Document of The World Bank Report No: 29519 IMPLEMENTATION COMPLETION REPORT (IDA-31050) ON A CREDIT IN THE AMOUNT OF US$6.80 MILLION TO THE KINGDOM OF LESOTHO FOR AN AGRICULTURAL POLICY AND CAPACITY BUILDING PROJECT June 20, 2004 Environmentally and Socially Susatainable Development Southern Africa Department Africa Region CURRENCY EQUIVALENTS (Exchange Rate Effective June 20, 2004) Currency Unit = Maloti M1 = US$ 0.20 US$ 1 = M6.30 FISCAL YEAR April 1 March 31 ABBREVIATIONS AND ACRONYMS AfDB - African Development Bank APCBP - Agricultural Policy and Capacity Building ASIP - Agricultural Sector Investment Project CAPs - Community Action Plans CAS - Country Assistance Strategy DES - District Economic Strategy DFID - Department for International Development DLSPP - Department of Lands, Survey and Physical Planning DPPA - Department of Policy Planning and Analysis EAs - Extensions Areas FAO - Food and Agriculture Organization FCSF - Farmer and Community Support Fund GOL - Government of Lesotho GOLFIS - Government of Lesotho Financial Information System GIS - Global Information System GTZ - German Agency for Technical Coporation ICR - Implementation Completion Report IFAD - International Fund for Agricultural Development IMSC - Interministerial Steering Committee LPRC - Land Policy Review Committee MAFS - Ministry of Agriculture and Food Security MOLG - Minitry of Local Goverment MOACLR - Ministry of Agricultural, Co-operatives and Land Reclamation MTIMC - Ministry of Trade and Industry, Co-operatives and Marketing PAD - Project Appraisal Document PIP - Project Implementation Plan PS - Permanent Secretary RCs - Resource Centres TOU - Technical Operations Unit UES - Unified Extension Areas Vice President: Callisto Madavo Country Director Fayez S. Omar Sector Manager Richard Scobey Task Team Leader/Task Manager: Robert Townsend LESOTHO AGRICULTURAL POLICY & CAPACITY BUILDING CONTENTS Page No. 1. Project Data 1 2. Principal Performance Ratings 1 3. Assessment of Development Objective and Design, and of Quality at Entry 2 4. Achievement of Objective and Outputs 5 5. Major Factors Affecting Implementation and Outcome 11 6. Sustainability 13 7. Bank and Borrower Performance 14 8. Lessons Learned 16 9. Partner Comments 17 10. Additional Information 21 Annex 1. Key Performance Indicators/Log Frame Matrix 22 Annex 2. Project Costs and Financing 25 Annex 3. Economic Costs and Benefits 27 Annex 4. Bank Inputs 30 Annex 5. Ratings for Achievement of Objectives/Outputs of Components 33 Annex 6. Ratings of Bank and Borrower Performance 34 Annex 7. List of Supporting Documents 35 Annex 8. Operationalization of the Unified Extension System 36 Annex 9. Land Reform 37 Annex 10. Institutional Restructuring 38 Project ID: P001402 Project Name: AG POL & CAP BLDG Team Leader: Robert Townsend TL Unit: AFTS2 ICR Type: Core ICR Report Date: June 27, 2004 1. Project Data Name: AG POL & CAP BLDG L/C/TF Number: IDA-31050 Country/Department: LESOTHO Region: Africa Regional Office Sector/subsector: Central government administration (93%); Agricultural extension and research (4%); Agricultural marketing and trade (3%) Theme: Rural policies and institutions (P); Infrastructure services for private sector development (P); Law reform (S); Rural services and infrastructure (S); Land management (S) KEY DATES Original Revised/Actual PCD: 07/19/2000 Effective: 09/01/1998 07/06/1999 Appraisal: 04/01/1998 MTR: 12/01/2000 06/25/2001 Approval: 06/25/1998 Closing: 12/31/2001 12/31/2003 Borrower/Implementing Agency: GOVERNMENT OF LESOTHO/GOL - MINISTRY OF AGRICULTURAE AND FOOD SECURITY (AT APPRAISAL IT WAS CALLED MINISTRY OF AGRICULTURE, COOPERATIVES AND LAND RECLAMATION). Other Partners: LANDS COMMISSION, MINISTRY OF LOCAL GOVERNMENT STAFF Current At Appraisal Vice President: Callisto E. Madavo Callisto Madavo Country Director: Fayez S. Omar Pamela Cox Sector Manager: Richard G. Scobey Sushma Ganguly Team Leader at ICR: Robert Townsend Sakwa Bunyasi ICR Primary Author: Pietros Kidane (FAO/CP); Robert Townsend 2. Principal Performance Ratings (HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HL=Highly Likely, L=Likely, UN=Unlikely, HUN=Highly Unlikely, HU=Highly Unsatisfactory, H=High, SU=Substantial, M=Modest, N=Negligible) Outcome: U Sustainability: L Institutional Development Impact: M Bank Performance: S Borrower Performance: U QAG (if available) ICR Quality at Entry: U U Project at Risk at Any Time: Yes 3. Assessment of Development Objective and Design, and of Quality at Entry 3.1 Original Objective: The objective of the Agricultural Policy and Capacity Building Project (APCBP) was to put in place improved institutional and policy arrangements for the sustainable and efficient management, financing and delivery of public and private agricultural services in Lesotho. The project was expected to achieve this objective by: (a) improving sector strategy and management by strengthening capacities in the Ministry of Agriculture and Food Security for policy analysis and, particularly at district level, for planning and budgeting, and setting up a monitoring and evaluation system; (b) redirecting agriculture support services to become more client responsive for effective and sustainable natural resource