Philippines: Cordillera Highland Agricultural Resource Management Project

Transcription

1 Completion Report Project Number: Loan Numbers: 1421/1422-PHI(SF) May 2006 Philippines: Cordillera Highland Agricultural Resource Management Project

2 CURRENCY EQUIVALENTS Currency Unit peso (P) At Appraisal At Project Completion (31 October 1995) (9 December 2005) P1.00 = $ $ $1.00 = P26.00 P54.12 ABBREVIATIONS ADB Asian Development Bank ASS agricultural support services ADF Asian Development Fund BME benefit monitoring and evaluation BNRMP Barangay Natural Resource Management Plan CADT certificate of ancestral domain title CAR Cordillera Administrative Region CHARM Cordillera Highland Agricultural Resource Management Project CIS communal irrigation system DA Department of Agriculture DA-CAR Department of Agriculture-Cordillera Administrative Region DAR Department of Agrarian Reform DENR Department of Environment and Natural Resources DWS domestic water supply system EIRR economic internal rate of return FIES Family Income and Expenditures Survey FMR farm-to-market road HADP Highland Agricultural Development Project ICC indigenous cultural community IFAD International Fund for Agricultural Development IPM integrated pest management LGU local government unit NCIP National Commission on Indigenous Peoples NGO nongovernment organization NIA National Irrigation Administration OCR ordinary capital resources O&M operation and maintenance PEO Provincial Engineering Office PMO project management office PSO project support office RISC Regional Interagency Steering Committee SSCG Small Savings and Credit Group GLOSSARY barangay The lowest local government administrative unit lapat Forest management practice by the indigenous people

3 NOTES (i) (ii) The fiscal year (FY) of the Government ends on 31 December. In this report, "$" refers to US dollars. Vice President C. Lawrence Greenwood, Jr., Operations Group 2 Director General R. M. Nag, Southeast Asia Department (SERD) Director U. Malik, Agriculture, Environment and Natural Resources Division, SERD Team leader T. Miyazato, Senior Water Resources Specialist, CWRD (formerly with SERD) Team member E. Tayao-Castro, Assistant Project Analyst, SERD

4 CONTENTS Page BASIC DATA i MAP vii I. PROJECT DESCRIPTION 1 II. EVALUATION OF DESIGN AND IMPLEMENTATION 2 A. Relevance of Design and Formulation 2 B. Project Outputs 4 C. Project Costs 6 D. Disbursements 6 E. Project Schedule 6 F. Implementation Arrangements 6 G. Conditions and Covenants 7 H. Consultant Recruitment and Procurement 7 I. Performance of Consultants, Contractors, and Suppliers 8 J. Performance of the Borrower and the Executing Agency 8 K. Performance of the Asian Development Bank 8 III. EVALUATION OF PERFORMANCE 9 A. Relevance 9 B. Effectiveness in Achieving the Outcome 9 C. Efficiency in Achieving Outcomes and Outputs 10 D. Preliminary Assessment of Sustainability 11 E. Impact 12 IV. OVERALL ASSESSMENT AND RECOMMENDATIONS 13 A. Overall Assessment 13 B. Lessons 13 C. Recommendations 14 APPENDIXES 1. Project Framework Summary of Training Programs Organization Chart Actual Annual Project Cost Project Implementation Schedule Status of Compliance with Loan Covenants Staffing Schedule of Consultants List of Equipment Economic Analysis 48

5 BASIC DATA A. Loan Identification 1. Country 2. Loan Number 3. Project Title 4. Borrower 5. Executing Agency 6. Amount of Loan 7. Project Completion Report Number B. Loan Data 1. Appraisal Date Started Date Completed 2. Loan Negotiations Date Started Date Completed 3. Date of Board Approval 4. Date of Loan Agreement 5. Date of Loan Effectiveness In Loan Agreement Actual Number of Extensions 6. Closing Date In Loan Agreement Actual Number of Extensions 7. Terms of Loan Interest Rate Maturity (number of years) Grace Period (number of years) Philippines 1421/1422(SF) Cordillera Highland Agricultural Resource Management Project Republic of the Philippines Department of Agriculture; Department of Environment and Natural Resources L1421: $9,500,000 L1422: SDR6,357,000 ($9,500,000) L397-IFAD: $9,200,000 PCR:PHI May June October October January May 1996 (signing date) 30 September June September 2003 L1421: 16 May 2005; L1422: 10 June (for L1421) 2 (for L1422) Pool-based variable rates 27 years for ordinary capital resources 35 years for Asian Development Fund 7 years for ordinary capital resources 10 years for Asian Development Fund

6 ii 8. Disbursements a. Dates Initial Disbursement L1421: 15 September 1997 L1422: 26 November 1997 to BCEOM Effective Date 3 June 1997 Final Disbursement L1421: 16 May 2005 L1422: 10 June 2005 Original Closing Date 30 September 2003 Time Interval 92 months 92 months Time Interval 75 months b. Amount Loan No PHI (in $) Category Original Last Revised Amount Amount Undisbursed No. Description Allocation Allocation Cancelled Disbursed Balance 01 Civil Works 3,862,000 6,522,565 (2,660,565) 6,522, Equipment and Vehicles 455, , , , Interest and Commitment Charges 1,707,000 1,546, ,605 1,546, Unallocated 416, , Local Expenditure 3,060, ,060, Total 9,500,000 8,300,000 1,200,000 8,300,000 0 Loan No PHI(SF) (in $) Cat Original Last Revised Amount Amount Undisbursed No. Description Allocation Allocation Cancelled Disbursed Balance 01 Equipment and Vehicles 1,273,242 1,506,036 (232,794) 1,506, Training 40, ,650 (612,301) 652, Consulting Services 532,012 2,046,291 (1,514,279) 2,046, Surveys and Special Studies 53,799 1,883,156 (1,829,357) 1,883, Recurrent Costs 321, , , , Service Charge During Construction 639, , , , Unallocated 200, , Local Expenditure 6,439, ,439, Total 9,500,000 6,427,954 3,072,046 6,427,954 0

7 iii Loan No PHI(SF) (in SDR) Cat Original Last Revised Amount Amount Undisbursed No. Description Allocation Allocation Cancelled Disbursed Balance 01 Equipment and Vehicles 852,000 1,148,743 (296,743) 1,148, Training 27, ,496 (463,496) 490, Consulting Services 356,000 1,530,498 (1,174,498) 1,530, Surveys and Special Studies 36,000 1,410,912 (1,374,912) 1,410, Recurrent Costs 215,000 82, ,940 82, Service Charge During Construction 428, , , , Unallocated 134, , Local Expenditure 4,309, ,309, Total 6,357,000 4,833,079 1,523,921 4,833, Local Costs (Financed: ADB+IFAD) - Amount ($ 000) 12,165 - Percent of Local Costs (Actual) 51.19% - Percent of Total Cost (Actual) 38.16% C. Project Data 1. Project Cost ($ 000) Cost Appraisal Estimate Actual Foreign Exchange Cost 9,532 8,111 Local Currency Cost 31,968 23,764 Total 41,500 31, Financing Plan ($ 000) Cost Appraisal Estimate Actual Implementation Costs Borrower-Financed a IFAD-Financed ADB-Financed Total 13,194 9,243 16,717 39,154 11,599 5,318 13,182 30,099 IDC Costs and Service Charge Borrower-Financed ADB-Financed Total 2,346 41,500 ADB = Asian Development Bank, IDC = interest during construction. a Including beneficiaries in-kind contribution of about $2.4 million. 1,776 31,875

8 iv Component 3. Cost Breakdown by Project Component ($ 000) Appraisal Estimate Actual A. Community Mobilization and Resource Management 13,484 13,181 Community Mobilization and Participatory Planning 3,365 1,395 Natural Resource Management 10,119 11,786 B. Rural Infrastructure Development 14,709 11,174 Farm-to-Market Access 6,130 4,799 Community Irrigation 7,104 5,415 Domestic Water Supply 1, C. Agricultural Support Services 3,407 4,700 Agribusiness Service 1,009 2,303 Extension Services 1, Adaptive Research Service Integrated Pest Management Rural Financial Services D. Project Management and Coordination 1,421 1,044 Physical Contingencies a 3,098 Price Contingencies b 3,035 Total Project Cost before Service Charge 39,154 30,099 Service Charge and IDC on the Loan 2,346 1,776 a b Total Project Cost 41,500 31,875 At 10% for civil works, vehicles and equipment; and 5% for other items. Annual factor of 2.2% for foreign exchange costs and 8% for local currency costs. 4. Project Schedule Item Appraisal Estimate Actual Date of Contract with Consultants Project Consultants: Q NGO: Q Project Consultants: 29 Dec 1997 NGO:3 May 1999 Completion of Engineering Designs Q December 2003 Civil Works Contract Date of Award Q Project Consultants: 21 January 1998 NGO: 14 June 1999 Completion of Work Q September 2003 Equipment and Supplies Dates First Procurement Q Last Procurement Q Start of Operations Beginning of Start-Up Q November 1996 Other Milestones First Partial Cancellation Second Partial Cancellation Third Partial Cancellation 26 April 2000 (L1421/1422) 12 March 2004 (L1422) 23 June 2005 (L1422)

