National Oilseed Development
Report No: ; Type: Report/Evaluation Memorandum ; Country: Pakistan; Region: South Asia; Sector: Annual Crops; Major Sector: Agriculture;
                                                         ProjectID: P010311



        The National Oilseed Development Project, supported by Loan 2973-PAK for US$31.4 million and Credit
1936-PAK for US$20.0 million was approved in FY87. The project was restructured in January 1994, at which time
US$21.6 million of the loan and US$3.7 million of the credit were canceled. The loan and credit closed on December
31, 1996, as planned. Outstanding balances of US$9.4 million of the loan and US$1.6 million of the credit were
canceled in June 1997. The Implementation Completion Report (ICR) was prepared by the South Asia Regional
Office, and the borrower’s comments are appended.

        The main objective of the project was to achieve a substantial increase in the production of

oilseed, particularly non-traditional oilseed, and to consequently reduce imports of edible oil and meal. The objectives
were to be achieved by expanding the area under oilseeds and raising the efficiency of oilseed production through
appropriate policy changes and the strengthening of support services, including research, extension, seed
multiplication, credit and the marketing network. Policy initiatives were intended to provide better incentives for the
production and effective marketing of oilseed.

         The original project design could not be implemented such that disbursements were only 17 percent of target
after four and a half years. Price disincentives discouraged farmer participation, objectives were over-ambitious, the
project was complex and difficult to manage, regional needs were overlooked, and weak leadership in central
government made matters worse. Following a mid-term review, project restructuring de-emphasized the credit
component, improved institutional arrangements, sharply reduced physical targets and increased the role of the private
sector. Deregulation improved production and marketing incentives.

         Most of the revised targets were substantially achieved. However, although there was a marked increase in
oilseed production, the main objective, it reached only 56 percent of the revised target. The extension component
performed poorly initially, but after the establishment of the Pakistan Oilseeds Development Board (PODB), which
set up well-articulated crop maximization campaigns, extension improved considerably. The research program
produced local sunflower hybrids which were cheap and effective. Government facilities for certifying seeds of edible
oil crops, which were strengthened under the project, were under-utilized. New seed processing facilities were set up
and technical assistance and overseas training were provided. The credit component was largely unused due mainly to
the lack of timely availability of sunflower seed, unsatisfactory crop purchasing arrangements and poor credit
discipline among growers. The actual project cost at completion was US$24.14 million, 71 percent lower than the
appraisal estimate and 45 percent lower than the estimated cost of the restructured project. The ERR re-estimated in
the ICR was 25 percent compared to 29 percent estimated at appraisal. The PODB is now generating its own funds
from a cess on edible oil and the borrower has prepared a workplan for the operational phase. Thus the institutional
mechanisms for the provision of good quality certified seed are in place, the policy environment is positive, and the
extension services should provide a favorable production environment for oilseed farmers.

         The Operations Evaluation Department (OED) rates the project outcome as marginally satisfactory
(satisfactory in the ICR), since the project achieved much less than originally planned and oilseed production was well
short of even the revised lower target. OED endorses the ICR in rating institutional development as modest,
substainability as likely and Bank performance as satisfactory despite a poor start.
         Some familiar lessons can be drawn from the ICR’s findings, including setting realistic targets and ensuring
that the policy environment is supportive, but the main lesson is that project designs should include a means for
farmer participation and be flexible enough to accommodate regional differences.

        The ICR is satisfactory.

        An audit is planned.