management; (c) facilitating the development of a new land policy and legislation that is compatible with sustainable land use systems and that enhances modern land management and administration practices, together with strengthening the capacity for effective land management; and (d) introducing changes in management through institutional restructuring, privatization and divestiture of activities, and market liberalization. Following the realization that the agricultural sector was suffering from an inadequate policy and institutional framework, some of which was put in place to respond to the challenges of the apartheid regime in South Africa, the project's objective to modernize the agricultural sector for sustainable growth was appropriate. The project's stated objective was in line with the Government of Lesotho (GOL) Strategic Program of Action that was prepared after the 7th Round Table meeting held in Geneva in 1995, as well as with the World Bank's Country Assistance Strategy (CAS). The major elements of the project viz; institutional reform, restructuring of the Ministry of Agriculture, Cooperatives and Land Reclamation ­ now the Ministry of Agriculture and Food Security (MAFS) - the privatization and divesture of many loss-making enterprises, market liberalization of some agricultural commodities, as well as introduction of land reform were desirable interventions as they would inject more dynamism in the country's agriculture, through better participation of the private sector. The project was initially conceived as an Agricultural Sector Investment Program (ASIP), and the dialogue between IDA and GOL, as well as the bulk of the preparatory work between 1993 and 1997 was focused on an ASIP. Following the realization of the lack capacity to undertake such a broad program, it was scaled down from an ASIP to the APCBP, in order to develop policies and build capacity within the relevant institutions in the country, with a view to laying the foundation for future development programs, under a longer-term sector-wide program. The objectives and scope of the APCBP were intended to be fairly broad, necessitated by the integrated/interrelated nature of service delivery. More responsive frontline services required an improvement in prioritizing, planning and budgeting at district level together with the realignment of the structure and composition of district and national level agricultural offices to expressed priorities. A clearer delineation of public and private roles was needed to ensure the improved effectiveness and efficiency of service delivery, including policy issues related to privatization and divestiture, market liberalization, and land management. Greater clarification of these linkages could have more clearly highlighted the potential trade-offs between the scope, sequencing, and speed of implementation in the context of limited capacity. Although the project focused on the right issues, with hindsight, it perhaps had too broad a focus, covering too many subjects, instead of initially concentrating on a few core strategic areas. This has rendered the project a more sector-encompassing one, resembling a broad-based investment program rather than a project with a more specific purpose. This broader focus made the project fairly complex, aiming at tackling far reaching - 2 - institutional and policy reforms. The Project Appraisal Document (PAD) provided for eight key performance indicators to monitor the achievements of project development objectives, and above forty indicators to monitor intermediate outputs, in many case these were not specific or measurable. 3.2 Revised Objective: The project objective was not revised during implementation. However, the objectives were more clearly defined in terms of specific quantitative indicators, beyond - but still consistent with - the general qualtiative indicators in the PAD. The supervision missions discussed the option of restructuring the project to further narrow its focus, however the Government's strong view was that all components should remain given their interlinkages. While the objectives did not change, the focus of implementation shifted more explicitly to the key development objective performance indicators rather than focusing on the component and sub-component output indicators. 3.3 Original Components: APCBP had four components with financing from multiple donors: (i) Sector Strategy and Management (US$1.25 million of which US$0.56 million was from IDA): designed to help strengthen analytical capacity for policy analysis; build skills and technical expertise in sectoral planning and budgeting with a district focus; develop a functional monitoring and evaluation system; and introduce an effective management information system. It comprised three subcomponents: Policy Analysis, Planning and Budgeting and Monitoring and Evaluation with support for policy studies on subsidies and deregulation, the development of district agricultural (economic) strategies, public expenditure reviews, monitoring surveys and analysis, training and consultation workshops, office hardware, vehicles, and international technical assistance on policy and public expenditure analysis. (ii) Agricultural Support Services (US$2.40 million of