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Document of
The World Bank
Report No: 20168-NI
PROJECT APPRAISAL DOCUMENT
ONA
PROPOSED CREDIT
IN THE AMOUNT OF US$23.63 MILLION EQUIVALENT
TO THE
REPUBLIC OF NICARAGUA
FOR A NICARAGUA
AGRICULTURAL TECHNOLOGY PROJECT
IN SUPPORT OF THE FIRST PHASE OF THE NICARAGUA AGRICULTURAL TECHNOLOGYAND TECHNICAL EDUCATION AND TRAINING PROGRAM
Environmentally and Socially Sustainable Development Sector Management UnitHuman Develoment Sector Management UnitCentral America Country Management UnitLatin America and the Caribbean Region
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CURRENCY EQUIVALENTS
(Exchange Rate Effective 04/06/00)
Currency Unit i Cordo ba1 Cordoba=- US$ .0827
US$ 1 = 12.29
FISCAL YEARJanuary 1 to December 31
ABBREVIATIONS AND ACRONYMS
AKIS Agricultural Knowledge & Information Systems IDA Intemational Development AssociationALIDES Alianza Centroamericana para el Desarrollo Sostenible IDR Institute for Rural Development (Instituto de Desarrollo Rural)APL Adaptable Program Lending IFAD Intemational Fund for Agricultural DevelopmentARS Annual Rapid Surveys IICA Instituto Interamericano Para la Cooperacion AgricolaATLMP Agricultural Technology and Land Management Project INATEC National Institute for Technical Training (Instituto Nacional
Tecnologico)ATPI Public Cofinanced Technical Assistance INTA Nicaraguan Institute of Agriculture Technology (Instituto
Nicaraguense de Tecnologia Agropecuaria)ATP2 Private Cofinanced Technical Assistance LACI PMR Loan Administration Change Initiative Project Management ReportATPM Mass Public Technical Assistance LSMS Living Standards Measurement SurveyATTEP Agricultural Technology and Technical Education Program M&E Monitoring and EvaluationAWP Annual Work Plan MAG-FOR Ministry of Agriculture, Livestock and Forestry (Ministerio
Agropecuario y Forestal)BANADES Public Rural Development Bank (Banco Nacional de Desarrollo) MARENA Ministry of Environment and National Resources (Ministerio del
Ambiente y Recursos Naturales)CAS Country Assistance Strategy MECD Ministry of Education (Ministerio de Educacion, Cultura y
Deportes)CATIE Centro Agronomico Tropical para la Investigacion y Ensenanza NPV Net Present ValueCETA INATECs Agricultural Education Centers/Curriculum scolarum of OED Operations Evaluation Department
technical agricultural schoolsCIAT Centro de Investigacion de Agricultura Tropical PAEF Farm Entrepreneurial Administration Plan (Plan de Administracion
Empresarial de Fincas)CIMMYT Centro Intemacional Para el Mejoramiento de Maiz y Trigo PASOLAC Proyecto de Agricultura sostenible de Laderas en Centro AmericaCOSINTA Council of the Nicaraguan System for Agricultural Technology PIP Project Implementation Plan
(Consejo del Sistema Nicaraguense de Technologia Agropecuaria)COSUDE Cooperacion Suiza al Desarrollo RPC Project Concept ProposalDGTA Directorate General of Agricultural Technology (Director General de PPF Project Preparation Facility
Technologia Agropecuaria)DTA Directorate for Agricultural Technology (Directorio de Tecnologia PRM Programa Regional del Maiz
Agropecuaria)EA Environmental Analysis PROTIERRA Rural Municipalities Project (Proyecto Municipios Rurales)ERR Economic Rate of Retum SA Social AnalysisFAITAN Support Facility for Nicaraguan Agricultural Technological Researc SIA Agricultural Technology Information System (Sistema de
(Fondo de Apoyo a la Investigacion Tecnologica Agropecuaria de Informacion Agropecuaria)Nicaragua)
FARMOD Farm Models SIL Sector Investment LoanFAT Support Facility for Technical Assistance (Fondo de Apoyo a la SMPs Small and Medium-Scale Producers (Pequeno y Mediano
Asistencia Tecnica) Productores PMP)FBC Formacion Basada en Competencias SINTA National System for Agricultural TechnologyFOMENTA Programa de Fomento a la Atraccion Animal TOR Terms of ReferenceGON Government of Nicaragua UTM Municipal Technical Units
Vice President: David De FerrantiCountry Manager/Director: Donna Dowsett-Coirolo
Sector Manager/Director: Thomas B. WiensTask Team Leader/Task Manager: Norman Bentley Piccioni
NICARAGUAAGRICULTURAL TECHNOLOGY PROJECT
CONTENTS
A. Program Purpose and Project Development Objective Page
1. Program purpose and program phasing 3
2. Project development objective 4
3. Key performance indicators 4
B. Strategic Context
1. Sector-related Country Assistance Strategy (CAS) goal supported by the project 4
2. Main sector issues and Government strategy 4
3. Sector issues to be addressed by the project and strategic choices 6
4. Program description and performance triggers for subsequent loans 7
C. Program and Project Description Summary
1. Project components 11
2. Key policy and institutional reforms supported by the project 14
3. Benefits and target population 14
4. Institutional and implementation arrangements 15
D. Project Rationale
1. Project altematives considered and reasons for rejection 16
2. Major related projects financed by the Bank and other development agencies 17
3. Lessons learned and reflected in proposed project design 19
4. Indications of borrower commitment and ownership 21
5. Value added of Bank support in this project 21
E. Summary Project Analysis
1. Economic 21
2. Financial 22
3. Technical 23
4. Institutional 245. Environment 25
6. Social 277. Safeguard Policies 28
F. Sustainability and Risks
1. Sustainability 29
2. Critical risks 293. Possible controversial aspects 30
G. Main Credit Conditions
1. Effectiveness Condition 302. Other 30
H. Readiness for Implementation 31
I. Compliance with Bank Policies 31
Annexes
Annex 1: Project Design Summary 34Annex 2: Project Description 43Annex 3: Estimnated Project Costs 61Annex 4: Cost Benefit Analysis Summary, or Cost-Effectiveness Analysis Summary 62Annex 5: Financial Summary for Revenue-Earning Project.Entities, or Financial Summary 67Annex 6: Procurement and Disbursement Arrangements 68Annex 7: Project Processing Schedule 77Annex 8: Documents in the Project File 78Annex 9: Statement of Loans and Credits 79Annex 10: Country at a Glance 81Annex 11: Govermnent of Nicaragua Letter fo Development Program 83Annex 12: Indigenous People Participation Plan 86Annex 13: Environmental Management Plan 93
MAP(S)Map IBRD 22428
NICARAGUA
Agricultural Technology Project
Project Appraisal Document
Latin America and Caribbean RegionLCSER
Date: May 1, 2000 Team Leader: Norman Bentley PiccioniCountry Manager/Director: D-M Dowsett-Coirolo Sector Manager/Director: John RedwoodProject ID: P064915 Sector(s): AY - Other AgricultureLending Instrument: Adaptable Program Loan (APL) Theme(s): Rural Development
Poverty Targeted Intervention: N
Program Financing DataEstimated
APL Indicative Financing Plan Implementation Period Borrower-(Bank FY) r__
IDA Others Total Commitment ClosingUS$ m % US$ m US$ m Date Date
APL 1 23.63 61.7 14.65 38.28 10/01/2000 09/30/2004 Government of NicaraguaLoan/C redit__ _ _ _ ___ _ _ _ _ _ _ _ _ _ _ _ _ _
APLo2 39.20 75.4 12.80 52.00 10/01/2004 09/30/2008 Govemment of NicaraguaLoan/Credit
APL 3 41.10 74.9 13.80 54.90 10/01/2008 09/30/2012 Government of NicaraguaLoan/Credit
APL 4 20.90 59.9 14.00 34.90 10/01/2012 09/30/2016 Government of NicaraguaLoan/
Credit__ _ _ _ _
Total 124.83 55.25 180.08
Project Financing DataD Loan O Credit g Grant O Guarantee O Other (Specify)For Loans/CreditslOthers:Amount (US$m): 23.63
Proposed Terms: Standard CreditGrace period (years): 10 Years to maturity: 40Commitment fee: 0.5% Service charge: 0.75%Financing Plan: Source Local Foreign TotalGOVERNMENT 5.65 0.00 5.65IBRDIDA 18.37 5.26 23.63INTERNATIONAL FUND FOR AGRICULTURAL 3.04 0.58 3.62DEVELOPMENTSWISS DEVELOPMENT COOPERATION 2.34 0.00 2.34BENEFICIARIES 3.01 0.03 3.04
Total: 32.41 5.87 38.28
Borrower: REPUBLIC OF NICARAGUAResponsible agency: MAG-FORMinistry of Agriculture, Livestock and Forestry (Ministerio Agropecuario y Forestal - MAG-FOR)Address: Carretera a Masaya, Km 8 1/2 - Managua, NicaraguaContact Person: Oscar NeiraTel: 505 276-0928 Fax: 505 2760770 Email: [email protected]
Other Agency(ies):National Institute of Agricultural Technology (Instituto Nicaraguiense de Transferencia Agropecuaria - INTA)Contact Person: Genaro MufiizTel: 505 278-0469 Fax: 505 278-1259 Email: [email protected] Institute of Technology (Instituto Nacional Tecnologico - INATEC)Address: El Zurnen, Centro Civico, Modulo "U"Contact Person: Roberto MoreiraTel: 505 2651014 Fax: 505 265-1014 Email: [email protected] disbursements ( Bank FYIUS$M):
Fy 2001 2002 2003 25Annual 2.9 6.4 6.3 5.3 2.4
Cumulative 2.9 9.3 15.6 20.9 23.3
Project implementation period: 2000-2004Expectedeffectivenessdate: 11/01/2000 Expected closing date: 09/30/2004
OCS APL PAD Fonn: RF Malch. 2DO
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A. Program Purpose and Project Development Objective
1. Program purpose and program phasing:
The Nicaragua Agricultural Technology Program draws from and expands upon the experience of theAgricultural Technology component of the Nicaragua Agricultural Technology and Land ManagementProject (ATLMP - Id. 7780). The program purpose is to increase agricultural productivity and familyincome of 110,000 small and medium-scale farm households (SMFs) through the generation/enhancementof an efficient, demand-driven, agricultural technology knowledge and innovation system. The program willbe carried out in phases, tentatively identified as follows:
Phase I (2000-2004) - System establishment by: (i) initiating the reforms necessary to strengthen thepublic institutions responsible for agricultural technology development and creating guidelines to guaranteethe interaction of public and private sector institutions and their participation in the program; (ii) setting upa competitive fund for agricultural services; (iii) defining the new role for and reforming the NicaraguaInstitute of Agricultural Technology (INTA); (iv) defining a strategy for, and piloting an agriculturaltechnical education & training system; and (v) setting up an agricultural information system (SIA).
Phase II (2004-2008) - System strengthening by: (i) consolidating the institutional reforms; (ii) fine tuningthe mechanisms for competitive funding of agricultural services and introducing additional grant facilities;(iii) improving INTA's capacity for strategic and applied research, technical assistance, and production ofbasic and registered seed; (iv) increasing the coverage of technical, vocational, in-service training programsfor technical assistance staff, agricultural public sector staff and farmers, and rehabilitating additionaltechnical centers; and (v) strengthening the agricultural information system.
Phase mI (2008-2012) - System expansion by: (i) improving the coverage and portfolio of the competitivefund for agricultural services; (ii) increasing the sophistication of INTA's agricultural services and portfolioof service providers receiving support from INTA as a second-tier provider; (iii) increasing the coverage oftechnical, vocational, in-service training programs for extension staff, agricultural public sector staff andfarmers nation-wide, and rehabilitating five additional technical centers; and (iv) extending the agriculturalinformation system to individual farmers and farmers'organizations at national level.
Phase IV (2012-2016) - System consolidation by: (i) maximizing coverage and portfolio of the competitivefund, including agricultural research, technical assistance and agricultural education & training; (ii) fullypositioning INTA as a provider of strategic and applied research, second-tier services, and technicalassistance; (iii) supporting an operational agricultural technical education & training system whichprepares technicians, farmers, administrators and managers for changes in the competitive national andglobal market; and (iv) maximizing of agricultural information system availability and use at lowest levels.
At the end of the last phase, it is expected that Nicaragua will have a clearly identifiable client-oriented,knowledge-based agricultural technology system that promotes the interaction of agricultural research,technical assistance and agricultural technical education & training to generate, promote and diffuseeconomically profitable agricultural innovation and information.
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2. Project development objective: (see Annex 1)
The Project development objective reflects the Program's goal, aiming to establish an efficient,demand-driven, agricultural technology, knowledge and innovation system. At the end of the Project, orfirst phase of the Program, it is expected that: (i) the main public agricultural technology institutions will beproviding effective, coordinated sector policy guidance and client-responsive services; (ii) the privatesector, the non governmental organizations, and the educational institutions will be participatingsignificantly in providing agricultural services to client farners; (iii) the public sector will be proactivelyundertaking strategic and basic research and providing advisory services that generate positiveexternalities; (iv) a national agricultural technical education training strategy will have been defined and apilot begun; and (v) timely, high quality agricultural and market information will be available to techniciansand farners.
3. Key performance indicators: (see Annex 1)
Project outcome indicators would include: (i) 60,000 SMEs receiving advisory services; (ii) 80 percentadoption of new practices by SMFs; (iii) 60 percent of satisfaction rate on the quality of services received;(iv) 35 percent increase in number of researchers, specialists, technical assistance staff and trainersworking on technological solutions in the system; and (v) 20 percent of the total national inventory oftechnologies aimed at resolving problems of SMFs provided by universities and private sector researchinstitutions (profit and non-profit).
B. Strategic Context1. Sector-related Country Assistance Strategy (CAS) goal supported by the project: (see Annex 1)Document number: 17496IDA/R 98-32; IFC/R 98-44 Date of latest CAS discussion: 04/09/98
Revitalization of agriculture and rational exploitation of the country's abundant natural resources is at thecenter of IDA's agricultural development strategy in Nicaragua, as articulated in the most recent CAS(Report No. 17496 March 18, 1998), which focuses on four core themes: (i) land markets, by resolving theissue of property rights; (ii) agricultural financial markets, by taking the government out of agriculturalbanking and promoting the development of incipient agricultural private banking network and sustainablenon-bank intermediaries; (iii) agricultural technology markets, by promoting innovation in the delivery oftechnical assistance services with private sector participation and appropriate research; and (iv)agricultural markets, by improving communications, privatizing grain storage facilities and making priceand production information available. Within this framework, the government will invest in public goodssuch as agricultural research and agricultural education & training by allowing the private sector to step in,and pass legislation to ensure fair competition and consumer rights.
2. Main sector issues and Government strategy:
Over the last decade, Nicaragua has consistently ranked among the poorest countries in Latin America interms of per capita GDP. Much of this poverty is concentrated in the agricultural sector, with the 1993LSMS showing 75 percent of agricultural households living in poverty, with a third in extreme poverty(World Bank, 1995). The most recent LSMS provides evidence, however, that the incidence of extreme andmoderate agricultural poverty was significantly lower in 1998. Perhaps not coincidentally, the agriculturaland livestock sector has been the most dynamic sector of Nicaragua's economy since 1994.
The high levels of agricultural poverty, in combination with the predominant role of the primary sector inNicaragua, has led the current government to single out the agricultural and livestock sector as key to therecovery and economic growth of the country (MAG-FOR, 1998). This strategic focus on agriculture
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appears sound, as Nicaragua is among the countries in Latin America with the highest share of the primarysector in GDP (34 percent in 1998 (World Bank, 2000)), with approximately 35 percent of theeconomically active population working in this sector during the 1 990s. Agricultural and livestockconstitute the most dynamic sector of the economy, with an average annual growth rate of over sevenpercent, and over four percent in per capita terms, from 1994 to 1998 (BCN, 1999).
The agricultural and livestock sector has undergone wide policy shifts over the last two decades. Thereversal of the state intervention in the agricultural sector characterizing the Sandinista period (1979-1990)was a key tenet of the Chamorro government. This included a drastic reduction in credit, the liberalizationof input prices, curtailment of government technical assistance services, and liberalization of foreign anddomestic output markets. However, government withdrawal was not simultaneously accompanied by thepromotion of institutions that would facilitate competition in input and output markets, or the provision ofcredit and/or technical assistance. As such, markets became highly segmented, and few households hadaccess to services (Davis, Carletto, and Sil, 1997). The current government has recognized the existence ofthese microeconomic problems, and at least in its public discourse and programmatic documents hasidentified them as key bottlenecks that inhibit the productivity and response capacity of producers,particularly small- and medium-scale farm households, such as failures in labor, land, and productmarkets; the absence of agrarian institutions; and the lack of public investment (de Janvry and Sadoulet,1997). In particular, the current administration policy program is focusing on the following unresolvedsectoral issues:
- Land market - The government has properly titled and registered only a quarter of the nation's farms,and a tangled web of laws on land tenure issued over the past two decades has added insecurity oftenure over land. Rental fees overshadow the relative selling price, leading to speculation, andindigenous people lack clear rights over their land.
- Agricultural financial services - The agricultural financial market is highly segmented. The supply offunds does not meet the demand due to market failure and incomplete government regulations,particularly on small loans. Following the withdrawal of the public agricultural development bank(BANADES), the Nicaraguan private banking system has not yet developed a network outside themajor urban areas.
- Agricultural Technology - Once at the vanguard of agricultural productivity in Central America,Nicaragua has dramatically lost its competitive advantage for both export and staple food crops.Agricultural scientists conduct research in isolation, responding just modestly to the needs of domesticor international markets, agricultural technical assistance covers only ten percent of the small andmedium-scale farm households, and the technical and vocational training system is obsolete and mostlybeyond the reach of the poorest and the illiterate.
- Infrastructure and trade - Despite government emphasis on commercialization, staple crop marketsremain highly segmented. The share of households participating in corn markets has fallen. Further,there is evidence of significant increase in transaction costs. Most silos lie in urban areas and belong tothe government. Slaughter houses, facilities for processing food, and communication infrastructure(including air and sea ports) lie in or next to the capital and need repair. The country does not have apackaging industry for food, proper standards for food labeling, and an up-to-date system to publicizestatistics on domestic production and prices.
- Forestry - Agricultural poverty and inadequate government policies have driven watershed destructionand catchment areas deforestation. The westem region of the country has been shorn of trees and oncerich farnlands contain compacted and eroded soils. Nicaragua's main watersheds have been wreckedby encroachers as they clear forest to make ends meet, by logging firms as they search for a fewvaluable timber species, by poor consumers as they search for firewood, and by commercial farmers as
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they expand their fields to the limit in search of profits.
Besides promoting macroeconomic stabilization measures directed at keeping inflation low, maintaining thereal exchange rate relatively competitive, and controlling public expenditure, since early 1998 thegovernment has designed a sector policy which includes measures for the short, medium and long term.
In the short term the government aims at eliminating price distortions by banning most food donations fromabroad and removing import quotas on food, import licenses, export restrictions, and price controls onfood. Import duties are being harmonized between farn and non-farm products. Machines and inputs foragriculture enter the country free of duty and exempt the sector from the quasi value-added tax of 15%. Inorder to make the land market work better, the government introduced a flat land tax. Taken together, thesemeasures are raising the price farmers receive for their production.
The medium term policy goal is to improve use of idle capacity by promoting sectoral reforms to removedistortions in the markets for land, financial services, agricultural technology, infrastructure and trade, andforestry. The government is removing information barriers and is modemizing the cadastre and landregistry. New private financial services, technologies for agricultural financial intermediation, andsecond-tier financial institutions are being encouraged. A larger participation of universities, NGOs,farmer's associations and private providers in a national, agricultural knowledge and innovation system isexpected to increase generation and adoption of low-input technologies and information for small andmedium-scale farm households. The Ministry of Construction and Transport is repairing roads in areaswhich show potential for agricultural growth, while the Ministry of Agriculture, Livestock and Forestry(MAG-FOR) is drafting legislation to auction silos to associations of producers and investors. Besidesprivatizing silos, research to develop new technologies for storing and processing food on farm is beingpromoted and the increase in the demand for transactions in the commodities exchange is being supportedby tax policies. Assisted by a Bank funded project, forestry legislation is being revised to introduce acorporate income tax and increase logging royalties to better reflect the economic value of forestryresources.
In the long term, the sector policy aims at: (i) continuing and strengthening the policy measures initiatedduring its medium term program; and (ii) increasing agricultural productivity by investing in humancapital, agricultural information and knowledge, strategic research and technology transfer. A researchmatching grant fund, the FAITAN, has been established with this purpose, while a strategy for acollaborative agricultural education system is being prepared. Agricultural technical schools will bestrengthened and agricultural training supported. The Ministry of Education (M1ECD) will revise thecurriculum studiorum as to eliminate its current urban bias. An agricultural information system providinginformation on markets, best practices, agrometeorology and services is expected to improve the decisionmaking and disclose opportunities to farmer groups, traders, service providers and decision makers.
3. Sector issues to be addressed by the project and strategic choices:
Agricultural technical assistance has constituted, during the last few years, the principal policy instrumentof the Nicaraguan Government in support of small and medium-scale farm households (see Annex 11,Letter of Development Program for a description of the Government Agricultural Technology Program). In1993, with assistance from the Bank, the Government articulated a comprehensive strategy for theagricultural sector which was incorporated in the design of the Agricultural Technology and LandManagement Project, leading to the creation of the Nicaraguan Institute of Agricultural Technology(TNTA).
The ATLMP and other government's initiatives increased access to technical assistance in the last fiveyears, however, overall utilization remains quite low. A recent study shows that while 24 percent of farmhouseholds have access to technical assistance in their communities, but only 15 percent actually use it
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(Davis and Murgai, 2000). Of those that use technical assistance, less than half (7 percent) is provided byGovernment. In agricultural areas the illiteracy rate is extremely high, contributing to low adoption rates.Heads of households have an average of less than 3 years formal education. Among the group ofagricultural youths and adults, 35 percent never attended school, and 62 percent have had between zero and3 years of schooling, constituting an large group of functional illiterates. There is little technical andvocational training available and most is beyond the reach of the average producer. The scientificcommunity is scattered and working in isolation, without an agreed agricultural research agenda andoutside an established system. Small and medium-scale farm households do not have access to timelyagrometeorological and market information and are unaware of service opportunities.
Building on the experience of the ATLMP, the govermnent is promoting longer term investment in anagricultural technology program that integrates agricultural research, technical assistance, and agriculturaleducation & training as a cohesive, integrated agricultural knowledge based system of agriculturaltechnology generation and transfer (MAG-FOR, 1998). The proposed Project will support the first phaseof this Program addressing the need for establishing the system.
Strategic choices made in Project design include: (i) Growth vs. poverty alleviation - GON believes thatby concentrating efforts on broad-based productivity growth, both for the poorest farmers and for the moreadvanced, there will be consequent direct benefits on agricultural poverty alleviation. Effective access byfarmers of all levels of technical advancement to technical advisory information and services will resultboth in economic growth and poverty alleviation. The new agricultural technology Program will placemajor emphasis on productivity increases and greater competitiveness for a maximum number of farmers,thus maximizing poverty alleviation effects; (ii) Public service vs. pluralist implementation of the system- The limited performance of the Nicaraguan public service has made it necessary to look for alternativeways of providing professional technical advisory services. The existence of institutions beyond*the publicservice and encouragement through competitive funding to provide such services to SMFs will lead to theparticipation of a variety of actors in the market for agricultural services; (iii) Support for commercialagriculture vs. small scale subsistence agriculture - The project has opted for concentrating onmaximizing access by small and medium-scale farm households to new and improved technology, to enablethem to evolve from a situation mainly of production for subsistence to one focused on market demand.Professional advisory services will still be available to commercial agricultural producers, who areprepared to contribute to the costs of such services; (iv) A long term strategy vs. continued independentuncoordinated initiatives - Past reliance on short term projects in support of agricultural research andtechnical assistance have demonstrated lack of sustainability and have duplicated resource use throughuncoordinated efforts. By defining a long term strategy and a national system for agricultural technology,knowledge and innovation with clear objectives and methodology to achieve them, the MAG-FOR willimprove coordination of external development funding while rationalizing use of public resources; and (v)Adaptable Program Lending (APL) vs. a Single Investment Loan (SIL) - integrated, pluralistic,provision of demand-driven services represents a fundamental change in Nicaraguan agricultural policythat will require a period of learning and refining of the Program design as its phases develop. Given thelong-term nature of the Program, the APL instrument allows greater flexibility than a time-bound, discreteoperation.
4. Program description and performance triggers for subsequent loans:
The Program will provide a phased, long term support to five sub-programs: (i) development ofinstitutional capacity; (ii) development of a competitive fund for agricultural services; (iii) support to theNational Institute of Agricultural Technology (INTA); (iv) development of an agricultural technicaleducation & training system; and (v) development of an agricultural information system.
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Development of institutional capacity - The main public institutions related to agricultural technologywill be reformed and strengthened. A Directorate of Agricultural Technology (DTA) will be strengthenedwithin MAG-FOR. Through the DTA, MAG-FOR will improve its capacity to design and implementagricultural technology and training policy and to coordinate and monitor publicly funded research,technical assistance and agricultural technical education & training activities. A Foundation will beestablished to manage public-funded agricultural research, technical assistance and agricultural technicaleducation & training under a competitive fund. COSINTA, currently an informal council bringing togetherpublic and private sector scientific community, will be given formal status as the Foundation's generalassembly and to serve as a permanent forum for discussing and agreeing on technology issues concemingthe participating organizations. The Department of Agricultural Education of the National TechnologyInstitute (INATEC) will be strengthened to enable it to offer diversified courses to a greater number ofyoung farmers throughout the country and to provide methodological advice to agricultural trainers.
Development of a competitive fund for agricultural services - As the main implementation tool of theFoundation, a competitive fund will promote demand-driven agricultural services. Under the fund, aresearch grant facility (FAITAN) will finance agricultural research projects presented by researchorganizations and institutions, domestic and foreign, certified by or prepared with the participation ofSMFs, and a technical assistance grant facility (FAT) will stimulate competitive, private agriculturaltechnical assistance services. As the Program rolls out, the competitive fund mechanism will be improvedand the portfolio increased so as to expand and maximize the research and technical assistance coverage.The possibility of establishing a grant facility for agricultural technical education & training will be studiedduring the first phase of the Program.
Support to the Nicaraguan Institute of Agricultural Technology (INTA) - Currently the maininstitution responsible for agricultural technology generation and diffusion, INTA will be supported toimprove its capacity for optimal use of public resources and to ensure the general availability, diffusion andquality of agricultural knowledge and services. During Program execution, the current role of INTA asdirect field provider of technical assistance will gradually shift in favor of a new, higher level role as mainprovider of: (i) strategic and adaptive research; (ii) technical assistance which generate extemalities; (iii)agricultural technology and knowledge captured from extemal sources; (iv) basic and registered seed; and(v) second-tier services to other agricultural service providers. Until a major involvement by other serviceproviders from the public and private sector is achieved, and especially during the first phase of theProgram, INTA will continue to provide direct services to SMFs.
Development of an agricultural technical education & training system - On the basis of acomprehensive strategy to be defined during the first phase of the Program, support will be provided toagricultural technical education & training methods and to a network of agricultural training institutions.The Program will support: (i) in-service training to technical assistance and education staff provided byspecialists from the private sector (universities, NGOs, agro-industrial companies) and public sector (INTAand INATEC); (ii) education and training of future agricultural trainers, for basic and intermediary levels;(iii) pilot initiatives, which will contribute to the alleviation of agricultural illiteracy and assist agriculturalyouth and unemployed adults to work as farmers or as skilled/semi-skilled farm workers, and (iv) in-servicetraining for agricultural public sector management, administrative and technical staff.
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Development of an agricultural information system - An agricultural technology information system willbe established to bring together several independent sources of information available nationally andinternationally. The system will provide timely, quality information on market trends and opportunities,agrometeorology, agricultural services, business opportunities and best practices to: (i) agriculturalresearchers, technical staff, subject matter specialists and trainers at all levels, to improve the quality oftheir professional services; (ii) farmers, through technical assistance agents, to enhance theirdecision-making ability; and (iii) policy decision-makers and program design and monitoring units, tostrengthen their capacity.
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Synopsis of the Program by phases and by sub-programs
Sub-programs APL phase 1- phase 2 Phase phase 3 Phase 4phase4
____________ 0 t00 -0 i00 i) (establishment)0 00000 0 (sitregthening) (expa S nsion)00 s (consolidation)Development of Establishment of DTA. Strengthening of DTA,Institutional Legal constitution of COSINTA andCapacity. COSINTA. Set up of Foundation.
Foundation. Sharpening of agriculturalDefinition of INTA's technology policy.role.
Development of a FAITAN allocation Consolidation of FAITAN. Maximization of FAITAN. Maximization ofcompetitive fund under Strengthening of FAT. Consolidation of FAT. coverage of competitivefor agricultural COSINTA/Foundation. Testing of agricultural Strengthening of agricultural Fund.services. Testing of FAT. Study to education grant. education grant. Testing of COSINTA/Foundation
establish agricultural additional grant facilities. as main player ineducation grant. channeling public
funds for agriculturalservices.
Support to INTA. INTA as main direct Strengthening of INTA's Increase in sophistication of Maintainance ofprovider of agricultural strategic and applied INTA's agricultural research research qualityservices. Provision of research. Decrease in services. Further decrease in service. Fulltechnology transfer individual visits. Increase individual visits. consolidation ofservices. Farners in coverage and quality of Consolidation of group visits INTA's as second-tierattended by individual group visits. Increase in modality. Increase in service provider toand group visits. INTA's support to service number of service providers farmers' associations,
provi.lers. supported by INTA. NGOs, universititesand private sector.