9 v 5. Project Performance Report Ratings Implementation Period Development Objectives Ratings Implementation Progress From 1 August 1998 to 30 November 1998 Satisfactory Satisfactory From 1 December 1998 to 30 June 2000 Partly Satisfactory Partly Satisfactory From 1 July 2000 to 30 June 2004 Satisfactory Satisfactory From 1 July 2004 to 30 June 2005 Satisfactory Satisfactory D. Data on Asian Development Bank Missions Name of Mission Fact-Finding Fact-Finding (follow-up) Date 17 August 7 September February 25 March 1995 No. of Persons No. of Person- Days Specialization of Members Livestock Specialist, Project Economist, Senior Environment Specialist, Consultants (Engineer, Institutions Specialist, Agronomist), Credit Specialist, IPM Specialist, Project Controller 6 69 Project Economist, Project Engineer, Financial Analyst, Senior Environment Specialist, Consultant (Engineer), Project Controller Appraisal 17 May 7 June Project Economists, Social Development Specialist, Programs Officer (Environment), Counsel Special Loan Administration 9 13 December Project Economist Inception August Senior Project Engineer, Project Administration Assistant Review 7 18 December Project Economist, Assistant Project Analyst Review 24 March 12 April 1 20 Project Economist 1999 Review 1 20 December Project Economist Midterm Review Juyl Manager/AEFN, Project Economist, Consultants (Development Specialist, Participatory Development Specialist), Assistant Project Analyst Review 2 May 17 May Forestry Specialist Loan Disbursement August Control Officer, Senior Disbursement Analyst

10 vi No. of Persons No. of Person- Days Specialization of Members Name of Mission Date Review 14 November 1 21 Forestry Specialist 5 December 2001 Review 2 11 September Senior Water Resources Specialist, Associate Project Analyst Loan Disbursement May Financial Control Specialist, Associate Disbursement Analyst Review Project Completion Review 29 October 12 November November Senior Water Resources Specialist, Project Officer 3 52 Senior Water Resources Specialist, Consultant (Economist), Assistant Project Analyst

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12 I. PROJECT DESCRIPTION 1. The Cordillera Highland Agricultural Resource Management Project (CHARM) 1 was a successor to the Highland Agricultural Development Project (HADP), 2 funded by the Asian Development Bank (ADB) and the International Fund for Agricultural Development (IFAD). HADP was implemented from 1987 to 1993 in 13 municipalities in Benguet and Mountain Provinces in the Cordillera Administrative Region (CAR). The ADB-funded feasibility study for the Project was completed in It was appraised and approved by ADB in 1995 and the loans became effective in June The cost at appraisal was $41.5 million, jointly funded by the Philippine Government, ADB, IFAD, and beneficiaries. The Project was designed to last 7 years. The overall aim was to reduce poverty in CAR by increasing household income in the target areas through agricultural productivity improvements and sustainable resource management practices. A project framework comparing the targets at the time of appraisal with actual achievement is in Appendix The project goal was to increase farm family annual incomes from an average of P21,200 in 1995 to P56,000 in 2006 (164% increase) and to reduce the number of families with incomes below the poverty line from 33,000 to 12,000 by 2006, a reduction in poverty incidence from 70% to 25%. 3. The Project covered 82 barangays in 16 municipalities in three of the five provinces in CAR Abra, Benguet, and Mountain Province. Selection of the barangays was based on minimizing the need for new road construction through environmentally fragile areas; the potential for intensified irrigated crop production; the area of land that could be developed relative to the cost of upgrading access to it; and poverty indicators. The immediate objectives of the Project were to: (i) promote sustainable resource management practices, (ii) protect the environment and mitigate adverse development impacts, (iii) strengthen existing institutions, (iv) involve project beneficiaries in planning and implementation, and (v) improve beneficiary access to formal and nonformal credit. 4. The total population in the project area in 1995 was about 170,000 households (850,000 persons at an average of five members per household). The target population was about 23,150 households, with some 139,000 persons benefiting directly. Indirect benefits would reach a further 50,000 households because of spillover impacts to all barangays within the target and adjacent municipalities. Thus it was expected that the Project would reach over 40% of the total population in the project area. 5. The Project had four components: (i) Community Mobilization and Natural Resource Management. This included two subcomponents (a) community mobilization and participatory planning that would mobilize communities to prepare 23,150 household profiles and 82 barangay profiles as the basis for the preparation of Barangay natural resource 1 ADB Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the Republic of the Philippines for the Cordillera Highland Agricultural Resource Management Project. Manila (Loan nos. 1421/1422-PHI[SF]). 2 ADB Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the Republic of the Philippines for the Highland Agriculture Development Project. Manila (Loan No PHI).

13 2 (ii) (iii) (iv) management plans (BNRMPs) in the project areas, and (b) natural resources management involving reforestation projects identified from BNRMPs and facilitation of issuance of land tenure instruments. Rural Infrastructure Development. This included (a) farm-to-market access involving the rehabilitation of 150 km of access roads, construction of 100 m of reinforced concrete bridges, 300 m of low-level spillways, 286 m of foot bridges, and a 2.5 km tramway; (b) community irrigation systems covering about 2,800 ha made up of rehabilitation of schemes with 1,066 ha and new construction of 1,688 ha; and (c) domestic water supply involving the installation of 63 domestic water supply schemes to about 3,260 households. Agricultural Support Services. This provided for (a) enhancing agribusiness support services through market analysis, radio broadcasts on market prices and agricultural technology, market expansion, promotion and linkage and agroprocessing and post-harvest technology promotion; (b) extension support services to improve the operational efficiency and effectiveness of agricultural support services at regional, provincial, and municipal levels with farmer training, trials, and demonstrations, including integrated pest management techniques; and (c) adaptive research services relevant to local needs and more closely integrated with extension functions within the Department of Agriculture (DA)- CAR and the replication of farmer-controlled parasitic wasp rearing facilities for integrated pest management (IPM). Project Management and Coordination. Establishment of a project support office (PSO) in DA-CAR prior to loan effectiveness with the principal responsibility for facilitating the implementation of the Project, including financial budgeting and control, monitoring and evaluation, procurement of goods and services, loan disbursement, and coordination and supervision. 6. The DA was the executing agency, with DA-CAR as the lead implementing agency. Partner implementing agencies in CAR were the National Irrigation Administration (NIA), the Department of Environment and Natural Resources (DENR), the Department of Agrarian Reform (DAR), the National Commission on Indigenous Peoples (NCIP), and local government units (LGUs) of Abra, Benguet, and Mountain Province. The PSO of DA-CAR, assisted by contracted international and national consultants, was responsible for overall management of the Project. The implementing arrangements were formalized in several memoranda of agreement between the partner implementing agencies. Coordination at the regional level was provided by an interagency steering committee headed by a senior DA official. Provincial steering committees were headed by the provincial governor. At the provincial, municipal and barangay levels, project management groups were headed by provincial and municipal planning and development officers. II. EVALUATION OF DESIGN AND IMPLEMENTATION A. Relevance of Design and Formulation 7. The Project was designed to address the following constraints to agricultural development in CAR: (i) inadequate access, (ii) insufficient irrigation services, (iii) inadequate post-harvest facilities, (iv) lack of appropriate technologies for sustainable highland farming