US$0.59 million was from IDA): aimed at rationalizing, decentralizing and effectively delivering agricultural support services that are client-oriented and promote agricultural production through effective natural resource management. It consisted of four subcomponents: Extension, Technical Services, Research and Marketing Facilitation with support for training workshops, studies on rural marketing and the rationalization of public services, office hardware, laboratory equipment, civil works for new laboratories, international technical assistance on extension and livestock technical services, vehicles, and a farmer and community support fund for the implementation of community action plans to improve the effectiveness of extension. (iii) Land Management and Administration (US$3.24 million of which US$1.58 million was from IDA): designed to facilitate a land policy review, legal and administrative reform and the strengthening of the institutional capacity of the Department of Lands, Survey and Physical Planning (DLSPP) in the Ministry of Local Government (MOLG). It comprised four subcomponents: Land Policy and Legislative Reform, Land Administration, Land Information Systems and Land Use Planning with support for policy studies, consultation workshops, legislation drafting, international technical assistance, vehicles, civil works, office hardware, training, and GIS software and equipment. (iv) Change Process Management (US$7.39 million of which US$4.07 million was from IDA): designed to support strategic management of the change process as a whole focusing on comprehensive reform of the Ministry of Agriculture at national and district levels, including institutional restructuring, - 3 - developing related policies and systems; and the privatization, market liberalization and divestiture of activities. It consisted of four subcomponents: Institutional Restructuring, Human Resource Management, Financial Management and Privatization and Divestiture with support for developing the privatization program and scheduling, international technical assistance on change management, training workshops, vehicles, civil works for improved district offices and office hardware. The design of all components were directly linked to the objectives described above and reflect the integrated/interrelated nature of service delivery consistent with the causal links described in 3.1. While the sum of the components logically lead to the objectives, some of the initial component output indicators were not directly linked to the core outcome indicators reflected in the PAD. 3.4 Revised Components: Project components were not revised during implementation. Focus was more explicitly directed to the core development objective indicators, namely operationalization of the unified extension system; improved land legislation; restructuring of district and national level agricultural offices, privatization and divestiture, improving the policies on subsidies and regulation; and improving the financial management systems. These represent a more prioritized focus of each component. One activity was added, namely, the development of an HIV/AIDS program within MAFS. The project closing date was extended for a two year period from December 31, 2001 to December 31, 2003, to allow more time to achieve the projects development objectives. 3.5 Quality at Entry: Quality at entry ICR rating is unsatisfactory. While addressing the appropriate institutional and policy constraints in the sector, project design failed to take account of the demanding nature of project activities, which in hindsight had unrealistic expectations on the pace of implementation, particularly considering the common political sensitivities on policy and institutional reform. Several reforms, including land legislation, privatization and divesture and liberalization of marketing required extensive stakeholder consultation, which is normally a time consuming exercise. While the project design and implementation period was scaled down from an Agricultural Sector Investment Program (ASIP) to focus more on policy and capacity building, the scope remained fairly broad with a mismatch between scope, duration and capacity. Furthermore, in hindsight, the project was overly optimistic about progress on cross-cutting issues. For example, it was assumed at appraisal, consistent with the stated policy at the time that the Government would carry out reform of the civil service and decentralize functions to districts, which has not yet been done in a broad based manner. Yet, the speed of implementation of key project activities, such as the restructuring of MAFS, was to some extent determined by progress on these cross-cutting issues. Prior to the start of the project in 1998, Lesotho was a relatively good performer, with relatively high Country Performance and Institutional Assessment (CPIA) ratings, and a relatively good record of implementation. The civil disturbances following the stongly contested elections in 1998 resulted in a more delicate balance of power which slowed policy and institutional reform significantly. This situation persisted until the Parliamentary elections in 2002. The political unrest heightened the outflow of human capital. Hence, with