Development of Design of system Three CBT centers Rehabilitation of four Consolidation ofan agricultural strategy. Technical, operational. Rehabilitation additional centers. Coverage agricultural educationeducation & vocational, in-service of four additional centers. of sub-program nation-wide. & training systemtraining system. training programs for Vocational training for Replication of successful within overall
technical assistance staff agricultural technicians. pilots. Systematization of agricultural technologyand farmers in a pilot School curricula revised. educational experiences. knowledge andregion. Rehabilitation of Training center for innovation System.three pilot CBT centers. agricultural techniciansEstablishment of training operational.program for agriculturepublic sector staff.
Development of Identification of users. Strengthening of the Expansion of system to Maximization ofan agricultural Design and system and use by individual farmers and system availability andinformation establishment of pilot information providers and organizations at national use at lowest levels.system. system. users. level. Countrywide coverage
of system achieved, adaptingto changes in informationtechnology.
Trigger indicators (see Annex 1, addendum to the logical framework)
The Adaptable Loan instrument will allow the Bank to provide phased support for the implementation ofthe agricultural technology Program along the lines set by the government's Letter of Development Program(Annex 11). In order to commit subsequent loans, each phase would be subject to an appraisal process to
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assess the feasibility of the new phase. The indicators, which will trigger graduation from one phase of theProgram to the next, will be evaluated towards the end of each phase and will be based on the results of thebiannual beneficiary assessments and external evaluations.
The addendum to Annex 1, provides a matrix with detailed trigger indicators over the Program period forProgram design, implementation and performance, effects, impact, and evaluation and feedback. Thenumber of triggers is limited to a few, relevant ones. The triggers to move to phase II show a relativeconcentration on design criteria. As the start-up of FAT and FAITAN implies some uncertainties due totheir innovative nature, no quantitative targets related to the commitment of the available resources areformulated as triggers to move to phase II. From phase II onwards, taking into account the improved dataprocessing and evaluation of the Program players as a whole, more weight is put on quantitative triggers atimplementation, performance, effect, impact, and evaluation and feedback level. As the Program evolves,there is a discernable shift from design and implementation towards effects, impacts and evaluation andfeedback significance and quality.
C. Program and Project Description Summary
1. Project components (see Annex 2 for a detailed description and Annex 3 for a detailed costbreakdown):
The Project is the first phase of a long term Program for the generation/enhancement of an efficient,demand-driven, agricultural technology knowledge and innovation system. The Project consists of fivecomponents to address the key issues identified in Section B. These include: (i) development of institutionalcapacity; (ii) establishment a competitive fund for agricultural services; (iii) strengthening of INTA'soperations; (iv) establishment and piloting of an agricultural technical education & training system; and (v)establishment and piloting of an agricultural information system.
Development of institutional capacity (US$9.5 m) - The government will reform and strengthen thepublic institutions of strategic significance to the sub-sector and establish institutional arrangements toencourage the involvement of both public and private institutions in agricultural technology andagricultural technical education & training activities. MAG-FOR, as the legal authority to coordinateProject activities among the different public and private executing agencies, will manage the overall Projectthrough a new Directorate for Agricultural Technology. A council representing public and private sectorinstitutions, including MAG-FOR, INTA, INATEC, NGOs, farmers' organizations and universities, willconstitute the governing assembly of a Foundation that will manage a competitive fund with grant facilitiesfor agricultural services. The council will act as a national scientific forum for consulting and agreeing onagricultural technology issues and policies. The Nicaraguan Institute for Agricultural Technology (INTA),an autonomous public institution under the umbrella of the MAG-FOR, will assume responsibility formanaging and executing public-sector services on research and technical assistance to small and mediumscale farm households. The Agricultural Department of the National Institute for Technical Education andTraining (INATEC), a public institution under the umbrella of the Ministry of Labor, in concertation withINTA, will carry out the Agricultural Education & Training component, under the overall responsibility ofMAG-FOR. The Institutional capacity development component will fund salaries, premises, vehicles,equipment, training, studies and operating expenses for MAG-FOR, INTA, INATEC and the Foundation.Costs for Monitoring & Evaluation and for preparing new investment operations are included under thiscomponent.
Establishment of a competitive fund for agricultural services (US$ 8.3 m) - This component willpromote grant facilities to fund agricultural services responsive to client demands. Under a competitivefund, the grant facilities will be tested at a reduced scale during the first phase, and then on the basis ofevaluation of their effectiveness will be expanded with improved administrative procedures and institutional
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arrangements. The Support Facility for Nicaraguan Agricultural Technological Research (FAITAN),established in 1998 under the on-going ATLMP, will finance innovative agricultural adaptive researchprojects presented by agricultural research organizations, domestic and foreign, and by institutions whichhave been previously certified by or prepared with the participation of SMFs associations or unions. Thegrant will also fund projects aimed at strengthening local research capacity to develop integratedtechnologies and pathways of change toward profitable and sustainable natural resources management. It isexpected that these projects will develop strategic alliances between local institutions and regional oroverseas universities and research centers. At least 36 research project contracts and 6 alliance projectcontracts would be awarded over the Project's life. INTA would be eligible to participate in the calls forresearch proposals. Competitive allocation of funding would improve research project planning and quality,and contribute to increase the country's overall availability of technological solutions to SMFs. TheSupport Facility for Technical Assistance (FAT) will be created to help stimulate the development ofcompetitive private agricultural technical assistance services. The design of this component will take intoconsideration the lessons learned from previous INTA experiences under the ATLMP, particularly withregard to Private Technical Assistance module (ATP2). Mainly under an IFAD credit, FAT will be firstfield-tested in Leon, Chinandega and Managua, targeting 5,600 SMFs families. Following evaluation ofFAT performance in year 2, services will be expanded to cover a second area (to be defined during Projectimplementation) targeting about 1,600 additional SMFs families. The possibility of establishing a grantfacility for agricultural education & training will be studied during Project implementation.
Strengthening of INTA's operations (US$ 16.7m) - The Project will support six sub-componentsincluding five strategic services: (i) agricultural research and development; (ii) technology transfer; (iii)seed production; (iv) in-service training of front line technical assistance staff and diffusion of information;(v) post harvest technology and market development with farmers' associations; and (vi) planning andsupervision of activities and agricultural technology transfer responding to small and medium-scale farmhouseholds needs. Research and Development activities will include materials, equipment and trainingevents related to diagnosis, priority-setting and analysis of demands for new technology; capture andanalysis of potential new profitable and environmentally friendly technology available nationally andinternationally; implementation of agreements with national and international agricultural researchinstitutions and networks; design and implementation of experimental trials and farmers-managedvalidation plots; processing of research results and diffusion to subject matter specialists and teclnicalassistance staff; and the rehabilitation and equipment of INTA's regional centers to become professionalcenters of technology diffusion. Under the Technology Transfer sub-component, INTA will attend on aregular basis a total of 60,000 SMFs, of whom about 37,000 will be new clients. Seed Productionactivities will ensure the production of basic and registered seed. A national seed system will be developedto encourage private farmers to produce and distribute seed. The Training and Diffusion sub-componentwill support activities of the training unit of INTA and will strengthen the institution's ability to providein-service training to technical assistance and research staff and subject matter specialists and to diffusetechnical and methodological information. The Post-harvest Technology and Market Developmentsub-component will support strategic alliances with public and private service providers of post harvesttechnology, providing technical, brokering and marketing advisory services in developing entrepreneurialskills. Planning, monitoring/evaluation and supervision activities will ensure the delivery ofclient-responsive agricultural advisory services.
Establishment and piloting of an agricultural education & training system (US$ 2.7m) - In line withthe orientations of a new strategy for agricultural education and training to be defined during the first 18months of Project implementation, the Project will fund civil works for the rehabilitation of agriculturaltraining centers, vehicles, equipment, consultants, training and operating costs for: (i) carrying out anassessment of the technical capabilities of the public and private technical assistance staff and teaching
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staff of agricultural training institutions; (ii) carrying out a demand and supply survey of technical trainingservices; (iii) workshops and in-service training for technical assistance staff and agricultural educators;(iv) carrying out an inventory of available training documentation and materials; (v) the establishment ofdocumentation centers in three pilot areas; (vi) pilot distance education via mass media for technicalassistance staff and farmers; and (vii) design and equipping a center for agricultural technical staff training,on the basis of recommendations of the study in (ii) above.
Establishment and piloting of an agricultural information system (US$1.2m) - A national AgriculturalInformation System will be established within MAG-FOR. The system will capture and make availabletechnical, market, environmental and other information to farmers, technical assistance agents, researchers,trainers, government planners, development NGO's, universities, and producers associations. The Projectwill fnance: (i) system analysis studies, such as demand and availability of information, strengths andweaknesses of participating institutions information processing, and other countries experiences inagriculture technology information systems; (ii) design and deployment of the software; (iii) a centralcomputer node for Managua; (iv) installation and piloting of the system; (v) development of promotion andtraining plans and their implementation; and (vi) vehicles, salaries and recurrent costs of the system.
Indicative Bank- % ofComponent Sector costs % of financing Bank-
- -SsM) Total (US$!) fnan-cingDevelopment of institutional capacity. Institutional 9.46 24.7 7.52 31.8
DevelopmentEstablishment of a competitive fund for Other Agriculture 8.30 21.7 3.07 13.0agricultural services.Support to INTA's operations. Other Agriculture 16.67 43.6 9.80 41.5Establishment and piloting of an Vocational 2.67 7.0 2.31 9.8agricultural education & training Education &system. TrainingEstablishment and piloting of an Other Agriculture 1.16 3.0 0.92 3.9agricultural information system.
Total Project Costs 38.26 100.0 23.62 100.0Total Financing Required 38.26 100.0 23.62 100.0
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2. Key policy and institutional reforms supported by the project:
The Project would reinforce commitment to and implementation of policy and institutional reforms alreadyunderway. Key areas of reform to be supported by the Project are: (i) strengthening of an integratedinstitutional framework that coordinates, facilitates, and promotes systematic, synergetic inter-relationsamong multiple public and private actors, in agricultural research, technical assistance, and agriculturaleducation & training; (ii) redefinition of the State's role in the provision of public agricultural research andtechnical assistance services, gradually transferring direct execution responsibility to the private sector andleading to the enpowerment of farmers and farmers' organizations; (iii) establishment of a Directorate ofAgricultural Technology in a modemized MAG-FOR. This body would be responsible for policy,regulation, fmancing and monitoring of a pluralistic agricultural technology and training system consistentwith the overarching goal of sustainable agriculture development; (iv) definition of the responsibilities, role,activities and financing of INTA and INATEC for the future; (v) expansion of private sector participationthrough technology development programs cofmanced with the private sector; (vi) strengthening ofproducer organizations and agribusiness associations with increased awareness of and access to profitableand environmentally friendly technology options; and (vii) contracting of services through a competitivefund.
3. Benefits and target population:
The Project would establish a client-responsive, knowledge based agricultural technology system thatwould facilitate the transfer of technological innovation, increase productivity and incomes, alleviatepoverty and promote sustainable use of natural resources.
Benefits - The expected benefits from the proposed Project would include: (i) the adoption of newproduction, marketing, management, and post-harvest technologies resulting in income and productivityincreases for approximately 60,000 farmers, increasing net farm incomes by approximately 25 percent inreal terms over 4 years; (ii) improved levels of agricultural education and training for 500 technicalassistance staff, trainers, agricultural promoters, supervisors, technical assistance and research managers;(iii) 200 young farrners trained under a pilot scheme; (iv) defnition of a agricultural education and trainingstrategy; (v) increased efficiency levels of 280 agricultural public sector employees; (vi) increasedagricultural growth, employment and community development resulting from greater resources beinggenerated in the agricultural areas; (vii) natural resource protection, and minimization of negativeextemalities as a result of soil and water conservation techniques on-farm and in water catchment areas.
Target population - The Project target population, Small and medium-scale farm households (SMFs),have been defned as agricultural and urban farm households controlling between 2 and 20 mzs of owned orrented farm land (I mzs = 0.7 ha). Land sizes have been adjusted for quality. This defnition covers 44percent of all farm households in Nicaragua, or approximately 110,000 producers. These households arefurther subdivided into two groups, small (2-5 mzs) and medium (5-20 mzs) sized producers. These groupsof farm households were chosen as target beneficiaries for two reasons. First, these farmers are responsiblefor the bulk of basic grains and export coffee production in Nicaragua (Davis, Carletto, and Sil, 1997), andshow the most productive potential among all farm producers. While Minifundista households (e-2 mzs)are important subsistence producers, they are hampered by land constraints, and may have difficultyresponding with sufficient productivity and output increases to make the provision of technical assistanceworthwhile. These households depend primarily on off-farm income sources for survival and thus the costof providing regular technical assistance would be prohibitive. Minifundista producers, however, may beincorporated in later phases of the Project. Large producers, on the other hand, are less in need ofgovernment support in providing technical assistance. Second, small and medium-scale farm householdssuffer high levels of poverty. Over 50 percent of medium producers, and 65 percent of small producers,were living in poverty in 1998, compared with 58 percent of agricultural households overall. These
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households have low levels of education, low levels of ownership of consumer durables, and minimalaccess to basic infrastructure. Agricultural and livestock production accounts for 40 to 49 percent of totalhousehold income for these households. Given the importance of farm income in total income for thesehouseholds, as well as their productive potential, expected increases in productivity and output would havea beneficial impact on lowering the incidence of poverty and increasing welfare among these households.
4. Institutional and implementation arrangements:
Implementation period: The credit is expected to become effective October 1, 2000 for a four year periodthrough September 2004. The proposed Project is the first of four planned phases supporting a long-termnational Program.
Project management: The Directorate for Agricultural Technology (DTA) within MAG-FOR will beresponsible for the overall technical implementation of the Project. Besides the Director, the DTA will bestaffed with support specialists in planning, agricultural technology, agricultural technical education,environment, monitoring and evaluation, information technology and communication. Administrative andprocurement functions will be carried out by a separate Administration Unit under MAG-FOR's GeneralDirectorate for Administration and Finance. The Administration Unit will be composed of a financialadministrator, an accountant and two procurement specialists. The Administration Unit will work closelywith the administrative units of INTA, INATEC and the Foundation. The unit will advance financial meansto support operations of these three entities for a 6 month period. The advances will be subject to properlyagreed financial reporting on previous disbursements. The Planning and Monitoring Officer will be incharge of ensuring that current activities correspond to planned activities. Before the credit is effective, theAdministration Unit will prepare procedures and operational manuals describing all administrativeprocedures, including how to plan, prepare, select, contract, finance, and supervise all activities to befmanced under the Project. These manuals will guide the implementation process by setting therequirements and rules of Project operations for the MAG-FOR and other implementing agencies.
Accounting, financial reporting and auditing arrangements: Each of the entities in charge of managingProject resources will maintain separate Project records and will periodically report on those resources tothe Administration Unit. Such records will be maintained in order to reflect, in accordance with soundaccounting practices, the operations, resources and expenditures of each Project activity. Implementingentities will be staffed at all times with qualified financial and accounting professionals. Adequate financialmanagement arrangements for the Project will be included in the Operations Manual. The AdministrationUnit will prepare combined financial statements for the Project as a whole. The Project accountsmaintained by the Administration Unit and all the other executing entities will be audited periodically byindependent qualified auditors acceptable to IDA, and in accordance with Intemational Standards onAuditing and the guidance provided in the "Guidelines and Terms of Reference for Audits of Project withFinancing by the World Bank in the Latin America and Caribbean Region" (the Guidelines) and otherguidelines. The auditors will be in place by Project effectiveness and before the beginning of each year tobe audited, and will perform interim audit work bi-annually. All implementing entities will submit theiraudited financial statements timely so that the Admninistration Unit submits to IDA a certified copy of theagreed audit reports no later than six months after the end of each year.
Financial management: In order to be in full compliance with Bank requirements per OP/BP 10.02, theAdministration Unit and the executing entities will implement planning, budgeting, accounting andreporting systems that substantially satisfy the needs of the Project. Also, Project Management has agreedto take the actions needed to have an integrated system which will allow for LACI PMR-baseddisbursements. Traditional disbursement methods (SOEs) will be used for the first two quarters of theProject, or a longer period, if due to valid reasons such system is not in place by the credit effectivenessdate. Officials of INTA, the foundation and INATEC will be properly trained to manage IDA's financial
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and procurement procedures during the first 18 months of the Project. The goal is to have each of theseentities certified with a procurement and financial management assessment within the first two years. Thiswill ensure executing agencies manage their program responsibilities in a more autonomous fashion. TheMAG-FOR will sign an agreement with INTA, the foundation and INATEC specifying the parties detailedfinancial and procurement responsibilities in Program execution both for pre and post financial andprocurement management certification.
Procurement arrangements: The Administration Unit would be responsible and would follow standardBank procedures for all Project procurement. A four year Procurement Plan is included in the ProjectImplementation Plan. Procedures for procurement would be incorporated into a specific OperationalManual for the Administration Unit. Procurement would include consultant services, goods and equipment,training, minor civil works, and grants. Contracts for execution of the grants would stipulate that theexecuting agencies would follow Bank Guidelines for all procurement under the contracts. TheAdministration Unit would carry out spot checks of procurement under grants and would audit them forcompliance with Bank Guidelines.
Management Information System: An integrated management information system will be established inthe MAG-FOR Agricultural Technology Directorate, in the Administration Unit and in the decentralizedunits of INTA, INATEC and the Foundation. The system will cover procurement, financial management,monitoring and evaluation, communication, scheduling and planning components. The procurementactivities will include establishing software for preparing and processing procurement contracts andprocurement reports for the LACI PMRs. The financial management system will include accountingsoftware to track the flow of Project funds and will also produce the LACI financial PMR reports. Thecommunication module will utilize web based software to function as a the central hub for informationexchange internally within the Project and for informing external audiences on the advancement of theProject. The scheduling and planning module will use off the shelf software to develop the annual operatingplans and monitor and control them.
Planning, Monitoring and Evaluation: The Agricultural Technology Directorate will be in charge ofplanning and monitoring activities, while MAG-FOR's Directorate of Monitoring and Evaluation will be incharge of evaluation, in coordination with the Directorate of Statistics. The system will track developmentobjective (impact) and component (process) indicators from the projecfts logical framework. An extemalbeneficiary assessment will be carried out at the end of the second year to elicit qualitative feedback from arepresentative sample of SMFs. An initial baseline survey before Project effectiveness will provide aquantitative benchmark for assessing key impact indicators through regular panel survey.Cost-effectiveness of the different models of agricultural technology service provision will be assessed andthe conclusions incorporated in the design of support during the next phase of the national Program.
D. Project Rationale
1. Project alternatives considered and reasons for rejection:
Exclusive support for a single research-technical assistance institution (e.g., INTA): While singlepublic institution agricultural research-technical assistance systems have developed successfulclient-responsive services in developed countries, such success has depended upon close collaborationbetween the private sector, universities and the national advisory services. Central American experiencewith single public institutions responsible for research and technical assistance has not proven effectivedue to, among other things, a lack of close involvement of the private sector and universities in technologygeneration and transfer. Experience from North America, Australasia, Africa, India, China and Europe hasdemonstrated the importance of a pluralistic and decentralized demand-driven system to meet the specificneed of SMFs at local, provincial/regional levels, while maintaining a strong national institution responsible
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for overall coordination and overall equitable and sustainable use of the natural resource base. Thus theProject will support a more formal diversification of agricultural research and technical assistance services,funding both private service providers, while maintaining a strong national research and technicalassistance institution.
Major emphasis of Project on competitive research and technical assistance funds: The initial Projectproposal emphasized significant funding through agricultural services out of competitive research andtechnical assistance funds from the first part of phase one of the Program. A more prudent transition hasbeen adopted, given the lack of experience both locally and regionally with this type of fund, and preparingthe institutions for transition to greater private sector involvement in the provision of basic field services tofarmers. While experience in the use of grant facilities for agricultural research is consolidated, competitivemechanisms for technical assistance are still relatively at a pioneering stage. The Project will test thetechnical assistance grant facility (FAT) in the pilot areas of the Departments of Le6n, Chinandega andNorth of Managua, and subject to positive performance will gradually expand it during the next phases.
Reliance on a traditional Agricultural Research and Technical Assistance Project scheme: Recentexperience from the ATLMP, and the increasing challenges of a newly liberalized market, made evidentduring preparation that the Project design had to broaden its scope and innovatively include agriculturaleducation & training as a third strategic pillar. Abundant literature and experience from other countriesprovide evidence of the positive impact of agricultural education and training on increasing productivityand income. Nicaragua high levels of illiteracy (32% generally in agricultural areas and 40% amongst theleast poor), and limited schooling of young persons (62% of persons 15- 39 with only 3 years) are likely todelay the rate of implementation of modem agricultural technologies, thwart diversification of theagricultural economy, and perpetuate the agricultural/urban divide. In Nicaragua, women are majorcontributors to agricultural production, and especially food production. Increasingly, it is recognized thatthe failure of many agricultural development efforts can be attributed to an underestimation of the need foragricultural training and information for women farmers. MAG-FOR has recognized that its strategy toenhance agricultural productivity must give emphasis to long term investment in human capital formation,reshaping agricultural education and adult literacy programs through alliances with the competentinstitutions and directly intervening in agricultural education & training. The new matrix managementsystem within the Bank provides a powerful tool for innovative cross-sector management in agriculturaland human development expertise.
Support for a single existing public training institution. This was rejected because MAG-FOR shouldfirst define a policy for agricultural education and training, define the characteristics of demand and supplyof technical, vocational and in-service training and assess the relevance and effectiveness of the existingpublic and private agricultural education and training institutions, before deciding where to direct the newinvestments.
2. Major related projects financed by the Bank and/or other development agencies (completed,ongoing and planned).
Latest SupervisionSector Issue Project (PSR) Ratings
(Bank-financed projects only)Implementation Development
Bank-financed Progress (IP) Objective (DO)
Financial sector adjustment and Financial Sector Adjustment S Sstrengthening. Project (Credit No. 7777)
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Development of agricultural technical Technology and Land S Sassistance services, land administration Management - ATLMPsystems and a pilot agricultural (Credit No. 7780)banking network.Poverty reduction through small-scale Agricultural Municipalities S Scommunal productive activities. (Credit No. 7790)Bio-diversity preservation, part of the Atlantic Biological Corridor S SMeso-American subregional program. GEFPromotion and development of Sustainable Forestry Investment S SSustainable Forestry activities. Promotion Project - PROFOR
(Credit No. 52080)
Other development agenciesCOSUDE/Switzerland Programa PASOLAC.COSUDE/Switzerland Programa POSTCOSECHA.JICA/Japan Desarrollo Produci6n Nacional
de Semillas.JICA/Japan Fomento a la producci6n de
granos basicos KR II.JICA/Japan Estudio Desarrollo Agricola
Costa del Pacifico.Kellogs'Foundation Programa Nicaraguense para la
Juventud Rural.FAO/Holland Sistema Integrado de Manejo de
Fertilidad.NORAD/Norway PROCATEPA.NORAD/Norway Programa de Cooperaci6n
Sector Agropecuario.STOAS/Holland Programa de Educaci6n
Tecnica Agropecuaria.DANIDA/Denmark Programa de Apoyo al Sector
Agricola.USAID/USA Programa de apoyo a los
pequefios productores.UESA/European Union Comercializaci6n de los granos
basicos.IADB Programa de Reactivaci6n
Productiva Agroalimentaria.Componente II: FortalecimientoInstitucional al MAG-FOR.
Italian Bilateral Cooperation Programa de Renovaci6nArrocera.
ASDI/Sweden Fondo de Rehabilitaci6nAgropecuaria MAG-FORASDI (FRAMA).
FAO/Spain Modelo de atenci6n productivaal sector de los pequefiosproductores, seguridadalimentaria -PESA.
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IP/DO Ratings: HS (Highly Satisfactory), S (Satisfactory), U (Unsatisfactory), HU (Highly Unsatisfactory)
3. Lessons learned and reflected in the project design:
Other Countries' experience
Private sector services for agricultural technology are generally confined to commercially produced, oftenhigh value commodities with a considerable bias towards the specialized needs of medium to large scalefarms. However, even in countries with more modem agricultural economies than Nicaragua, the costs ofagricultural research and technical assistance are still largely borne by the state. In Europe, only the UK,Denmark and the Netherlands have moved towards the provision of agricultural research and advisoryservices which are predominantly funded by farmers or farmers' associations. In Italy, Portugal, Spain andBelgium the state still ensures research and technical assistance services as a fully-funded public service,while in Germany, France and Ireland, farmers contribute to, through direct and indirect taxes, between25% and 50% of the cost of the service. Small holders, if organized into associations, can be strongcustomers for agricultural technical services. Fiscal constraint is a pervasive problem in both developingand developed countries, and thus strategies for (i) streamlining and cost recovery measures (e.g., Mexico,Chile and the United Kingdom) and (ii) promoting the development of private sector technical assistance(as in China and Colombia) have been pursued. Experience with direct cost recovery for the provision oftechnical assistance services remains inconclusive for low-income countries with agricultural economiescomposed mainly of small-scale poor farmers. Public sector provision of agricultural services does notnecessarily imply public delivery of these services and there has been recent interest in subcontractingtechnical assistance to the private sector as a viable option.
Bank experience worldwide
Bank experience indicates that success of agricultural research and technical assistance projects dependsupon: (i) fiscal capacity, past support for technical assistance and commitment of government to improvedservices and to a policy framework that favors the adoption of technology; (ii) acknowledgment of specificrequirements of potential clients, their access to resources and their capacity to pay for services; (iii)definition of the scale, type and intensity of face-to-face service needed for particular areas and clientgroups. Full involvement of clients in program planning and implementation will ensure needs are identifiedand met; (iv) the technology stock for sustainable development in each of the farming systems and thecapacity of the private and public sectors to generate new technology; (v) prioritization of client groups forpublic technical assistance services; (vi) the capacities of public agencies and their staff to provide differenttypes of services, and the potential of private agencies for providing services; (vii) the importance of genderas it affects farm tasks, household decisions and service requirements; (viii) the potential of mass mediaand information technology for complementing other private or public forms of technical assistance; (ix)needs-based staff training programs that focus not only on relevant technology but also on methods ofunderstanding and interacting with farmers' groups, so as to involve clients fully in defining and resolvingproblems and hence make technical assistance more responsive; (x) the benefits of a service culture inwhich the provider understands he or she is accountable to the client rather than to a public sectorbureaucracy, and of a system for monitoring performance (individuals' and agencies' effects on clientbehavior) that reflects this expectation.
Successful experiences of Bank projects shared the following principles - programming of activities,continuous training of staff, program supervision, close links between research and technical assistance anduse of feedback from farmers to allow technology to be adapted to farmers' circumstances. Weaknessesincluded research agencies which were not responsive to farmers' needs, focus of technical assistance oncontact farmers, lack of training of field staff in how to select and facilitate farmer groups and application
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of uniform package of investments and technical assistance ill-adapted to local circumstances (World Bank,1999).
Experience in Nicaragua
There has been little analysis of the cumulated experience of the multiple projects, funded over recentyears, both through MAG-FOR and through other Government Ministries, notably IDR projects under thePresident's Office. The ATLMP, co-financed by an IDA and COSUDE, provides relevant experience andlessons for the new Project. The ATLMP introduced methodology for cofmancing of technical assistancecosts by some 30,000 small and medium-scale farm households, encouraging private companies andindividuals to provide technology transfer services, and created a competitive fund for agricultural research(FAITAN). Although the ATLMP has recorded generally satisfactory performance, there are indicationsthat assumptions about the capacity/willingness of farmers to co-finance technical assistance services andthe criteria for sub-contracting private technical assistance providers need to be revised: (i) recovery offarmers' contributions under the ATP1 mode (cofinanced services provided by INTA) for the provision oftechnical assistance services have not exceeded 60 percent of dues as an average over the past three years;however, the figure may be largely due to the low repayment rates in 1998 resulting from damage done byHurrican Mitch; (ii) complex formula for calculating the subsidized payment to private technical assistancecompanies have introduced distortions and resulted in a drop of farmers receiving cofinanced advisoryservices under the ATP2 mode; (iii) the application of different methods and levels of cofinancing bydifferent service providers (notably under ATP 1 and ATP2 modes) in the same district has led to charges ofunfair competition and confusion about the charges to be recovered from farmers; (iv) attempts to outreachnew technology to large numbers of small holder farmers in remote areas (ATPm) using mass media,community meetings and reference farmers has yet to be evaluated, but there is little evidence of significantuptake of new technology beyond the reference farners and designated members of local communitycommittees, who have direct access to inputs distributed under the Program. Recent inter-institutionalcollaboration, facilitated by INTA, with local, regional and international institutions has provided recentpositive results. New technology developed include recommendations for soil conservation, integrated pestmanagement, ox-drawn tillage and grain storage.
Lessons leamed from the disaster provoked by Hurricane Mitch in October 1998 include: (i) theimportance of more widespread and generalized adoption of soil conservation and other sustainableagricultural development technology; (ii) the need to accelerate capital accumulation in the agriculturalareas; and (iii) the need for mitigation measures and emergency response teams to help farmers in hard hitdisaster areas.
The design of the present Project
The Project design has benefited from an extensive review of global experience and lessons leamed fromBank and other agencies' technology development programs. These lessons are also reflected in the mainprinciples included in the Government's new strategy: a client-oriented, knowledge based system whichpromotes the interaction of agricultural research, technical assistance and agricultural technical education& training to generate, promote and diffuse economically profitable innovations and information whichrespond to the needs and possibilities of adoption of small and medium-scale farm households. The strategydefines principles to be respected for all future, and to the extent feasible, ongoing publicly fundedresearch, technical assistance and training programs.