14 3 systems, (v) inadequate access to credit for small farmers, (vi) poor marketing services brought about through a lack of market infrastructure and market information, (vii) land tenure issues, and (viii) land use conflicts between forest and proclaimed watershed reservations and agricultural lands. 8. At appraisal and completion, the Project was highly relevant to the Government s priority of developing rural communities and reducing poverty. The overall aim was to reduce poverty in CAR by increasing household income in the target areas. Agricultural productivity would be improved by providing complementary infrastructure and agricultural support services and by promoting sustainable resource management practices. 9. The Project was designed under an ADB-financed project preparatory technical assistance 3 (TA), conducted in close collaboration with the Government. It also drew on lessons learned from the earlier HADP. A joint ADB and IFAD appraisal mission was fielded in June 1995 and the Project became effective in June The following changes to the design and institutional arrangements were made during the course of implementation. (i) The passage of the Indigenous Peoples Rights Act in 1997 meant that the implementing agency responsible for the issuing certificate of ancestral domain titles (CADTs) and land tenure improvements was changed from the DAR to the NCIP, which joined the Project in early (ii) A new target for the formulation of Ancestral Domain Sustainable Development and Protection Plans was incorporated to complement the issuance of CADTs and to help indigenous cultural communities (ICCs) in their resource management and development. (iii) Indigenous resource management practices were promoted as a means of empowering and encouraging ICCs to take care of their resources. For example, lapa, the indigenous land management system in Abra, was officially recognized by the ICCS, LGUs, and DENR. (iv) Agro-forestry was promoted to increase income generation and enhance forest conservation. (v) NGO services were extended to help prepare beneficiaries for the eventual handover of project facilities to local communities and to help integrate people s organizations into the activities of the LGUs, and BNRMPs into the barangay and municipal development plans. (vi) Plans and targets for some infrastructure components were revised to make them more relevant, e.g., the number of domestic water supply systems (DWS) was reduced, design standards for farm-to-market roads (FMRs) were changed, the length of spillways and service areas for irrigation schemes was increased, and the tramline project was cancelled in favor of rehabilitating an existing road. (vii) Targets for agricultural support services (ASS) were increased in response to proposals from beneficiaries made at annual planning workshops. (viii) The roles of the project director and project manager were merged, allowing fulltime leadership and supervision of the Project, and a more active regional coordination committee was created. 3 ADB Technical Assistance to the Republic of the Philippines for Cordillera Highland Agricultural Resource Management Project. Manila (TA 1915 PHI).

15 4 B. Project Outputs 1. Community Mobilization and Natural Resource Management a. Community Mobilization and Participatory Planning 11. A consortium of six NGOs based in CAR was hired to undertake this activity. Community mobilization officers and NGO staff conducted participatory planning activities in the project area. The output was 10,200 household profiles and 82 barangay socioeconomic profiles in June July 2000, and the finalization of 82 BNRMPs in July b. Natural Resources Management 12. With respect to land tenure improvement in connection with the issuance of certificate of ancestral domain claims, DENR-CAR aimed to survey 150,000 ha of ancestral domain claims. By the end of 2000, it had surveyed 123,765 ha and turned over three certificate of ancestral domain claim documents (the target was four). After the passage of the Indigenous Peoples Rights Act in October 1997, the NCIP joined the Project as a partner implementing agency and took over responsibility for this subcomponent, with continuing assistance from DENR. In the course of the surveys a total of 423 Philippine reference system stations (PRS 92) were established to serve as official reference points for ground surveys. Environment and natural resources maps of six municipalities were produced. DAR issued 13,905 ha of comprehensive agrarian reform program beneficiary certificates, for 12,276 farmer-beneficiaries, and 1,105 ha certificate of land ownership awards for 1,053 farmer-beneficiaries before NCIP joined the Project. 13. One certificate of ancestral domain title (CADT) covering 29,444 ha was issued to Bakum municipality in July 2002 and another covering 26,353 ha was issued to Kibungan municipality in March As of March 2005 the Atok ancestral domain was 100% complete and the Buguias ancestral domain was 70% complete. The CADT for a tribe in Abra was 75% complete. Some work relating to a boundary dispute remains to be completed. 14. A total of 6,560 ha was reforested (3,806 ha) or benefited from agroforestry (1,781 ha) or enrichment planting (973 ha). The overall achievement for reforestation was 99.65%. 2. Rural Infrastructure Development a. Farm-to-Market Access Roads 15. Because of the delay in mobilizing the NGO, the identification of infrastructure projects was delayed. A total of km of FMRs (target 150 km); 95.4 m of bridges (target 100m); m of spillways (target 300 m); and m of footbridges (target 286 m) were completed under the Project. All of the completed FMRs have been handed over to the local governments. The project completion review (PCR) mission visited several FMRs and found that the condition of FMRs handed over to the provincial governments ( km) was generally satisfactory. However, FMRs handed over to the barangays (41.5 km) were not so well maintained.

16 5 b. Community Irrigation Systems 16. A total of 52 communal irrigation systems (CISs) covering an irrigation service area of 2,810 ha were completed under the Project, compared with the original target at appraisal of 63 CISs with 2,800 ha of service area. All of the completed CISs have been handed over to the irrigators associations (IAs) concerned. At PCR preparation, all but five CISs were operational. The five CISs at Baniwas, Daldalao-Malingeb, Ducligan, Lingey, and Mamulyas-Sinag in Abra province were badly damaged by floods caused by typhoon Igme in June 2004, affecting a service area of 645 ha. NIA has prepared a plan to rehabilitate damaged facilities at a total cost of P24.6 million. Works will begin in c. Domestic Water Supply 17. A total of 30 domestic water supply systems (DWSs) covering 3,558 households were completed under the Project, compared with the original target of 63 systems covering 3,260 households. The size of each DWS at appraisal was smaller than the actual systems that were constructed, which led to a reduction in the number of number of systems constructed from 63 to 30 (although the number of households served by the DWSs exceeded the target). All 30 systems are operating without any difficulties. 3. Agricultural Support Services 18. This component comprised (i) agribusiness services, (ii) extension services, (iii) adaptive research services, and (iv) rural financial services. The performance of this component was generally satisfactory, especially a radio program aired from local radio stations called CHARM on the Air which provides market information and is much appreciated by the farmers in the area. Although project support has ended, the program is still running and is sponsored by several private companies. Integrated pest management (IPM) training for farmers was also much appreciated by farmers as it helped to reduce their pesticide use and lower their production costs. IPM is leading to safer vegetable and rice production. A summary of training implemented under the Project is shown in Appendix The targets for the rural finance services subcomponent were scaled back during project implementation. The Project organized and supported 172 small savings and credit groups (SSCGs) with 1,355 members, the great majority of whom are women. However, the performance and sustainability of SSCGs is mixed, with savings by groups mostly used for onlending to group members for productive purposes. 4. Project Management and Coordination 20. A PSO within the DA-CAR was established in November 1996 before loan effectiveness. It served as the center of operations for project implementation. Assisted by consultants, the PSO implemented the policies promulgated by the regional interagency steering committee (RISC) and carried out budgeting and financial control, procurement of goods and services, loan disbursement, and coordination and supervision of project implementation. The key staff at the PSO were obtained from DA-CAR and most had been involved in the earlier HADP. In each province, two provincial coordinating officers were responsible for coordination and liaison with the LGUs. A civil engineering assistant was detailed to each provincial engineering office (PEO). Appendix 3 shows the current project organization chart, compared with the organization envisaged at the time of appraisal.

17 6 C. Project Costs 21. At appraisal, the total project cost was estimated at $41.5 million, $9.532 million in foreign exchange cost and $ million in local currency cost. ADB approved two loans for a total of $19.0 million equivalent (46% of total project cost) for the Project, consisting of $9.5 million from ADB s Asian Development Fund (ADF), equivalent to SDR6.357 million, and $9.5 million from its ordinary capital resources (OCR). IFAD loaned $9.2 million (22% of the total project cost). The actual project cost was $ million or 76.8% of the original estimate. The cost underrun was mainly attributed to the depreciation of the peso to the US dollar from P26 at appraisal to P55 at the loan closing date. In peso terms, the actual project cost was P1.45 billion, compared with P1.32 billion (including contingencies) at appraisal. Appendix 4 shows the actual annual disbursements under the Project. D. Disbursements 22. At the initial stage of the Project, disbursement of the loan proceeds was very slow, because of the delayed implementation of the infrastructure component, such as farm-to-market roads (FMRs), communal irrigation systems (CISs), and domestic water supply systems (DWS) see para Four imprest accounts amounting to $3 million were established for the Project to help expedite disbursements. Three imprest accounts were for the DA two for ADB under L1421- PHI and L1422-PHI(SF) (footnote 1), and one for the DA component under IFAD. The fourth account ($327,048.95) was for the DENR component under IFAD, which was established at a later stage at the request of DENR. During the 5 years of implementation ( ), the average annual turnover ratios of the imprest accounts were 1.4 for L1421-PHI and 1.0 for L1422-PHI(SF). E. Project Schedule 24. The Project was supposed to be implemented over a period of 7 years starting in early The original project completion date was 31 March Actual project implementation was delayed initially because of difficulties in recruiting NGOs, which were required for the formulation of BNRMPs for each barangay. L1421-PHI was extended once by 1 year and closed on 30 September L1422-PHI(SF) was extended twice until 31 March 2004, compared with the original closing date of 30 September The IFAD loan was also extended to 30 June 2005 from 30 September Appendix 5 shows the project implementation schedule at appraisal compared with the actual schedule. F. Implementation Arrangements 25. The implementation arrangements were generally successful. A major change from the previous project, HADP, was that implementation of FMRs was carried out by the provincial governments, instead of the Department of Public Works and Highways. ADB considered that the provincial governments were capable of implementing the FMR component, and that this would generate a stronger sense of ownership. 26. The Project established a project management office (PMO) with staff seconded from the executing and implementing agencies. The arrangement was different from the original