hidsight, it is easy to draw conclusions, but the preparation team could not know the impending political changes which were to take place shortly after the completion of project preparation. - 4 - Nevertheless, project formulation lacked adequate preparation of some subcomponents and activities with the explicit or implicit intention that these tasks would be accomplished during the preparation of the Project Implementation Plan (PIP), or later on as part of project execution. For instance, defining principles and procedures for the decentralization and restructuring of MAFS, and how the project's support would be operationalized, was left to be completed and agreed with donors through the PIP, which amounts to assigning project preparation responsibility to the PIP. Furthermore, preparation of the PIP was to have been undertaken by MAFS even though its capacity in this area had been identified as weak. Likewise, some project activities were not well defined at appraisal and this task was left to be done as part of project implementation. Examples of not well prepared activities are the design and implementation arrangements for the farming community support fund (FCSF); and project organization and management. Some proposals were also not carefully studied in spite of their possible social and political impact such as the implications of privatization and divesture of assets and commercial activities or liberalization of marketing of some agricultural commodities. The proposal to outsource about 20 percent of the extension services and 20 percent of the agricultural research program to the private sector, including non-governmental organization, was not based on any proven experience or practicability. In addition, while the project improved donor co-ordination significantly through joint financing in the sector, the parallel co-financing arrangements exposed the project to risks when donors delayed declaring their support for the project. Considering the above points, the quality at entry was unsatisfactory. 4. Achievement of Objective and Outputs 4.1 Outcome/achievement of objective: Outcome ICR rating is marginally satisfactory. Since the ICR guidelines only permit ratings of statisfactory an unsatisfactory, an unsatisfactory overall rating is given. The project did not achieve its development objectives over the project timeframe, however it did make substantial progress towards many of the objectives. The likelihood of the project activities achieving satisfactory development results over time will depend on whether the Government maintains consistency in policy measures adopted under the project. At completion, APCBP has produced mixed results in terms of achieving the development objective and delivering the outputs specified in the PAD. While the project clearly advanced the policy and institutional framework that supports the delivery of agricultural services, a number of the reforms remain incomplete. The project achieved some notable policy advances, e.g. completing the district economic strategies, the national agricultural sector strategy, drafting the agricultural subsidy and land policies, unifying the extension system; as well as institutional reforms, such as streamlining of MAFS, with ongoing restructuring of the central and district offices and decentralizing functions. However, several key project outcomes such as completion of land legislation, full privatization of public enterprises, marketing liberalization of some agricultural commodities, and completion of the restructuring of the Ministry of Agriculture national and district offices still remain to be accomplished. According to MAFS staff, upgrading the skills of MAFS personnel, in the context of capacity building, was limited as the training program was short term in nature. Despite not fully achieving all the ambitious development objectives set at appraisal, APCBP has, nevertheless, made significant policy, institutional and technical advancements that merit recognition. This is particularly so if account is taken of the fact that completing the partially achieved tasks is in process. (the Table below provides a summary of progress towards the development objective indicators). - 5 - Table 1: Project Development Objectives (as reflected in the Project Appraisal Document) Descriptive Indicator Verifiable Indicator Status at Project Closing Satisfactory Unified Extension Service (i) All district extension staff trained in · 96 percent of district extension staff operational in 10 districts relevant multi-disciplinary trained for UES implementation with services delivered facilitation and the action learning according to defined client cycle · 85 percent of extension areas have at categories and needs (ii) District extension staff have prepared least one community action plan assessment and are implementing at least one completed with implementation district community action plan in initiated each extension area · District budgets are consistent with (iii) District budgets are consistent with UES implementation UES implementation · 89 percent complete (iv) Ten farmer and community support fund projects implemented in each district Unsatisfactory Improved land legislation in Revised Land