The design of the Project took in consideration important lessons learnt during the implementation of theNicaragua ATLMP, of which it is considered a follow-up of the Agricultural Technology component. Thesystem design includes strategic support for agricultural technology generation and transfer, along the linesof the ATLMP. However, it broadens its scope by including an Agricultural Education and Training
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component, and an Agricultural Information System component.
The inclusion of the Agricultural Education & Training component recognizes the role that knowledgeplays in adopting new agricultural technology. Agricultural education, broadly conceived, has anunprecedented opportunity to contribute to generating new employment and advancing agriculturaldevelopment (Coombs and Ahmed, 1974), while farmers who have access to basic education have shown tobe more likely to adopt new technology than those who lack access (Jamison and Lau, 1982).
Although the idea of including an Agricultural Information component is innovative, some preliminarystudies find a strong potential demand across the LAC countries (AKIS, 1998). It is believed that whilemost of the information needed by farmers exist, due to absence of a delivery system this information islargely inaccessible to farmers and service providers. The Project design included the establishment of anAgricultural Information System as a platform for further training technical assistance service providers, amedia to demonstrate success stories from adapting new technology and to share best practices (local,regional, national and international), a forum for collaboration among the different actors in the sector, anda tool to enhance participatory and interactive approach.
4. Indications of borrower commitment and ownership:
The Government of Nicaragua has followed a phased approach to agricultural sector development by firstinitiating macro-economic and structural reforms to stabilize the economy and providing a base for futuregrowth. With those reforms in place, the government prepared a agricultural development strategy whosecontent strongly emphasizes the need to invest in agricultural technology and human capital programs suchas the proposed one (cf. A Road Map for Modernizing Rural Nicaragua). In addition to the governmentrequest for this Project credit, the following indicates Nicaraguan commitment and ownership in theProject: (i) widespread discussion, in both public and private sector institutions, on the need to develop ademand-driven, institutionally pluralistic research and technical assistance system; (ii) numerousconsultations during Project preparation that developed a general consensus among the major stakeholderson the principles on which the Project is designed, including a specific workshop to define the mainorientations and objectives of an environmental impact analysis of the Project (08/13/99); (iii) participationby a team of representatives from Nicaragua at the World Bank AKIS retreat, where the Program waspresented and received group discussion feed-back, and incorporated observations in the Project design;(iv) full endorsement, by the Minister of MAG-FOR, of the proposed support Project (Aide MemoirePiccioni/De Franco of 2/17/99); (v) Minister of Finance request on May 1999 for a Project PreparationFacility of US$1.9 million to start setting up the monitoring and evaluation system and initiate thefeasibility and technical studies; (vi) the government has recently launched the FAITAN, calling andapproving research proposals.
5. Value added of Bank support in this project:
The Bank is a major financier of improved agricultural technology generation and transfer systemsworldwide and has strong commitment to these instruments to stimulate economic growth and alleviateagricultural poverty (Vision to Action Plan; October, 1997). The Bank has extensive experience in LatinAmerican in design and implementation of competitive funding systems for agricultural technology, i.e.,Chile, Colombia, Brazil, Bolivia, Ecuador, and Venezuela. The Bank is also providing support fordevelopment of an agricultural sector strategy in Nicaragua, strongly focusing on agricultural technologyand sustainable agriculture.
E. Summary Project Analysis (Detailed assessments are in the project file, see Annex 8)
1. Economic (see Annex 4):
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* Cost benefit NPV=US$76.2 million; ERR = (20 years) 35.5 %, (10 years) 29.5 % (see Annex 4)O Cost effectivenessO Other (specify)
The process - In line with OED guidelines, the focus of Project preparation has been on institutionalizingthe capacity within MAG-FOR/I:NTA to use economic analysis to define program and crop priorities.FARMOD software was used to establish representative mixed farming models for 13 different regions and1 one small holder (minifundista) model, based on INTA's data generated from technical data sheets andfarm data samples under the ongoing ATLMP. A team of INTA staff and local consultants developed thedata for the models (in Project files), which provided the summary tables presented in Annex 4.
The result - There is ample evidence of satisfactory economic returns to investment in agriculturaltechnology systems with an average return of over 40% (Pardey et al., 1999). Economic analysis of thepresent Project demonstrates comparable potential. Economic benefit/cost streams were developed forrepresentative mixed farming system models for 13 different regions of the country and I minufundistamodel. The results of these models were multiplied by the number of new farmers to be attended by INTA,NGOs and private technical assistance providers funded by the Project. The numbers of new farrners wereadjusted to reflect conservative rates of adoption of new technology. Such adoption rates assumed that forthe first year (n) during which farmers received advice from technical assistance staff, they testedtechnology using small on-farm demonstration plots or units. The following year (n+]), or at least 2cropping seasons later, it was assumed that 50 percent of farmers would adopt new technology, with theremaining 50% adopting the technology the following year (n+2), at least 4 cropping seasons after initialdemonstration. The benefit stream, on the basis of these conservative assumptions, was calculated over 10and 20 years. The cost stream included total Project costs through Year 4, followed by an average of Years1-4 during the subsequent 6 years. The resulting ERR was 29.5 if calculated over 10 years, and 35.5% ifcalculated over 20 years.
Sensitivity analysis - Table 1 and 2 in Annex 4 presents the switching values for each of the 14 farmmodels and for the Project in totum. On average, financial revenues at the farm level should fall by 50% ortotal costs (investments plus operating) increase by more than 100% in order to reduce the NPV to zero(Table 1). This analysis confirms that the financial attractiveness of the proposed changes in the householdproduction units is robust. Analysis performed (switching values, Table 2) to measure the sensitivity of theERR to the estimated benefits and costs of the Project activities and investments included indicates thatProject benefits should fall by 30% or costs should increase by 44% from there expected estimates in orderto bring down the ERR to 12%.
2. Financial (see Annex 5):NPV=US$ million; FRR % (see Annex 4)
Financial viability of recommended technology - The profitability of a variety of crop and livestockproduction models has been analyzed and has demonstrated high financial returns for most systems. Manyrecommended practices available to Nicaraguan farmers through technical assistance require relatively lowlevels of capital investnent and hence involve low risks of financial loss. Financial evaluation of morecomplex technologies is the responsibility of the monitoring and evaluation unit of INTA, which willcontinue to analyze technologies for both market and financial risks. Increases in net farm income, as aresult of project-financed on-farm investments, ranged from about 25% to more than 100% at fuilldevelopment. On wei-ghted average, the annual net on-farm income would grow by 67% in about 6 yearsof technical assistance, ftom about US$1,500 to US$2,500. It can be concluded that even farmers livingunder extreme povert-y and mainly subsistence conditions can benefit from improved food security andon-farm increased incomes as a result of the provision of appropriate technical support services.
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Project Cost - Total Project cost is estimated at 38.3 million, of wlhich US$ 27.9 million investnient andUS$ 10.4 million recurrent costs. The IDA Credit of US$ 23.3 million will contribute towards the costs ofcivil works (US$ 1.3 million), vehicles and equipment (US$ 4.4 million), training (US$ 2.9 million),consulting services (US$5.1 million), competitive grant funds (US$5.2 million) and operating costs (US$4.7 million). The Project financing plan provides for US$ 5.6 million from Government and US$ 3 millionfrom beneficiaries in cofmancing of technical assistance services and competitive Fund grants, representing8 percent of total Project costs. Cofinancing of US$ 3.6 million and US$2 million will be provided byIFAD and COSUDE respectively.
Fiscal Impact:
The incremental counterpart contribution of the government to the Project is US$ 5.6 million over fouryears or an average of US$ 1,400,000 per annum, of which a little more than half is allocated to INTA. In1998, actual expenditure directly related to Agricultural Research and Technical Assistance, both throughMAG-FOR, INTA and the Instituto de Desarrollo Rural (IDR) was approximately US$6 million, withabout equal proportions between INTA and IDR. The fiscal impact of the Project on local resources istherefore acceptable on the basis of historic resource allocation trends by the Government of Nicaragua. Inaddition, the Nicaraguan Government has made agriculture a major priority for development expenditure inclearer terms than any other countiy in the Region. Cofinancing the Program by government could beargued to contribute to reduce social investments in poverty alleviation, given both income and employmenteffects. Improvement in the effective use of external aid, through cofmancing by a nunber of aid agenciesrepresents a potential reduction on duplication of credit and grant funds from external sources. Fiscalrevenue from increased volume of primary and secondary agricultural products, although difficult toestimate, should have a major positive effect.
Government economic policy in Nicaragua has rejected the option of agricultural development throughsubsidies, compensatory tax mechanisms, fixed exchange rates. There is an appreciation that it would beunrealistic to provide farmers with a full range of the classic factors required for modernization, such ascredit, chemical fertilizers, pesticides, hybrid seeds, machinery. The approach adopted is rather one ofproviding small and medium-sized access to information, training, instruction and demonstration of newtechnology to provide them with knowledge to generate the income which will reduce the tendency to moveto the urban areas. Numerous studies indicate that employment generation in urban areas is up to six timneas expensive as in agricultural areas. Other studies suggest that the public cost of maintaining a family inthe city is up to 20 times that of a agricultural family. By providing direct increased income to some 60,000agricultural families, the potential saving in public expenditure is high.
3. Technical:
The Project is technically sound for it builds on a knowledge-based, technology delivery system and onadministrative mechanisms which have been tested and refined over the past 6 years, under the Technologyand Land Management Project. Many simple and cost-effective recommendations for improving productionand productivity and post-harvest crop storage and processing are available off-the-shelf from private andpublic sources, universities and farrners in Nicaragua. INTA alone has an inventory of more than 120technical recommendations. Intensification of participatory diagnosis techniques and local adaptation ofintegrated sustainabie practices in farmers' fields accompanied by more intensive training of field staff willcombine to maintain confidence between farmers and field staff, leading to better adoption rates ofimproved practices.
To ensure market outlets for increased production generated by Project efforts over coming years, INTA ispromoting a new service in support of farmer associations and links with the private sector agricultural
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merchants and suppliers. A similar service will support seed production efforts. The multidisciplinarygroup, whose modus operandi will be experimental during the first phase of the Program will dedicateefforts to promoting contacts between suppliers, traders and industries interested in agricultural rawmaterials and farmers' associations and groups interested in buying inputs and selling produce.
New initiatives, such as the competitive Grants Funds will be introduced gradually and only adopted on awider scale if proved to be effective. Major new investmnents in agricultural education and training will bedependent upon a balanced review of the sector, on the preparation of a strategy for implementation overthe coming years.
4. Institutional:
The first phase of the Program will focus in particular on the institutional settings as a condition for thedevelopment of the other technical components during the subsequent phases.
4.1 Executing agencies:
The Ministry of Agriculture (MAG-FOR), the National Institute for Technical Training (INATEC), theNicaraguan Institute for Agricultural Technology (INTA), and the COSINTA through the Foundation willbe the executing agencies. Universities, NGOs, and representatives of SMFs will play an important role aspart of the COSINTA and as potential clients of the competitive fund. Program implementationarrangements are relatively complex, as it is necessary to build an institutionally-pluralistic technologysystem with substantial private sector participation. Implementing agencies will include: MAG-FOR,INTA, the Foundation (to be established in accordance with Law 147 Ley General sobre PersonasJuridicas sin Fines de Lucro), farrners'organizations, universities, INATEC, other government technicalinstitutions, private sector firms, foundations, NGOs, and others. Although the number of participatinginstitutions is large, the Program will build on existing institutional capacity and programs and will requireonly incremental changes at each level of activity.
4.2 Project management:
The Directorate for Agricultural Technology (DTA) within MAG-FOR will be responsible for the overalltechnical implementation of the Project. Administrative and procurement functions will be carried out by aseparate Administration Unit under MAG-FOR's General Directorate for Administration and Finance.Specific implementation arrangements, roles and responsibilities are described in section C4 above.
Governance and transparency in Nicaragua have recently become a major concern of the donors'community, which is closely monitoring their applicability. Government's records on project managementcapacity are poor. Experience with other projects has shown that political considerations and preferentialtreatment easily prevailed over technical criteria when it came to designate key project managementpositions. Some projects attempted to resolve this issue by establishing external project implementationunits. While this solution has not proved immune from favoritism, it has failed to provide institutionalstrengthening and sustainability. Within this context, the design of the Project incorporated specific riskminimization's measures including: (i) the establishment of a Selection Committee composed byrepresentatives from the implementing agencies in a proportion satisfactory to the Bank and responsible forapproving terms of references, short lists, and appointment/renewal of key management staff; (ii) a clausein the Development Credit Agreement that the terms of reference and the short-lists be satisfactory to theBank; (iii) periodic annual independent evaluation of management capacity for the DTA and administrativecapacity for the Administrative Unit; and (iv) strengthening of MAG-FOR and implementing agencies'management capacity through specific training courses.
4.3 Procurement issues:
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At the time this PAD was prepared no up-to-date Country Procurement Assessment Report (CPAR) wasavailable. The last CPAR was prepared on September 4, 1992 by Carlos Mena, Consultant. Thisdocument does not raise any particular issue. A new draft procurement law and draft implementingregulations are currently being discussed by the Nicaraguan legislature and are expected to be adoptedsoon. Based on a preliminary review of the draft regulatory framework, it is anticipated that duringnegotiations it will be agreed to include the following "special provisions" in the Development CreditAgreement:
* Bidders shall not be registered as a condition for bidding.
The submission of a single bid shall not be a sufficient reason to invalidate the bidding process.
The content of the bids and the evaluation report thereof shall remain confidential with respect to thosenot involved in the evaluation process until the award of the bid is made.
The Credit would support the strengthening of an Administration Unit established within the Ministry ofAgriculture and Forestry's MAG-FOR General Directory of Finance and Administration. Two procurementspecialists would be recruited, one of whom with substantial experience in Bank-financed procurement, andtwo support staff. Additional actions include the adoption of an internal manual with a detailed descriptionof procurement responsibilities, processes, and internal controls, establishment of a reliable and securefiling system, and preparation of standard procurement documents acceptable to the Bank, including NCBdocuments, formats for shopping, and a contract for individual consultants. The current risk rating, basedon the situation at the time of the assessment is "high". However, it is anticipated that with theimplementation of the measures described above, which is already partially underway, the risk will besignificantly lower and the unit will have sufficient capacity to implement the Project.
4.4 Financial management issues:
A Financial Management Assessment was carried out by German Escobar, Consultant, and reviewed andcertified by Roque Ardon, Financial Management Specialists, on January 19, 2000. At the present time,the Project does not satisfy IDA's minimum financial management requirements. An action plan to remedythis situation has been agreed with MAG-FOR The Project will implement planning, budgeting,accounting and reporting systems which comply with the requirements of OP/BP 10.02. In additionMAG-FOR will establish an integrated system which will allow PMR-based disbursement. Traditionaldisbursement methods will be used for the first two quarters of the Project, or a longer period if, due tovalid reasons, such system is not in place by the credit effectiveness date. No Country FinancialAccountability Assessment has been prepared for Nicaragua.
5. Environmental: Environmental Category: B5.1 Summarize the steps undertaken for environmental assessment and EMP preparation (includingconsultation and disclosure) and the significant issues and their treatment emerging from this analysis.
The Project's Environmental Analysis has taken into account the environmental and socioeconomiccharacteristics as well as ecological vulnerability of the seven agroecological regions of the country. It hasdemonstrated that the Project overall is both directly and indirectly environmentally beneficial. The Projectwill contribute to the development, the local adaptation and the diffusion of improved and profitabletechnologies compatible with sustainable agricultural and animal husbandry practices appropriate to thecircumstances of SMFs. In addition, through training, education and capacity building activities, theProject will provide the appropriate social and environmental information and a knowledge base to themajor stakeholders, including researchers, technical assistance providers and producers to ensure thepractice of sustainable agriculture, consistent with economic, social and environmental criteria.
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There are no major negative environmental issues expected from Project implementation. Potentialenvironmental impact is related to the testing and adoption of technology promoted through INTA' s fieldservices and by those funded by the FAT and FAITAN competitive research grant facilities. These areintended to promote locally adapted "pathways" of changes toward sustainable agriculture, throughimproved, cropping patterns, integrated nutrient and pest control practices and soil and water conservationtechniques. If implemented according to prevailing best practices, the environmental impact of thesechanges will be positive. In the Pacific, Central and Northem Regions, the Project will increase the waterand soil quality, help decrease erosion rates and promote the implementation of agroforestry system . In theAtlantic Region, the Project will help moderate the advance of the agricultural frontier by encouragingsedentary agricultural practices and production systems adapted to the ecological conditions such as cocoa,oil palm and agroforestry. Technical themes will include those which encourage reforestation.
The only major issue is related to efficient and effective implementation of the Project. Although there is arisk of promoting technology options which rely on short term profit and marketing opportunities withouttaking full attention to medium and long-term environmental and social sustainability, the outlook forsuccessful implementation of the Project is positive. To mitigate this risk, there will be a need to ensure: (i)persistent attention to training in cost-effective and environmentally sustainable technology; and (ii) a readysupply of environmentally friendly recommendations developed by research. Operation manuals forsoliciting, preparing, evaluating and selecting proposals submitted for FAT and FAITAN funding includeenvironmental criteria of compliance. INTA already is developing sustainable technology under a specificprogram, including soil and water conservation measures, no-tillage and legume covercrops managementand IPM technology. An environmental specialist will sit on the evaluation committee for the FAT andFAITAN competitive funds. Environment specialists and technical assistance staff will be trained on theprinciples of agroecology and sustainable agriculture under the training program. The agricultural technicalDirectorate will have access to funds to recruit the services of environmental specialists to advise onspecific aspects of environmental management concern.
The Project complies with the objectives of OP 4.01, Environmental Impacts, OP 4.09 Pest Managementand OP 4.36 Forestry, which includes "to reduce deforestation, enhance the environmental contribution offorested areas, reduce poverty, and encourage economic development." No pesticides will be procuredunder this project. A provision will be made in the Operational Manual to screen potential pesticide use.
5.2 What are the main features of the EMP and are they adequate?
The main features of the EMP are related to mitigation measures of potential negative impact of the projecton the natural resources quality, environmental pollution, deforestation and loss of biodiversty for whichdetailed information is provided in Annex 13.
5.3 For Category A and B projects, timeline and status of EA:Date of receipt of final draft: March 24, 2000
The Environmental Impact Analysis (EIA, see Project files) includes: (i) detailed analysis of the currentenvironmental status of the country, (ii) GIS mapping of Nicaragua on the basis of biophysicalcharacteristics, demographic and poverty data, (iii) for each of the GIS zones identified, evaluation ofenvironmental impacts of the Project components, and (iv) mitigation measures when required, includingindicators and criteria of environmental compliance to be used in the selection process of proposalssubmitted to the Facility for Technical Assistance (FAT), and to the Facility for Nicaraguan AgricultureTechnological Research (FAITAN). In addition appropriate provisions have been included in the budget toensure that specific recommendations for mitigation measures and supervision will be adequately funded,such as specialized education on sustainable natural resources management and environmental impact audit
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under the responsibility of MARENA.
5.4 How have stakeholders been consulted at the stage of (a) environmental screening and (b) draft EAreport on the environmental impacts and proposed environment management plan? Describe mechanismsof consultation that were used and which groups were consulted?
A process of intensive consultation of stakeholders has been put in place during Project preparation. At thelaunching phase of the EIA, in June 1999, a workshop was held in Managua with the major public andprivate stakeholders. The participants discussed the scope and objectives of the EIA. During the EIA, theconsultants systematically interviewed farmers and front line agents from all agroecological zones - onaverage ten persons per zone- to assess and compare the perception of local land users on the extent andseverity of the environmental issues in comparison to the results of specialists evaluation. The draft EIAreport was discussed in a final workshop held in Managua with representatives of all stakeholders, and theoutcomes have been incorporated in the final report.
5.5 What mechanisms have been established to monitor and evaluate the impact of the project on theenvironment? Do the indicators reflect the objectives and results of the EMP?
Process of environmental impact has been established, including environmental audit, criteria ofenvironmental compliance to be used in the selection process of proposals submitted to the two grantfacilities (FAT, FAITAN) under the competitive fund, and indicators of environmental impact.
6. Social:6.1 Snmmarize key social issues relevant to the project objectives, and specify the project's socialdevelopment outcomes.
A social assessment (SA) was carried out during the Project preparation and the report is in the projectfiles. The main objectives of the SA were to: (i) ensure that Project objectives and incentives for change areappropriate and acceptable to beneficiaries; and (ii) minimize or mitigate adverse social impacts. Acombination of secondary data and qualitative methods were used to carry out the social assessment insite-specific Project locations. All key stakeholders were consulted extensively during the assessment, andwill continue to be consulted during the remaining part of the Project cycle. Based on the findings andrecommendations of the SA, an Indigenous Population Participation Plan (IPPP) has been prepared (seeAnnex 12). The SA report provides details on the content, form and mechanism of the indigenous strategyand the strategy will be included in the Project Implementation Plan.
6.2 Participatory Approach: How are key stakeholders participating in the project?
During the Project preparation, primary beneficiaries -small and medium-scale fartn households- wereconsulted through numerous field visits, nine regional stakeholder workshops, and case studies. Duringimplementation, COSINTA, currently an informal council bringing together MAG-FOR, INTA, INATEC,NGOs, farmers, universities, public and private sector research and technical assistance actors, will begiven formal status and strengthened to permit it to participate in the periodic review of agriculturaltechnology policy and in the definition of the national agricultural technical assistance, research andtraining agenda. Primary beneficiaries would be represented in the local and regional committees for theselection of proposals submitted to the Facility for Technical Assistant (FAT), as well as in the selectioncommittee of the Facility for Nicaraguan Agriculture Technological Research (FAITAN). Primarybeneficiaries would be also consulted through beneficiary assessments.
6.3 How does the project involve consultations or collaboration with NGOs or other civil societyorganizations?
Community organizations, trade unions, professional associations, business associations, research
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institutes, religious organizations and NGOs have been consulted during Project preparation. Theparticipatory, pluralistic nature of the Project will make involvement of NGOs and other civil societyorganizations (CSOs) a natural process throughout implementation. Through the COSINTA and theFoundation, NGOs and CSOs will play an active role in the management and decision making of the publicfunds under the Project. Through access to the grant facilities (FAITAN and FAT), research institutions,universities, private firms, farmers' associations, and small companies will implement research andtechnical assistance projects. Farmers will be able to play an active role in funds allocation indirectly,through their associations (gremios) and directly, by selecting technical assistance providers (forcontractual arrangements for service delivery, see Annex 6). Small and medium size farmers willparticipate in the monitoring and evaluation process through periodic beneficiary assessment.
6.4 What institutional arrangements have been provided to ensure the project achieves its socialdevelopment outcomes?
Institutional arrangements encompassing the power and practices of formal and informal organizations, theinter-relationships among those organizations, and strategies to ensure efficient coordination among themare described in the Social Assessment (see Project files). Specific institutional arrangements have beenincluded in the Project design to allocate resources (the Foundation), and deliver services (FAITAN andFAT). Section C4 provides the details of the implementation arrangements.
6.5 How will the project monitor performance in terms of social development outcomes?
The Project identifies explicit indicators focusing on the level of satisfaction with Project outcomes andinstitutional performance. These indicators have been integrated within the Project monitoring system andare part of the trigger indicators to move to the next phase. While no specific resources have beenearmarked for separate social impact monitoring, implementation arrangements have been designed as to beflexible and to respond to ongoing monitoring and evaluation findings.
7. Safeguard Policies7.1 Do any of the following safegard policies apply to the project?
Environmental Assessment (OP 4.01. BP 4.0l1 GP 4.01) Z Yes O NoEl Natural habitats (OP 4.04. BP 4.04, GP 4.04) O Yes O NoOi Forestry (OP 4.36, GP 4.36) Yes l NoEl Pest Management iOP 4.09) N Yes El NoEl Cultural Property (OPNl 11.03) L Yes IZ NoEl Indigenous Peoples SOD 4.20) Z Yes L NoO Involuntary Resettlement (OD 4.301 l Yes 12 NoEl Safety of Dams (OP 4.37, BP 4.37) l Yes Z NoEl Projects in International Waters (OP 7.50. BP 7.50, GP 7.5)) LI Yes Z NoEl Projects in Disputed Areas (OP 7.60. BP 7.60, GP 7.60 El Yes O No
7.2 Describe provisions made by the project to ensure compliance with applicable safeguard policies.
A Social Assessment has been completed at the end of March, 2000. Based on the findings andrecommendations of the assessment an Indigenous Population Participation Plan has been produced (IPPP,see Annex 12). An Environmental Impact Analysis has been conducted during Project preparation (seeabove), and an Environmental Management Plan has been prepared (EMP, see Annex 13).
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F. Sustainability and Risks
1. Sustainability:
The project carries three risks affecting sustainability. These vary in severity as follows:- Financial sustainability is a major issue for agricultural technology systems throughout the world. The
project will incorporate strategies as described above to address this risk and to enhance financialsustainability of the project.
- Institutional sustainability is a moderate risk due to the participation of a large number of institutionsand the need for these to relate in new ways, i.e., public-private partnerships for research and technicalassistance.
- Environmental sustainability presents a minor risk. Project activities will improve knowledge anddiffusion of environmentally friendly technologies.
2. Critical Risks (reflecting assumptions in the fourth column of Annex 1):
Risk Risk Rating Risk Minimization MeasureFrom Outputs to ObjectiveLegal/institutional framework does not M WB and other donors' continuos dialogue withfavor development of non-profit GON.organizations.A fading, through time, M Risk monitoring during bi-annual supervisions.political-institutional support to promote Promotion through mass-media campaign,the development of the system. workshops, and SIA web site. Involvement of
parliamentarians to field visits.Institutional commitments for Program's H Promotional campaign to ensure highdemand-driven focus and pluralism not participation of the public, the private sector andmaintained. NGOs; increased participation of SMFs in
decision-making.Political criteria and preferential H Establishment of a selection committeetreatment override technical judgement representing implementing agencies, Bank's nowhen selecting key project management objection for TORs and shortlists, and periodicstaff. review of management capacity; close
monitoring of the staff-mix & educational level.Lack of available funds for local M Signing of agreement with Government; duringcounterpart contribution and Government each budget year, close follow up ofdoes not maintain its budget commitment, commitment level; timely feed-back to decisionin real terms, for INTA. makers and pressure groups on the progress
made through the project.Shortage of sufficient number and quality M Timely, quality dissemination of opportunitiesof private research agencies. offered by FAITAN and FAT; provision of
training to raise quality standards.Civil society unreliance on Government's M Bank dialogue with GON and Civil society.initiatives. Leverage through other donors.Trained
procurement personnel at the Project level;Lack of institutional or managerial M Increased leverage through MAG-FOR politicalwillingness to provide & share quality influence; establishment of a rewarding system;information through SIA. assessment of the need and type of infonnation
provided by participating institutions andcreation of an information exchange mechanism.
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From Components to OutputsLack of sustained commitnent by M Agreement with GON for a sustainedgovernment to institutional strengthening. institutional commitment; promotional campaign
to keep the visibility of the Project.Deficiency in Counterpart funds M Close follow up of budget allocation andavailability. dialogue with the Government; budget
commitment as part of trigger indicators.Lack of political commitment to involve M WB dialogue with GON underlying thethe private sector. importance of the private sector involvement.Political commitment to involve private M MAG-FOR to sign formal agreement.sector.Limited private sector interest in service M Involvement of the private sector in theprovision and SIA participation. development of the system.
Overall Risk Rating
Risk Rating - H (High Risk), S (Substantial Risk), M (Modest Risk), N(Negligible or Low Risk)
3. Possibie Controversial Aspects:
None
G. Main Credit Conditions
1. Effectiveness Conditions
- INTA Implementation Agreement with MAG-FOR, setting forth their respective responsibilities,signed by both parties;
- INATEC Implementation Agreement with MAGFOR, setting forth their respective responsibilities,signed by both parties;
- Operational Manual issued and adopted by MAG-FOR, INTA and 1NATEC;
- Baseline survey to provide quantitative benchmarks for assessing key impact indicators carried out;
- Financial management system established to the satisfaction of IDA.
2. Other [classify according to covenant types used in the Legal Agreements.]
Conditions for disbursement against Component 2:
- Establishment under the Nicaraguan Law 147, and thereafter maintainance during the execution of theProject, of a Facility Administrator (The Foundation) in form and substance satisfactory to IDA. Thatmeans: (i) a non-profit organization with the participation of the public and the private sector for theexecution of Component 2, and (ii) with legal personality granted by the "Asamblea Nacional",published in "la Gaceta" and with its statutes registered in the respective official registry.
- Foundation Implementation Agreement with MAG-FOR, setting forth their respective responsibilities,
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signed by both parties.
H. Readiness for Implementation
El 1. a) The engineering design documents for the first year's activities are complete and ready for the startof project implementation.
1 1. b) Not applicable.
Z 2. The procurement documents for the first year's activities are complete and ready for the start ofproject implementation.
Z 3. The Project Implementation Plan has been appraised and found to be realistic and of satisfactoryquality.
El 4. The following items are lacking and are discussed under loan conditions (Section G):
* The subsidiary agreement between MAG-FOR and the Foundation, setting forth their respectiveresponsibilities in the implementation of Part B of the Project will be prepared and submitted to IDA.
* The legal personality for the Foundation needs to be established in form and substance satisfactory toIDA.