18 7 design, which envisaged that the PMO would be staffed by contractual staff, not from the government agencies. The revised arrangement meant that institutional memory has been retained within the executing and implementing agencies. Although most of the project staff have now returned to the DA and other agencies, the project office is still operating. 27. The DA, DENR, and local government project coordination teams in each Province had regular coordination meetings and visited the three provinces in turn, which helped to resolve implementation issues in a timely way. G. Conditions and Covenants 28. The Government s compliance with the loan covenants was generally satisfactory. None of the covenants was modified, suspended, or waived during the implementation of the Project. All the reporting requirements were fulfilled by the Borrower and the executing agency. Appendix 6 shows the status of compliance with the loan covenants. One of the key covenants was the issuance of land title to indigenous people. The issuance of certificates of the land title by DAR and DENR was stopped because of the passage of the Indigenous Peoples Rights Act in October 1997, which effectively transferred the jurisdiction of ancestral lands from DENR and DAR to NCIP. As part of the Project, NCIP issued the Philippines first title for an ancestral domain for the Bago-Kankanaey tribe of Bakun on 20 July H. Consultant Recruitment and Procurement 29. Project consultants were engaged by DA-CAR in accordance with the ADB s Guidelines on the Use of Consultants. In total, person-months of consulting services were provided, of which 31.7 person-months were international (30 person-months estimated at appraisal) and person-months were domestic (261 person-months estimated at appraisal) see Appendix 7 for details. 30. The consultant team was fielded in January 1998 and the services were completed in September 2003, compared with the appraisal s planned mobilization of consultants in 1996 and completion in Although ADB approved advance actions for the recruitment of consultants at appraisal, actual recruitment was delayed because of cumbersome government procedures. 31. The NGO for community mobilization and participatory planning was fielded in June 1999, a delay of about 24 months from the appraisal schedule. The main causes of the delay were (i) after evaluation of the proposals received from shortlisted firms, two first-ranked NGOs were asked by the Government to form a consortium and it took a long time for the NGOs to agree on the arrangements; and (ii) the contract amount was high and required the approval of the President of the Philippines, following time-consuming procedural requirements. 32. Procurement of all the equipment provided under the Project, including heavy equipment for operation and maintenance of the roads, for a total cost of P million was conducted from 1997 through 2003 (7 years), compared with 1996 to 2002 at the appraisal estimate. The equipment was procured following ADB s Procurement Guidelines. All procured equipment was turned over to the user agency or user offices upon delivery. In general, the procurement process went smoothly. The list of procured equipment, with costs and users, is in Appendix 8.

19 8 I. Performance of Consultants, Contractors, and Suppliers 33. The performance of the consultants was generally satisfactory. The consultants (i) guided NGO, DA, and local government staff in formulating household and barangay profiles and preparing the BNRMPs, (ii) formulated and prepared a catch-up plan for the 4-year infrastructure program and guided the planning, directing, supervising and monitoring of projects from identification to maintenance after completion, (iii) formulated and prepared the agriculture support services, and (iv) assisted project management. 34. The NGO achieved the general objectives of managing community mobilization and participatory planning for 82 BNRMPs, one for each barangay covered, and preparing the profiles of 82 barangays and 10,200 households. However, with hindsight, it would have been better to have engaged four or five NGOs rather than one consortium under a large contract. This would have avoided delays in NGO selection and fielding and would have created a competitive environment. 35. As envisaged at appraisal, bridges, river crossing spillways, and some sections of FMRs which needed heavy equipment and technical capability, were implemented by contractors selected through local competitive bidding. The performance of the contractors was generally satisfactory. However, construction of small and simple infrastructure for CIS and DWS done by IAs with the participation of the beneficiaries was slow, and required close supervision and guidance by the PMO staff. J. Performance of the Borrower and the Executing Agency 36. The Borrower and the DA worked closely to solve problems, and their performance was satisfactory. The DA made an effort to provide sufficient counterpart budget and to ensure its timely release. The implementation capability of the provincial engineering offices (PEOs) for the rehabilitation of FMRs was weak at the beginning of the Project because of the new implementation mechanisms, but their performance improved rapidly after they became used to the system. The Project provided a good opportunity for PEO staff to gain experience. In addition, DA staff for the agricultural support services (ASS) activities were very innovative in initiating the radio broadcast program CHARM on the Air, which became very popular in the region and provided up-to-date information about market prices and agricultural technology. K. Performance of the Asian Development Bank 37. ADB monitored the Project closely, fielding one inception mission, nine review missions and two loan disbursement missions, involving 211 person-days of staff and consultant services, and including an intensive midterm review in July ADB reviewed the Project annually and took steps to solve problems appropriately during implementation. There were no disagreements with the Borrower or DA on the terms of reference, bid documents, awards, project costs, implementation schedule; or other matters affected implementation procedures. ADB s performance in jointly administering the Project with DA was satisfactory.

20 9 III. EVALUATION OF PERFORMANCE A. Relevance 38. At appraisal and completion, the Project was highly relevant to Government and ADB policies and priorities to develop rural communities and reduce poverty. The Project was in accord with the Government s Medium-term Philippines Development Plan ( ) which at the time of project formulation promoted sustainable economic growth and poverty reduction as the foundation for regional and sectoral policies, programs, and projects. The Project was also in accord with the Department of Agriculture s Medium-term Agricultural Development Plan ( ), under which government assistance was to be focused on infrastructure, postharvest handling and market assistance, credit support, and research and extension services. It was compatible with regional planning priorities of the Cordillera Regional Physical Framework Plan ( ) of the National Economic and Development Authority-CAR. The Project s objectives complemented ADB s country and sector strategy for the Philippines, which emphasized economic growth based on sustainable development. ADB s strategy for agricultural and rural development in the Philippines was to increase agricultural production and productivity by developing rural infrastructure such as roads and irrigation, post-harvest and storage facilities, and agricultural support services, especially with respect to (i) community development and self-help approaches to increase rural incomes, (ii) sustainable approaches to resource management, and (iii) on-farm research and extension. B. Effectiveness in Achieving the Outcome 39. The Project was effective and contributed to reducing poverty. It had achieved most of its revised output implementation targets by the end of the 1-year project extension to March After the slow start to project implementation (caused by the delay in mobilizing NGOs) and delays in the process itself, the pace of project implementation picked up in the last 3 years. All works were completed during the revised project implementation period. 40. The overriding objectives of the Project as stated in the report and recommendation of the President (RRP) were to increase incomes for smallholder farm families and to reduce poverty (footnote 1). The appraisal document stated that the objective was to increase the average annual farm family income from about P21,200 ($820) in 1995 to at least P56,000 ($2,170) by 2006 in real terms (a 164% increase). It noted that about 70% of the 47,600 households in the target municipalities were below the poverty line (defined as an income less than P3,353 [$130] per month in 1992); an associated goal of the project was to reduce the number of households below the poverty line from about 33,000 to about 12,000. In order to accomplish this, the Project directly targeted about 23,150 households. Indirect benefits to another 50,000 households were anticipated through spillover impacts in the adjacent barangays and municipalities, as a result of the institutional strengthening of implementing agencies and NGOs, increased economic activity in the target communities, more connections between markets, and higher demand for labor. In addition it was anticipated that 8,000 households in the influence zone of the improved roads would also benefit, especially from better access to social services. 41. The Project s poverty reduction goal was ambitious, as it implied that over 90% of the direct beneficiaries would be poor. By their nature, the Project s main activities were aimed at benefiting the communities as whole rather than selected individuals, which implied that the Project was to target only the communities that had poverty incidence of over 90%. The detailed