Legislation passed by · Land Reform process has been approved place Parliament by Cabinet. The Bill had not yet been submitted to Parliament. Institutional restructuring of MoACLR Unsatisfactory (i) restructuring of MoACLR (i) Headquarters office restructured · Non-core units have been transferred; headquarters including transfer of non-core units new national structure has not yet been approved by MoPS (ii) restructuring of district (ii) 10 district offices restructured · 65 percent of all positions in newly offices [includes staff approved district office structure have decentralization plan] been filled (iii) rationalization of technical (iii) Agreed policy on afforestation/ · Background studies complete services conservation, animal health, seeds, and irrigation (iv) divestment & privatization (iii) 16 enterprises privatized, liquidated or · 4 enterprises liquidated; 1 privatized restructured Unsatisfactory Rationalized marketing and (i) Agreed policy statement on subsidies · Cabinet has issued a policy directive pricing policy for farm inputs based on subsidy on the use of input subsidies evaluation review (ii) Deregulation of remaining controls · Deregulation schedule has been on agricultural commodities submitted to Cabinet for approval implemented according to schedule Satisfactory Financial management (i) Accountants posted in 10 districts · Accountants have been posted in system and disaggregated (ii) Disaggregated accounting system in each district accounting system for districts place · Dissaggregated accounting system in operational place Satisfactory MOA's recurrent (i) 15 percent reduction in MOA real · 20 percent decline (priori to split of expenditure reduced by 15 recurrent expenditure Ministry) percent through (ii) 60 percent of recurrent expenditure · 53 percent divestment/privatization/ spent at district level cessation of non-core activities - 6 - 4.2 Outputs by components: Component 1: Sector Strategy and Management: Satisfactory This component had three subcomponents: policy analysis; planning and budgeting, and monitoring and evaluation. The outputs of this component should be considered as satisfactory as significant capacity was developed for policy analysis, planning and budgeting has improved and a monitoring and evaluation system is in place, although some of the activities need consolidation. Policy Analysis: Satisfactory: Overall, the outputs of this component should be considered marginally satisfactory. While the project made progress in a number of areas there was significant policy reversal in 2002 from Government commitments made at the start of the project which inhibited implementation. The project made considerable progress in strengthening MAFS capacity for planning and policy analysis and in initiating monitoring and evaluation activities in the agricultural sector. Specifically, under the policy analysis subcomponent, the MAFS completed district economic strategies (DESs) designed to serve as the basis for its agricultural extension services for the country's ten districts in 2000/2001. Drawing from these district strategies, the MAFS prepared its first ever national Agriculture Sector Strategy document in August 2003, which is a statement of national policy and strategy in the agricultural sector. Planning and Budgeting: Satisfactory: In the planning and budgeting subcomponent, MAFS introduced activity-based budgeting and in 2001 drafted planning and budgeting guidelines for the districts to ensure consistency in approach, although adoption of this approach has been slow. A public expenditure review was undertaken a medium-term expenditure plan developed. Monitoring and Evaluation: Satisfactory: A project baseline survey in two pilot districts was undertaken in 2001, and a follow-up survey in 2003 to monitor impact. It is still too early to determine aggregate household level impacts, although there were visible impacts on site specific field visits. Attribution was also difficult to assess due to the large overlapping Government subsidy program in 2002. Although initiated, much remains to be done to institutionalize effective planning and budgeting systems, to strengthen overall financial management (e.g., computerization of the financial management system) and to train the Ministry personnel to perform these functions effectively. In 2002 the Government introduced a large subsidy program in response to the weather related food situation. The subsidy program did not take account of lessons from past programs in Lesotho and from the rest of Africa and reversed the efforts under the project to rationalize the design and use of the subsidy program (one of the key policy issues under the project). Seventy percent of staff time was spent on coordination of seed and fertilizer distribution under the subsidy program, which diverted attention from the implementation of the UES. The goal of the subsidy program was to plough and plant every field in Lesotho. The program was fiscally unaffordable, had an adverse private sector impact, encouraged production on marginal lands and perpetuated farmer dependency. While, as a result of this experience, MAFS issued a more rational national policy statement on the use of subsidies in the agricultural