for fisheries. For overall project the estimated ERR was 21.4% as against the FRR of 19.9%. The
project has met the physical targets (in most of the key investments) and also exceeded the
productivity targets in some of the key interventions. As per the progress reports of M&E
consultants, the project has so far achieved and/or exceeded the EOP targets by about 20% in
respect of crop productivity, fish productivity and crop diversification. Hence, the projected ERR
will not only be realized, but likely to be exceeded by EOP. AF is focusing on enhancing the
investments that are already generating much higher returns than originally projected in PAD.
Estimated ERR for the AF investments are 23% for fisheries, 43.4% for agriculture and irrigation
and 49% for micro watershed drainage. Overall ERR for the AF investment for AACP is
estimated at 24.5%. The projected benefits are quiet robust, as demonstrated by sensitivity
analysis. With 20% reduction in benefits and 20% increase in costs considered together, overall
ERR for the AF still remained above 15%.
20. Financial Management: The financial management arrangements for the additional
financing will largely remain the same. The financial management arrangements have been
moderately satisfactory, primarily due to (i) large number of accounting centers across
departments and (ii) weak capacity and delays in reporting by Community Interest Groups
(CIGs) resulting in delays in financial reporting. In order to address this the following measures
have been agreed - PCU will contract directly district level finance consultants (who would be
provided with laptops with TALLY customized as per revised chart of accounts) who will be
responsible for (i) updating the monthly accounts from the manual cash book and ledgers being
maintained by the line department accounting centers and send the reports to PCU for
consolidation on a monthly basis and (ii) also support/train on financial management aspects the
various community groups under fishery & forestry. This combined with the reduction in number
11
of districts to 17 from 27 and reduction in disbursement categories (see below) is expected to
ensure timely submission of IFRs. An acceptable audit report for FY 2010-11has been submitted
by the project and the additional audit assurance by way of sample verification of community
assets/ CIGs will be continued.
21. Report-based Disbursement: Disbursement under the on-going project is based on SOE
and there are 7 disbursement categories with varying reimbursement percentage which imposes
considerable transaction cost on the project. It is proposed to shift to quarterly report based
disbursement (quarterly IFRs) for both the on-going project (w.e.f April 1, 2012) and for
additional financing and also consolidate the disbursement categories to two with a common
reimbursement percentage. The following table specifies the categories of Eligible Expenditures
that may be financed out of the proceeds of the Financing (“Category”), the allocations of the
amounts of the Financing to each Category, and the percentage of expenditures to be financed for
Eligible Expenditures in each Category:
Category Amount of the
Financing Allocated
(expressed in SDR)
in million
Percentage of
Expenditures to be
Financed
(inclusive of Taxes)
in million
(1) Goods, works, non-
consulting services, consultants’
services, training and operating
costs
25.600 80%
(2) Grants
7.000
80% of the amounts
disbursed by GoA
under a Sub-project
TOTAL AMOUNT 32.600
22. Procurement: The Project has established a robust procurement management system
with dedicated staff at the PCU and two committees headed by the State Project Director and the
Agriculture Production Commissioner with delegated financial authorities respectively, for
reviewing and approving procurement activities based the contract value. For procurement of
hand pumps and other items used at community level, an elaborate community procurement
process is followed which is now recognized as a good practice innovation across the sector. The
project has established a procurement monitoring and impact assessment system using
independent auditors and NGOs for the community procurement and the reports from these
sources acts as the data used for used for triangulating the process and beneficiary details which
are uploaded on line by district and sub district level project MIS. Progress on procurement plan
has been satisfactory and most of the items listed in the first phase of the project are completed.
Except for minor deviations reported, post procurement reviews have not revealed any
significant systemic or capacity constraint in procurement implementation in the project. Rural
Roads and markets construction would be undertaken by the Assam PWD, the e-Procurement
12
solution recently cleared by the World Bank based on an assessment for the Assam State Roads
Project will be used.