1. Compliance with Bank Policies
1 1. This project complies with all applicable Bank policies.El 2. The following exceptions to Bank policies are recommended for approval. The project complies with
all other applicable Bank policies.
Norman Bentle Piccioni ohn Redwood D-M Dowsett-Team Leader Sector ManagerlDirector Country ManagerlDirector
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Uquillas, J. E. and B. G. Navas. 1993. "Linking Research, Extension and Agricultural Education: anExperience in Ecuador." Overseas Development Institute. Agricultural Administration (Research andExtension) Network Papers (39a): 13-27.
World Bank. 1995. Republic of Nicaragua Poverty Assessment. Volumes I and II. Washington, D.C.
---------. 1999. "Ex-Ante Economic Analysis of Agricultural Research and Extension." AgriculturalKnowledge Information System Good Practice Note. Washington, D.C. Processed.
---------. 1999. "Agricultural Extension." OED Lessons and Practices. No. 6, Washington, DC. Processed.
---------. 2000. World Development Report 1999/2000: Entering the 21st Century. New York: OxfordUniversity Press.
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Annex 1: Project Design Summary
NICARAGUA: Agricultural Technology ProjectKey Performance
Hierarchy oOfdObjetives Indicators Monitoring Evaalualion Critical AssumtionsSector-related CAS Goal: Sector Indicators: Sector/ country reports: (from Goal to Bank Mission)Increased agricultural Family real net income Country Studies, Reports by Sustained investment inproductivity and agricultural increased by 40% for SMFs at Ministry of Finance and improvement of social servicesfamily income for small and the end of the program. MAG-FOR; Reports by lN and in poverty alleviationmedium-scale farm Agencies. programs.households (SMFs).
CAS benchmark reviews CAS benchmark reviews, Political stability.confirm area productivity and Country Studies, Reports byincome trends as anticipated Ministry of Finance andby the program purpose MAG-FOR; Reports by UNindicators below. Agencies.
Program Purpose: End-of-Program Indicators: Program reports: (from Purpose to Goal)Increased agricultural At the end of each program Country studies (WB, LSMS, Economic and social stabilityproductivity and income of phase, average agricultural Ministry of Finance, maintained in the country andparticipating small and yields of participating farm MAG-FOR, INTA, UN the sub-region.medium-scale farm households show the following Agencies, Central Bank, etc.).households. cumulative increments over
baseline benchmark values:
Program phases: Phase % Farm Households Monitoring & Evaluation GON Long-term policy
Phase I: System I 2 5 % 60, 0 0 0 system reports. committement to executeEstablishment. I I 4 0 % 8 0, 0 00 program and to
III 7 0 % 95, 000 promote/facilitate, throughPhase II: System IV 80 % 110,000 other programs andStrengthening. institutions, agriculturalPhase III: System and real net household income financial services,Epanseio. shows the following infrastructure and
Expansion. increments: communications in favor ofPhase IV: System Phase % Farm Households SMFs.Consolidation. 15 60,000 Stable market and agricultural
I I 20 % 8 0, 0 00 output prices. Terms-of-tradeIII 3 5 % 95, 000 remain constant in real terms.IV 40 % 110 000..IV 40 % 110,000 Mitigation measures against
natural disasters adopted byGON.
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Key PerformanceHierarchy of Objectives tndicators Monftoring & Evaluation Critical Assumptions
Project Development Outcome / Impact Project reports: (from Objective to Purpose)Objective: Indicators:
Establishment of an efficient, At phase end, at least 60,000 M&E system reports. Stable macroeconomicdemand driven agricultural SMFs receiving advisory environment.technology, knowledge and services. Development of road
innovation system. At phase end, at least 80% M&E system reports. infrastructure and expansionrate of adoption by SMFs of of telecommunications.technology messages Programs at national levelintroduced by front line staff. aimed at steadily reducing the
At phase end, at least 60 % of Beneficiary Assessment. vulnerability of populations tosurveyed farm households, natural threats and nowith inclusion of at least 40% occurrence of large-scalefemale respondents, express natural disaster.satisfication with the systemperformance.
At phase end, at least 35% FAITAN's annual reports;increase in number of Record/Directory of serviceresearchers, specialists, providers.technical assistance andtrainers working ontechnological solutions in thetechnology system.
At phase end, at least 20% of Evaluation at end of phase.the total national inventory oftechnologies aimed atresolving problems of SMFsprovided by Universities andprivate sector researchinstitutions (profit andnon-profit).
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__ _ 0~~~~Ke I-rfran.~
Output from each Output Indicators: Project reports: (from Outputs to Objective)component:1. Institutional framework for 1.1 MAG-FOR and line 1.1 Official MAG-FOR Favorable legal andthe operation of the system agencies have invested in documents. Bi-annual institutional framework for theestablished. infrastructure, equipment and supervisions. development of profit and
staff training to develop non-profit organizations.pre-investment andmonitoring & evaluationcapacity.
1.2 By year 1, INTA has 1.2 Institutional inventories Stable, political-institutionaladopted a new organizational and budgets. Training records. willingness to promote thechart, operational regulations Bi-annual supervisions. development of the system isand is operating in accordance maintained.with new by-laws.
1.3 By year 2, COSINTA is 1.3 Management Council's Institutional commitmentsformalized and managing the Record Book. Bi-annual regarding the program'scompetitive fund through a supervisions. demand-driven focus arefoundation. maintained.
1.4 By year 2, the Agriculture 1.4 Official MAG-FOR Technical criteria in staffTechnology System's (SIA) documents. Bi-annual selection prevail.institutional framework is supervisions.enacted.
1.5 Project management 1.5 Annual reports. Bi-annual Availability of funds for localestablished and coordinating supervisions. Audits. counterpart contributions.effectively with public and Evaluation at end of phase.private institutions and agents.
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2. Competitive Fund for agric 2.1 By phase end, at least 5 2.1 FAITAN's records. Sufficient number and qualityultural services created and calls for research proposals Bi-annual supervisions. of private research agencies.operating. are carried out and at least 36 Civil society's reliance on
research-services contracts are Government's initiative.awarded to local universities,the private sector, regionalresearch centers or overseasuniversities.
YI Y2 Y3 Y4 TOT1 2 1 1 5
2.2 70% of awarded researchprojects provide solutions to 2.2 Foundation and FAITAN'SMFs production problems. s records. Bi-annual
2.3 10 different local research supervisions.institutions and 6 different 2.3 Research projects finalregional and overseas research reports; Foundation andinstitutions have singly or FAITAN's records. Bi-annualjointly participated in the supervisions field visits.execution of researchcontracts.
2.4 SMFs have access togrant funded technical 2.4 Foundation and FATsassistance as follows (# of records. Bi-annualfamilies): supervisions
Y1 Y2 Y3 Y4
* 528 1056 1584 2432** 528 1056
* Le6n, Chinandega, Managua** To be defined in 2001.
2.5 By phase end, at least 30different private service 2.5 Final report of Technologyproviders and 100 different Transfer Project andindividual professionals or Foundation's annual reports.technicians provide services Bi-annual supervisions.cofmanced by FAT.
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3. INTA strengthened to 3.1 At phase end, INTA is in 3.1 Technological inventory The Government maintains itsimprove research capacity, a position to train and coach document updated each year budget commitment, in realincrease ATPm coverage, and at least 500 technicians per (INTA Files). terms, for INTA.become a service provider in a year and implements at least Product prices and factorspluralistic system. 30 service contracts, with remain in a viable range.
public and private clients,with explicit second tier Counterpart and externalfunctions. funds are available on time.
3.2 INTA's annual reports3.2 At phase end, INTA has (INTA files).consolidated at least 180technologies, of which at least6 new ones relating to postharvest and processing and atleast 50 technologies withcorrect indications onadoption (geographic andclient profile, degrees of
adoption, etc.). 3.3 Annual reports.
3.3 The production of Agreement records.conventional and artisanal Agreement documents (INTAseed material allows the Files).following coverage:
(mzs.xl 000):Item Y1 Y2 Y3 Y4
Corn 80 95 117 117Beans 26 30 42 45Rice 15 32 30 30Sorgh 20 20 20 20Grass .7 2 4 6
through at least 500commercial and/or financialagreements by phase end,facilitated by INTA betweengroups of producers and 3.4 Annual reports. Trainingintermediaries. records.
3.4 By phase end, at least 400technical assistance agents ofINTA, firms, NGOs receiveon-the-job training at a ratioof at least 20 days/person per 3.5 Documents of annualyear. summary of validation
3.5 Each year, INTA prepares technology (INTA Files).a summary of the outcomes ofthe validation of technologies,producers' records and thePAEF instrument, to bereviewed jointly with DTA ofMAG-FOR.
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4. Agricultural education & 4.1 By the end of Y2, a 4.1 Project files. Bi-annual Technical criteria prevail intraining system established comprehensive, supervisions. interinstitutional coordination.and piloted. interinstitutional strategy for Low turover of staff involved
agricultural education and in project.strategy is available.
4.2 By the end of Y2, a 4.2 Project files. INATEC Goveant ent willinsiess totraining plan for service Records. Bi-annual interdisciplinary system.providers and technical supervisions.assistance and leaders offarmers established.
4.3 By end of Y1, a 4.3 Project files. Bi-annualConsultative Committee and supervisions.an executive trainingmanagement unit thatcoordinates the EducationAgricultural and Training
System is created and 4.4 Project files. Conceptfurnctioning. document. Curriculum
4.4 By end of Y2, design for document. Organizationalagricultural technical training manual.center completed.
4.5 By end of Y2, technicalagricultural training programoperational.
4.6 By end of Y3, a 4.5 Bi-annual supervisions.conceptual document andpedagogical guides ondeveloping curricula andteaching programs for thestudents of the agriculturaltraining institutions is created.
4.7 By Y 3 of the project,three education centersrenovated, equipped and usingFBC method.
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5. National Agriculture 5.1 By Yl end, analysis, 5.1 Study final reports, project Institutional willingness toInformation System (SIA) design and programming of records. Bi-annual provide and share qualityestablished and piloted. software completed. supervisions. information through the
5.2 By Y3 end, the system is 5.2 Pilot study report. system.pilot tested in two regions. Bi-annual supervisions. Technical criteria in relation
5.3 By Y2 end, operation 5.3 Operational manual. to staff prevail.guide for system utilizationand maintenance prepared. Low turn over of staff
5.4 By Y3 end, 20 agriculture 5.4 Minutes of training associated with SIA.sector institutions are events, training records, Willingness of privateinter-connected, inputting and dissemination materials agencies to remain associatedgenerating information from published. with SIA.the SIA.
5.5 Training and capacity 5.5 Evaluation reports.building plan developed andimplemented in two pilotregions.
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Key PerfornanceHierarchy of Objectives Indicators, Monitoring & Evaluation Critical Assumptions
Project Components I Inputs: (budget for each Project reports: (from Components toSub-components: component) Outputs)1. Development of US$ 9.5m M&E system. Bi-annual Sustained commitment byinstitutional capacity. supervisions. Evaluation Government to institutional
reports strengthening.
2. Establishment of a US$ 8.3m M&E system. Bi-annual Counterpart funds availability.competitive fund for supervisions. Evaluationagricultural services. reports
3. Strengthening of INTA's US$ 16.7m M&E system. Bi-annual Political commitment tooperations. supervisions. Evaluation involve private sector.
reports
4. Establishment and piloting US$ 2.7m M&E system. Bi-annual Private sector interest inof an Agricultural Education supervisions. Evaluation service provision and SIA& Training System. reports participation.
5. Establishment and piloting US$ 1.2m M&E system. Bi-annualof an Agricultural Information supervisions. EvaluationSystem. reports
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Addendum to the logical framework - trigger indicators for program's phasing
yConent of tie Prg *Phe SetikSstecm Rfm asis Ph ase SystemPhase II1: System Phase IV: System;.i i: :Pha sesiV;f S : ;::t: LrengthenZin i:.* ;jt Exp ansiont *: ConsolidatXon
Domains Criteria Critical Triggers to move to Phase II Critical Triggers to move to Critical Triggers to move Final Indicators of the APLPhase III to Phase IV
Information By phase end, M&E follows routine (i) same, (ii) in at least 4 (i) same, (ii) in all regions, (i), (ii), (iii) sarne.and Feedback feedback procedures, and SIA provides regions, (iii) agricultural (iii) samne.
Evaluation comprehensive information services in at information websiteand feedback least 2 regions to all relevant stakeholders operational by end of year 2.
(reports).
Evaluation By phase end, MAG-FOR has routinely Evaluations correlated withevaluated data for at least three year national and intemational(reports). macro-economic indicators
Adoption By phase end, at least 60% of farmers At least 700/o of farmers At least 80% of farmers At least 90% of farmersattended by the project are satisfied with the attended by technical assistance attended by technical attended by technical assistancetechnical assistance services received have adopted at least one new assistance have adopted at have adopted at least one new(beneficiary assessments) and have adopted technology (technical least one new technology technology (technical assistanceat least one new technical recommendation assistance records). (technical assistance records).(technical assistance records). records).
Coverage By phase end, (i) at least 60,000 SMFs have By phase end, (i) at least By phase end, (i) at least By phase end, (i) at leastaccess to technical assistance services and (ii) 80,000 SMEs have access to 95,000 SMFs- have access to 110,000 SMFs have access to
Effects one pilot experience of agricultural education technical assistance services technical assistance services technical assistance services andis concluded in at least three centers and (ii) at least 1350 persons and (ii) at least 2700 persons (ii) at least 5400 persons given(technical assistance records). given education/training per given education/training per education/training per year.
year. year.Availability By phase end, (i) at least 60 technologies are (i) at least 80 documented (i) all documented (i) same, (ii) same, adjusted if
validated and/or documented in technology technologies with indication on technologies are reviewed required.guidelines (guidelines), and (ii) a first adoption, (ii) consolidated and prioritized, (ii) same,generation agricultural education and agricultural education and adjusted if required.training concept is available (concept). training concept.
Resources By phase end, public sector funding for Increase in real terms of publicImplementati agricultural research and technical assistance sector funding for agricultural
on and corresponds to commitments made in the research and technicalperformance development credit agreement (reports). assistance compared to average
of phase 1.
Institutional By phase end, (i) the foundation hosting By phase end, the foundation By phase end, the foundationarrangements COSINTA is solidly established after at least hosting COSINTA has hosting COSINTA has
two years at full development (minutes, leveraged funds for at least 3 leveraged funds for at least 6reports), and (ii) the Directorate of third party funded projects. third party funded projects.Agricultural Technology is fully operational(reports).
Design Strategy By end of year 2, a long term research,setting technical assistance and agricultural
education and training strategy is approvedby MAG-FOR and COSINTA, andsubsequently implemented (strategy, reports).
* The trigger indicators to move to Phase III and IV of the program would be further reviewed during program implementation.
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Annex 2: Project Description
NICARAGUA: Agricultural Technology Project
The Project is the first phase of a long term Program for the generation/enhancement of an efficient,demand-driven, agricultural technology knowledge and innovation system. The Project consists of fivecomponents to address the key issues identified in Section B of the main text and to set the basis for theProgran's next phases. These include: (i) development of institutional capacity; (ii) establishment acompetitive fund for agricultural services; (iii) strengthening of INTA's operations; (iv) establishment andpiloting of an agricultural technical education & training system; and (v) establishment and piloting of anagricultural information system.
By Component:
Project Component I - US$9.47 millionDevelopment of institutional capacity
The Government will reform and strengthen the public institutions of strategic significance to the sub-sectorand establish institutional arrangements to encourage the involvement of both public and private institutionsin agricultural technology and agricultural technical education & training activities. The Ministry ofAgriculture (MAG-FOR), as the legal authority to coordinate Project activities among the different publicand private executing agencies, will manage the overall Project through a new Directorate for AgriculturalTechnology. A representative group of public and private sector institutions, including MAG-FOR, INTA,INATEC, NGOs, farmers' organizations and universities (COSINTA) will constitute the governing body ofa Foundation that will manage a competitive fund with grant facilities for agricultural services. TheCOSINTA will act as a national scientific forum for consulting and agreeing on agricultural technologyissues and policies. The Nicaraguan Institute for Agricultural Technology (INTA), an autonomous publicinstitution under the umbrella of the MAG-FOR, will take responsibility for managing and executingpublic-sector services on research and technical assistance to SMFs. The Agricultural Department of theNational Institute for Technical Training (INATEC), a public institution under the umbrella of the Ministryof Labor, will be in charge of executing the Agricultural Education & Training component, sharingmanagement responsibilities with INTA and MAG-FOR. The Institutional capacity developmentcomponent will fund salaries, premises, vehicles, equipment, training, studies and operating expenses forMAG-FOR, INTA, INATEC and the Foundation. Costs for Monitoring & Evaluation and for preparingnew investment operations are included under this component.
A newly established Directorate for Agricultural Technology (DTA) will manage the overall technicalimplementation of the project. The DTA will comprise a Director, three sub-sectoral specialists in the areasof research and technical assistance, technical education and environment, and three support officers in theareas of planning and monitoring, information technology and communication. During the first two years ofProject execution the Directorate will receive technical support by an international consultant, funded byCOSUDE under a separate bilateral agreement, to assist in the establishment of effective programmanagement arrangements and institutional capacity. Besides its project management responsibilities, theDirectorate will define sub-sectoral strategies and policies, monitor markets, undertake analytical studies,and submit proposed laws to the Congress. It will promote, monitor and evaluate the implementation of thenational agricultural technology strategy, monitor (in conjunction with INTA) the technical quality of theProgram's achievements, participate in the supervision of the activities of executing entities, and publicizethe Program's achievements and lessons leamt. The Directorate will ensure the consistency of the nationalagricultural technology strategy with the National Environmental Action Plan of the AlianzaCentroamericana para el Desarrollo Sostenible (ALIDES), and the coordination of ongoing and future
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donor support to publicly funded research, technical assistance and agricultural education, supervising fieldactivities and ensuring quality control of sub-contracted technical assistance, research and technicaleducation functions. The project's administrative, financial and procurement functions will be performedby an Administrative Unit under the General Directorate for Finance and Administration of theMAG-FOR. This unit will be composed of an Administrative Director, two Procurement Specialists and anAccountant. The director of the DTA will have control over payments and procurement processed by theadministrative unit. The administrative unit will work closely with the respective administrative units of theINTA, the INATEC and the Foundation. The administrative unit will advance funds to support operationsof each institution for a 6 month period. The advances will be subject to properly agreed financial reportingon previous disbursements. The Planning Officer and Monitoring and Evaluation officer will be in chargeof ensuring that current activities correspond to planned activities. Officials of the INTA, the INATEC andthe Foundation will be properly trained under the Project as to manage IDA's financial and procurementprocedures. Each executing agency will produce financial and procurement plans on a yearly basis,satisfactory to the Bank and according to the procurement and financial guidelines described in Annex 6.Appointment and any change of staff in the DTA and the Administrative Unit staff will be done by acommission composed of MAG-FOR, INTA and INATEC from a shortlist acceptable to IDA and the othercofinanciers.
The National System for Agricultural Technology (SINTA), created in 1997 as a national counterpart forthe Central American System for Agricultural Technology, does not have an independent legal status.However, it does have a charter and by-laws which establish its objectives as: cooperating in theformulation of public policies, promoting activities of technology development and training andcoordinating the activities of the institutions which make up the system. SINTA is open to farmerorganizations, higher education institutions and research centers. Under the Project, its Council, theCouncil for the National System for Agricultural Technology (COSINTA) will be given legal statusand become the Foundation's highest governing body -the General Assembly. In this capacity, COSINTA'sinvolvement in the management of the competitive Fund will greatly contribute to enhance its more widerrole of a national forum for agricultural technology. Chaired by the Minister of the MAG-FOR, theCOSINTA will have representatives from all stakeholders in agricultural technology, including INTA,INATEC, universities, research institutions, farmers' associations, NGOs and the private sector. TheCOSINTA will meet twice a year or as requested by at least two of its representatives or any of theexecuting agencies. The Directorate of Agricultural Technology will act as its secretariat and receiveadvice from COSINTA on technology policy and strategies. A Management Board composed of fivemembers appointed by COSINTA will coordinate the Foundation's plans and programs, approve programyearly operational plans, monitor financial and physical execution program, approve audits andevaluations, and review other reports or activities critical for sound program performance.
The Foundation for Agricultural Technology Knowledge and Innovation (the Foundation); a vitalcomponent of the Government's strategy to increase the participation of civil society in the process oftechnology innovation, will be a mixed enterprise with private status. The Foundation will mobilize publicinvestment in support of accelerated adoption of new agricultural technology by small and medium-scalefarm households. The Foundation will administer a fund with grant facilities for agricultural research,technical assistance and, at a later date, agricultural education & training and other agricultural servicesunder a subsidiary contract with MAG-FOR. Through operation of the Foundation, it is expected that atransparent, pluralistic mechanism will be created to promote the development of skills and capacity ofpublic and private sector partners in the market of farner advisory services, while improving efficiency inthe use of public funds in support of technology development. Elected by the COSINTA, a ManagementBoard will be responsible for the operations of the Foundation. Agreement by the Bank to the statutes andregulations of the Foundation and to the subsidiary contract between MAG-FOR and the Foundation willbe a condition of disbursement for the Competitive Fund component of the Project. Once operational, the
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Foundation will contract national research and technical assistance institutions, local and foreignuniversities, agricultural schools, technical assistance and training agents, and other services providersthrough competitive means. The competitive research and technical assistance grant facilities (FAITANand FAT) will be supervised by a Managing Director, who will report to the Management Board. TheFAITAN and the FAT will each have its own coordinator.
The Nicaraguan Institute of Agricultural Technology (INTA) will play a major role in Projectimplementation, with direct responsibility in technology generation and transfer services and as second-tierinstitution for agricultural advisory services to small and medium-scale farm households delivered byprivate service providers, either directly contracted or under competitive grant funding. Experience underthe Agricultural Technology component of the Nicaragua ATLMP has demonstrated INTA's capacity forProject implementation. INTA relies on 27 local technical assistance agencies, 5 research centers, and 4research stations operating in the countryside delivering services to producers. Institutional strengtheningactivities will include formal training for INTA staff, the development of a career development structureand strengthening of the decentralization of INTA's activities including the opening of new agencies in theAtlantic Region. While INTA is expected to relinquish gradually part of the responsibility for directadvisory services to small farmers, private service providers, and NGOs, the process will be gradual andwill proceed on the basis of positively evaluated results. Meantime, INTA will maintain its role as the mainprovider of agricultural research and technical assistance services in Nicaragua. As the key agriculturalresearch institution, INTA's research stations will be managed by a local board (universities or localeducation centers, producers associations, municipalities representatives), to ensure that research agendasare demand-oriented and the long term productivity of the national natural resource base is maintained. Inview of the changes in its role and scope of its activities, the organizational structure of INTA will bemodified to reflect its new functions.
The Agricultural Education Department of INATEC operates 11 training centers countrywide, whichwill be rehabilitated and strengthened to train technicians and farmers. INATEC will rely on its existingadministrative capacity and procedures to manage its responsibilities under the agricultural education &training component. It will receive support under this component as recommended in the agriculturaleducation study produced during the first 18 months of Project implementation (see below). This wouldinclude a review of the curriculum scolarum of technical agricultural schools (CETAs) and review of thecase for strengthening existing capacity in these schools or redeploying the teaching staff to make a greaterand more cost-effective contribution to farmer training. INATEC will be an active member of theFoundation, and will provide technical assistance and guidelines to local-level agricultural technicalcolleges, as their coverage increases.
A Monitoring and Evaluation (M&E) module for the Project activities will be established in theAgricultural Technology Directorate (DTA) of the MAG-FOR with decentralized units in INTA, INATECand the Foundation. Specialist personnel will be hired to strengthen the DTA and the units during the firstphase. The Project will also strengthen the MAG-FOR Directorate for Evaluation and Monitoring aswell as the Directorate for Statistics. Both Directorates will provide support to the DTA for carrying outperiodic surveys to evaluate Program impact against a baseline to be built before Projects start.
Three levels of Project monitoring and evaluation will be supported: (i) internal monitoring and evaluationof the regular operation of the national technical assistance, research and education and training system;(ii) an external beneficiary assessment to elicit feedback from a representative sample of SMFs, to assesslevels of satisfaction with the services provided and to identify areas for improvements or reorientation ofthe services; from an economic, socio/institutional and enviromnental perspectives; and (iii) an initialbaseline survey of farmers and resource use to provide the basis for repetitive surveys providing panel data.On the basis of these results, the cost-effectiveness of the different models of agricultural technology
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service and education and training provision will be assessed and the conclusions incorporated in the designof support mechanisms during the various phases of the national Program. Internal monitoring andevaluation will follow the indicators included in the project's logical framework (Annex 1) and in theProject Implementation Plan (Project files). The followving types of activities should be ensured:
- Regular review and analysis of information internally generated by the public and private field staff. Thisincludes information on: (i) participation rates of farmers (women and men) being attended by technicalassistance staff; (ii) the number of technical assistance contact groups and their distribution by gender(women, man and mixed) and by typology of farmers; (iii) the number of demonstration plots, trials andvalidation plots; (iv) comparison of yields on demonstration plots and on control plots; (v) the number oftechnical recommendations being introduced; (vi) the number of training sessions and technology reviewmeetings; and (vii) the number and type of field trials carried out by researchers.
- Assistance and support to field staff in performing financial evaluation of expected net benefits ofadopting recommended technologies and support to the farmer association and marketing support staff ofINTA in contracting and reviewing market studies and post harvest crop processing project proposals.External evaluation of Project impact would be carried out using: (i) beneficiary assessment studies to becarried out at least every two years; (ii) baseline and update panel surveys of agricultural production andrevenue from farm activities will be carried out at least every two years as well as environmental impactat least at the beginning and at the end of each phase of the Program. The results of these surveys willprovide quantitative indicators to assess the impact of agricultural technical assistance and researchprovided by public and private service providers. On the basis of these results (information available forat least four crop seasons) the cost-effectiveness of the different models of agricultural technologyservice provision will be assessed and the conclusions incorporated in the design of support during thenext phase of the national Progratn; and (iii) ten ad hoc technology adoption studies will be undertakenevery year. These will be simple exercises involving 7-10 working days each and will be carried out byindependent professionals, either recruited from within MAG-FOR or consultants. Communities will beselected on the basis of information collected by the internal monitoring system. Within the communities,a purposive sample of farmers to be interviewed will be chosen, reflecting the social stratification of thecommunity and the gender division of labor. The case studies will report in-depth information abouttechnology adoption, the reasons for adoption, the modifications introduced by the adopting farmers, thereasons for rejection, if applicable, the farmer's appreciation of the risk involved in adopting thetechnology, and how the technology contributed to solving household livelihood problems;
- For the evaluation of the independent impact of research on Project outcomes by INTA staff, a consultantwill be contracted to: (i) interact with the various research stakeholders and arrive at a formal list ofimpact indicators; (ii) provide guidelines to researchers on formulating monitoring indicators for theirresearch tasks; and (iii) specify data requirements for a rigorous evaluation of research impact.Consultant services will also be provided to: (i) carry out independent evaluations of the research projectsfunded by FAITAN competitive research grants; and (ii) develop and validate cost-efficient indicators ofenvironmental impact of technical assistance projects to be developed by INTA and other providerssupported by FAT.
Project Component 2 - US$8.30 millionEstablishment of a competitive fund for agricultural services
This component will strengthen and promote grant facilities under a competitive fund to promoteclient-responsive agricultural research and technical assistance undertaken by private and publicinstitutions. The fund is intended to improve efficiency in resource use and stimulate a market foragricultural services. Grants would fund proposals submitted by applicants under competitive procedures,open to producers, producer groups, government research institutes, universities, the private sector, NGOs
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and other institutions active in agricultural research and technical assistance.
Under the competitive fund, grant facilities will be tested-at a reduced scale during the first phase, and thenon the basis of evaluation of their effectiveness they will be expanded with improved administrativeprocedures and institutional arrangements. Detailed operation manuals and appropriate training programson procedures for soliciting, preparing, evaluating and selecting proposals, with guidelines for monitoringand evaluation will be developed during this first phase.
Two grant facilities will be established under the fund during the Project: (i) the Support Facility forNicaraguan Agricultural Technological Research (FAITAN); and (ii) the Support Facility for TechnicalAssistance (FAT). As a way of ensuring independence of decisions and pluralistic participation of the Fundstakeholders, MAG-FOR will contract the component execution with the Foundation created for thispurpose. The Foundation's Management Board, appointed by the COSINTA and representing its members,will have a technical secretariat, headed by a General Manager, to carry out the technical and financialtasks associated with the Fund execution. Project selection will rely on peer reviewing of proposals in thecase of research; and on local and regional selection committees in the case of technical assistanceproposals. The Board's Technical Committee will be responsible for the selection of proposals done by thepanels and lower-level committees.
Support Facility for Nicaraguan Agricultural Technological Research (FAITAN)
The Support Facility for Nicaraguan Agricultural Technological Research (FAITAN) will financeinnovative agricultural adaptive research projects proposed by research organizations and institutions,domestic and foreign. FAITAN will also fund on a competitive basis a more reduced number of projectsaimed at strengthening local research capacity through strategic alliances of local institutions with regionalor overseas universities/research centers, particularly aimed at developing integrated technologies and"pathways" of change toward profitable and sustainable natural resources management. Competitiveallocation of funding would improve research project planning and quality, and contribute to increasedoverall availability of technological solutions to SMFs. At least 36 research project contracts and 6 allianceproject contracts will be awarded over the project's life. iNTA would be eligible to participate in the callsfor research proposals.