21 10 social profiles undertaken by the Project showed that the poor households were spread out and not concentrated in distinct geographic areas, which made it difficult to target the planned number of poor households and reach the desired level of poverty reduction. Nevertheless, the Project targeted the barangays with high poverty incidence and had a significant impact in reducing poverty. 42. Despite the Project s clear statement of its objectives, and considerable investments in benefit monitoring and evaluation (BME) during implementation, the available data do not allow a rigorous assessment of the Project s impact. Delays in recruitment of NGOs meant that, although project implementation began in 1997, benchmark surveys could only be carried out in June Similarly, the final BME surveys were undertaken in February March 2004, which was too early to gauge the full impact. For a sample of beneficiary households, the BME reports quantify the change in household income between the benchmark survey and the final BME survey. The results are summarized in Appendix 9, Table A9.2. The average income per month is expressed in current prices for three activities (CIS, FMR and DWS) and these show an average increase for the three activities of 97%. However when allowance is made for inflation between 2000 and 2004 of around 20%, the percentage increase in income in real terms is reduced to an average of 65% over the 5 years (an average increase of 13% per annum). This can be compared with the stated objective at appraisal to increase average family incomes by 168% in real teams for the 11 years from 1995 to 2006 (an average increase of 15.2% per annum). Although the Project has achieved a commendable increase in household income over the 5 years, it is unlikely that it will achieve its target of 168% by However, project benefits are expected to increase further, especially from CIS, because of anticipated increases in paddy yields. 43. In the absence of poverty data from the BME survey, results from the Family Income and Expenditures Survey (FIES) of 2000, conducted by the National Statistics Office, were used to ascertain the impact on poverty incidence. These showed that from 1997 to 2000 the poverty incidence among families in the CAR had been reduced by 5.9% (from 42.5% to 36.9%), the biggest decline in the country. For rural families in the CAR, the decline in poverty incidence for the same period was 5.5% (from 55.5% to 50.0%). Comparable data for poverty incidence are not available from the FIES 2003, but that year s survey does show that, with regard to the real change in average family income by region, the CAR s performance was the seventh best of the 17 regions in the Philippines, with a decline of 2.4%, compared with a national decline of 10%. In conclusion it can be assumed that CAR has achieved a measure of poverty reduction during the Project period that was higher than that in other regions, but considerably less than that envisaged during appraisal. Some of this poverty reduction would have been due to the Project, but it is not possible to differentiate its impact from other influences. C. Efficiency in Achieving Outcomes and Outputs 44. The economic internal rate of return (EIRR) for the overall project (excluding costs and benefits of the reforestation component funded by IFAD) is evaluated at 15.9%, compared with the EIRR at appraisal of 18% (Appendix 9). The project has achieved its targets for implementation of the various components with only a 1-year extension, and was cost-efficient in that its actual cost in dollar terms was less than the appraisal estimate (which allowed a writeoff of the loans). 4 The EIRR is slightly lower than the appraisal estimate, despite an 4 It should be noted that the cost savings in dollar terms were a result of the depreciation of the peso against the US dollar during implementation.

22 11 improvement in the terms of trade for agricultural commodities brought about by the devaluation of the peso vis-à-vis the dollar. Vegetable producers are facing pressure on prices because of increases in supply in the CAR and other regions and because of competition from vegetable imports. The sensitivity analysis shows that the economic return is sensitive to changes in the level of benefits, especially the returns from vegetable production. 45. The efficiency of the Project is also judged by the efficiency of the process (i.e., the way in which the executing and implementing agencies and ADB managed the Project). The efficiency of implementation was satisfactory, particularly through the supervision provided by the project management and the use of seconded staff with good local knowledge for project management, rather than hired contract staff. The Government s allocation of counterpart funds from the national development budget was also efficient. However, the initial delays in the appointment of NGOs for the participatory planning process did result in a slow start that delayed the achievement of the outputs. Project management and ADB were responsive and flexible to changes in design and approach and maintained a very good dialogue and relationship throughout which also contributed to efficiency. D. Preliminary Assessment of Sustainability 46. The sustainability of the improvements to infrastructure and the resulting economic benefits of increased agricultural productivity largely depend on the effectiveness of the beneficiaries and local government to fund and organize operation and maintenance (O&M) adequately to ensure the durability of the irrigation, road, and water supply schemes. The Project encouraged traditional sustainable natural resources management through a participatory approach. Most communities prefer to rely on traditional methods of contributing voluntary labor and in-kind materials for O&M according to need, rather than making regular contributions of money to a maintenance fund. While this ad hoc system may be able to deal with minor and routine O&M, it is unlikely to be able to cope when a bigger effort is required to rectify major problems. 5 The maintenance of FMRs, a responsibility of the barangays, also suffers from a lack of funds. The Cordillera region is susceptible to regular typhoons that can cause major flooding and damage, e.g., the damage caused by typhoon Igme to project irrigation and road infrastructure in June Although the beneficiaries are prepared to contribute labor and in-kind materials for periodic repair of the infrastructure, they have not put in place a system for regular contributions to a fund for O&M as was envisaged at appraisal. 47. These factors will reduce the sustainability of the facilities installed by the project. A culture of organized self-help needs to become institutionalized in the beneficiary communities and ways and means developed to apply user pays to collect more finds for O&M. On the other hand, the sustainability of the agricultural support services appears to be more assured as there is good appreciation of the value of training and knowledge transfer (helped by the relatively high level of education of the beneficiaries). For example, it has been possible to attract private sector sponsorship in order to maintain the radio program CHARM on the Air after closure of the Project. As a result, overall the Project s sustainability is rated as less likely. Follow-up action is recommended to ensure that the implementing agency continues to promote O&M by the communities. Overall the sustainability of the Project is assessed as likely. 5 This was also mentioned in ADB s Special Evaluation Study on the Effectiveness of Participatory Approaches in Rural Development Projects Do the New Approaches Offer an Effective Solution to the Conventional Problems? (2004).

23 12 E. Impact 48. At completion, the Project had made significant strides towards achieving its twin goals of increased farm incomes and reductions in the poverty. As discussed above, farm incomes had risen by about 65% by 2004 (from 2000 levels), and poverty incidence had declined by about 6% in 2000 (from 1996 levels). Because of lack of data, these results, while significant, do not fully capture the Project s impact on incomes or poverty levels. While the Project was implemented from 1997 to 2004, income improvements are reported for the period , and reductions in the poverty level for the period Interestingly, the most recent data available for poverty incidence in the Project area predate the benchmarks for the income data. While the Project will not achieve the ambitious levels of poverty reduction envisaged at appraisal, the PCR mission s interaction with the stakeholders suggests that the Project s impact on incomes and poverty is considerably larger than that indicated by the available data, and is anticipated to increase further when the full benefits of components such as the CISs materialize. 49. The environmental impact was minimal and mostly positive. The Project was primarily involved with the rehabilitation and improvement of existing facilities irrigation and roads and the promotion of better agricultural practices. The changes it made to agricultural production systems are unlikely to have a major environmental impact. The development of new irrigation systems and the improvement of FMRs have resulted in the more intensive cultivation of some agricultural land, but most of the land was already being used for rainfed agriculture. Improved agricultural practices, especially the adoption of IPM by 52% of farmers, have helped farmers to make better informed decisions about the use of agro-chemicals and fertilizer, reducing risks to the ecosystem. The reforestation of 6,560 ha is expected to have major environmental benefits. On the other hand, the better infrastructure has resulted in more intensive vegetable production and there is a risk that inappropriate land management practices will be applied, especially on steep land, and that there will be greater use of agro-chemicals. 50. Construction of project facilities led to considerable local employment, which has had a positive impact on the local economy. The participatory approach that was used to identify community needs and to prepare the BNRMPs under the project has heightened awareness of development issues and priorities and has strengthened the sense of ownership and community responsibility. 51. The Project had no adverse impacts on livelihoods or assets. The amount of land voluntary contributed by the beneficiaries for infrastructure or conversion to other uses (resulting in loss of income, livelihood, or assets) was negligible. There was no land acquired under the Project. Most of the aggregates required for road rehabilitation were collected from riverbeds and no major quarry sites were opened. 52. The Project had a positive impact on indigenous people. It facilitated the first issuance of CADT of 29,444 ha for the Bakum and 26,353 ha for Kibungan communities. This was major breakthrough in the conflict over land titles in the Philippines and was the first step to giving the land titles to individual owners, which will have significant impact on the economic development of the indigenous people in the area.