23. Procurement of all goods, works and non-consulting services required for and to be
financed from the additional financing project shall be in accordance with the requirements set
forth or referred to in Section I of the “Guidelines: Procurement under IBRD Loans and IDA
Credits” (dated January 2011). Procurement of consulting services shall be in accordance with
“Guidelines: Selection and Employment of Consultants by World Bank Borrowers” (January
2011) and the provisions stipulated in the Financing Agreement. Based on the above assessment,
the following methods and value thresholds are proposed for the project based on a Moderate
risk rating:
Category Prior Review
Thresholds (USD
mill)*
Procurement Method Thresholds Proposed (USD million)
ICB NCB Shopping QCBS QBS CQS LCS/
FBS SSS
Goods 0.5
≥0.5 <0.5 <0.05 (0.01 for all
Direct Contracts) Works 10 ≥10 <10 <0.10
Consulting
Services
0.5 for firm
NA NA NA default TBD <0.1 <0.2 TBD
0.05 for
Individuals
(0.01 for all
SSS)
Operating expenditures are not subject to Procurement and Consultant Guidelines;
In case of a slice and package arrangement, the prior review threshold is determined
based on the aggregate value of individual contracts (including all taxes and duties
payable under the contract) to be awarded.
A contract that is post review will be subject to prior review if the price of the lowest
evaluated responsive bid exceeds the prior review threshold at the bid evaluation stage.
For consultants, it is the financial offer of the selected firm that determines whether the
contract is subject to prior review.
Community Participation in Procurement (as per provisions para 3.19 of the guidelines)
will be the method followed for items identified to be procured with community
participation.
Force account will be the method followed for repairs and minor works subject to a
maximum ceiling of US $ 10,000 per activity.
24. Safeguards: The social safeguard performance of AACP is moderately unsatisfactory
primarily due to delay in providing rehabilitation assistance to 10 project affected persons
(PAPs) adversely affected by rural roads up gradation. The Social Management Unit (SMU) of
AACP has prepared a remedial Social Safeguard Action Plan for Rural Roads, and a social
13
mitigation plan for the 10 PAPs. All PAPs will be provided applicable resettlement assistance by
15 March 2012. Notwithstanding the provisions of Part A of this Section, withdrawal shall only
be made for payments made under Category (1) once the Association has received satisfactory
evidence, that Assam has duly made all Resettlement Payments due under the Original Project
in accordance with the provisions of the relevant social mitigation and/or resettlement plan
prepared under the Resettlement and Rehabilitation Policy.
25. The SMU has taken several steps and completed several important follow up actions: re-
orientation of project staff and NGOs on R and R policy provisions, strengthened consultations
and documentation of voluntary land donation, rapid socioeconomic impact assessment and
preparation of mitigation plan. A fulltime social development specialist (SDS) and dedicated R
and R nodal staff in SMU and PWD are now available to implement the plan. The action plan
will also ensure strengthened consultations and information sharing, proper documentation on
land donation process, training for project staff and NGOs, external audit and strengthened
monitoring support through Bank STC during AF. A policy learning workshop on R and R and
an external audit will also be held during the AF
26. On the environmental safeguards, the project is making efforts to complete the mandatory
testing for presence of Arsenic and Fluoride in shallow tube wells (STW) water samples, as the
gap between installed STW and samples tested is increasing. The project will complete testing of
all samples by March 15, 2012. It has been agreed that the 20,000 samples tested until now
would be mapped to identify sensitive and safe blocks with respect to presence of Arsenic and
the maps would be updated once all samples have been tested. The Bank team was assured that
sample collection would restart to cover the gap. Based on this mapping, the Bank would review
the mandatory condition for testing all STW samples and may consider diluting this for the safe
blocks. Further scaling up of STW distribution would be based on the findings of the on-going
updating of the Safe Yield of Groundwater study, which is likely to be completed by November
30, 2011 for the six target districts. The external audit on EMF implementation has revealed
some shortcomings. The AF will include a time bound action plan comprising consultancy,
training, external audit and monitoring support for safeguards, in addition to having a full time
social development specialist. The Environment and Social cells in ARIAS would continue to be
fully staffed during the AF. The implementation of these plans will monitored during project
supervision by Bank task team members with the appropriate skills.