sector in May 2003, the activities in 2002 significantly undermined implementation progress and represented a significant policy reversal from the stated Government position at the start of the project. Component 2: Agricultural Support Services: Satisfactory This component had four subcomponents: extension, research, marketing facilitation, and technical services - 7 - . The output under this component is considered satisfactory and the main task of developing a unified extension system has been achieved with implementation underway. Extension: Satisfactory: Consistent with the development objectives, the main subcomponent was the introduction of the UES, which the project has achieved. MAFS developed and consolidated the UES extension model, in March 2001, and piloted it in three districts. The MAFS then introduced the UES in all the districts through training of district extension staff in the action learning cycle and in the preparation and implementation of Community Action Plans (CAPs). All staff have been trained in 7 of the 10 districts, with 90 percent or more staff trained in the remaining 3 districts. About 160 CAPs have been prepared with implementation underway on 80. To complement the extension services provided under the UES, the MAFS prepared the necessary guidelines and operationalized the Farmer and Community Support Fund (FCSF) in 2002 in order to finance, with matching grants, selected small-scale agricultural investments identified by communities in the CAPs. At project close, the FCSF has prepared about 140 micro projects, with disbursement, in all ten districts of the country, and efforts are being made to focus the program to community-based support (see Annex 8). However, the project is still in the process of consolidating UES implementation, staffing the Resource Centres (RCs), and institutionalizing district work-planning and reporting systems. The outsourcing of selected extension service and research programs to the private sector through a District Services and Innovation Fund was not introduced. Research: Unsatisfactory: The project did not address MAFS's agricultural research policy and the institutional needs under the research subcomponent, mainly due to the slow pace of the concerned Division in advancing the planning and execution of the subcomponent. The Research Division produced a study evaluating the impact of agricultural research in June 2001 and drafted a national research strategy, but it was never finalized. As part of institutional support, the project constructed a new district agricultural office in Maseru and expanded and equipped the soils and veterinary laboratories of the MAFS. On balance, however, the output under this subcomponent should be considered satisfactory as the main task of operationalizing the unified extension system has been largely achieved with steps to consolidate implementation of the system underway, notwithstanding the significant diversion of extension staff to the subsidy program in 2002 and early 2003. Marketing facilitation: Satisfactory: Project activities related to marketing facilitation/reform have not yet led to deregulation. However, the project succeeded in carrying out studies, including an analysis of the 13 commodities that are under GOL control, with the view to understanding the impact of liberalization/deregulation on producers, consumers and trade in general. The results of these studies were discussed with stakeholders in workshops carried out in all ten districts, the recommendations of which were discussed in a national workshop in March 2003. Finally, a report was prepared containing the recommendations for deregulation with the necessary policy measures for quality, standards and competitiveness. The recommendations were well received by both MAFS and MTIMC, and are expected to be presented to the Cabinet soon. Technical Services: Unsatisfactory: Significant background work on technical services was undertaken during the project, including on policy issues related to afforestation, conservation, irrigation, seeds and animal health, with the initiation of a livestock database and registration system, however much of it is still to be taken forward to implementation. Component 3: Land Management and Administration: Unsatisfactory This component had four subcomponents: land policy and legislative reform, land use planning, land information systems, and land administration. Although there has been significant progress on the land - 8 - policy and legislation, the new legislation is still to be enacted and together with the slow performance on land administration, information systems, and land use planning, this component is rated as unsatisfactory. Land policy and legislative reform: Satisfactory: The establishment of a Land Policy Review Commission, to undertake the necessary land policy review and consultations, was delayed for almost a year, hindering initial progress in this area. The reasons for this included the delay by the main donor in declaring its contribution effective and the weak coordination between the two ministries, MAFS and MOLG. Once the commission was established, however, it made real progress in developing a new land policy and in drafting, if not