24 13 IV. OVERALL ASSESSMENT AND RECOMMENDATIONS A. Overall Assessment 53. The overall performance rating for the Project is successful. The Project was relevant to the Government s and ADB s agriculture and rural development policies when it was prepared and it continues to be relevant. The Project met all its physical targets and achieved most of its immediate development objectives. It was implemented as conceived with only minor changes that improved the overall outcome (e.g., the design for FMRs was changed from gravel roads to concrete wheel tracks). Agricultural support services have raised agricultural productivity but have yet to reach their full potential. Performance and project outcomes, as measured by the BME surveys, were in line with expectations for the main indicators: cropping intensity, rice yields, farm household income, and employment. It has also had a significant effect on rural poverty and livelihoods, but has not yet achieved the target for reducing the percentage of households below the poverty line. Overall, the reevaluated EIRR of 15.9% is acceptable and indicates that the Project was efficient. 54. The maintenance and sustainability of the infrastructure developed by the Project (FMR, CIS, DWS and reforestation) is an issue. The capacity of the beneficiaries and LGUs to provide ongoing O&M is not certain and further support is needed to build capacity, institutionalize fee collection, and introduce user pays systems. Repairs to major damage caused by extreme climatic events will continue to rely on support from provincial governments. B. Lessons 55. The following key lessons were learned from the Project. (i) (ii) (iii) (iv) Using the new approach to the Project, it is necessary to train the government officials and project staff properly at the very beginning of the Project. The Project was the first ADB-funded project in the Philippines to use a participatory process to mobilize and empower local communities to bring them into the development process. It also strengthened the capacity of government institutions with responsibility for delivering a range of services. Although the participation of community members was largely confined to the planning stage, with implementation undertaken by the line agencies using conventional means, valuable experience was gained that will be relevant to similar projects. In the participatory process, early and quick mobilization of planning facilitator is the key to success of the Project. The 2-year delay in completing the contractual arrangements and mobilizing the locally-based NGOs led to delays in initiating the participatory process and resulted in a compressed time frame for the participatory process and delayed implementation, which should be avoided in future projects. The involvement of an NGO in the formulation of BNRMP was very useful since the NGO was familiar with the participatory approach, the CAR, and indigenous people. For the establishment of new project implementation office, the secondment of staff from the participating agencies to the project support office, rather than hiring contract staff, contributed to human resource development and enabled

25 14 (v) (vi) (vii) (viii) institutional knowledge to be retained within the implementing agencies, which will be useful for similar projects in the future. Support for the CHARM on the Air radio program provided market information and increased awareness of the Project. Because of strong support from listeners, the radio program has attracted private sector support since project completion of the Project, which is an ideal way of sustaining project activities. The expansion of the IPM program through farmers field schools to cover other activities such as livestock, agro-forestry and child nutrition was successful and beneficial. This methodology may be applied to other agricultural activities. Because of the sense of ownership generated by implementation arrangements under the Project, the construction of roads by the provincial engineering office was more effective than using the Department of Public Works and Highways (which had been used as the implementing agency for the previous HADP). Incorporation of indigenous peoples knowledge to the project design makes the Project more implementable and easy to be understood by the people. The Project incorporated indigenous forest management practices called lapat. It may prove to be a model for the use of other indigenous knowledge and institutions in the management of other sectors e.g., water, agriculture, and health. Such indigenous knowledge should be drawn on for future projects. C. Recommendations 1. Project-Related 56. Future Monitoring. Ongoing monitoring of the Project needs to become institutionalized within the local government structure to ensure that an ongoing and cost-effective monitoring and evaluation system is operating and that there is good coordination between the DA and other line agencies. 57. Covenants. The current covenants in the loan agreement should be maintained without any major modifications for at least 5 years (unless the Project is affected by a catastrophic disaster). 58. Further Action or Follow-Up. Rehabilitation of the typhoon damage to irrigation systems and FMRs, including the abutment of the Wanga bridge, should be carried out as soon as possible. If feasible, flooded rice fields should be rehabilitated. 59. Timing of the Project Performance Evaluation Report. The project performance evaluation report should be produced in about 3 years. This will allow the sustainability of the infrastructure to be assessed and allow time for communities and LGUs to develop O&M processes. 2. General 60. For future rural development projects in the Philippines the following actions are recommended.

26 15 (i) (ii) (iii) (iv) (v) (vi) The participatory approach with the local communities and beneficiaries full involvement in scheme selection, design, construction and O&M should be used. The pre-construction and pre-implementation participatory planning phase should be clearly distinguished from the construction and implementation phase, in order to avoid delays in the implementation schedule and to allow lead-time for community consultation and preparation. More consideration should be given to the sustainability of facilities in projects concerned with capacity building and strengthening of LGUs and people s organizations responsible for O&M. An adequate monitoring system needs to be in place. Regular collection of fees and the possibility of user charges for the use of new facilities should be included in the project design. Local governments should provide funding from their regular budget to cover O&M of completed FMRs. In allocating funds, priority should be given to the O&M budget over the new construction of roads. The design of FMRs should consider the future O&M needs and aim to reduce maintenance needs by use of concrete pavement rather than graveled surface, especially for steep sections. Monitoring of household incomes to measure the impact of the Project on level of poverty levels should be conducted in close coordination with the National Statistics Office to ensure that the methodology used is compatible with the Family Income and Expenditure Survey that is usually conducted every 3 years.

27 16 Appendix 1 PROJECT FRAMEWORK Design Summary Goal To increase farm incomes on a sustainable basis To reduce poverty Purpose To increase agricultural production and productivity in 82 barangays in Abra, Benguet, and Mountain Province, using sustainable resource management practices, involving beneficiaries. - Increase overall cropping intensity from 124% in 1995 to 175% by year 2006 Performance Indicators/Targets Raise farm family incomes in 82 target barangays from about $820 (P21,200) to about $2,170 (P56,000) in 1995 prices by 2006 and by the project performance evaluation report Reduce the number of families below the poverty line (1994 indicator) in target municipalities from 33,000 households to 12,000 households by Increase yields of irrigated rice from 2.0 tons/ha in 1995 to 4.0 by 2006 and traditionally irrigated rice from 1.5 tons/ha to 2.0 Increase vegetable area irrigated by 1,688 ha by 2006 Increase rice area irrigated by 296 ha by 2006 Monitoring Mechanisms Benchmark household profiles in 82 barangays Community profiling of investment priorities Benchmark municipal profiles in 16 municipalities Biannual project reviews Socioeconomic surveys at midterm and after project completion Project completion report PPAR Benchmark household, barangay and municipal profiles Socioeconomic surveys at midterm and project completion Project completion report/ppar Project progress reports ADB review missions Assumptions And Risks No natural disasters. Sound macroeconomic management policies are adopted Prices for commercial crops and rice and corn remain at real levels Infrastructure is maintained and/or managed Extension staff at local government unit level are not PCR Evaluation Final BME survey in 2004 indicated that the average family income of CIP beneficiaries had increased by 65% from P25,968 per year from the benchmark survey in 2000 to P45,324 in 2004; for beneficiaries of FMR roads from P46,452 to P98,484 per year (112% increase); and DWS by 92% from P35,796 to P68,796 per household over 5 years. Yields of irrigated rice increased to 3.09 ton/ha and traditionally irrigated rice to 2.2 ton/ha The area of irrigated vegetables increased by 1,780 ha The area of rice area increased by 812 ha

28 Appendix 1 17 Design Summary - Raise net farm incomes from $2,133 (P55,000) in 1995 to $5,935 (P153,000) by year Achieve an economic internal rate of return of 18% - Reduce the use of pesticides from 47 kg/ha in 1995 to 18 kg/ha by year 2006 Performance Indicators/Targets Increase rice cropping intensity in Benguet and Mountain province from 108% to 150 % by year 2006 and vegetable cropping intensity from 140% to 200% by year 2006 Increase rice cropping intensity in Abra from 120% to 175% by year 2006 and vegetable cropping intensity from 140% to 175% by year 2006 Monitoring Mechanisms Assumptions And Risks diverted to nonextension activities Counterpart funding is released in a timely manner and in adequate amounts PCR Evaluation Cropping intensity for new rice irrigation in Benguet and Mountain provinces increased from 91% to 192% (111% increase) and vegetable cropping intensity from 132% to 212% (61% increase) in 2004 For rehabilitated vegetable irrigation the cropping intensity increased from 132% to 161% (22% increase) in 2004 Increase net farm incomes by $2,133 (P55,000) to $5,935 (P153,000) by year 2006 Achieve an economic internal rate of return of 18% Increases in net farm incomes ranged from 206% for new vegetable and rice irrigation in Benguet to 85% for rehabilitation of rice irrigation in Mountain Province In 2004 Reduce the use of pesticides from 47 kg/ha in 1995 to 18 kg/ha by year 2006 No data on absolute reduction in pesticide use are available but the number of farmers stating that they had decreased their use of fertilizer