14
Annex 1: Results Framework and Monitoring
INDIA: ASSAM AGRICULTURAL COMPETITIVENESS PROJECT (AACP) (CR. 4013-IN)
Results Framework
Revisions to the Results Framework Comments/
Rationale for Change
PDO
Current (PAD) Proposed
To increase the productivity
and market access of targeted
farmers and community
groups.
No Change
PDO indicators
Current (PAD) Proposed change*
Increased Crop Productivity
(i) Paddy
(ii) Mustard
(iii) Vegetables (Cabbage
& Cauliflower)
Increase in Crop Productivity
(i) Boro season Paddy - revised
(ii) Mustard
(iii) Vegetables (Cabbage &
Cauliflower)
Since Boro season paddy is an
additional crop due to project
intervention (STW) its impact
needs to be tracked separately.
Cropping Intensity in project
area.
No Change
Gross Cropped Area (in
STW/LLP farms)
Cereals
Oil Seeds
Fruits
Vegetables
Total non foods
grains
No Change
Percentage marketed surplus
to production:
Paddy
Mustard
Vegetables
Milk
Fish
No Change
Increased Fish Productivity
(i) Ponds
(ii) Beels
(iii) Tanks
No Change
Increased Milk Productivity
(i) Cross Bred Cows
(ii) Local Cows
No Change
Project Beneficiaries New Core indicator added
Intermediate Results indicators
Current (PAD) Proposed change*
Number of STW Area irrigated by STWs - Revised Indicator revised to track the
additional area that is brought
under assured irrigation
Drained area brought under New This will help the project to track
15
Revisions to the Results Framework Comments/
Rationale for Change cultivation the Micro-watershed drainage
activities
Increase in crop productivity
in drained lands under
cultivation
New To track productivity of the
reclaimed area under the Micro-
watershed drainage activities
Fishery groups reporting
increased fish productivity
New Help in tracking the number of
groups that are having high levels
of productivity and also if these
yields are sustainable.
Farmers participating in
ATMA demonstrations adopt
at least 50% of the
technologies demonstrated
New Will determine the adoption rates
of the improved technologies
demonstrated by ATMA
Improved progeny produced
through AI (outsourcing)
New Outsourcing is being piloted under
the AF
* Indicate if the indicator is Dropped, Continued, New, Revised, or if there is a change in the end of project target value
16
REVISED PROJECT RESULTS FRAMEWORK
Project Development Objective (PDO): To increase productivity and market access of targeted farmers and community groups. (No Change)
PDO Level Results Indicators4
Co
re
UOM5
Baseline
Original
Project
Start
(2006)
Progress
To Date
(July
2011)6
Cumulative Target Values7 #
Frequency Data Source/
Methodology
Responsibility
for Data
Collection
Comments 2012 2013 2014 2015 @
(by
March)
1. Increase in Crop Productivity
(i) Boro Season Paddy
(Revised)
(ii) Mustard
(iii) Vegetables (Cabbage &
Cauliflower)
Periodic Survey External M&E
agency
Measured as t/ha of
crop yield in the new
STW irrigated
command area
t/ha 1.5 5.7 - 4.5 - 5.0
t/ha 0.6 0.8 - 0.7 - 0.8
t/ha 7.0 10.5 - 7.0 - 8.5
2. Increase in Fish Productivity
(i) Ponds
(ii) Tanks
(iii) Beels
Periodic Survey External M&E
agency
Fish productivity
measured as t/ha of
WSA from new CIGs
for ponds, new CTGs
for tanks and new
Beels
t/ha 0.485 3.00 - 2.50 - 2.75
t/ha 0.850 2.50 - 1.75 - 2.25
t/ha 0.480 1.00 - 0.60 - 0.75
3. Increase in cropping intensity % 130 180 - 165 - 195 Periodic Survey External M&E
agency
Measured as % of
gross cropped area to
the net area in new
STW commands
4. Increase in crop diversification
(i) Area under cereals
(ii) Area under high value crops
%
Periodic Survey External M&E
agency
Measured as a
proportion of gross
cropped area in new
STW commands
83 78 - - - 80
17 22 - - - 20
4 Please indicate whether the indicator is a Core Sector Indicator (for additional guidance – please see http://coreindicators). 5 UOM = Unit of Measurement. 6 For new indicators introduced as part of the additional financing, the progress to date column is used to reflect the baseline value. 7 Target values should be entered for the years data will be available, not necessarily annually. Target values should normally be cumulative. If targets refer to annual values, please indicate
this in the indicator name and in the “Comments” column.