enacting, new land legislation. The commission delivered its first major output, the land policy review report, in September 2000, which the GOL adopted as an official working document. The MOLG then appointed a task force to develop a Land Policy White Paper based on the report. The White Paper was delivered for Cabinet consideration and approval in August 2001. However, the government suggested that MOLG prepare new land legislation based on the White Paper for submission to the Parliament. This was done in 2003, and the draft land bill is soon to be submitted to Parliament (see Annex 9 for more details on the process). Land use planning and land administration: Unsatisfactory: Progress was slow in rationalizing and streamlining land use planning functions between MOLG and MAFS, but the Land Use Planning Division in MAFS was finally transferred to MOLG in 2002. Strengthening land use planning has not advanced as the proposed guidelines have yet to be prepared. There was little progress in actually improving land administration at the local level other than constructing three MOLG district office complexes which were complete at project closing. Decentralization of DLSSP personnel has been slow and somewhat dictated by the local government reforms on with the implementation of the new land act will be based. Land information systems: Unsatisfactory: Slow but steady progress was also made on the land information system, creating compatible data bases among GOL agencies. Instituting the geographic information systems still remains to be completed. Component 4: Change Process Management: Unsatisfactory This component had four subcomponents: institutional restructuring; human resource management; financial management system; and privatization and divestiture. Given that restructuring and privatization and divestiture remains incomplete the output of this component is rated unsatisfactory, notwithstanding the significant progress made. Institutional restructuring: Unsatisfactory: The project has made some significant institutional changes, although many of these remain incomplete. MAFS has transferred its non-core units to other, more appropriate institutions (i.e., Youth Affairs to the Ministry of Gender, Youth and Sports; Land Use Planning to MOLG; Marketing to the Ministry of Trade and Industry, Cooperatives and Marketing (MTIMC), and the Lesotho Agricultural College to the University of Lesotho. although recently GOL decided to move the Agricultural College back to MAFS. GOL intends to incorporate the Department of Research within the College to form one institution of agricultural education and research. - see Annex 10). The split of the Ministry of Agriculture, Co-operatives and Land Reclamation into the Ministry of Agriculture and Food Security, the Ministry of Forestry and Land Reclamation, with Co-operatives moving to the Ministry of Trade and Industry, Co-operatives and Marketing was not a proposal under the project but came as a Cabinet directive. There are concerns that the split will cause confusion at the district level, with two separate Ministry offices, and dampen the focus on the community action plans; however, the Ministries intend to work closely together in order to prevent this from happening. The organogram of the new structure of the MAFS has been developed and discussed but not yet implemented. - 9 - The MAFS began restructuring of the ten districts agricultural offices in line with the DESs and the UES. The approved establishment for the new district agricultural office structures represents about a 30 percent decline from the previous establishment, largely the result of privatization and divestiture. The restructuring program is expected to be undertaken in three phases over three years, about 65 percent of the posts in the new structure have been filled. About 15 percent of district posts have been transferred from headquarters, and about 40 percent have been upgraded to provide better incentives for staff to move to districts. The central departments of MAFS have not yet been restructured and rationalized based on the Ministry's new sector vision and strategy although a new structure (organogram) has been proposed. The proposal envisages a halving of the number of staff at headquarters to about 230 staff (excluding the Agricultural Research Division and Lesotho Agricultural College). Human resources management: Satisfactory: Under the human resources management subcomponent, MAFS formulated and adopted a new human resources management policy in 2001, as well as policies for training and development, performance management, human resources relocation, and communications. The Ministry has conducted a staffing inventory, eliminated ghost workers, audited staff salaries and is in the process of revising job descriptions. Overall, human resource management has also become more efficient due to the project's support in introducing modern practices following a review of job descriptions for all staff, and synchronizing these with the new policies, objectives and functions of the Ministry. As a result of the restructuring of MAFS, the budgetary process has been streamlined and significant savings were made. In terms of agricultural support services, the