29 18 Appendix 1 Design Summary Outputs 1. Community Mobilization and Resource Management 1.1. Communities mobilized and involved in planning project activities 1.2. Natural resource management improved Performance Indicators/Targets Increase the area under forest cover in the 82 target barangays by 6,150 ha Involve 23,150 families in target barangays in participatory planning programs Prepare 23,150 household profiles, 82 barangay profiles, and 16 municipal profiles Prepare prioritized list of investment needs for 82 barangay Preserve existing area (211,013 ha) of protection forestry Reforest 6,150 ha by 2002 with an average survival rate of 80% Monitoring Mechanisms Project progress reports and review missions Project progress reports and review missions Assumptions And Risks LGUs and NGOs work effectively together NGO is effective Political commitment to the Project is forthcoming at LGU level Existing forest estate resources not protected Survival rates of reforested areas are high Community enthusiasm for PCR Evaluation and agrochemicals had increased from 7% at the time of the benchmark survey to 32% at the time of the final BME survey The Project has increased the area of forest cover through 3,806 ha of reforestation, 972 ha of enrichment planting. and 1,781 ha of agroforestry, a total of 6,560 ha Target was reduced to 100 household profiles per barangay. 10,200 household profiles were completed BNRMP were prepared for the 82 target barangays Reforestation target was achieved with an acceptable survival rate

30 Appendix 1 19 Design Summary 2. Rural Infrastructure Development 2.1. Farm-to-market access constructed or rehabilitated and utilized Performance Indicators/Targets Establish a geographical information system Undertake cadastral surveys covering about 26,450 ha of land by 1999, and issue land titles Issue certificates of ancestral domain titles covering about 150,000 ha by 2002 Rehabilitate about 26 road segments covering 150 km Construct about 100 m of vehicle bridge; 300 m of low level river spillway; and 290 m of footbridges Construct a pilot tramline/project of 2.5 km Rehabilitated and new access facilities properly maintained. Monitoring Mechanisms Project progress reports and review missions Assumptions And Risks reforestation activities Geographic information systems activities are linked with project planning and implementation Cadastral mapping requests from municipalities are acted upon Department of Environment and Natural Resources (DENR) has inadequate resources or attaches low priority to project activities Selection criteria are not applied Contractors perform satisfactorily Supervision is adequate Consultants are fielded in a timely manner PCR Evaluation Geographic information systems was established Two certificates of ancestral domain title were issued Rehabilitation of km of roads was achieved 95.5 m of vehicle bridges, of low level river spillway and m of footbridge were constructed The pilot tramline project was shelved when it was no longer required because of improved road access

31 20 Appendix 1 Design Summary 2.2. Community irrigation rehabilitated or constructed and operational 2.3. Domestic water supply constructed and functional 2.4. Engineering services provided Performance Indicators/Targets Rehabilitate and/or extend about 20 CISs covering 1,066 ha net irrigable area Construct about 34 communal irrigation projects CIPs covering 1,688 ha net irrigable area Maintain about 2,800 ha of CIS/CIP Construct about 63 domestic water supply schemes serving 3,259 households in 27 barangays Strengthen the three provincial engineer s offices by providing 630 person-days of training, together with additional plant and equipment Provide additional resources to National Irrigation Administration and the three provincial irrigation offices Monitoring Mechanisms Project progress reports and review missions Project progress reports and review missions Project progress reports and review missions Assumptions And Risks Adequate LGU resources for maintenance Beneficiaries are sufficiently involved in planning/design Selection criteria are applied Construction activities are satisfactory Beneficiaries can repay the debt incurred Beneficiaries have technical and financial resources for maintenance Consultants are recruited in a timely manner Counterpart funding availability does not delay institutional strengthening activities Attrition law prevents hiring of additional staff Consultants are fielded in a timely manner PCR Evaluation 52 community irrigation schemes serving 2,810 ha were rehabilitated or constructed 30 domestic water supply schemes serving 3,558 households were constructed Three provincial engineers office had been strengthened through training

32 Appendix 1 21 Design Summary 3. Agricultural Support Services 3.1. Agribusiness services enhanced Performance Indicators/Targets Undertake 8 market analyses and systems investigations Daily wholesale market price bulletins broadcast Monitoring Mechanisms Project progress reports and review missions Assumptions And Risks Attrition law prevents hiring of additional staff PCR Evaluation 22 market studies were prepared The CHARM on the Air program was broadcast from three local radio stations daily 3.2. The effectiveness of extension services improved Twice-weekly extension information programs broadcast 16 agroprocessing feasibility studies undertaken Provide additional resources to three provincial agriculture offices and 16 municipal agriculture offices 70% of target beneficiaries perceive extension support services to have been improved by 2002 The number of farmers adopting recommended farming practices increased by 100% by 2002 Project progress reports and review missions Consultants are fielded in a timely manner LGU staff are not diverted to non-project activities Farmers are willing to participate in field demonstrations Beneficiaries are willing to adopt recommended farming practices Good coordination between extension and Extension information service centers were established in each province 16 feasibility studies on agroprocess and post-harvest technology were conducted Provincial agricultural offices were supported through a range of activities including equipment, materials, special training, short-courses The final BME survey recorded that 100% of the surveyed farmers were aware of the Project and that 97% had taken advantage of its support. 79% of farmers said that they had applied lessons learned from project training

33 22 Appendix 1 Design Summary 3.3. Enhanced research services 3.4. Access to and utilization of rural financial services improved 4. Project Management Coordination 4.1. Institutions strengthened 4.2. Provincial government planning capability strengthened 4.3. Appropriate monitoring and Performance Indicators/Targets from 1995 Contract for 35 specific applied research subprojects About 8,200 farmers attend farmer field schools during Formation of 1,529 savings/credit farmer groups On-site facilitation groups by community mobilization officers Establish strong project planning and execution capability within the DA-CAR and at LGU level Regular annual planning and evaluation workshops are conducted in 80% of target barangays by 2000 Specific personnel assigned to the three PPDOs to coordinate project activities Management information Monitoring Mechanisms Project progress reports and review missions Project progress reports and review missions Project progress reports and review missions Project progress reports and review Assumptions And Risks research Beneficiaries are willing to form groups and be guided Beneficiaries are willing to use tenurial instruments for formal credit Organizational structure of DA- CAR confirmed Adequate staff resources within DA-CAR and at LGU level to implement project activities Staff detailed in a timely way Adequate management PCR Evaluation 50 adaptive research subprojects were introduced About 2,244 farmers attended farmer field schools during the Project The target was reduced and the Project helped form 172 SSCGs 42 SSCGs were linked to semiformal and formal lending institutions Project management coordination was achieved as planned Provincial governments planning capacity was strengthened, but there were some delays at the early stage of the Project Monitoring and evaluation

34 Appendix 1 23 Design Summary evaluation systems established Activities 1. Community Mobilization and Resource Management Communities mobilized and involved in planning project activities Enhanced Land Security: - MOA with DENR and Department of Agrarian Reform Natural resource management: - MOA with DENR Performance Indicators/Targets system provides timely feedback on the performance of project activities 6-monthly bank review missions fielded and monitoring by an independent agency Benefit monitoring evaluation surveys conducted in 1996, 1998, 2000, and 2002 $4.0 million One NGO to coordinate 41 community mobilization officers Community mobilization specialists (12 person-months) $3.9 million $8.2 million 35 personmonths of international and local consultants Monitoring Mechanisms missions Review missions and project progress reports Review missions and project progress reports Review missions and project progress reports Assumptions And Risks information systems provided Benchmark information collated and synthesized Feedback from progress reports of mission reviews incorporated into project planning/ execution activities Capable NGOs are identified and are willing to participate Existing provincial and municipal staff are detailed to community planning exercises No delays in signing of MOA No delays in signing of MOA Good community participation in reforestation activities PCR Evaluation system are in place, but needs to be strengthened Implemented as appraised but slow Implemented as appraised Implemented as appraised but delayed