# Targets are for the project interventions completed during the first year. Same targets apply for the project interventions in subsequent years.
@ All the indicator values realized in 2011 are due to sustained project interventions through infrastructure (irrigation/ponds/tanks/beels/markets/rural roads) development, mechanization,
and extension (ATMA) approaches spreading over five seasons covering 104,692 ha until 2011. During AF period (2012 to March 2015), new areas (120,308 ha) are projected to come under
similar project interventions. But these new areas will fully go through only three seasons (2012/13, 2013/14 and 2014/15). Even here, the impact of the third season (2014/15) will not be
captured in the EOP Impact Assessment, since the project is ending in March 2015. Now only with two seasons available for the new areas, it is not feasible to realize the same indicator
values as recorded in 2011. It will be lower than the current levels but higher than the PAD projected levels (for the parent project) since current levels (2011) for most of the indicators are
higher than the PAD projected targets.
17
5. Increase in marketed surplus
(i) Paddy
(ii) Mustard
(iii) Vegetables
Periodic Survey External M&E
agency
Measured as a percent
of production sold by
the farmers.
% 18 47 - 30 - 45
% 17 61 - 30 - 45
% 28 89 - 45 - 65
Project Development Objective (PDO): To increase productivity and market access of targeted farmers and community groups. (No Change)
PDO Level Results Indicators C
ore
UOM8
Baseline
Original
Project
Start
(2006)
Progress
To Date
(July
2011)9
Cumulative Target Values10 Frequency Data Source/
Methodology
Responsibility
for Data
Collection
Comments
6. Beneficiaries11
Project beneficiaries (new) Number Not
recorded 300000 - - - 410000
End of
Project PIU/Survey PCU/PIU/M&E
Of which female (beneficiaries)
(new) Number
Not recorded
60000 - - - 82000 End of
Project PIU/Survey PCU/PIU/M&E
8 UOM = Unit of Measurement.
9 For new indicators introduced as part of the additional financing, the progress to date column is used to reflect the baseline value.
10 Target values should be entered for the years data will be available, not necessarily annually. Target values should normally be cumulative. If targets
refer to annual values, please indicate this in the indicator name and in the “Comments” column. 11
All projects are encouraged to identify and measure the number of project beneficiaries. The adoption and reporting on this indicator is required for
investment projects which have an approval date of July 1, 2009 or later (for additional guidance – please see http://coreindicators).