The Foundation's Management Board will prepare detailed procedures for FAITAN administration andcompetitive selection process. The Management Board will develop standard grant and contract documentsto be used for projects financed by the FAITAN. All grant contracts would include requirements for use ofBank procedures for all procurement and would require regular reporting keyed to the LACI. TheFoundation will maintain standards of full transparency in implementation of the component with respect toreview and award of grants, and release of infonnation on Program implementation. The FAITAN willaccumulate experience and know-how from the success and challenges faced along the way, seeking tostrengthen itself, methodologically and institutionally. Towards this end, workshops and seminars will becarried out to familiarize clientele with its mandate, and train the country's researchers and scientists indrafting proposals.
Open-Subject Research Projects: The Foundation will execute at least one call per year for innovativeproposals that, responding to technological demands of SMFs, would generate practical, transferableresults to the producers group. Calls for proposals under this category will leave it open to the biddinginstitution to define the research project content and scope, including location, target group, problems tosolve, and methodology and resources to apply. Exceptionally, as a way of filling evident technology gaps,the Foundation will carry out calls for proposals focused on: (i) predetermined geographicalareas/problems; (ii) gender participation in technical assistance projects; or (iii) local community andindigenous peoples participation in technical assistance programs.
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FAITAN will provide matching grants to finance up to 75% of the total project operating cost, up to a limitof $ 80,000 per grant. Costs eligible for financing would include research materials and supplies, travel,minor equipment requirements, facility renovation and maintenance, and research assistant and laborersalaries. Grants may also finance short term training and travel for research team leaders, but would notfinance construction, salary supplements, general degree training programs, or salaries for lead researchers.
To be financed, open-subject research proposals should: (i) respond to the technological demands of thecountry's SMFs; (ii) be scientifically sound both in terms of their intrinsic methodological feasibility and ofthe capacity of the bidding research institution to achieve the proposed results; (iii) evidence an effectivepotential to transfer their practical results to agricultural technical assistance and agricultural technicaleducation activities, (iv) have a significant impact in terms of the number of potential beneficiaries,cropping area and the producers expected returns from adoption; (v) avoid or minimize local and/orexternal negative externalities; (vi) promote and use an effective collaboration among the best scientificresources (human, information, infrastructure, and equipment) available for research locally or overseas;and (vii) whenever possible, be able to mobilize additional research resources from the private sector, NGOs, foreign universities, and other research organizations.
Strategic Alliances for Research: The Foundation will execute at least three calls for proposals focusedon strengthening the research capacity of local institutions through strategic alliances with regional oroverseas universities or research centers. Project proposals under this category will concentrate on theexecution of one or more research case-projects. The proposals will utilize the case-project workingenvironment to execute a major component aimed at enhancing the beneficiary institution researcherscapacity to design and carry out sound and effective research programs. The projects included will focuson the development of comprehensive strategies of technological changes conducive to the adoption ofsustainable agriculture.
FAITAN will provide matching grants to finance up to 75% of the total cost of the case-project, and up to60% of the institutional development component, with a maximum of $ 220,000 per grant. Whereas costseligible for financing of the case-project would be identical to those for the open-subject research categoryabove; cost eligibility for institutional development would include local courses and seminars; travelexpenses for the alliance's foreign researchers and assistants; attendance of local researchers and researchassistants to training events overseas, including study tours; salaries of foreign research assistants servingin the local institution; subscriptions to periodicals, databases and procurement of bibliography; publicationof papers and other information material; procurement of data-processing and audiovisual equipment; andoffice supplies and communications.
For a strategic alliance proposal to be financed, the case-project component will have to meet the samecriteria as the open-subject alliance proposals. The institutional development component will have to: (i)be methodologically sound, in terms of its potential to significantly contribute to increase the capacity ofthe bidding research institution to design and carry out effective research programs and projects; (ii) ensurea substantive participation of quality researchers from overseas; and allow access of the local institution tointernational research support systems and networks; (iii) include the participation of the relevant researchprofessionals of the local bidding institution; (iv) be led by a qualified local researcher; and (v) becost-effective and include a significant contribution of resources from third parties.
Calls for proposals will publicly invite research institutions to firstly present a brief research (or alliance)project concept proposal (RPC). RPCs will be peer-reviewed, the review panel recommendations will beutilized by the Foundation's Technical Committee to select those projects meeting minimum FAITANstandards. Pre-selected institutions/projects will be invited to present detailed proposals, which will beagain peer-reviewed for a final selection by the Technical Committee. The two-stage selection processwould encourage a wider participation of research institutions in the calls for proposals, as it does not
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require a heavy initial investment in project preparation from researchers.
Grant contracts for research services will be awarded by the Foundation to the selected researchinstitutions/projects. Project execution will be monitored periodically on the basis of indicators establishedon the contract; and payments will be linked to project outputs or milestones. Projects will be reviewedperiodically by an Evaluation Committee, integrated by the Foundation's Research Coordinator, the projectofficer, two members from the scientific and agribusiness community, and one or two representatives ofproducers and agricultural communities. Results from the completed research projects will be published bythe Foundation and made available to technical assistanceists and producers through INTA and SIA.
Support Facility for Technical Assistance (FAT)
FAT's main objective is to improve SMFs family income and well-being through enhanced productive andmarketing capacities of agricultural producers, while ensuring the medium and long terrn productivity ofthe natural resource base. FAT will competitively finance proposals involving direct contracting ofassistance by producers in the private technical assistance market. The proposals involve preemptivepromotional and organizational activities in the area of intervention; extensive support to eligible groups inproject identification and formulation and initiatives aimed at strengthening the management of farmersorganizations. This will enhance SMFs empowerment in the technical assistance market; and ensure thepresentation of proposals to FAT reflecting producers genuine needs. Gender issues will be addressedthrough a special program in the promotional activities, subject to adaptation to local circumstances. It isforeseen that women will represent about 35% of overall Program beneficiaries.
FAT will be first field-tested in Leon and Chinandega during Phase I of the Program, targeting about 5,000SMiFs families by 2003. The pilot experience will be financed with resources provided under the creditagreement between the GON and IFAD; and complemented by Bank resources. Following an evaluation ofFAT's scheme performance by the end of Phase I, coverage would be expanded under Bank financing toother areas over the subsequent phases of the Program.
FAT technical assistance projects will target SMFs and small agricultural business in the program's areasof intervention. To be eligible to participate, producer organizations will be required to have legal status, adesignated representative, and provide financial guarantees. Service providers will include privateindividuals (professional, technicians), NGOs, commercial consulting firms, agribusiness, universities andothers. FAT will competitively provide grant funds under a cost-sharing scheme to SMFs groups presentingeligible proposals within the following categories:
Promotion and organization. Identify and formulate technical assistance - or other demands, as listedbelow.
Preinvestment and special studies. Contract consulting services to carry out studies/projects aimed atimproving: (i) producer groups productive infrastructure, such as storage and processing facilities; and (ii)the management of natural resources, such as new irrigation systems, and forestry or soil resources.
Technical assistance. Contract technical assistance services from private sources to: (i) increaseproductivity, profitability, competitiveness and managerial capacity; (ii) improve marketing capacity,including price infornation, marketing channels, product presentation, on-farm storage, and product sale;(iii) improve/establish agroindustry or processes adding value to products; (iv) develop non-agriculturalproducts; (v) optimize utilization of natural resources, including forestry resources and production ofenergy; (vi) use and maintain irrigation infrastructure and equipment; and (vi) establish/consolidate smallbusiness firms in agricultural areas to obtain legal and other advisory services and access technology andmarket information.
Strengthening of local capacities. Contract consulting services to strengthen the group's capacity to
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organize the provision of technical services to its associates; including management, accounting, marketinformation; communications, and environmental awareness.
Small investment supporting technology adoption. Contract services and procure inputs and qualified assetsto demonstrate or promote the adoption of a technology that had been worked out by a group under aTechnical Assistance project.
Project selection criteria will be specific for each category and will mainly stress: (i) the proposal'stechnical consistency and coherence with expected results; (ii) the group's resource availability andcapacity to effectively utilize the proposals results within a reasonable timeframe; and (iii) the proposalsexpected impact in terms of number of benefited producers, cropping area and family income. Location ofoffices: Resources will be located as close as possible to clients. The Foundation will establish a regionaloperation office and arrange a network of project reception offices utilizing locally installed capacities,such as the PROTIERRA Municipal Technical Units (UTM) or INTA local agencies. Producers' groupswill present their project proposals at these reception points. Officers in these agencies will be trained tosupport producers in formalizing their demands.
Most proposals are expected to involve grants under US$ 5,000. Proposals under or equal to that cost willbe selected and awarded at the local level by a Local Selection Committee, integrated by a municipalityrepresentative, an independent professional and the program's project officer. Proposals over US$ 5,000and up to US$ 15,000 will be processed at the FAT regional level by a Regional Selection Committee andwill require a formal review by an independent professional prior to selection. A Technical Committeeunder the Foundation's Management Council will select the reduced number of proposals costing overUS$15,000, previously reviewed by an independent professional. The Technical Committee will also beresponsible for the decisions of the local and regional committees. A project field officer will verify projecteligibility and information; and facilitate appropriate processing of proposals and communications with thebeneficiaries.
Grant contracts ensuring sound technical and financial implementation will be awarded by the Foundationto producers groups with approved projects. Producers will in tum execute subsidiary service contractswith individual professionals/ technicians, NGOs, or other service suppliers. Producers will be fullyresponsible for the execution of the subsidiary contract; and will thus be entitled to terminate the contract ifthe services rendered prove unsatisfactory. The progress of project execution will be monitored at the locallevel by a monitoring and evaluation officer, on the basis of indicators established on the main contract; andpayments to the producers' group will be linked to the achievement of project outputs or milestones. Apari-passu scheme will be applied to ensure compliance of the beneficiaries contribution. An EvaluationCommittee integrated by the Coordinator of the Foundation's Monitoring and Evaluation Unit, the FAT'sMonitoring and Evaluation Officer and the Project Officer will periodically review contract perfornanceand the effects of completed projects on the beneficiaries; and the Foundation will submit semi-annualreports to IDA and IFAD. A mid-term review of FAT will be performed during year four of projectexecution.
Project Component 3 - US$ 16.67 millionStrengthening of INTA's operations
Currently the main institution responsible for agricultural tecnology generation and diffusion, INTA will besupported as to improve its capacity for optimal use of public resources and to ensure the generalavailability, diffusion and quality of agricultural knowledge and services. During Program execution, thecurrent role of INTA as direct field provider of technical assistance will gradually shift in favor of a new,higher level role as main provider of (i) strategic and adaptive research, (ii) technical assistance whichgenerate externalities, (iii) agricultural technology and knowledge captured from external sources, (iv)
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production of basic and registered seed, and (v) second-tier services to other agricultural service providers.Until achivieng a major involvement by other service providers from public and private sources, andespecially during the first phase of the Program, INTA will continue to provide direct services to SMFsmostly on the same line of the Agricultural Technology component of the Nicaragua ATLMP.
As the first phase of the Program, the present Project will support six sub-components including fivestrategic services: (i) agricultural research and development; (ii) technology transfer; (iii) seed production;(iv) in-service training of front line technical assistance staff and diffusion of information; (v) post harvesttechnology and market development with farmers' associations; and (vi) planning and supervision ofactivities and agricultural technology transfer responding to small and medium-scale farm householdsneeds.
Agricultural research and development - This sub-component will address the problem of insufficientavailability of technology appropriate to small farming systems of family farmers, whose presentproduction capacity limits their ability to benefit from local and international markets and whoseproduction systems lead to reduced soil fertility and environmental degradation. Causes of this problem areprincipally due to: (i) few options of technology which respond to existing conditions of small andmedium-sized farm holdings; (ii) the lack of new varieties and improved cropping systems which canperform better under local conditions; (iii) lack of availability of fundamental breeder seed to increase theavailability of base and certified seeds; (iv) limited adoption of currently available new technology byfarmers; (v) poor conditions for ensuring regular training and instruction in appropriate methods oftechnology diffusion; and (vi) development of new technology which has not been generated followingparticipative diagnosis of farmers problems, reflecting existing market, productive and service conditions.
Activities to be supported will test and validate technology adapted to the needs and capacity of small andmedium-scale farm households. New and improved technologies will be identified or developed jointlybetween farmers, technical assistance staff and researchers, tested in on-farm trials, documented anddisseminated through the training of subject matter specialists and front line technical assistance staff.INTA will rely on its existing inventory of available technology (more than 120 recommendations) andduring the first phase of the Program will prioritize through an intensive participatory approach 60demand-driven technologies and develop appropriate guidelines for implementation, two thirds focusing onintensification and diversification of production and one third on sustainable natural resource managementdevelopment. By the end of the first phase, at least 50 of these new technology recommendations shouldhave been tested, validated and adopted by small and medium-scale farm households, including at least 10percent on new post-harvest technology and 10 percent which have resulted from FAITAN-sponsoredresearch projects. Emphasis will be on research into: (i) improved cropping systems and animal husbandrythemes, which ensure sustainable use of natural resources, and (ii) improved varieties, which are especiallyappropriate for poverty alleviation and have the potential to increase productivity for the poorest farmers.Oversight of INTA's research stations will gradually be transferred to management boards, represented byfarmers' associations, universities and the public sector in such a way as to ensure that the research agendaof these stations reflect the needs of farmers and involves the country's major training institutions.
INTA will act as a facilitator of the process, managed through the Foundation, which encourages increasedparticipation of private research, technical assistance and training service providers in the nationalProgram. INTA will ensure the operation of a management system under which technology transfer supportfunctions (access to regular training, agricultural research services, supervision, access to information,feedback from monitoring and evaluation, access to agricultural inputs, including improved seeds, access tomarket opportunities and financial and administrative support) will be provided. The quality ofparticipatory diagnosis between farmers, researchers and technical assistance workers will be improved toensure the implementation of technical assistance and research programs, which are responsive to: (i)priority demands from small and medium-scale farm households; and (ii) the development of strategic areas
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of technology development identified by government as representing future potential and/or of nationalinterest, or by international research centers (CIMMIYT, CIAT etc), advanced national research centers(KIT, CDE, CIRAD, NLH, etc.) and regional research networks, (PASOLAC, FOMENTA, SICTA, IICA,PRM, CATIE) to test new cropping systems, new plant breeding material or livestock productiontechnology.
Project funding will support investment and recurrent costs to improve the quality of INTA's existingresearch and technical assistance activities. Current national technical assistance methodology will bereviewed and modified to reflect the joint objectives of ensuring rationalization of the diverse and oftenconflicting methodology for agricultural service delivery by multiple actors (projects, public institutions,NGOs, private sector companies etc.) and of encouraging greater private sector participation in theprovision of demand-driven agricultural services. A new map of agricultural technical assistance coverage,involving all current public sector projects and programs, will be drawn up for each zone, to reflect theavailability of existing resources and to identify those resources to be funded by the Project. Strategicalliances will be agreed between different actors in each zone, to reflect more cost-effective servicecoverage and distribution. INTA will facilitate this process. By its participation in the process of definitionof research priorities to be funded by the FAITAN, INTA research staff will play an increasinglycollaborative role with researchers from the private sector and from international research institutions,facilitating the process of capture of technology from beyond national frontiers.
Technology transfer - Under this sub-component, INTA will attend on a regular basis over the next fouryears a total of 60,000 small and medium-scale farm households, of whom 37,000 will be new clients. Theobjective of technical assistance attention will be to: (i) promote the adoption of technologies which respondto the financial and technical conditions of the farmers attended to improve the production of basic grains,fruits and vegetables, livestock, the conservation of soils and natural resources, integrated pest managementand post-harvest activities to increase productivity and incomes and improve nutritional levels; (ii)consolidate a market for privately supplied agricultural technical assistance services; and (iii) introducenew technology which will provide farmers with access to new markets, improved food security andproduct quality. The provision of advisory services subcontracted to private service providers, startedunder the ATLMP, will continue until the FAT pilot initiative demonstrates the advantages of changing theexisting procedures and methodology for funding private service providers.
Currently, INTA provides three classes of service: mass media and demonstration free of charge (ATPm),publicly co-financed (Asistencia Tecnica Publica Cofinanciada - ATP I), and private technical assistance(Assistencia Tecnica Privada - ATP2). While the first two are provided by INTA's staff, the third iscarried out by private technical assistance firms (Dinar and Keynan, 1998). These programs are quitedifferent in terms of their objectives, as is reflected in the process of selection of communities andproducers, type of technology transferred, and technical assistance method used in each program.
The ATPm program is targeted to small producers with scarce resources who reside in marginal areas ineach of the five INTA zones, with the objective of supporting basic grain production for homeconsumption. The principal methods of technical assistance used include establishment of reference farmsfor demonstration of new technologies during farm days, monthly group meetings for training of groupleaders, and radio programs. No payment is required from the farmers, but the selection of farmers forparticipation depends on their participation in community producer organizations and on the communityleaders.
ATP 1 and ATP2 were designed to improve the effectiveness of technical assistance services, by makingextensionists accountable for results. As a result, recipients of ATP 1 and ATP2 are required to pay for anagreed service provided by the technicians. Both programs try to target small and medium producers whofarm in favorable agro-ecological zones. However, while ATP 1 seeks to improve production of basic grains
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and a selected few other crops and small livestock among producers who have at least a minimum amountof resources to engage in productive activities, ATP2 covers a wide range of farm and livestock (includingcattle) production and marketing aspects and is targeted to producers who have sufficient resources toengage in agriculture for commercial purposes. The technical assistance methods under the two modalitiesare different. Producers who demand ATP 1 services, and are willing to pay for a percentage of the costs,organize into groups of approximately 12 producers. Producer groups can either be previously formedgroups, or groups that are formed either by the technician or users themselves for the purpose ofparticipation in ATP1. An INTA technician visits the producer group every 15 days, or according to thedemands of the clients. The technician provides practical demonstration of new technologies and holdstraining workshops for the group. In contrast to ATP 1, ATP2 participants receive training on an individualbasis. ATP2 technical assistance services are provided by private firms who recruit producers selectively,accounting for professional skills to allow better implementation of technical assistance recommendationsand ability to pay for the services they receive.
Farm households need assistance while new, cost effective mechanisms are established by the projct, inparticular through the use of a competitive fund. That is why support to the INTA's operations foragricultural technical assistance will continue under the present Project. Coverage under the ATP1 andATP2 modalities will be maintained at the current levels, about 15,000 farmers annually under ATP 1, andaround 17,000 annually under ATP2. Subject to satisfactory performance of the competitive mechanism,INTA's ATP1 and ATP2 modalities will be gradually reduced over phase II and III, and will not besupported by the Program during the last phase. Conversely, coverage under the ATPm will be beincreased, introducing methodological changes to ensure higher adoption rates of new technology and toidentify and apply cost effective technical assistance methods. Coverage of technical assistance staff will beintensified from about 1:2,500 farmers to 1:400 farmers. The total number of ATPm technical assistancestaff will grow from 18 to 90 over 4 years to enable technical assistance services to be provided to 36,000farmers, of whom 29,000 will be new clients.
Closer relationship between research and technical assistance staff at the farm level will be an underlyingprinciple behind the technical assistance methodology. At least 35 percent of farmers adopting newtechnology will be women. To achieve cost-effective coverage, INTA and sub-contracted service providerswill achieve average producer/extensionist ratios by the fourth year of the Project: (i) for fully subsidizedATPM services 1:400 farmers; (ii) for services provided by INTA and private sector extension services tofarmers in groups of 1:150 farners; (iii) for services provided by private service providers on an individualbasis 1:80 farmers. By year 4 of the Project, 90 groups will be receiving technical advisory services underthe FAT. By the end of Year 2, the terms and conditions for private service providers sub-contracted byINTA will be aligned with the terms applying to service providers funded by the FAT. By the end of Phase1, all fanners receiving advisory services, will have adopted at least 1 new technology during the course ofthe year (Annex 1).
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Seed production - The component will contribute to the multiplication and production of improvedvarieties of base and registered seeds for basic grains, vegetables, fruits, root crops and pasture for seedmultipliers to produce sufficient quantities of improved seeds to meet national demand. Training inproduction and organization will be provided to seed multipliers. Support will be provided to conventionalseed production to produce and supply base and registered seeds for farmers who produce certified seeds.Support will also be provided to production and transfer of seeds under a system of artisan production,whereby farmers will be organized trained and assited in the production of improved seeds on their ownfarms.
Conventional seed production - INTA will increase production of base and registered seed on theInstitute's research stations throughout the country and by way of agreement with commercial seedproducers. Private farmers using registered seed provided by INTA will produce certified seed to be soldfor commercial production.
Non-conventional seed production - Given the potential for producing a good quality of seeds by smallproducers, under appropriate technical supervision, INTA will assist small farmers in the production and inthe identification of markets for improved seeds, by supporting small seed associations and companies,starting from existing infrastructure and providing support in market analysis, organizational, training,inter-institutional coordination and minor equipment.
The Project will provide funds for: (i) logistical support; (ii) technical assistance provided both by INTAand by the private sector; and (iii) marketing information support. Preliminary objectives, which are likelyto change as a function of market opportunities and demand from farmers, envisage: 13,000 qq ofregistered basic grain seeds; 10,000 mz of improved basic grains seeds produced under artisanalarrangements by individuals, organized associations and seed companies; 1,100,000 tubers (prebase potatoseed); 1,550,000 hybrid cocoa plants; 350,000 hybrid coconut plants and 45,000 pure seed plants; 620 mzof pasture; 14,000 lb of vegetable seeds; 36,450 qq of quequisque; 2,218,000 manioc tubers; 30,000farmers will have participated in 1,100 seed multiplication training courses.
Training and Diffusion - The sub-component will support activities of the training unit of the INTA toprovide in-service training to extension and research staff, including public and private agricultural servicesproviders, and to disseminate updated technical and methodological information. These activities will aimat increasing knowledge and know-how of researchers and front line agents and farmers' organizationsleaders, and to facilitate the local adoption, validation and dissemination of improved technologies that areprofitable and environmentally friendly. INTA will carry on these activities as a technical module of theAgricultural Education & Training component, in close coordination with INATEC, MAG-FOR, and otherproviders of training and diffusion of technical and methodological information.
Activities supported under this sub-component will be demand-driven and will include specialized trainingand diffusion focused on: (i) participatory farrn-systems disagnosis; (ii) community-based identification ofpathways of change adapted to specific conditions of SMFs; (iii) knowledge and technology transmittalmethodologies appropriate to women and men farmers; (iv) improved agro-ecological and profitabletechnologies, such as conservation tillage, cover-crop and crop residues management, nutrient cycling, andIPM; (v) improvement of farmers managerial and entrepreneurial skills; (vi) integrated watershedmanagement; (vii) post-harvest technologies and processing; (viii) basic economic, environmental andmarket information adapted to the needs of SMFs.
The Project will provide funds for:
- Investment and recurrent costs for capacity building and human resources development such as: (i)training and education for researchers and extensionists with the objectives of having 15 additionalMSc., and 40 postgragduates by the end of the first phase; (ii) specialized training, short course, study
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tours, participation to congresses and specialized events, and field visits for researchers (about 30man-days per year), extensionists (about 20 man-day per year), farners' leaders, and administrativestaff; and (iii) consulting services to develop a comprehensive program of capacity building includingthemes, type of attendees, locations, periodicity, and organizations best able to provide training andcapacity building services as well as a database on training activities to be coordinated with theAgricultural Technology Information System.
- Investment and recurrent cost for diffusion of information in support to technology transfer, such as: (i)complementary office equipment for computation and communication; (ii) consulting services todevelop a comprehensive agenda and plan of action for cost-efficient diffusion of agriculturaltechnology; and (iii) mass communication media such as radio, TV, and leaflets.
Post Harvest Technology and Market Developement - This sub-component will support the creation ofnew Post Harvest Technology and Market Development unit in INTA. This unit will support associativeactivities of SMFs to achieve more favorable access to: (i) input and produce markets; (ii) financialservices and credit; (iii) training artisans, agricultural promoters, and technical assistance staff in postharvest technology; (iv) technical and marketing advisory services in developing entrepreneurial skills; and(v) evaluation of impact development. The Project will fund vehicles, equipment, studies, training, andincremental staff salary in support of the following activities (i) assessment of the demand for post-harvesttechnologies; (ii) identification of available post-harvest technologies, design and implementation of trialsby INTA and with private counterparts; (iii) validation and dissemination of post-harvest technologiesthrough INTA agencies and private counterparts; (iv) establishment of a market information service inconjunction with the Agricultural Information System (SIA); (v) recruitment of a team of brokers (producerassociation specialists), who would facilitate the negotiation of contracts between farmers' associations andprivate sector merchants and financial institutions.
By the end of the first phase (a) INTA will have disseminated at least 60,000 technology guidelines andissued at 1,200 visual or written articles to the mass media; (b) 1NTA ensure that all technical assistanceand research staff, whether direct employees or employees of affiliated service providers or the FAT, arereceiving in-service training at the rate of at least 5 person-days per year; (c) at least 37,000 grain silos willbe in use and 6 additional post-harvest technologies will have been disseminated; (d) at least 200 groupscomprising of about 5,000 SMFs will be affiliated to the SIA commercial information service; (e) at least400 transactions between SMFs associations and financial and commercial intermediaries will have beennegotiated, in the last year of Phase I, under INTA's intermediary.
Planning, Monitoring and Evaluation - This sub-component will support activities required to ensure theeffective planning, monitoring and evaluation of the delivery of client-responsive agricultural advisoryservices. Information generated under this sub-component will be coordinated with data-gatheringrequirements of the Monitoring and Evaluation Module of the Project Management Unit, including data andinformation required by environmental impact measurement of technical assistance projects to be developedby INTA and other providers supported by FAT. The Project will fund vehicles, equipment, operatingexpenses, information systems access in support of activities which include: (i) re-mapping of agriculturaltechnical assistance services through programming workshops, to define technical assistance methodologyand coverage which ensure optimum cost-effectiveness by all service providers. The workshops will bringtogether private and public organizations, institutions and projects involved in providing or potentialproviders of services to SMFs. Priority will be given to those operating in agro-ecological zones, where theuniversities intends to reinforce agricultural advisory services. By Project effectiveness, prioritygeographical areas will be defined; (ii) definition of a simple and transparent monitoring system, whichdefines the responsibilities and contents of data collection and information gathering systems, to maximizethe time frontline staff spent with farmers; (iii) agricultural community consultation activities; (iv)processing, evaluation and feedback to technical staff; (v) processing of information on farn production
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systems and on technology validation, adoption and impact, to be shared with MAG-FOR, SIA and donors;(vi) annual planning, preparation and coordination of the AWP.
By the end of Phase I: (i) all staff providing agricultural advisory services will be receiving regularfeedback on technology diffusion, adoption and impact; (ii) INTA will facilitate at least four meetingsannually bringing together representatives of agricultural service providers and farmers' organizations; (iii)annual work programs covering all activities of publicly funded research and technical assistance will beprepared in conjunction with MAG-FOR; (iv) 1NTA presents an annual report, whose contents are directlylinked to the Program log frame and respective indicators; and (v) by the end of June each year, INTAprepares summaries of technology validation, adoption and impact for review by the Directorate ofAgricultural Technology of MAG-FOR.
Project Component 4 -US$2.67 millionEstablishment and piloting of an agricultural technical education & training system
The success of technology transfer and adoption depends upon an efficient agricultural technical assistanceservice, whose staff (i) are technically qualified; (ii) receive regular training; (iii) work in close contact withagricultural researchers; (iv) are provided with supportive supervision; and (v) have access to a broadspectrum of timely information, and (vi) receive timely feedback from monitoring and evaluation services.This component is concerned with the first two items on this list. Regular in-service training, both formaland informal, will receive major attention. Support will be provided to the organization of in-servicetraining activities for technical assistance service providers, including technical staff recruited by localcommunities and working under the guidance of professional technical assistance staff. With respect toimproving the technical qualifications of technical assistance staff, while basic technical training is notenvisaged as part of the national Program, specific measures will be reviewed under the first phase of theProgram to strengthen the initial training of the corps of professional agricultural technical assistance staff.
To ensure that farmers are capable of understanding and applying technical recommendations which areprovided to them, there is a need for a methodology and introduction of new technology to be adapted tofarmers' education, skills and know-how. This implies, in the first instance, that technical assistance staffbe skilled in diagnosing clearly the appropriate levels of technology for the different types of farners theyare assisting. There is also a correlation between the level of education (literacy and numeric) and the speedof adoption of new technology by farmers and thus there is a need to improve levels of small andmedium-scale households. The latter concern will be addressed in conjunction with the Ministry ofEducation and with specialized public and private institutions.
Based on the definition of a new strategy for Agricultural Technical Education, support will be provided tothe development of a demand-driven model of technical agricultural training and education, resulting inmore rapid adoption of new technology by small and medium-scale farm households. Specialists, from bothpublic and private sources, will be engaged to collaborate to provide training in technology transfermethodology, basic agricultural skills and client service delivery to staff and farmers involved in technologygeneration and transfer.
Activities during the four years of the first phase of the Program will be organized in two parts. The firstpart lasting 18 months will concentrate on base surveys and studies to obtain a better understanding of theagricultural technical education and training sub-sector and to permit a participative elaboration of aAgricultural Technical Education and Training Strategy. Institutional capacity will be evaluated andtraining of technical assistance staff, in close collaboration with INTA, will be intensified. During theremaining 30 months Phase I, regular training of technical assistance staff will be consolidated and pilotprojects will be carried out to test new agricultural technical education and training curricula for small
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farmers. A detailed system of monitoring and evaluation will accompany the process and ensureadjustments and flexibility based on experience. In summary, activities will serve both to ensure ongoingtraining support for agricultural technical assistance and research and will prepare the way for longer termchanges in the methodology and quality of technical training required by tomorrow's agricultural sector inNicaragua.