35 24 Appendix 1 Design Summary 2. Rural Infrastructure Development 2.1. Farm-to-market access: - detailed design - construction Performance Indicators/Targets $7.3 million 84 personmonths of consultant services Monitoring Mechanisms Review missions and project progress reports Feasibility reports Contract documents Assumptions And Risks Consultants are recruited in a timely manner No right-of-way acquisition problems PCR Evaluation Implemented as appraised Acceptance criteria adhered to 2.2. Community irrigation: - detailed design - establishment of irrigators association - construction - training in operation and maintenance $8.5 million 23 personmonths of local consultant services Review missions and project progress reports Feasibility reports Contract documents Consultants are recruited in a timely manner Acceptance criteria adhered to Beneficiaries included in planning process Implemented as appraised 2.3. Domestic Water Supply: - detailed design and costing for nominated sites - construction - training in operation and maintenance $1.8 million Ten personmonths of local consultant services Review missions and project progress reports Feasibility reports Contract documents Irrigators associations willing to take over CIS after implementation Implemented as appraised 3. Agricultural Support Services 3.1. Agribusiness services: - contracts for radio time $1.2 million 40 personmonths of consultant Review missions and project progress reports Consultants are fielded in a timely manner Implemented as appraised and completed as scheduled

36 Appendix 1 25 Design Summary slots - identification of priority market research studies and key wholesaler groups 3.2. Extension services: - workshops - training - farmer exchange visits - field demonstration 3.3. Research services: - procurement of equipment - training - exchange visits of scientists Performance Indicators/Targets services $1.2 million 31 personmonths of consultant services Three vehicles 3 motorcycles 112 extension kits $1.5 million 33 personmonths of consultant services Monitoring Mechanisms Review missions and project progress reports Feasibility reports Contract documents Review missions and project progress reports Feasibility reports Contract documents Assumptions And Risks Existing DA- CAR staff have capacity for additional tasks Farmers participate as expected LGU staff (MOAs and agricultural technicians) are sufficiently motivated to actively participate in extension activities DA-CAR, Bureau of Plant Industry staff are sufficiently motivated to actively participate in research activities PCR Evaluation Implemented as appraised and completed as scheduled Implemented as appraised and completed as scheduled 3.4. Rural financial services: - form 1,529 savings/credit farmer groups targeting poorer households - conduct training - access formal credit sources - engage in income- $0.09 million 6 person-months of consultant services Review missions and project progress reports DA-CAR, Bureau of Plant Industry staff have the capacity to take additional tasks Farmers participate as expected Formal credit sources accessible to groups Groups engage in incomegenerating activities Implemented but the target was reduced

37 26 Appendix 1 Design Performance Monitoring Assumptions PCR Evaluation Summary Indicators/Targets Mechanisms And Risks generating activities 4. Project Management and Coordination - arrange MOAs between DA- CAR and National $1.7 million 13 personmonths of consultants Review missions and project progress reports Consultants are recruited in a timely manner MOAs are signed without delay Implemented as appraised Irrigation Attrition law Administration, prevents Department of adequate Agrarian resourcing of Reform, DA-CAR DENR, and the three provincial governments 4.1. Local government planning capability strengthened: - appointment/ detailing of three staff at PPDO - procurement of plant equipment - training for PPDO staff $0.2 million 4 person-months for local taxation specialist Review missions and project progress reports Staff are detailed or recruited Implemented as appraised ADB = Asian Development Bank, BME = benefit monitoring and evaluation, BNRMP = Barangay Natural Resources Management Plans, CAR = Cordillera Administrative Region, CIS = communal irrigation system, CIP = communal irrigation project, DA-CAR = Department of Agriculture-Cordillera Administrative Region, DENR = Department of Environment and Natural Resources, LGU = local government unit, MOA= Memorandum of Agreement, NGO = nongovernment organization, PCR = project completion review, PPAR = project/program performance audit report, PPDO = provincial planning development offices, SSCG = small-scale credit groups.

38 Appendix 2 27 SUMMARY OF TRAINING PROGRAMS Component Duration Number of Persons (days) Batches Male Female Total Total Days A. Conducted for Beneficiaries 1. Community Mobilization and Resource Management ,067 2,470 6,537 13, Agricultural Support Services ,208 5,957 11,165 46, Rural Infrastructure Development ,222 3,286 Total ,103 8,821 18,924 62,881 B. Conducted for Staff 1. Community Mobilization and Resource Management ,969 3,400 7,369 19, Agricultural Support Services ,563 1,843 3,406 11, Rural Infrastructure Development , Project Management and Coordination ,637 2,848 6,485 16,255 Total ,493 8,249 17,742 48,901 Source: Project completion report prepared by the Department of Agriculture-Cordillera Administrative Region.

39 ORGANIZATIONAL STRUCTURE Department of Agriculture-Cordillera Administrative Region at Appraisal Regional Director 28 Appendix 3 CHARM Project Support Office Technical Assistance on Integrated Pest Management Other Foreign-Assisted Projects Institutional Development and Training Administration Finance Legal Planning Monitoring and Evaluation System Information Agribusiness CIARC Asst. Regional Director for Fisheries Asst. Regional Director for Crops Asst. Regional Director for Livestock Sectoral Division Chief for Fisheries and Operations Sectoral Division Chief for Crops Sectoral Division Chief for Livestock and Regulatory Regulatory Assistance Technical Assistance Regulatory Assistance Technical Assistance Regulatory Assistance Technical Assistance Licensing and Law Enforcement Conservation of Inland Resources Fish Laboratory Aquaculture Postharvest Seed Quality Control Plant Quarantine Soils Laboratory Pest Analysis Laboratory Pesticide Residue Soils/ Engineering Crops/ Production Farming Systems Kasakalikasan Production Services Animal Nutrition Animal Breeding Forage and Pasture Development General Technical Services CHARM = Cordillera Highland Agricultural Resource Management, CIARC = Cordillera Integrated Agricultural Research Center. Source: Project Completion Report prepared by the Department of Agriculture-Cordillera Administrative Region. Technology Dissemination Regional Disease Diagnostic Laboratory Livestock Quarantine Feed and Drug Quality Control Licensing and Registration

40 Appendix 3 29 Project Support Office at Appraisal Regional Director Project Manager Project Monitoring and Evaluation System Administration and Finance Resource Mobilization and Management Rural Infrastructure Development Agricultural Support Services 3 Provincial Coordination Officers Source: Project Completion Report prepared by the Department of Agriculture-Cordillera Administrative Region.

41 30 Appendix 3 DA-Cordillera Highland Agricultural Resource Management Project (CHARM) Project Organizational Chart as of July 2004 Department of Agriculture Central Office Assistant Secretary for Field Operations and Foreign Assisted Project DA-CARFU Project Director/Manager Administration Training Planning, Monitoring and Evaluation Geographic Information System Unit Information Unit Finance Supply Unit Property Budget Unit Motorpool Accounting Unit Cashier HRMO/Personnel and Records Agricultural Support Services Janitorial Services/Security/Administrative Services Adaptive Research Services Unit Integrated Pest Management Unit Community Mobilization and Resource Management Rural Infrastructure Development Extension Support Services Reforestation NGO Farm-to-Market Roads Domestic Water Supply Agribusiness Unit Land Tenure Improvement Community Irrigation Projects Rural Finance Services Provincial Coordinators DA-CARFU = Department of Agriculture-Cordillera Administrative Region Field Unit, HRMO = Human Resouce Management Office, NGO = nongovernment organization. Source: Project Completion Report prepared by the Department of Agriculture-Cordillera Administrative Region.

42 Appendix 4 31 ACTUAL ANNUAL PROJECT COST Table A4.1: Actual Costs per Category per Year for L1421 Category Actual Cost Number Category Year ($) 01 Civil Works , ,122, ,274, ,426, , ,026, Subtotal Category 01 6,522, Training , , Subtotal Category , Interest during Construction , , , , , , , , Subtotal Category 03 1,546, Source: Project completion review mission. Total 8,299,999.99

43 32 Appendix 4 Table A4.2: Actual Costs per Category per Year for L1422 Category Actual Cost Number Category Year ($) 01 Equipment and Vehicles , , , , , , , Subtotal Category 01 1,506, Training , , , , , , , Subtotal Category , Consulting Services , , , , , , , Subtotal Category 03 2,046, Surveys and Special Studies , , , , , , Subtotal Category 04 1,883,156.28

44 Appendix 4 33 Category Actual Cost Number Category Year ($) 05 Recurrent Costs , , , , , , Subtotal Category , Service Charge , , , , , , , Subtotal Category , Total 6,427, Source: Project completion review mission.

45 34 Appendix 5

46 Appendix 5 35