18
Intermediate Results and Indicators
Intermediate Results Indicators
Co
re Unit of
Measur
ement
Baseline
Original
Project
Start
(2006)
Progress
To Date
(July
2011)12
Cumulative Target Values
Frequency Data Source/
Methodology
Responsibility
for Data
Collection
Comments 2012 2013 2014 2015 @
(by
March)
Intermediate Result 1: Investment Grant Scheme
1. STWs installed and operated Number 100 41877 60000 75000 90000 - Annual PIU/Survey PCU/PIU/M&E Cumulative
2. Area irrigated by STWs - Revised Ha - 104,692 150,000 187,50
0 - 225000 Annual PIU/Survey PCU/PIU/M&E Cumulative
3. Drained area brought under
cultivation - (new) Ha - 15000 15000 22500 - 30000 Annual PIU/Survey PCU/PIU/M&E Cumulative
4. Increase in crop productivity in
drained lands under cultivation -
(new)
t/ha - 1 - - 1.5 2.0 Annual PIU/Survey PCU/PIU/M&E Cumulative
5. ASGs operating at financially
sustainable levels % - 70 - 75 80 85 Annual PIU/Survey PCU/PIU/M&E
Measured as a % of
ASGs operating
above breakeven
point levels of 750
hrs per year
6. Fishery groups reporting
increased fish productivity - (new)
CIGs
CTGs
Beels
Annual PIU/Survey PCU/PIU/M&E
By at least 200% for
CIGs and CTGs and
at least 100% for
beels over the
baseline
% - 80 - 80 85 85
% - 70 - 70 75 80
% - 60 - 60 65 70
Intermediate Result 2: Agricultural Services and Market Chain Development
7. Farmers participating in ATMA
demonstrations adopt at least 50% of
the technologies demonstrated -
% 0 15 - 25 40 50 Annual PIU/Survey PCU/PIU/M&E
Measured as % of
ATMA farmers
adopting at least
12
For new indicators introduced as part of the additional financing, the progress to date column is used to reflect the baseline value.
19
Intermediate Results and Indicators
Intermediate Results Indicators
Co
re Unit of
Measur
ement
Baseline
Original
Project
Start
(2006)
Progress
To Date
(July
2011)12
Cumulative Target Values
Frequency Data Source/
Methodology
Responsibility
for Data
Collection
Comments 2012 2013 2014 2015 @
(by
March)
(new) 50% of the
technologies to
which they are
exposed
8. Number of Dairy cooperative
working Number 35 90 110 130 155 175 Annual Survey
External M&E
agency
Measured as
number of DCS
collecting at least
100 lits of milk per
day one year after
formation
Intermediate Result 3: Infrastructure Development
9. Villages connected with improved
rural roads Number 189 - - - - 1350
End of
Project Survey
External M&E
agency
To be done at end of
project assessment.
10.Increase in traffic density on
completed roads by 200%
Number
of
vehicles
/day
96 - - - - 285 End of
Project Survey
External M&E
agency
To be done at end of
project assessment.
11.Increase in trading volume of
improved markets by 30% Tons 393 - - - - 510
End of
Project Survey
External M&E
agency
To be done at end of
project assessment.
20
ANNEX 2: OPERATIONAL RISK ASSESSMENT FRAMEWORK (ORAF)
Board Package Version13
Project Development Objective(s)
The project development objective (PDO) of the on-going AACP is to increase the productivity and market access of targeted farmers and
community groups.
PDO Level Results Indicators: 1. increased yields of crops, fish and livestock products
2. increase in the proportion of marketed surplus
Risk Category
Risk
Rating
Risk Description Proposed Mitigation Measures
Project Stakeholder Risks
Low All the stakeholders need to come together to
enable ARIAS in the coordination,
management and monitoring of various
government’s agriculture schemes.
The Bank has already held multiple rounds of
meetings with GoA where this was discussed in
detail. There is a strong political and
administrative support for ARIAS managing the
government scheme. All government schemes
would not be taken at a time. As a first step
ARIAS would start the support for ATMA
program funded by Government of India and
progressively other schemes would be added.
Implementing Agency Risks
Medium
Non compliance with the project accounting
requirements and delays in financial reporting.
The number of accounting centers is proposed to
be reduced; the financial management
requirement for CIGs has been simplified and the
finance capacity in PCU will be strengthened
further.
13
This is the version that should be used for Negotiations and submission for Board Approval.
21
Low
Non compliance with agreed procurement
arrangements and project not maintaining the
required procurement capacity in the project.