Three sub-components will be supported: (i) training of trainers; (ii) reform & strengthening of agriculturaleducation and training; (iii) strengthening of human resources for the public agricultural sector.
Training of trainers - Annual in-service training programs will drawn up and carried out to providetechnical assistance staff with training in methodology for providing client-responsive advisory serviceswhich correspond to the needs of their clients. Beneficiaries of such training will include all field technicalassistance staff and their supervisors, whether employed by INTA, or by local communities or working asprivate technical assistance companies or as individual technical assistance agents. An important targetgroup will be technical assistance agents funded by the FAT. Successful implementation of thissub-component requires inter-institutional collaboration, drawing upon the specialized skills and knowledgeof staff from public and private research institutions (especially INTA), universities, private companies,large farms, development projects and NGOs. Farmers should be associated in the definition of technicalbulletins and training materials to ensure that language and presentation take account the real conditionsand levels of understanding of farmers. Implementation will involve the following activities:
- Preparation of annual training program, including training of trainers, research staff, subject matterspecialists and training for staff involved in implementation of competitive grant funds;
- Implementation of annual training program;- Inventory and evaluation of academic and technical levels of technical assistance staff, years of service
and profile compared with program requirements;- Identification of technical assistance staff training needs in technical knowledge, prioritized according to
the level of demand from farmers;- Evaluation of participative diagnostic skills and organization of training in on-farm participative
diagnosis;- Identification of technical assistance staff training needs in communication skills;- Organize and equip documentation centers in the pilot regions;- Study of the demand for and supply of specialized knowledge and skills sources;- Inventory of training materials and existing sources of information;- Preparation of new training materials;- Creation of a unit within the Directorate for Agricultural Technology responsible for formulating,
providing quality control and monitoring implementation of the annual training program, and forensuring coordination between the different institutions and specialists available as trainers to carry outthe training program;
- Definition of complementary activities in support of the training program such as distance learningprograms, use of internet, interactive radio programs and other mass media support.
Reform and strengthening of agricultural technical education and training - Work will begin onidentifying new agricultural technical education and training curricula to improve basic training inagricultural production skills for the next generation of technicians, farmers, skilled and semi-skilled farmworkers, either through specific courses offered by existing technical educational institutions or bymodifying the curricula of basic, middle and higher level training institutions. Implementation of thissub-component will involve the following activities:
- Establish a forum involving the main actors in agricultural technical education and training with a viewto reform and strengthen curricula for technical agricultural training;
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- Prepare an institutional map, identifying organizations and institutions involved in agricultural educationat all levels;
- Select 3 agricultural technical education and training institutions to test and evaluate competency basedtraining methodology (FBC) and define the resources required to implement the methodology;
- Inform and train teaching staff from these 3 institutions in the elaboration of curricula and practice ofCBT;
- Carry out improvements as defined in the practical training infrastructure of the CETAs;- Train the teaching staff of the selected CETAs;- Define the future strategy for INATEC's Agricultural Education Centers (CETA);- Define and apply training evaluation methodology, including follow-up of students trained in the CETAs;
Strengthening of human resources for the public agricultural sector - This Sub-component aims to: (i)build and equip a Center for Training and Continuing education of MAGFOR; (ii) acquire educationalmaterials; and (iii) conduct 70 sessions of training (from 3 to 5 days for 20 people in each session) andoverseas training. By the end of the four-year period of the Project, MAGFOR is expected to have in placea permanent capacity to execute training program and services catering to the need of technicians,administrators and managers for institutions of the Public Agricultural sector - MAGFOR, INTA, IDR,MARENA, etc. This program would allow participants to update their knowledge with currentdevelopment in their profession, which, in turn, would allow them to perform with greater efficiency. Underthis sub-component, the following activities are proposed: (i) survey to understand problems (related toactivities ) of technical assistance and development; (ii) preparation of training modules for technicalassistance professionals and definition of their duties and responsibilities; (iii) seminars for trainingtechnical assistance professionals; (iv) introduction of the Agricultural Information System with its relatedduties; and (v) technical review of the related duties.
Institutional arrangements for the component
An Executive Committee will be responsible for the management of Agricultural Technical Education &Training component. This committee will be charged with providing supervision and adjustingimplementation as the overall Program evolves. The committee will be chaired by the Director of the DTAand will include representation from the main agricultural training institutions, in addition to INTA andINATEC. A small agricultural technical education and training coordinating unit will be established withinthe Directorate for Agricultural Technology within MAG-FOR to provide national leadership, coordinationand technical support for the development of the agricultural technical education and training strategy. Theunit will work closely with the Training and Extension Department of INTA (Departamento deCapacitaci6n y Divulgaci6n) and with the Agricultural Education Directorate of INATEC and will buildand maintain national partnerships/networks, promoting public awareness campaigns and consolidatingmonitoring/evaluation activities for training. The coordinating unit will be responsible .for implementation,coordination and planning of the component and will have specific responsibility for managing educationalfunds, and a data bank including information on projects, donors, teaching staff and trainees. The Directorwill prepare the annual work plan in conjunction with representatives of the sub-sector, INTA andINATEC.
To carry out the annual work plan, the coordinating unit of the DTA will rely mainly on INTA andINATEC. INTA will ensure in-service and continuous training to technical assistance staff, supervisorsand subject matter specialists, with technical and training support being provided by universities, researchstaff, specialized non-governmental organizations, private companies and advanced farmers. INATEC willseek to make more integrated use of the physical and human resources of its CETAs, in support of specifictraining events for continuous and in-service training. The capacity and skills of the training staff of theCETAs will be up-graded. Training capacity of other institutions will be identified during the first 18months of this phase. By the end of the Project, clear delineation of functions will have been agreed
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between the main public institutions (Ministry of Education, Ministry of Labor, Rural DevelopmentInstitute, MARENA), universities, higher technical training colleges and NGOs concerned with agriculturaltechnical education and training.
Project Component 5 - US$1.17 millionEstablishment and piloting of an agricultural technology information system
An affective agricultural technology information system (AIS) for Nicaragua will be designed to supportthe country's efforts to develop its agricultural markets - financial, land, inputs, products, labor andtechnology. The agricultural information system should meet the increasing demand of technical and marketinformation needed to sustain current sectoral growth, in the perspective of sustainable agriculture andnatural resources management. Nicaragua's economic reform program aims at establishing a competitivemarket economy through the modernization of the agricultural sector. Agricultural technology and marketinformation will play an increasingly important role in raising the country's productivity andcompetitiveness. Rural markets signals and scientific technology information should eventually become themost important source for investment decisions in the countryside. If this is achieved, the Project will havemade a significant contribution in making the agricultural sector more efficient. The agricultural technologyinformation system will: contribute to market transactions transparency, facilitate the integration of mainactors in the agricultural technology system (education, research and technical assistance), promote accessof technological information, and lower transaction costs of technology transfer.
The AIS will integrate technical and agricultural markets information into one national system and willmake it accessible to researchers, technical assistance workers, trainers, government planners, developmentNGO's, universities, environmental organizations and producers associations. The system therefore aims atconnecting the main agriculture sector actors together. The type of SIA best suited to lower costs oftechnology transfer for Nicaragua is one that will facilitate access of rural markets information as close tothe produicers as possible. Given the low educational background of Nicaraguan producers the closestaccess by producers to technical information one can get is the technical assistance worker, the key playerin technology transfer in the foreseeable future. The SIA will equip the technical assistance worker with anarray of technical and market information to enable him/her to greatly improve his/her services toproducers. The technical assistance worker will also know available and current agricultural research athis/her disposal and the sources of information. The extensionist will be able to choose the type of traininghe/she would like to take and advice producers of their availability. In the end, the products of the nationalinvestment effort (education, research and technical assistance) in agricultural technology will be availableto the technical assistance worker, the key player in technology transfer. The technical assistance workerwill also be a key source of producer demand for information and will facilitate the feedback of marketdemand into the SIA.
The Project will finance a virtual, web based information system that stores, systematizes, and organizestechnical and agricultural markets information either currently produced or to be produced in the future bygovernment agencies, universities, international institutions, products stock markets, NGO's and projects.Given the weak institutional development of the country, the information system will be designed to operatein a user- friendly environment on simple PC's already operating in the country. This information will beaccessed by web browsers and through telephone lines, modems and electronic mail systems from any partof the country. The Project will establish a central computer node in Managua under the responsibility ofMAG-FOR. Final users will have access through computers in offices of existing institutions likeproducers associations, government regional offices of INTA and MAG-FOR, regional agriculturaleducation centers, producers associations and unions, and NGOs.
The system will be comprised of a network of basic information generators and consumers that could be.expanded if user demand prove necessary. These identified institutions are: INTA (research, technical
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assistance and training), MAG-FOR (sector statistics, policy issues, agricultural inputs and productsdomestic and international prices, land market, geographical socio-economic* data), INETER (soil, water,watershed, environment, atmospheric conditions) agricultural documentation centers, universities (researchand education), INATEC (agricultural training), financial institutions (agricultural financial services).Demand studies will give information about other possible sources and uses of infornation.
The SIA will be demand oriented, ample and democratic. It will be designed in a manner that differentactors and decision-makers can participate during system development and operation. The Directorate forAgricultural Technology in MAG-FOR will be responsible for the information system, which will bemanaged by a small office comprised of a system coordinator and two specialist in information systems.The Director for Agricultural Technology will act as chairperson in COSINTA's discussions. During theProject, SIA activities will be geared towards designing and establishing the system, testing its perfornanceand importance in two provinces, and designing and delivering a training program for system users. A closemonitoring and evaluation system will track system development.
The system will be designed and deployed in five phases during the Project duration. During the first phase(3 months) a study of other country's experiences with similar agricultural information systems will beconducted. The second phase (9-12 months) will include the following studies: demand by different users,information availability, information sources and their authority and institutional capacity of the higherlevel sector actors like MAG-FOR, INTA, INATEC, IDR, INETER, MARENA and universities and thedesign, deployment and piloting of this phase of the system. The third phase (9-12 months) will focus onmid-level users like NGOs, research centers, private sector firms, and documentation centers and the samestudies will be conducted for this group and the design, deployment and piloting of this phase along with acomplete integration with the high level users of the system. The fourth phase (6-9 months) will focus onproducer organizations, technical assistance workers and SMFs and will include the same studies for thistarget group and the design, deployment and piloting of this phase integrating with the other two levels. Thefifth phase (12 months) will be a pilot of the whole system of all three levels and a comprehensiveevaluation to improve the system will be conducted. The system will be tested in one province whereagricultural markets are well developed and producers have a high integration to the market, expecting ahigh demand for technical and agricultural markets information. A second province will be piloted whereservice markets are rather weak and producers work in a more traditional fashion. The pilot projects willserve as basis for developing the system for the rest of the country during a second phase. A comprehensivetraining program will be designed and executed starting from second year of Project execution. All actorsand potential system users will be trained in system operations and maintenance.
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Annex 3: Estimated Project Costs
NICARAGUA: Agricultural Technology Project
Local Foreign TotalProject Cost By Component US $million US $million US $million
1. Development of Institutional Capacity 7.33 2.00 9.332. Establishment of a Competitive Fund for Ag. Services 7.78 0.50 8.283. Strengthening of INTA's Operation 14.23 2.19 16.424. Establishment and Piloting of an Ag. Edu.&Training System 1.88 0.72 2.605. Establishment and Piloting of an Ag. Information System 0.95 0.19 1.14
Total Baseline Cost 32.17 5.60 37.77Physical Contingencies 0.20 0.12 0.32Price Contingencies 0.03 0.16 0.19
Total Project Costs 32.40 5.88 38.28
Total Financing Required 32.40 5.88 38.28
T Local Foreign TotaiProject Cost By Category | US $million US $million US $million
Goods 2.50 2.41 4.91Works 1.57 0.00 1.57Services 5.18 2.26 7.44Training 2.14 0.92 3.06Competitive Funds 10.42 0.00 10.42Recurrent Costs 10.36 0.00 10.36Physical Contingencies 0.20 0.12 0.32Price Contingencies 0.03 0.16 0.19
Total Project Costs 32.40 5.87 38.27Total Financing Required 32.40 5.87 38.27
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Annex 4: Cost Benefit Analysis SummaryNICARAGUA: Agricultural Technology Project
Summary of Benefits and Costs:
The Project would build a sustainable and client-responsive agricultural technology system, which wouldfacilitate the transfer of technological innovation and increase productivity, alleviate poverty and promotenatural resource conservation. Increased productivity by increasing numbers of small and medium-scalefarm households, in areas which have not benefited from agricultural services in the past, will contribute topoverty alleviation. Growth of the agricultural economy will be stimulated through expanded markets forgoods and services, which will have direct and indirect employment effects from increased production, andlower prices of basic foods for consumers. The Project would have a strong poverty dimension and criteriafor use of competitive funds would be applied to ensure that benefits are equitably shared.
Benefits - The expected benefits from the proposed Project would include:
- The adoption of new production, marketing, management, and post-harvest technologies resulting inincome and productivity increases for approximately 42,000 farmers to be covered with technicalassistance services, increasing family farm incomes by approximately 25% percent over 4 years (67%percent over 6 years).
- Improved levels of agricultural education and training for youths and adults from SMFs families,which will facilitate the adoption of improved appropriate technology and contribute to thesustainability of the project's economic benefits.
- Increased agricultural growth and community development resulting from greater resources beinggenerated in the agricultural areas.
- Strengthening public institutions, which facilitate the sustainable supply of pluralist and efficientservices, responding to SMFs demands for agricultural research, technical assistance, and agriculturaleducation and training.
- The development of technologies that open new market opportunities, increase exports, improve foodand other product quality, and provide altematives for economic development.
Costs - For purposes of the economic cost/benefit analysis, full Project costs for all components have beenused based on the gross totals (including physical but not financial contingencies) derived from COSTABfor recurrent and investment costs. Average annual costs of US$4.8 million for the following years after theimplementation first phase period has been included, probably over-estimating costs during this period. Itdoes however provide for a more conservative cost/benefit ratio.The average annual costs for the four yearfirst phase period has been used to obtain costs for the following 6 years, which probably over-estimatescosts during this period, given the level of investment and consultancies in the early years. It does howeverprovide for a more conservative cost/benefit ratio.
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Economic analysis - The most relevant economic benefits of the Project are: (i) more sustainable andpositive effects on natural resources; (ii) increased food security, nutrition and health as a result ofincreased and diversified production; (iii) effects of strengthened farmers and community organizations;and (iv) investments in human capital. Cost benefit analysis was performed at the Project level including allcomponents. The internal economic rate of return (ERR) is estimated at about 35.5 percent. Table 2 showsthe aggregated beneficiaries, project costs (productive investments and technical support investments,including all Project components), the resulting economic indicators (ERR, NPV) and the correspondingswitching values for the whole Project. Economic return calculations included the cost of all Projectcomponents: (i) incremental research and technical assistance investments; (ii) on-farm productiveinvestment and recurrent expenditure for the adoption of sustainable agricultural production systems to bepromoted; (iii) technical education costs; and (iv) institutional strengthening and project administrationcosts. Benefits included expected increments on production and lower farm unit costs.
The adjustments made for the economic analysis mainly reflect the removal of taxes and subsidies. Whilethe Project would increase on- and off-farm employment in the selected areas, unemployment andunder-employment would not be eliminated. Therefore, a conversion factor of 0,85 to reflect theopportunity cost of unskilled labor was used. The policy reforms and the opening of the economy that havebeen taking place in the last decade, together with the open market determination of the exchange ratereflecting fairly well its real value, leads to the conclusion that domestic prices tend to correspond to bordereconomic values. While it is considered that there are few distortions on agricultural input and outputprices, as they bear limited taxation and subsidies, agricultural products were adjusted by a 0,9 factor inorder to penalize benefits and better reflect their economic (shadow) prices.
As only activities identified and presented by potential beneficiaries would be considered by the Project, anex-ante determination of costs and benefits of productive investments would not be feasible. Consequently,economic return estimates were based on a sample of farm models described above, incorporating scenariosfrom all regions, where the Project will be operational.
Financial Analysis - The analysis is based on 14 farm models covering the most relevant activities ofsubsistence household production units to be supported by the Project. The preliminary results aresummarized in table 1. These models illustrate the likely effect of the Project in introducing improvedsustainable production practices into the family household systems. They are based on conservativeestimates of attainable changes in family households (including progressive and limited productivityincreases, expansion of herds and/or reduced changes in prevailing cropping patterns), taking into accountthe subsistence nature and risk minimizing strategy, typical of the targeted population. Labor familyavailability, new activities labor requirements and returns per family-day of labor were also considered inthe farm budget models. The financial analysis would confirm: (i) the new technologies potentialattractiveness to smallholders; (ii) the degree of expected profitability according to the different regions andagro-ecological zones; and (iii) the marginal returns to labor being higher than the opportunity labor wagerate of each region.
Investments considered in the models would generally imply the introduction of soil conservation techniquesinto manual basic grain cultivation, simple improvements in patio activities (poultry, pigs, apiculture, andsmall-scale family orchards) and in double purpose cattle breeding. In some cases, investments impliedsome improvements in permanent crops as in the case of plantain, pineapple, maracuya, coffee or cacao.Increases in net farm income, as a result of project-financed on-farm investments, ranged from about 25%to more than 100% at full development. On weighted average, their annual net on-farm income would growby 67% in about 6 years of technical assistance, from about US$1,500 to US$2,500. It can be concludedthat even farmers living under extreme poverty and mainly subsistence conditions can benefit fromimproved food security and on-farm increased incomes as a result of the provision of appropriate technical
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support services.
The main assumptions for the financial analysis were: (i) discount rate: 12%; (ii) time horizon: 20 years;(iii) constant August 1999 labor, input and output prices; (iv) real exchange rate constant: C$12.4 per USdollar; (v) 80% of investment costs (excluding labor) included in farm models, would be financed andrepaid to existing revolving funds. For the purpose of the financial analysis and its effect on the cash flow,three constant payments including a 5% annual interest rate was considered, beginning in the followingyear of the investment period.
Table 1. AGRICULTURAL TECHNOLOGY AND AGRICULTURAL EDUCATION &TRAINING
Financial Evaluation: Sample of Illustrative Farm Models
Al Le6n-Chinandega _ _
1. Minifundio (maize-beans-patio) 2 239 378 -70 231 7892. Somotillo (platano-chiltoma-cattle) 12 464 2053 2857 -60 151 32753. Le6n (maize-sorghum-chilt-cattle) 15 1005 1794 2242 -19 23 1740A2. Masatepe1. Minifundio (maize-beans-patio) 2 | 239 378 -70 231 7892. Ticuampe (maizebeans-veget-cattle) 4 1064 2818 3834 -53 115 50663. Carazo (maize-beans-coffee-veget) 10 1105 1978 3078 -47 87 45684. Rivas (maize-beans-fruits-catlle) 18 650 4624 7222 -68 212 12593B3. Esteli1. Minifundio (maize-beans-patio) 2 239 378 -70 231 7892. Jalapa (maize-beans-rice-coffee-catt) 10 794 2006 2954 -41 71 41953. Estelf (maize-beans-veg-cattle) 8 558 1422 2365 -60 150 5260B5. Matagalpa-Jinotega1. Minifundio (maize-beans-patio) 2 239 378 -70 231 7892.Pantasma (maize-beans-veg-cof-catt) 15 1114 2726 4439 -55 123 77653. Sebaco (maize-beans-veg-cattle) 6 462 3873 5912 -78 355 116894. Matiguas (maize-beans-sorg-cattle) 30 3566 3100 4660 -24 31 4342C6. Jigalpa1. Camoapa (maize-cattle-patio) 42 3164| 3265| 4368| -28 39 37032. San Carlos (maiz-beans-rice-cattle) 20 846 2464 3400 -42 73 46633. Waspan (maize-beans-plantain-patio 8 546 1067 2416 -60 152 6556
Table 2. AGRICULTURAL TECHNOLOGY AND AGRICULTURAL EDUCATION &TRAINING
Economic Evaluation: Sample of Illustrative Aggregate Regions
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technicalassistancemodelsATPI 120 60.0 462(A3region)ATP2 80 49.2 344(Carazo)ATPM 400 24.7 105(C6region)
Projects 42500 3.976 47.828 51.804 35.5 76.140 -30.8 +44.5
Main Assumptions:Description of the Approach. The fnancial and economic analysis was based on: (i) the technical and fieldexperience of MAG-FOR and INTA's experts; and (ii) the evaluation of the economic aspects of twotechnical assistance programs, ATP 1 and ATP2, sponsored and managed by INTA in Nicaragua Keynan etal., (1997), Dinar and Keynan (1998) and Dinar (1999). In their studies, Keynan & Dinar concluded thatboth ATP 1 and ATP2 cover short-term production cost and also leave in most cases margin wide enough tocover the paid technical assistance fees. Yield, production cost, and gross margin values increasedsignificantly between the base and observed situations. Because of the demand driven nature of the Project,it is not possible to know a priori which research and technical assistance subprojects will be actuallyfinanced, nor in which proportion. For the evaluation, a scenario approach was adopted, analyzing aselection of activity budgets for prototype investments and farm budgets typical of farming situations in thevarious regions and agro-ecological zones. Twenty-five crop and activity models and fourteen farm modelshave been elaborated to cover the universe of possible alternative beneficiaries and compare with andwithout Project situations in order to measure the possible changes to be induced by the Project. Thebudgets take into account minor on-farm investments, production parameters, recurrent costs and familylabor availability and farm requirements. In most cases, rates of return are not possible to estimate due tothe lack of negative figures in the annual cash flows. The use of expected on-farm income improvements(before labor costs) and its NPV have been preferred as indicators of financial results, since most of themodels basically deal with inexpensive technology improvements to existing situations.
Sensitivity analysis / Switching values of critical items:Sustainability of Project benefits is expected to be high, given that the new technology levels to be adoptedand increases in productivity will be complemented with improvements in social and human capital throughthe technical education and training component. Additionally, the enforcement of better linkages with otherprojects including those with the development of informal local micro-fmancing schemes and communitydevelopment activities will help the development of existing financial intermediation systems. As a result ofProject activities, improved production competitiveness and new commercial activities including smallbusiness and enterprises are expected to develop, which would have a positive impact on local employment.The Project will also promote private sector technical assistance and community development services tocommunities, which is expected to increase the impact of project-financed on-farm investments.
Table I and 2 present the switching values for each of the 14 farm models and for the Project in totum. Onaverage, financial revenues at the farm level should fall by 50% or total costs (investments plus operating)increase by more than 100 % in order to reduce the NPV to zero (Table 1). This analysis confirms that thefinancial attractiveness of the proposed changes in the household production units is robust. Analysis
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performed to measure the sensitivity of the ERR to the estimated benefits and costs of the Project activitiesand investments included indicates that benefits should fall by 30% or costs should increase by 44% fromthere expected estimates in order to bring down the ERR to 12% (Table 2).
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Annex 5: Financial Summary
NICARAGUA: Agricultural Technology Project
Years Ending2004
tIILVMENTATION P£EvOD
. Year I Year 2 Year 3 Year 4 Year 5 Year 6 Year 7Total Financing RequiredProject CostsInvestment Costs 6.4 8.2 7.2 6.8 0.0 0.0 0.0Recurrent Costs 1.7 2.7 2.9 2.9 2.9 2.9 2.9
Total Project Costs 8.1 10.9 10.1 9.7 2.9 2.9 2.9
Total Financing 8.1 10.9 10.1 9.7 2.9 2.9 2.9
FinancingIBRDIIDA 5.7 6.8 5.9 5.1 0.0 0.0 0.0Government 1.0 1.6 1.4 2.2 2.9 2.9 2.9
Central 0.0 0.0 0.0 0.0 0.0 0.0 0.0Provincial 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Co-financiers 1.2 1.5 1.7 1.6 0.0 0.0 0.0User FeeslBeneficiaries 0.2 1.0 1.1 0.8 0.0 0.0 0.0Others 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Total Project Financing 8.1 10.9 10.1 9.7 2.9 2.9 2.9
Main assumptions:
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Annex 6: Procurement and Disbursement Arrangements
NICARAGUA: Agricultural Technology Project
Procurement
All procurement of goods and works under the Project would be carried out in accordance with the"Guidelines, Procurement under IBRD Loans and IDA Credits" dated January 1995 and revised in Januaryand August 1996, September 1997, and January 1999. Consultants would be employed in accordance withthe "Guidelines, Selection and Employment of Consultants by World Bank Borrowers", dated January1997 and revised in September 1997 and January 1999.
Procurement Responsibilities and Capacity
Several agencies will have various degrees of involvement in Project implementation. However, theMinistry of Agriculture and Forestry (MAG-FOR) will be the lead agency and will be responsible forcarrying out or closely supervising all procurement under the Project, ensuring quality control at each stageof the processes. As one of the Project's components's objective is to provide institutional developmentcapacity to key government entities, the Credit would support the creation and strengthening of anAdministration Unit to be established within the MAG-FOR's General Directorate for Finance andAdministration. This unit will closely coordinate its activities with the Directorate of AgriculturalTechnology. Together, these two entities would carry out the projects' core technical implementation andwould be responsible for its administration. The details of their relationship are set forth in the ProjectImplementation Plan.
Since the Administrative Unit would operate within MAG-FOR, it is anticipated that procurement skillswill be transferred to or procurement resources otherwise retained by the institution. MAG-FOR'sprocurement actives are otherwise limited and its capacity to plan, implement and monitor procurement ispoor. MAG-FOR's overall organization and delegation of authority do not create particular obstacles to theprocurement process. However, the General Directorate for Finance and Administration comprises onlyfew staff with generic qualifications and little training. Roles and responsibility are not clearly defined inwriting. There is almost no experience with international procurement, very limited experience withnational competitive bidding and procurement of consulting services, and no standard procurementdocuments.
Actions to be taken include: (i) adequately staff the Administrative Unit by recruiting two procurementspecialists, at least one of whom with substantial experience in Bank-financed procurement, and twosupport staff to carry out the procurement function for the institution including procurement under theProject (staffing needs should be re-assessed as the Administrative Unit takes on additional projects); (ii)adoption of a manual with a detailed description of procurement responsibilities (i.e., the TOR for the unitsetting forth individual job descriptions, delegation of authority, and reporting) and processes; and (iii)preparation of standard documents, including NCB documents acceptable to the Bank. It is alsorecommended that an intemational consultant be retained as soon as possible on a short term basis to assistwith the said actions and the establishment of a LACI compatible monitoring systems. In addition theconsultant should help organize reliable and secure files and a control and checking systems for the files.
A procurement capacity assessment was carried out also for INTA. This institution is presently staffedwith one procurement officer who has limited experience with IDA-financed procurement but is familiarwith its procurement policies and procedures having received on-the-job training from an experiencedprocurement consultant who works for the ATLMP. The capacity of this small procurement unit appears tobe fair given the limited responsibilities it presently carries out, and would be appropriate to handle smallamounts of non-complex procurement.
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A new procurement law and implementing regulations were recently passed by the Nicaraguan legislature.Based on a preliminary review of the regulatory framnework, during negotiations it was agreed to includethe following "special provisions" in the Credit Agreement:
1. Bidders shall not be registered as a condition for bidding.
2. The submission of a single bid shall not be sufficient reason for the rejection of the bidding process.
3. The content of the bids and the evaluation report thereof shall remain confidential with respect to thosenot involved in the evaluation process until the award of the bid is made.
Procurement methods (Table A)
Works
The Project would include small civil works contracts for rehabilitation of several regional officesestimated to cost about US$1.6m total. Construction sites are scattered around the country and the worksare needed at different times. Consequently, no ICB package is expected. However, contracts for worksestimated to cost more that US$150,000 equivalent up to an aggregate amount of US$820,000 would beprocured following NCB procedures.
Contracts estimated to cost less than US$150,000 equivalent up to an aggregate amount of US$830,000equivalent would be procured under lump-sum, fixed price contracts awarded on the basis of quotationsobtained from a minimum of three qualified domestic contractors in response to a written invitation. Theinvitation shall include a detailed description of the works, including basic specifications, the requiredcompletion date, a basic form of agreement acceptable to IDA, and relevant drawings, where applicable.The award shall be made to the contractor who offers the lowest price quotation for the required work, andwho has the experience and resources to complete the contract successfully.
Goods
The Project would finance the procurement of vehicles, agriculture equipment, information systems, officeequipment, laboratory, and field equipment. Contracts for vehicles, agriculture and laboratory equipmentand information systems estimated to cost more than US$150,000 equivalent up to an aggregate amount ofUS$4.12 million would be awarded following ICB procedures. Contracts for other goods such as officefurniture and minor equipment estimated to exceed US$25,000 equivalent up to an aggregate amount ofUS$2.2 m. equivalent would be awarded on the basis of NCB procedures. Prior review of the first contractshall serve as the basis for agreement on a standard model to be used in subsequent contracts, if any.
Contracts estimated to cost less thanUS$25,000 equivalent up to an aggregate amount of US$1.0 m wouldbe awarded following shopping procedures in accordance with paragraphs 3.5 and 3.6 of the Guidelines.The invitation to submit quotation for shopping shall be in writing and include appropriate information, asindicated in the Project's Implementation Manual.
Consultant Services
The credit would finance technical assistance, studies and capacity building for MAG-FOR, INTA,INATEC and the Foundation, and other technical assistance for Project implementation including aprocurement specialist who will work in MAG-FOR's Project administrative unit. The procurementspecialist's responsibility will include implementing the system and procedures recommended by theinternational consultant, transferring appropriate procurement skills to other administrative staff inMAG-FOR, and ensuring that adequate institutional capacity is retained (i.e., procedures are updated, filessecure and well maintained, and staff trained.)
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Contracts with consulting firms would be awarded following a Quality and Cost Based Selection (QCBS)process, in accordance with Section II of the Consultant Guidelines.
In addition to Project staff, individual consultants would be used for assigmnents that meet therequirements of Paragraph 5.1 of the Consultant Guidelines.
Competitive Funds for Agricultural Research and Technical Assistance
Grants for agricultural research and agricultural technical assistance subprojects would be madecompetitively to eligible private sector beneficiaries, as defined in the respective operational manuals, andin accordance with the selection procedures described therein. Beneficiaries would include organizationssuch as universities, research institutes, producers, farmers associations and NGOs. Standard grantagreements acceptable to IDA and included in the operational manuals would be used to transfer grantfunds to the beneficiaries under conditions that would ensure adequate implementation.
Individual grants for research would average US$80,000 equivalent; grants for technical assistance areestimated at around US$400 equivalent. All grants would be cofmanced by the beneficiaries, in cash or inkind. The total amount of the grants is estimated to be US$10.6 m. equivalent of which IDA will fund $5.2m.
Procurement of goods and works under the grants would follow commercial practices which would includeprice comparison from three qualified suppliers, whenever possible. Services of individual consultants mayalso be procured under the grants. All goods and services shall be procured at a reasonable price, takinginto account also other relevant factors such as time of delivery and efficiency and reliability of the goodsand availability of maintenance facilities and spare parts and, in the case of services, their quality andcompetence of the parties rendering them. All such works, goods and services shall be used exclusively inimplementing the grants. Purchase of land will not be financed by the Project.
The grants would be administered by the the Foundation, institution that will be solely responsible forawarding the grants in accordance with the established procedures, disbursing grant funds from a specialaccount opened for this purpose and managed by the institution, monitoring implementation of the grants,evaluating performance, and ensuring that grantees follow agreed procedures. The establishment of theFoundation with appropriate technical, administrative, and financial management capacity to carry outthese responsibilities would be a condition of disbursement of the Credit.
Table A: Project Costs by Procurement Arrangements(US$ million equivalent)
:0 E*penditure Category 1B Pro;li t ;:o-:di N.B.F. Total Cost
1. Works 0.00 0.82 0.83 0.00 1.65
(0.00) (0.65) (0.65) (0.00) (1.31)2. Goods 4.10 2.25 1.04 0.00 7.37
(2.77) (0.95) (0.42) (0.00) (4.14)3. Consultant Services 0.00 0.00 4.99 0.00 4.99
(0.00) (0.00) (2.93) (0.00) (2.93)4. Individual Consultants 0.00 0.00 1.45 0.00 1.45
(0.00) (0.00) (1.07) (0.00) (1.07)5. Training 0.00 0.00 2.65 0.00 2.65
(0.00) (0.00) (2.48) (0.00) (2.48)6. Competitive Grants 0.00 0.00 10.58 0.00 10.58
(0.00) (0.00) (5.24) (0.00) (5.24)
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7. Recurrent Costs 0.00 0.00 7.68 0.00 7.68(0.00) (0.00) (4.57) (0.00) (4.57)
8. PPF (0.01) 0.00 1.90 0.00 1.90(0.00) (1.90) (0.00) (1.90)
Total 4.11 3.07 31.09 0.00 38.27(2.77) (1.60) (19.26) (0.00) (23.63)
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The table below is a summary of table on consultants in the Project file.
Table Al: Consultant Selection Arrangements (optional)(US$ million equivalent)
Exedtr QGB SB LS _ Q ; t er : Tta Cost
A. Firms 5.12 0.00 0.00 0.12 0.00 0.00 0.00 5.24(4.63) (0.00) (0.00) (0.10) (0.00) (0.00) (0.00) (4.73)
B. Individuals 0.00 0.00 0.00 0.00 0.00 3.24 0.00 3.24(0.00) (0.00) (0.00) (0.00) (0.00) (2.68) (0.00) (2.68)
Total 5.12 0.00 0.00 0.12 0.00 3.24 0.00 8.48(4.63) (0.00) (0.00) (0.10) (0.00) (2.68) (0.00) (7.41)
1\ Including contingencies
Note: QCBS = Quality- and Cost-Based SelectionQBS Quality-based SelectionSFB = Selection under a Fixed BudgetLCS = Least-Cost SelectionCQ = Selection Based on Consultants' QualificationsOther = Selection of individual consultants (per Section V of Consultants Guidelines),Commercial Practices, etc.
N.B.F. = Not Bank-financedFigures in parenthesis are the amounts to be financed by the Bank Credit.
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Prior review thresholds (Table B)The first two contracts awarded following NCB procedures, and the first procured through shopping wouldbe subject to prior review. In addition, prior review procedures would apply to all contracts awardedfollowing QCBS procedures estimated to cost more than US$50,000 equivalent, and all contracts withindividual consultants estimated to cost more than US$30,000.
Any contract awarded on a single-source basis, assignments of a critical nature, and amendments raisingcontract values above the said thresholds would be subject to prior review.
Table B: Thresholds for Procurement Methods and Prior Review
Contract Value Contracts Subject toThreshold Procurement Prior Review
Expenditure Category (US$ thousands) Method (US$ millions)1. Works >150 NCB First 2 contracts
<150 Price Comparison First contract2. Goods >150 ICB ALL
25-150 NCB First 2 contracts<25 Shopping First contract
3. ServicesConsulting Firms >50 QCBS ALL
<50 QCBS NONE>30 Chapter V of Consultant ALL
Individuals <30 Guidelines NONE4. Training N/A N/A N/A5. Competitive Grants CQ According to Operational
Individual Consultants ManualShopping
6. Recurrent Costs N/A N/A N/A
Total value of contracts subject to prior review: N/A
Overall Procurement Risk Assessment
High
Frequency of procurement supervision missions proposed: One every six months (includes specialprocurement supervision for post-review/audits)Procurement supervision will be performed by a Procurement Specialist (PS) or Procurement AccreditedStaff (PAS) and will include a review of: (i) the Administration Unit capacity; (ii) the procurement plan forthe Project, including a timetable for procurement actions anticipated during the next 12 months; (iii) theAdministration Unit monitoring system; and (iv) complete records for one in every five contracts (forgoods, works, and consulting services, respectively). In addition the PS or PAS will perform selectedphysical inspections of the goods received or works performed, and meet with selectedsuppliers/contractors, whenever possible. Procurement procedures under competitive grants will followcommercial practices which would include price comparisons from three qualified suppliers, wheneverpossible. This will be specified in the Operational Manuals.
1Thresholds generally differ by country and project. Consult OD 11.04 "Review of ProcurementDocumentation" and contact the Regional Procurement Adviser for guidance.
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Disbursement
Allocation of credit proceeds (Table C)
A financial management consultant assessed the financial execution capacity of the Ministry of Agricultureand Forestry (MAG-FOR). Even though MAG-FOR has a clear definition of the organizational structureof the Project at a macro level, it has not created the necessary units and implementing entities (e.g.,Administration Unit, General Directorate, Foundation). The consultant also assessed the capacity of twoother proposed implementing entities, INTA and INATEC, determining that they have some capacity forproperly managing and reporting on Project resources, but their staff need training in Bank procurementprocedures as well as in monitoring and evaluating outcomes. Currently there is no financial managementsystem that can be used for the Project and that would facilitate the design and implementation of a systemcapable of producing Project Management Reports (PMRs). Given the dissimilar state of financialmanagement capabilities in the different implementing units, the Bank and MAG-FOR have agreed that thetraditional disbursement mechanism (SOEs) will be used for at least six months after Project effectiveness.Transition to a full PMR system would be subject to the satisfactory results of new financial managementassessments.
Project implementing entities will have in place accounting and internal control systems that: (i) reliablyrecord and report all assets, liabilities and financial transactions of the Project and, as appropriate, theentity, including those transactions involving the use of Bank funds; and (ii) provide sufficient financialinformation for managing and monitoring Project activities.
As for the procurement aspects, during the first stages of the Project, and until the capabilities of the INTA,INATEC and the Foundation are satisfactorily developed responsibility for financial management,procurement and accounting will be centralized in MAG-FOR. The responsibility for quality control of allprocesses and management of the only special account will be centralized in MAG-FOR, who will also beresponsible for providing technical assistance to the other entities to establish their own procurement unitsand financial management systems for meeting Bank requirements.
The Bank and MAG-FOR have agreed on an action plan to develop the Administration Unit capacity toprepare quarterly PMRs within six months after Project effectiveness. The Adminstration Unit and theother entities will implement an Integrated Project Monitoring System, with accounting and financialinformation, disbursements, purchasing, procurement, and control of contracts, to allow the generation ofquarterly programmatic financial reports on the physical advance of each component, as well as financialinformation by disbursement category. The procedures for this system will be contained in an OperationsManual.
Once each of the implementing entities still not created is in place and deemed ready by the government forassuming their role in the Project, a Bank Financial Specialist will assess the financial execution capacityof the entity and agree on an action plan fully in line with the one agreed with MAG-FOR. TheAdministration Unit will receive from each implementing entity financial statements on a regular basis inorder to prepare consolidated PMRs and financial statements and to facilitate Project auditing.
Table C: Allocation of Credit Proceeds
t020 00:Expenditure: :tegory Amount in lio Financing Percentage1. Works 1.30 80%2. Goods 4.00 100% FE/80% LE3. Consultant Services 3.80 100%4. Training 2.50 100%
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5. Competitive Fund 5.30 100%6. Recurrent Costs 4.50 80%7. Project Preparation Facility 1.90 100%8. Unallocated 0.33 0%
Total Project Costs 23.63
Total 23.63
Use of statements of expenditures (SOEs):
The Bank and MAG-FOR have agreed that the traditional disbursement procedures (SOEs) will be used forat least six months after Project effectiveness. Transition to a full PMR system would be subject to thesatisfactory results of new financial management assessments.
Disbursement applications will be fully documented except for expenditures under contracts costing lessthan US$ 150,000 for goods; US$ 100,000 for consulting firms; US$ 50,000 for individual consultants,and all expenditures for training, competitive grants and recurrent costs, which may be submitted on thebasis of statement of expenditure."
(a) contracts which value does not exceed the equivalent of:
US$ 150,000 for goods,US$ 100,000 for consulting firms, andUS$ 50,000 for individual consultants.
(b) all local training programs, competitive grants and recurrent costs.
All other expenditures in excess of these amounts or of any other type will be fully documented whensubmitted to IDA. All consolidated documentation relevant to SOEs, will be available at the PMU forBank missions and audit purposes.
Special account:The authorized allocation(s) to the Special Account(s) will be set at a level sufficient to cover about fourmonths of estimated expenditures eligible for financing by IDA and any other donor whose funds aremanaged in trust by IDA. Replenishments of funds will be made on evidence of satisfactory utilization ofthe previous advance(s) as evidenced by the documentation submitted in support of disbursementapplications. Deposits into the Special Account and its replenishments, up to the Authorized Allocation(s)will be made initially on the basis of Applications for Withdrawals (Form 1903) accompanied with thesupporting and other documentation specified in the Disbursement Handbook. Once the accounting andfinancial management system is deemed compliant with LACI requirements, and is certified as such byIDA, a migration to a LACI type of disbursements may be implemented as described hereafter.
The Administration Unit will implement an Integrated Project Monitoring System, with accounting andfinancial information, disbursements, purchasing, procurement, and control of contracts will have to beimplemented, to allow the generation of quarterly programmatic financial reports on the physical advanceof each component, as well as financial information by disbursement category. This system will alsoestablish the procedures for its own operation and maintenance throughout Project implementation. Thedetail of these procedures are contained in the Operational Manual. The Administration Unit will have inplace accounting and intemal control systems that accord with such accounting standards or agreed formatand that (i) reliably record and report all assets and liabilities and financial transactions of the Project and,
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as appropriate, the entity, including those transactions involving the use of Bank funds; and (ii) providesufficient financial information for managing and monitoring Project activities.
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Annex 7: Project Processing ScheduleNICARAGUA: Agricultural Technology Project
Project Schedule Planned Actual
Time taken to prepare the project (months) 10 12First Bank mission (identification) 02/11/99 02/11/99Appraisal mission departure 07/01/99 02/15/2000Negotiations 01/24/2000 04/03/2000Planned Date of Effectiveness 06/26/2000 10/02/2000
Prepared by:
Ministry of Agriculture, Livestock and Forestry (MAG-FOR); National Institute of AgriculturalTechnology (INTA); National Institute of technology (INATEC).
Preparation assistance:
PHRD (TF 025984)Project Preparation Facility (Q 177-0-NI)
Bank staff who worked on the project included:
Name SpecialityNorman B. Piccioni Task Team Leader, Agricultural EconomistChristian Pieri Sr. EcologistChristopher Trapman Sr. Agricultural EconomistMark Austin Project Management SpecialistEnzo de Laurentiis Procurement SpecialistJeannette Ramirez Operations AnalystLenor A. Armstrong Education SpecialistMariana Montiel Legal CounselRoque Ardon Financial Management SpecialistTeresa M. Roncal Procurement AnalystSamuel Taffesse Consultant/Operations AnalystSanathadevi Meenaskshy Consultant/Sociologist
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Annex 8: Documents in the Project File*NICARAGUA: Agricultural Technology Project
A. Project Implementation Plan
Project Implementation PlanComponent(s) Implementation Plan(s) - for the five ComponentsFAITAN Operational ManualFAT Operational ManualAgricultural Education & Training Strategy
B. Bank Staff Assessments
Environmental Impact AnalysisSocial AssessmentFinancial Management AssessmentProcurement Assessment
C. Other
TORs for Project Evaluation StudiesFarm modelsCost TablesINTA Management Capacity (Euroconsult)*Including electronic files
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Annex 9: Statement of Loans and Credits
NICARAGUA: Agricultural Technology Project
Difference between expectediand actual
Onginal Amount in US$ Millions disbursements
Project ID FY Borrower Purpose IBRD IDA Cancel. Undisb. Orig Frm Rev'd
P007777 1998 Nicaragua FINAN SEC. ADJUSTMEN 0.00 71.00 0.00 16827 15.29 16.65
P040197 1999 Nicaragua FISE III 0.00 44.24 0.00 31.23 -2.06 D 00
P052080 1999 Nicaragua FORESTRY 0.00 8.61 0.00 7.80 1.17 0.00
P035753 1998 Nicaragua HEALTH SECT II 0.00 24.08 0.00 20.45 3 90 0.00
P035080 2000 Nicaragua INSTITUTIONAL DEV CR 0.00 21.11 0.00 1.60 -0.72 0.00
P007783 1995 Nicaragua NI Basic Education Project 0.00 43.97 0.00 921 -1.66 1040
P049296 2000 Nicaragua NI ECONOMIC MANAGEMENT TAC 0.00 20.57 0.00 20.57 0.00 0.00
P050613 2000 Nicaragua NI Second Basic Education Project 0.00 52.85 0.00 52.P5 0.00 0.00
P007788 1996 Nicaragua ROADS REHAB & MAINT 0.00 23.13 0.Q0 0.92 1.65 0.00
P007790 1997 Nicaragua RURAL MUNICIPALITIES 0.00 28.03 0.00 5.70 -5.42 0 00
P007780 1994 Nicaragua TECH &LAND MGMT 0.00 41.82 0.00 3.11 3.68 0.00
P055853 2000 Nicaragua TELECOMMUNIC. REFORM 0.00 15.60 000 15.60 1.31 0.00
P053705 1998 Nicaragua TRANSPORT il 0.00 47.27 0.00 32.58 -7.82 0.00
Total: 0.00 442.28 0.00 217.89 9.32 27.05
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NICARAGUASTATEMENT OF IFC's
Held and Disbursed Portfolio31-Jul-1999
In Millions US Dollars
Committed DisbursedIFC IFC
FY Approval Company Loan Equity Quasi Partic Loan Equity Quasi Partic
1998 AEF Ansbby 0.10 0.00 0.00 0.00 0.00 0.00 0.00 0.001996/98 AEF Bailey Bridg 0.68 0.00 0.00 0.00 0.00 0.00 0.00 0.001992 AEF Canplas 0.04 0.00 0.00 0.00 0.04 0.00 0.00 0.001999 AEF Chartered 0.32 0.00 0.00 0.00 0.00 0.00 0.00 0.001996 AEF Courdeau 0.40 0.00 0.00 0.00 0.40 0.00 0.00 0.001997 AEF Ekesons 0.29 0.00 0.00 0.00 0.29 0.00 0.00 0.001994 AEF Eterna 0.70 0.00 0.00 0.00 0.70 0.00 0.00 0.001999 AEF Hercules 1.30 0.00 0.00 0.00 0.00 0.00 0.00 0.001999 AEF Hygeia 0.38 0.00 0.00 0.00 0.00 0.00 0.00 0.001996 AEF Mid-East 0.00 0.00 0.12 0.00 0.00 0.00 0.12 0.001998 AEF Minaj 0.50 0.00 0.00 0.00 0.00 0.00 0.00 0.001997 AEF Moorhouse 1.35 0.00 0.00 0.00 1.35 0.00 0.00 0.001997 AEF Radmed 0.29 0.00 0.00 0.00 0.29 0.00 0.00 0.001991 AEF Stark 0.03 0.00 0.00 0.00 0.03 0.00 0.00 0.001997 AEF Telipoint 0.15 0.00 0.00 0.00 0.15 0.00 0.00 0.001995 AEF Vinfesen 1.00 0.00 0.00 0.00 1.00 0.00 0.00 0.001994 Abuja Intl 1.75 0.75 0.00 0.00 1.75 0.71 0.00 0.001964/66/89 Arewa Textiles 0.00 0.12 0.00 0.00 0.00 0.12 0.00 0.001992 FSDH 0.00 0.86 0.00 0.00 0.00 0.86 0.00 0.002000 Finarca 2.00 0.60 0.00 0.00 0.67 0.00 0.00 0.001998 Frutan 2.00 1.00 0.00 0.00 1.00 0.43 0.00 0.001981/85/88 Ikeja Hotel 0.00 0.25 0.00 0.00 0.00 0.25 0.00 0.001998 La Colonia 4.00 0.00 0.50 0.00 2.00 0.00 0.50 0.001993/99 Oman Leasing 0.00 0.83 0.00 0.00 0.00 0.83 0.00 0.001999 SEF Dicegsa 1.00 0.00 0.00 0.00 1.00 0.00 0.00 0.001993 Tourist Co Nir 11.00 0.00 6.50 0.00 0.00 0.00 2.50 0.001994 United Power Crp 11.25 4.00 0.00 34.22 11.25 4.00 0.00 34.22
Total Portfolio: 40.53 8.41 7.12 34.22 21.92 7.20 3.12 34.22
Approvals Pending Commitment
FY Approval Company Loan Equity Quasi Partic
Total Pending Commitment: 0.00 0.00 0.00 0.00
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Annex 10: Country at a Glance
NICARAGUA: Agricultural Technology ProjectLatin
POVE-RTY and SOCtAL America Low-Nlcaragua & Carib. Income Development diamond
199SPopulabon, mid-year tmniltions) 4.8 502 3.515 Life expectancyGNP per capita (Atlas method, US$) 410 3,940 520GNP (Atas melhor, USS billions) 20 1,978 1 844
Average annual arowth. 1992-9S
Population f%) 2.8 1.8 1.7 G Gotabor force %) 4t1 23 1.9 GNP Gross
per primaryMost recent estimate flatest year available, 1992-98) capita .' enrollment
Poverty (% of popuMb5on belw national povelty line- 50Urban population (% of total oopulation) 64 75 31Life expectancy ot birth (years) 68 70 63tnftnt mortality (Pet t,000 live biths) 43 32 69Child malnutrition (% of children under 5) 12 a Access to safe waterAccess to safe water % of Population) 62 75 74Illiteracy (% Of population age IS+) 37 13 32Gross primary enroliment % of sctoo-age population) 103 113 108 -N icaragua
Male 101 - 113 Low-income groupFemale 104 - 103
KEY ECONOMIC RATIOS and LONG-TERM TRENDS
1977 1987 1997 1998Economic ratios'
GDP (US$ billions) 2.2 2.9 2.0 2.1Gross domestic investment/GDP 25.6 1 58 322 345 TradeExports of goods and servlceslGOP 32.1 11.8 42.8 37,7Gross domestiosavingsaGOP 20.3 13o8 -4.5 -5.3Gross national savings/GDP 13.9 13.3 *3.0 -5.8 5
Current account balancelGOP -86 -27.5 -30.3 -2.9 Domest Interest PaymentsiG.DP 2.3 04 7.6 7.2 Savings InvestmentTotal debtJGDP 571 271 i 291.0 283.9Total debt servicietexports 14.6 14.4 31,5 32.2Present value of debtlGDP 224.2Present value of debtlexports 410.5
Indebtedness197747 1938-98 1997 1998 1999-03
(average anrnal growth)iGDP -2.0 2.0 S. 4. .64 ANfcaraguaGNP oer capita -5.7 0.8 8.6 3.3 3.8 Low-income groupExports of goods and services -8.3 t1.0 4.0 -6.4 7.4
STRUCTURE of the ECONOMY1977 1987 1997 1998 Growth rates of output and investment (%)
(% of GDP)Agriculture 22.9 28.9 33.9 34.0Industry 26.0 23.1 21.6 21.5 20 -
Manufacturing 19.2 18.7 15.5 15.1Services 51.1 48.0 44.5 44.4 0 9
Private consumption 70.8 52.0 89.9 91.1 -20General aovernment consumption 8.9 34.2 14.6 14.2 - GDI GDPImports of goods and services 37.4 13.8 79.5 77.5
1977-87 1988-98 1997 1998 Growth rates of exports and imports (%)(average annual growth)Agriculture -3.2 4.3 8.3 4.2 -Industrv -1.4 2.2 5.7 4.6 301
Manufacturinq -0.4 0.9 3.8 2.1 5
Services -1.7 0.5 2.6 3.6 It
Private consumption -7.8 2.1 8.8 9.6General government consumption 17.5 -5.5 -0.7 -0.4 94 9S 96 97 "5Gross domestic investment 0.6 6.9 22.2 20.0 -ImDorts of goods and services -0.5 6.2 14.1 7.9 - Exports ImportsGross national Product -2.8 3.4 9.6 6.1
Note: 1998 data are preliminary estimates.
The diamonds show four key indicators in the countrv (in bold) compared with its income-group averaae. If data are missina, the diamond willbe incomplete.
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Nicaragua
PRICES and GOVERNMENT FINANCE1977 1987 1997 1998 Inflation (%)
Domestic prices(% change) 30 TConsumer prices 11.4 911.9 9.2 13.0 20Implicit GDP deflator 11.9 523.1 9.2 13.0
Government finance(% of GDRP includes current grants) | oCurrent revenue .. 28.8 33.4 35.4 93 94 95 9S 97 98
Current budget balancE .. -11.9 4.5 7.8 | GDP deflator -PIOverall surplus/deficil .. -18.0 -9.2 -4.2
TRADE
(USS millions) 1977 1987 1997 1998 Export and import levels (US$ millions)Total exports (fob) 637 273 704 573 2,000
Coffee 199 115 116 173Shrimp and lobster 22 12 80 79 1,s00Manufactures 187 39 279 125
Total imports (cif) 761 827 1,454 1,508 1,000 -Food III 88 276 344 500Fuel and energV 103 125 189 131 sCapital goods 193 242 394 402 0C C¾l5~
92 93 94 95 96 97 90Export price index (1995=100) 64 80 93 90Import price index (1995=100) 67 76 106 112 elExports 0 ImportsTerms of trade (1995=100) 96 106 86 81
BALANCE of PAYMENTS
(US$ millions) 1977 1987 1997 1998 Current account balance to GDP ratio (%)Exports of goods and services 720 302 928 830 0
Imports of goods and services 841 895 1,471 1,517Resource balance -121 -593 -543 -687 .20
Net income -71 -208 -236 -211Net current transfers C 0 165 200 -40
Current account balance -192 -801 -614 -699 3.Financing items (net) 196 578 672 693Changes in net reserves -3 223 -58 6 -ao
Memo:Reserves including gold (US$ millions) 153 113 383 355Conversion rate (DEC, local/US$) 7.0 925.8 9.4 10.6
EXTERNAL DEBT and RESOURCE FLOWS1977 1987 1997 1998
(US$ millions) Composition of total debt, 1998 (US$ millionsTotal debt outstanding and disbursed 1,278 7,897 5,887 6,033 A 1
IBRD 75 248 24 15 G A2 15 IDA 22 60 368 487 G 422 8 487
Total debt service 107 44 349 337IBRD 8 0 20 1 1IDA C 0 4 4 D ,3
Composition of net resource flowsOfficial grants 2 68 216 107Official creditors 68 477 37 178Private creditors 116 9 -2 0Foreign direct investment 1c 0 173 116Portfolio equity 0 0 0 0 E: 3,601
World Bank program A |Commitments 35 0 0 238 A - IBRD E - BilateralII B - IDA D - Other multilateral F - PrvateDisbursements 17 0 51 106 |C-IMF G-Short-termPrncipal repayments 3 0 18 10Net flows 15 0 33 95Interest payments 5 0 6 5Net transfers 9 0 27 90
Development Economics 9/22199
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AdditionalAnnex No.: 1I
Letter of Development Program from the Government of Nicaragua
April 4, 2000
Mrs. Donna Dowsett-CoiroloDirector, LCC2C Country Management UnitThe World Bank1818 H St., NWWashington, DC 20433U.S.A.
Dear Mrs. Dowsett-Coirolo,
The Government of Nicaragua is committed to the revitalization of agriculture and rational exploitationof the country's abundant natural resources through the design and implementation of agriculturalpolicies and sectoral reforms. The main instrument of the national agricultural technology policy is theNicaragua Agricultural Technology Program (The Program). The Program will focus on thegeneration/enhancement of an efficient, demand-driven, agricultural technology knowledge andinnovation system.
Agriculture constitutes 34% from Nicaragua's GDP and employs 50% of the Economically ActivePopulation of the country. As a result, agriculture remains one of the most important sector inNicaragua's economy. The sector is dominated by small and medium-scale farm households (SMFs)which are characterized by low levels of productivity but with a large potential yet to be exploited.Only a small fraction of SMFs have access to technical assistance (less than 15%), resulting in lowrates of adoption of new technologies. On the other hand, there is a large number of technologies thathave been adapted to existing conditions and are appropriate to SMFs' circumstances.
Long term goals of the program
The program purpose is to increase agricultural productivity and family income of SMFs through theestablishment, strengthening, expansion and consolidation of an agricultural technology knowledge andinnovation system whereby public and private institutions participate and interact. The process ofestablishing an efficient operation of this integrated system requires a gradually-implemented,long-term plan. The sustainability of the transformation requires a long-term horizon allowing forfollow-up of beneficiaries and institutional strengthening. Given these considerations and theGovernment's long-term commitment to improve economic conditions in the agricultural sector,through agricultural technology innovation system development, the Government of Nicaragua hasrequested Financial Assistance from the World Bank for an Adaptable Program Loan (APL) to financeThe Program.
The Program which is expected to be implemented over a period of sixteen-years is designed to beimplemented in four phases. Phase I, which would take place between 2000 - 2004, will be systemestablishment phase. During Phase II and up to Phase IV, it is planned to strengthen, expand andconsolidate the system, respectively. The quantitative goal of the overall Program are by 2016 toincrease, on average, the productivity of 110,000 SMFs agricultural productivity by 80% and to raise
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their income by 40 %.
Phase I (The Project): The main objective of the Project is the establishment of an efficient, demanddriven agricultural technology, knowledge and innovation system. By the end of the project, at least60,000 SMFs will receive advisory services, there will be at least a 40% increase in the rate ofadoption of new practices by SMFs. In addition, at least 35 % increase in the number of researchers,specialists, technical assistance workers and trainers will be achieved. At end of Phase I, at least 20%of the total national inventory of technologies aimed at resolving problems of SMFs will be providedby Universities and private sector research institutions (profit and non-profit).
Project Output: By the end of the Project the following outputs, from the five components of theProject, are expected:
* Institutional framework for the operation of the system established;* Competitive Fund for agricultural services will be created and start operating;* INTA will be strengthened to improve research capacity, increase Nicaragua Agricultural
Technology and Land Management (ATLM) project's coverage, and become a service provider ina pluralistic system;
* Agricultural education & training system will be established and piloted;* National Agriculture Information System (SIA) will be established and piloted.
Critical Triggers: In order to gauge progress in the implementation of Phase I of the Program and toproceed to Phase II, the following critical triggers are agreed upon as a bench-mark.
* monitoring & evaluation follows routine feedback procedures, and SIA provides comprehensiveinformation services, in at least two regions, to all relevant stakeholders;
* Ministry of Agriculture and Forestry (MAG-FOR) has routinely evaluated data for at least twoyears;
* at least 60% of farmers attended by technical assistance have adopted at least one new technology;* at least (i) 60,000 SMFs have access to technical assistance services, and (ii) in three centers one
pilot experience of agricultural education is concluded;* at least (i) 60 technologies are validated and/or documented in technology guidelines, and (ii) a
first generation agricultural education and training concept is available;* public sector funding for agricultural research and technical assistance corresponds to commitments
made in the development credit agreement;* organizationally (i) the foundation hosting COSINTA is solidly established after at least two years
at full development, and (ii) the Directorate of Agricultural Technology is fully operational;* by end of year 2, a long term research, technical assistance and agricultural education and training
strategy is approved by MAG-FOR and COSINTA, and subsequently implemented.
The triggers to move to Phase III and IV of the Program will be reviewed during Phase I and refinedas the Program progresses.