Poor implementation capacity of the user
groups.
While the original project is successful, by
scaling up with expanded scope of work will
place additional demands on the PCU and the
implementing agencies and may dilute the
quality of implementation or the agency’s
capacity to monitor this quality in the field.
External interference in selection of the of
project districts and the beneficiaries
The assets supplied to CIGs may not be
utilized / misused or be disposed off by
beneficiaries
Poor procurement outcomes, delays and non
utilization of the items
Prior and post review arrangements and regular
supervision from Bank.
Project will provide support through NGOs for
social mobilization, training, technical and
management support to the user groups.
Adequate capacity to implement the existing
project has been built at State and District levels,
however, the ARIAS is revisiting its
organizational structure and staffing capacity, to
ensure that this is adequate and sufficiently
responsive to meet the additional demands of
expansion.
Project Implementation Plan (PIP) for the
implementation will include the responsibilities
of implementing agency, service standards,
eligibility criteria, eligible proposals, selection
criteria, and negative list for funding, funds flow,
procurement arrangement and other rules of the
game. The project districts for Additional
Financing would be identified during the
preparation phase
Sample verification of assets delivered to CIG
will be continued under additional financing.
Mandatory disclosures and Complaint
management mechanism to be used for potential
F&C Indicators
22
Project Risks
Design
Low
Low adoption rate of new technologies and
technical advice by farmers and user groups.
Increase in crop production due to project
intervention may not have sufficient markets
for sale / storage of excess production
ATMA approach will be followed which takes a
bottom up approach for the identification of
farmer’s technology needs, based on which the
extension plans for both production and
marketing will be developed and implemented.
Project will assist the communities in identifying
new markets and establishing new contacts,
based on the experience gained from the
collaboration made with Private Sector under
original credit.
Social and
Environmental
Substantial
The Rural Roads component could result in
small to moderate level adverse impacts in
some packages.
Delay in testing for presence of Arsenic and
Fluoride in shallow tube well water samples
prior to installation.
The social management unit (SMU) will be
strengthened with fulltime social development
specialist, refresher training programme for staff
and NGO partners, and additional consultant
support for implementing and monitoring the R
and R/ social action plan more effectively and
regular reporting of social performance.
Over 40,000 results of water samples tested
would be mapped block-wise to identify sensitive
and safe blocks with 100% testing to be
continued in sensitive blocks. At least 20,000
samples would be mapped by Nov 30, 2011.
Guwahati University would be provided with
appropriate financial resources to ensure
adequate human resources for timely testing of
collected samples.
Program and Donor
NA NA
Delivery Quality
Low
Group / community assets will not be
maintained or their use will be captured by
local elites.
Project has already developed a well functional
transparent beneficiary selection procedures
including the scorecard – this will be further
23
Medium
Lack of coordination among the Implementing
agencies can adversely impact the project
implementation.
strengthened and this will be followed with
extensive use of NGOs to effect social
mobilization; Non selected groups would be
informed in writing with reason for non selection
within a specified time frame of 15 days.
Effective Training would be organized for the
Agricultural Service Group (ASG) members
owning tractors and power tillers and Area
Groups in land development under the project.
Implementation arrangements under the proposed
additional financing would remain the same as
for the original project. The ARIAS society will
continue to be the Project Coordination Unit and
will continue to monitor and coordinate the
implementation of the project. The society has
build capacity in the project coordination. This
will be further strengthened during the additional
financing. Project has also setup a Governing
Body, chaired by the Agricultural Production
Commissioner and with active participation of
the Commissioners and Secretaries of
implementing line Departments, along with the
Finance and the Planning and Development
Departments, under the overall guidance of the
Chief Secretary.
Overall Risk Rating at
Preparation
Overall Risk Rating During
Implementation Comments
Medium Medium
The proposed Additional Financing is on a solid
base of knowledge and capacity on implementing
successful original project. This risk template would
be reviewed and updated throughout preparation.