Cost and Financing: The total cost of the Program is estimated at US$180.69. For Phase I of theProgram, the estimated cost is US$38.89. Indicative cost by phases and financing is given in thefollowing table.
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Program financing data Estimated GON Beneficiaries IDA- Cost Financing (US$ million) (US5 million)
APL's (USS million) (US$ million) COSUDE_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ ~~FID A
First Phase 38.89 3.57 3.3 32.02Second Phase 52.0 3.5 3.8 i 45.6Third Phase 54.9 3.5 3.8 i 47.6Fourth Phase 34.9 3.1 3.3 28.5Program Cost 180.69 13.2 14.2 | 153.29
Monitoring and Evaluation (M&E): MAG-FOR's General Directorate of Agricultural Technology(the Directorate) in coordination with Directorate for Statistics and Impact Evaluation Unit will be incharge of the overall M&E activities. The system will generate, systematize and interpret informationproduced by the Project's relevant stakeholders using the SIA system.
Monitoring and evaluation will: (i) be carried out at management levels according to World Bankstandards and as part of the institutional strengthening process to be carried out by the InstitutionalStrengthening Component; (ii) include follow-up of project finance and product delivery, in terms ofefficacy, efficiency and quality; (iii) study SMFs demand for technical services, technology andinformation; (iv) gauge beneficiaries' satisfaction regarding the Project's products quality; and (v)analyze the Project's impact in terms of the net benefits resulting from adoption of new technology bySMFs.
Institutional arrangements: To carry out the Program, the Government has appointed an ExecutiveCommittee to act as National Director of the Program. This committee will be presided bv theMinister of Agriculture and Forestry and will be composed of government officials in charae of eachthe Program's components. A Technical Coordination Group, composed of representatives of themajor public and private institutions participating in the Program, will advise the Conmnittee and theDirectorate. The day to day management of the program will be carried out by the Directorate assistedby the five managers responsible for the five components. Procurement and accounting will be carriedout by the PMU.
The Government of Nicaragua, through this Ministry, understands that acceptance of support for PhaseI of the Agricultural Technology Program does not necessarily represent a commitment by theGovernment of Nicaragua or by the World Bank to contract additional loans in support of theaforementioned Program.
, Sincerely,
JaimeCuadraMinister of Agriculture and F
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AdditionalAnnex No.: 12
Indigenous Population Participation Plan (IPPP)
Based on the summary of findings of the consultations carried in the Atlantic region, and the review ofrelevant documents on the indigenous population of the Atlantic Coast of Nicaragua.
BACKGROUND
The Atlantic region of Nicaragua stands out not only for its physical and biological characteristics, but alsosocio-economically. Even after the incorporation of the region to the Nicaraguan nation in 1894, thepresence of the state has been minimal. Although non-indigenous peoples now constitute more than half thetotal, indigenous peoples who for centuries did not have an effective relationship with the rest of thecountry have traditionally inhabited the region. Ancestral indigenous territories are now subject tocolonization and to the expansion of the agricultural frontier.
In the context of the Agricultural Technology Project, it is extremely important to invest in the developmentof indigenous communities because strengthened and stable indigenous communities are believed to bepositive forces for sustainability of any project activity. In order to fully prepare the proposed activities toaddress the needs of the indigenous peoples and to ensure overall compatibility of the Project with theirdevelopment priorities, fieldwork and secondary data analysis was carried out. Three ethnic communities inseven municipalities were consulted under the Social Assessment (see Project's files) using participatorytools such as municipal overview, focus group discussions, wealth ranking, social mapping, trend analysis,semi-structured interviews and case studies. Hiring male and female consultants who are residents of theAtlantic region with local language skills to carry out interviews, consultations and group discussionsensured participation of both male and female indigenous population during the Social Assessment.
Population and Ethnic Composition
The population of the Atlantic region is estimated to be around 400,000 inhabitants, occupying thirteenmunicipalities in two autonomous regions of the Atlantic (RAAN and RAAS). The following table providesan overview of the name of different communities, rough estimate of the number of inhabitants anddescription of these communities.
Community # of Description of CommunitiesInhabitants
Miskitos 102,000 Largest indigenous group; settled in northern part of RAAN and inRAAS
Sumu 8,000 Include three sub-groups (Panamahka, Itwhka, and Ulwa);majority of the Sumu live in RAAN; they are most affected byprocess of outside domination
Rama 1,400 Live in South of Blue fields; they have suffered the greatest declinein population in the Atlantic region
Creoles 36,000 Oldest indigenous population; they represent more than one-third ofthe total population; they mostly live in urban areas especially inthe Blue fields
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Mestizo 104,000 Migrants; mainly employed in the banana plantations andlarge-scale mining operations during the first decades of thetwentieth century; they expanded as large settlements of smallfarmers
Livelihood Systems
The indigenous patterns of natural resources management are still predorninantly traditional, based onsubsistence needs. They combine shifting agriculture with hunting, gathering and fishing. Indigenouscommunities have been able to maintain their forests, but population growth, coupled with increasingperceived material needs, have led them to disregard their old customs and to extract resourcesnon-sustainability.
Agriculture is a family activity carried out in the communal lands, with simple tools and no inputs otherthan family labor. The care of home gardens is the primary responsibility of women. Men are responsiblefor hunting, fishing and other off-farm activities. Due to the poor quality of the soils, people rotate theiragricultural plots and, in some cases, have to make long journeys to reach their plots. The main cropsproduced are beans, rice, maize, root crops and plantains. Areas under production average 1.9 Ha perhousehold in Rio Coco and 4.2 Ha per household in Waspuk. Cattle ranching are of limited extent, yet it isgrowing activity.
Livelihood patterns are affected not only by the increasing needs of the population in the context ofshrinking resource base, but also by the fact that trade in agriculture and forest products faces obstaclessuch as long distances and the lack of roads. Where they exist, agricultural commercial activities aredominated by a few intermediaries who have little competition and thus impose prices on producers andconsumers alike. Timber production is also affected by the lack of knowledge about the market and by thedependency of communities on a few logging enterprises.
Improved natural resource management and development in these areas require concerted effort, based ontechnical assistance, training, education and focused investments, not only to improve production but tocreate marketing channels so that people can sell under less exploitative conditions.
OBJECTIVE
The Indigenous Population Participation Plan (IPPP) aims to ensure that the process of developmentgenerated by the Agricultural Technology Project fully respects the dignity of the native population, theirhuman rights and their cultural identity. In particular, the objective of the plan is to ensure that the nativepopulation do not suffer any negative effects during the project, that they receive social and economicproject benefits compatible with their culture and that they participate in the planning, implementation andevaluation of the proposed activities under the Project.
The strategy followed by the project should allow this objective to be achieved. The selection of thecommunities will take into account the social level of the populations and the percentage of ethnicminorities. Similarly, in the selection process of the beneficiaries, the project will pursue, in addition to themotivation of the applicants, fair representations of the various social and ethnic groups and will givepriority to farmers who are most disadvantaged in economic terms. The strategy is based on theinformation and consultation of the various levels of stakeholders and on the participation of thebeneficiaries at all stages of implementation of the project. The project will also encourage the developmentof the abilities and the reinforcement of the capacities of the native communities in order to help thecommunities to get the most out of the proposed technical assistance and allow their integration within thedominant society, while preserving their cultural identity.
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INDIGENOUS POPULATION PARTICIPATION PLAN
The Government of Nicaragua reiterated its commitment to make every effort to prevent the AgriculturalTechnology Project from having a negative impact on the populations of the five ethnic communities and toensure that the latter benefit fully from the Project. The IPPP is an integral part of the Project, and thisAnnex extracts and summarizes the mechanisms in the Project design that will ensure the above. The IPPPdeveloped for the project aims at ensuring that the ethnic communities are not economically marginalized inthe development process, but can maintain and revitalize their own institutions, traditions and culture. Withthis aim, the IPPP pursued in order to implement the Project in the Atlantic region is as follows:
The effects of the project will be all the greater, due to the demonstration and distribution of technicalinformation, the higher the number of beneficiaries it reaches. The selection of the beneficiaries will be fullyvoluntary and will depend on three factors: (i) the general objectives of the project; (ii) the anticipatedadvantages for the beneficiaries; (iii) the constraints and conditions associated with participation in theproject: availability of labor, undertaking to repay the loan, compliance with the agreed technical methods.The information will be disseminated in the native language of the ethnic group at local communitymeetings and will be supplemented by field visits and meetings with existing small medium farmers(SMFs).
Local participation aims to encourage the adoption of the new technology and skills proposed by theProject by the beneficiaries. Simple mechanisms and structures will be established to ensure the sustainableparticipation of all the indigenous populations in all phases of the Project preparation, implementation andmonitoring.
As far as possible, the institutional arrangements of the Project will follow the existing arrangements andwill reinforce them if necessary. At the Central level: (i) the DTA will include a full time IndigenousCommunity Participation Specialist; and (ii) COSINTA will include an Indigenous Organization, selectedto represent the indigenous communities from the Atlantic region along with representatives from INTA,INATEC, universities, research organizations, farmer's associations, NGOs and private sector. The INTAand the other providers of technical assistance services will be reinforced by recruiting Ethnic CommunityExtension workers to the extent possible. At communal level, the institutional arrangements will, as far aspossible, use the political, social and professional organizations that are already in place and the traditionalsocial organizations and powers whose authority is recognized by the local populations and whichrepresents a mobilization force. Among the many associations that represent basic organizational level, theProject will coordinate with the 'Council of Elders' as the greatest authority, highly respected in thecommunity, where elders are elected once a year.
Developmental Activities
The developmental activities in the IPPP can be divided into two broad categories: (i) activities that arebuilt into the project components as a whole, to facilitate participation of ethnic communities; and (ii)activities that are exclusively designed outside the Project components, to support the participation ofethnic communities in the Project. They fall into two categories: (i) mobilization and reinforcement of theethnic communities; and (ii) enhancement of the capacity of the Project service providers to reach anddeliver appropriate services to the ethnic communities.
A. Activities built into the project components as a whole to facilitates participation of ethniccommunities
They provide the mechanisms to facilitate participation of the indigenous population in the specific fiveproject components. Specifically:
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Component I - Development of Institutional Capacity. The Project will include a full time IndigenousCommunity Participation Specialist within the DTA to facilitate and protect the interests of the indigenouspopulation and to promote, monitor and evaluate the implementation of the national agricultural technologystrategy. The Community Participation Specialist will also supervise the activities of the executing entitiesand publicize the Program's achievements. The Project will also ensure selection of a regional IndigenousOrganization (criteria for selection of the Indigenous Organization will be developed by MAG-FOR andcleared with the Bank) through competitive bidding. The selected Indigenous Organization will representthe indigenous Population interests in the body of COSINTA. The Indigenous Organization will aim todevelop local level capacity for social organizations around the common purpose and to give a voice to allelements of poor indigenous communities. Additionally the Indigenous Organization would liaise withstakeholders at all levels of the project nationally via COSINTA, and locally with the technical assistanceagents, male and female SMFs, and other community organizations through its local chapters. The selectedIndigenous Organization will require a vote of confidence from the Council of Elders from each ethniccommunity and 'Mestizos'. The regional Indigenous Organization should have chapters in all the requiredmunicipalities in order to effectively interact with the local community members. Upon election, should theIndigenous Organization receive a vote of no-confidence from a minimum of twenty-five votes from themembers of the indigenous community and/or Council of Elders at any time, it will be removed from statusand new elections will be conducted.
The Indigenous Organization will ensure that all the five communities are given equal rights and nocommunity/group is over or under represented in the body of COSINTA. The Indigenous Organization willmeet periodically with the communities through its local chapters to identify their needs and priorities. TheIndigenous Organization will ensure that all meetings have a gender balance with female representation.The schedule of the meetings will be announced in the local churches along with the agenda for themeetings and decisions made during the previous meetings. All meetings and list of attendees will bedocumented. The local chapters of the Indigenous Organization will send their recommendations to theirregional office who will then represent the indigenous community's interest in the body of COSINTA.
INTA, responsible for managing and executing public sector services, will ensure research and technicalassistance to SMFs from the Atlantic Coast. Selection of the SMFs from the Atlantic region will be madeon the basis of the criteria developed by DTA and COSINTA. Twenty percent of the total SMFs coveredby INTA will come from the Atlantic Coast, covering each of the five communities. Gender balance inselection of the SMFs will be confirmed by ensuring that at least 30% of the total indigenous SMFs arewomen farmers. Among women farmers, priority will be given to women headed households with noearning male member in the household.
Component II - Establishment of a Competitivefundfor Agriculftural Services. Under the AgriculturalTechnology Fund, the Project will establish two grant facilities, FAITAN and FAT.
- Under the FAITAN grant facility, the Foundation will execute at a minimum one call per year forinnovative, open project proposals responding to technological demands of SMFs from the Atlanticregion. COSINTA through the Foundation's management council will ensure that a minimum of oneinnovative proposal per year responds to the technological demand of the SMFs from the Atlanticregion. The type of technology to be addressed in the proposal will be unanimously selected throughconsultations and joint decision making among the SMFs, local chapters of Indigenous Organization,technical assistance agents, and Council for Elders from the five ethnic groups. The local chapters ofIndigenous Organization will forward their requests for technology to their regional office. To promotestrategic alliances for research, the Foundation will also execute at least three calls for proposalsfocused on strengthening the research capacity of local institutions through strategic alliances withregional or overseas universities or research centers. Out of the three proposals, COSINTA will ensure
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that the Foundation will execute at a minimum one proposal to strengthen the research capacity of aselected local institution in the Atlantic region. The local institution will be selected throughconsultations and joint decision making by regional agricultural technical assistance office (throughtheir local agricultural technical assistance offices), regional Indigenous Organization (through theirlocal chapters and SMFs) and the Council of Elders from the five different communities.
- Under FAT grant facility, no specific, direct activities to promote indigenous population participationwill be promoted. During the first phase of the Program, FAT will be field tested in Leon, Chinandega,and Managua, targeting 5,600 SMFs families and not in the Atlantic region. On the basis of theexperience of the first phase, a nation-wide approach, sensitive to the cultural demands of each regionwill be developed during the second phase. However, during the first phase, the indigenous populationsof the Atlantic region will be encouraged to participate through sharing the information from theexperiences from the three pilot locations.
Component III - Strengthening of INTA 's Operations
Under the Research and Development activities, the project will ensure that demands for new technologycovers the needs and priorities of the SMFs from the five ethnic communities of the Atlantic region. Theneeds and priorities for the SMFs will be periodically identified through the agricultural technicalassistance staff. Both male and female technical assistance officers will be used to cover the Atlantic regionin order to empower and effectively communicate with both male and female SMFs. These identified needsand priorities will be further discussed and decisions jointly made in the monthly meetings in the presenceof SMFs, members from the local chapter of the Indigenous Organization, Council for Elders of eachcommunity and agricultural technical assistance agents. The schedule, agenda, list of attendees, decisionstaken and how they were taken will be documented by the Indigenous Organization. Further, technicalassistance agents along with the local chapter of the Indigenous Organization, will facilitatedemonstrations of new technologies in SMF's farms in order to create an awareness of the new technologywhich they feel pertinent to the region and to build faith among the neighboring farmer communities on itsadvantages. Demonstrative farms will be selected from both male and female SMFs of all the five ethnicgroups. All expenses incurred for the demonstration will be covered under the component.
Under the technology transfer sub-component, one third of the total SMFs covered through INTA in theAtlantic region will come from the five different ethnic communities. SMIFs requiring advisory services willforward their applications to the local chapter of the elected Indigenous Organization, who will make fieldvisits along with the technical assistance agent to the SMF's farms. SMFs eligible for advisory services arethen selected based on the urgency of situation discussed in a meeting attended by the IndigenousOrganization, technical assistance agent, Council of Elders and the SMFs. Out of the total selected SMFs,at least thirty percent should be female SMFs with priority given to women headed households.
Under the seed Production sub-component, both male and female SMFs from the five ethnic communitieswill be encouraged to participate in the process. Feed-back on the type of seeds will be discussed inmeetings attended by agricultural technical assistance officers, SMFs and the Indigenous Organization. Allmeetings, with the list of attendees, decisions made, and the manner in which they are made will bedocumented by the Indigenous Organization and forwarded to the regional office, and from there to INTA'sregional centers.
Under the training and diffusion sub-component, in-house training will be provided to technical assistanceand research staff, private service providers and subject matter specialists covering five ethnic communitiesof the Atlantic region. The trainees for the Atlantic region will represent thirty percent of the total selectedtrainees. Gender equality will be strictly maintained during the selection of trainees. The type of technicaland methodological training information that are required for the specific localities of the Atlantic regionwill be jointly decided through consultations with SMFs, the Council of Elders, members of the local
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chapter of the Indigenous Organization and INTA. This will contribute towards the definition of thein-house training agendas.
Planning, Monitoring and Evaluation activities will ensure the delivery of client-responsive agriculturaladvisory services. The information created under this sub-component will indicate the number ofindigenous people (from the Atlantic region) who have received the advisory services. The information willalso indicate the gender and ethnic group of the indigenous person, the manner in which the requests weremade, and the number of times requests were made before they were attended to. The informnation gatheredwill be coordinated with data gathering requirements of the Monitoring and Evaluation Module of theDTA. The Project will make special efforts to make available funds, vehicles, equipment, operatingexpenses and information systems access necessary to effectively address the issues of the indigenouspopulations of the Atlantic region.
Component IV - Establishment and Piloting of an Agricultural Education & Training System.
Under this component, the project will ensure that INATEC will fund civil works for the rehabilitation ofagricultural training centers in the Atlantic region and vehicles, equipment, consultants, training andoperating costs to effectively carry out all the proposed activities under the component in the Atlanticregion. Under the component, the project will also ensure that consultants chosen to work in the Atlanticregion know the spoken language of the locality and are familiar with the cultural context of the specificlocation.
The Project will also ensure that under the sub-component "Training of the Trainers", annual in-servicetraining programs will be drawn and carried to the technical assistance staff from Atlantic region in themethodology for providing client-responsive advisory services and technology for sustainable production,harvesting, processing storage, packaging and marketing techniques specific to the locations within theAtlantic region. SMFs, local chapters of the Indigenous Organization will be consulted in the definition oftechnical bulletins and training materials to ensure that language and presentation take account of the realconditions and the SMF's levels of understanding.
The Project will also consult the local chapters of the Indigenous Organization, Council of Elders andSMFs through series of meetings and workshops to initiate work on identifying new agricultural educationand training curricula to improve basic training in agricultural production skills for the next generationtechnicians, farmers, skilled and semi-skilled farm workers. The Indigenous Community ParticipationSpecialist will play a major role in evaluating the activities in conjunction with members of COSINTA.
Component V - Establishment and Piloting of an Agricultural Information System
Under this component, MAGFOR will ensure that the information is effectively disseminated withoutexclusion of the Atlantic Region. In order to guarantee participation of the indigenous population in thepreparation and implementation of the above component, MAGFOR will consult and jointly decide withIndigenous Community Participation Specialist and COSINTA the nature of information that will be madeavailable through the above system.
B. Activities that are exclusively desianed to support the participation of ethnic communities in theproiect
Two specific set of activities include: (i) mobilization and reinforcement of the ethnic communities; and (ii)enhancement of the capacity of the service providers to reach and deliver appropriate services to the ethniccommunities.
Mobilization and reinforcement of the ethnic communities. It will involve: (i) information dissemination andawareness raising; and (ii) contributing towards a community gathering place. An extensive information
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campaign will be carried out in the five ethnic communities participating in the Project. This will beorganized by the DTA and carried out with the help of the Indigenous Organization. All villages in theAtlantic region will be visited and several meetings will be arranged in each village. Information will beprovided to male and female SMFs separately, and in native language of the locality. The campaign willintroduce all elements of the project and focus on the possible benefits and obligations/risks of thosechoosing to participate. Potential beneficiaries will thus be provided with a choice whether to participate ornot to participate in the project.
Prior to launching the information campaign, all persons involved in the campaign (technical assistancestaff and service providers) will be trained in participatory approaches to information dissemination andconsultation, arranged by the Indigenous Community Participation Specialist and the selected IndigenousOrganization.
Project management will seek to provide ample opportunities for the indigenous community members tomeet as a group and/or to meet with local chapters of the Indigenous Organization, Council of Elders andagricultural technical assistance agents and thus spend time sharing information on topics of commoninterest within each ethnic group. In order to achieve the goal, Project will allocate funds to build or repair,as need may be, the community gathering places. The indigenous people will, contribute their labor toconstruction/repair, and the process of building them as well as the building itself is expected to strengthenthe identity of the ethnic communities. These structures are also aimed to facilitate and revitalizetraditional organization management structures such as the Council of Elders and ritual gatherings.
Enhancement of the capacity of the service providers to reach and deliver appropriate services to the ethniccommunities. The project aims to build the capacity of the govemment officials in the various locations atthe national and provincial level on the ways and means to effectively address the indigenous population ofthe Atlantic region through recruitment of Indigenous Community Participation Specialist and regionalIndigenous Organization and training of the regional and local level agricultural technical assistance staff.Specifically, training will be provided to those officials will be replicated and disseminated to the localagricultural technical assistance staff, who will closely work with the SMIs from the different communitiesin the Project areas of the Atlantic region.
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AdditionalAnnex No.: 13
Environmental Management Plan (EMP)Based on the summary of findings of the Environmental Impact Analysis.
In Nicaragua, crop and animal production systems are the largest user of natural resources (soil, water,plant and animal genetic resources and climate). Although the need for agricultural productivity is urgentlyrequired to address poverty reduction and food security issues, lessons learned from past experience as wellas from the disaster provoked by Hurricane Mitch, have lead MAG-FOR to recognize that farmers' incomegeneration and agricultural development cannot be achieved at the expenses of the natural resources base.The Project's Environmental Impact Analysis (see Project files) has made an evaluation of the past andcurrent major environmental issues, taking into account the biophysical and socioeconomic characteristicsas well as ecological vulnerability of the seven agroecological regions of the country. These environmentalissues include:
* Deforestation, resulting from the agricultural frontier and from the unsustainable use of timber andfuel wood resources, all over the country;
* Environmental Pollution, induced by mismanagement of agrochemicals, inappropriate processingof agricultural products, and lack of water sanitation systems in agricultural and urbanenvironments, all over the country;
* Soil erosion and loss of fertility, resulting from encroachment of small and medium farmers infragile areas, such as steep slopes in the North of the Central zone and in the acidic sandy soilsfrom the Atlantic zone; and
. Loss of Biodiversity, resulting from monocropping in intensive production systems, unsustainableforest resources management, and loss of habitats through deforestation and soil erosion,particularly in the Central and Atlantic zones.
In view of the importance of addressing efficiently these issues, the strategy developed by MAG-FOR toenhance agricultural productivity gives emphasis to: (i) long term investment in human capital formation,reshaping agricultural education and adult literacy programs through alliances with the competentinstitutions, (ii) capital accumulation in the agricultural areas, and particularly for the resource; (iii) morewidespread and generalized adoption of soil conservation and other sustainable agricultural developmenttechnology; and (iii) the development of mitigation measures and emergency response teams to help farnersin hard hit disaster areas.
The Project will contribute to the implementation of this strategy through:
* the development, the local adaptation and the diffusion of improved and profitable technologiescompatible with sustainable agricultural and animal husbandry practices appropriate to thecircumstances of SMFs,
* training, education and capacity building activities, and the provision of the appropriate social andenvironmental information and knowledge base to the major stakeholders, including researchers,extensionists and producers to ensure the practice of sustainable agriculture, consistent witheconomic, social and environmental criteria.
Potential environmental impact of the program is related to the testing and adoption of technology promotedthrough INTA's field services and by those funded by the FAT and FAITAN competitive grant facilities.These are intended to promote locally adapted "pathways" of changes toward sustainable agriculture,through improved cropping patterns, integrated nutrient and pest control practices, and soil and water
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conservation techniques. In addition the Project does not foresee procurement of pesticides. If implementedaccording to prevailing best practices, the environmental impact of these changes will be positive. In thePacific, Central and Northern Regions, the Project will increase the water and soil quality, help decreaseerosion rates and promote the implementation of agroforestry system. In the Atlantic Region, the Projectwill help moderate the advance of the agricultural frontier by encouraging sedentary agricultural practicesand production systems adapted to the ecological conditions such as cocoa, oil palm and agroforestry.Technical themes will include those which encourage reforestation.
To mitigate the risk of promoting technology options which rely on short termn profit and marketingopportunities without taking full attention to medium and long-term environmental impact, there will be: (i)persistent attention to training in cost-effective and environmentally sustainable technology; and (ii) a readysupply of environmentally friendly recommendations developed by research. Operation manuals forsoliciting, preparing, evaluating and selecting proposals submitted for FAT and FAITAN funding includeenvironmental criteria of compliance. INTA is developing sustainable technology under a specific program,including soil and water conservation measures, no-tillage, legume covercrops management, and IPMtechnology. An environmental specialist will be part of the evaluation committee of the competitive fund.Environmental specialists, front line agents, and producers leaders will be trained on the principles ofagroecology and sustainable agriculture under the training program. The agricultural technical Directoratewill have access to funds to recruit the services of environmental specialists to advise on specific aspects ofenvironmental management concern. As a result of these actions the program is expected to impactpositively on the environment.
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Matrix of potential Environmental Impacts and Risk Reduction Measures
Issue Potential Project Possible Effects Mitigation MeasuresImpact
Mismanagement of Efforts to increase in A decline in total (i) INTA is developing sustainable soil, cropNatural Resources in the short term factor and water management practices based onagricultural productivity and productivity. the principles of ecology, including IPM,landscapes SMFs' income IPNM, conservation tillage etc., and
through greater provision has been made for the localintensification of adaptation of these technologies to localproduction systems, socio-environmental conditions; (ii)might result in soil proposals submitted for FAT and FAITANerosion, loss of soil funding include specific environmentalfertility, and criteria of compliance; (iii) agriculturalunbalanced use of education component include specificchemical fertilizers. training on environmental awareness and
sustainable agriculture development; (iv)monitoring and impact measurements ofproject activities on the quality of NR.
Environmental Development of high Exposures of The project will support (i) diversification ofPollution value crop could users/applicators crops and production systems, with the
increase the use of to pesticides with potential to reducing the impact of pest andpesticides; support for negative health diseases and the building-up of predators;further income effects. (ii) IPM and use of bio-pesticides; (iii)generation through environmentally friendly processing system;local processing of Increasing (iv) specific training on safe and efficientproducts such as pollution of management of agrochemical.coffee could also surface and deep In addition, proposals to FAT and FAITANincrease pollution of water. funding must comply with environmentalwater streams in the criteria, including the list of non restrictedCentral and Pacific agrochemical (Pan-American HealthZones. organization) with due consideration of the
pesticides guidelines laid down by the WorldBank in OP 4.09.
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Deforestation and Development of short Disturbance of The project will support (i) alternatives toLoss of Biodiversity term profit crop and hydrological shifting cultivation techniques, such as
animal production cycles, and Integrated Plant Nutrient Managementsystems might induce narrowing of the (IPNM) and agroforestry; (ii) participatoryfurther encroachment genetic base for development of local strategy ("pathways ofin fragile and/or production change") leading to agricultural stabilizationpreserved areas, while systems. and better adjustment of land use to landnarrowing the capability; (iii) implementation of soil andagrobiodiversity and water conservation practices with potentialdegrading habitats of to control land degradation to protectlocal. habitats and loss of biodiversity resources
and; (iv) develop working linkages with GEFprojects, such as Biological Corridor in theCenter and Atlantic zones.
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IBRD 22428
N I C A R A G U A 6HONDURAS 845 82POTENTIAL LAND USE
POTENTIAL LAND USE USO POTENCIAL DE LA TIERRASuitable (orUSO POTENCIAL DE LA TIERRA intensive annual crop cultivation
Selected main roads IApropido paraCarreteras principa/es culSos anuales infeosivos
National capital Suitable forcapital nanc'iOnaS_l intensive perennial crop cultivation
~ ~ PA NA PA Apropiado paraCities and towns = -a/CN cultivos perennes intensivos
_ 14° Ciudades y pueblos _ , nanzaInternational boundaries l.a ta > a Cabezas Suitable forFronteras internacionales / lCOA intensive forest usc or protecLion
T 441- ~~~~~~~~~~~7 ~ p~Apropiado parauso Intensivo forestal o dle protecci6n
Maria [ Wt j'1¢ t- 1.S.: ,s:Ll 0eict : t qL q r-- T-r- . *; i IVOUNTA LAGOON Suitable for
extensive livestock and forest use0 ~~~~~~~~~~LApropiado para
ertcio Isabe uso extensrvo granadero o forestal
FOA > giG CA R/BEAN SEA
0 20 40 60 50 100 120 140 16e
1 p| AJlpaNOtNRFA KILOMETERS '
0 20 ~~~40 0 50 T00
oR, ^ . S.~lhnadeF >>ary e ;,_ SnJa e oe>D rl;M Sa t
_ . , | \ . FEE;RUARY 199~~~aolco -1 %
-4~~~~~~~~~~~~~~PRA LAGOON MAIZ BE tt" AaPA P
I ~ ~ ~ SLUCFIEWS BAY~~ISAND
NICARAGUA K~~~~~~~~~~~~~~~ODUA
San Ub Id &LIEFIR0.5 BANY /E BY ,onrsr >
-q A Q,,- EA
~ )M~~~3~ D'M~~~ 0,San, Juan Juancdel Nonel\
'-~~~~~~~> RICA -i ~~~~~~~ SAN JOAN DfLNO 7B
PACIFIC DC/AN > PAIAAMA
-- in,,sMo, as' ~~~~~~~~~~~~~~~~~~~~~~~~~~~~FEBRUARY 1991