project has introduced the UES in all districts, and all field officers now have a clear message and guidelines on how to serve the farming communities. In line with each DES, staff have started to be deployed to the RCs to initiate operations. The implementation of the FCSF is being carried out under the new UES approach, further strengthening the project's impact in agricultural extension. Financial management system: Satisfactory: The financial management subcomponent experienced initial delays while MAFS and the Bank determined that the Government of Lesotho Financial Information System (GOLFIS) needed improvements to meet the reporting requirements of the APCBP. Once agreement was reached on this issue, however, MAFS initiated computerization of its financial management systems and placed senior accountants in all the district offices. Privatization and divestiture: Unsatisfactory: Privatization, deregulation and liquidation have not progressed as envisaged at appraisal, but, among other things, the studies carried out by the project identified many issues that were not given sufficient attention at appraisal. For instance, it became clear that: the local private sector was under-resourced to purchase enterprises; many stakeholders did not agree with the sale of land where the enterprises operate; some activities, like training centres, did not attract the private sector. Of the 16 enterprises identified to be privatized at appraisal, 1 has been privatized (leased); 4 liquidated; with a further two being partially liquidated (see Annex 10 for the status of each of the 16 enterprises). The most costly enterprise to the Ministry budget was the Technical Operations Unit. Over the course of the project, since 1998/99 the material size of the TOU has been significantly reduced, with the number of tractors declining by 70 percent (from 200 to 59). The number of combine harvesters has stayed relatively constant at about 20. The share of the MAFS recurrent budget going to the TOU has declined from about 30-35 percent in 1998/99 to about 6-7 percent as of 2003/04. 4.3 Net Present Value/Economic rate of return: No net present value or economic rate of return were calculated at appraisal as the project focused essentially on policy reform and institution building. It would have been useful to undertake an assessment - 10 - of some of the the ex-ante impacts of the proposed policy changes at appraisal. From a purely cost-effective perspective the project did not achieve its expected output by project closing meaning that the costs per unit of output were higher than envisgaed at appraisal. A number of useful economic analyses were undertaken during project implementation including: (i) costs and benefits of marketing liberalization of various commodities; (ii) economic impacts of the 2002 subsidy program; (iii) economic implications of the new land act; (iv) cost effectiveness of various implementation modalities of the UES; and (iii) quantification of the impact of restructuring plans on the Ministry of agriculture budget (see Annex 3 for more detail). The results guided the formulation of some of the policy and instituional reforms during implementation which showed positive ex-ante impacts. It is too early to undertake an evaluation of the actual impact of some of the reforms and many are still in progress and hence are incomplete. 4.4 Financial rate of return: No financial rate of return was calculated for the project at appraisal. 4.5 Institutional development impact: Modest. The project has had a modest institutional impact. It has been instrumental in improving the system of work and efficiency of several departments within MAFS. The most important impact has been in the Department of Policy Planning and Analysis and in the Department of Human Resources. With external technical assistance, and through work on policy issues under the project, including the subsidies policy and deregulation, together with the work on the Agricultural Sector Strategy, DPPA has developed greater capacity to undertake systematic policy analysis. The monitoring and evaluation unit, established by the project, has also shifted focus from ad hoc and project or donor-specific, to a more permanent sector-wide focus, covering any relevant activity in the agricultural sector. Presently, there are no separate approaches for monitoring and evaluation within the agricultural sector. APCBP has also made a positive imprint on the institutional restructuring of MAFS, particularly at district level with a greater alignment of district agricultural office structures to the district economic strategies and the UES, supported through the decentralization of many technical and management functions and the redeployment of higher level staff to the districts. The national level structure has also changed significantly with the transfer of non-core units as noted in section 4.2. While much of the restructuring has been agreed (district structures) with some still to be agreed by project closing (e.g. headquarters), acutal implementation (physical changes on the ground), were modest. To a lesser extent, the DLSPP and the Department of Marketing in the other two Ministries (MOLG and MTICM) have also benefited in terms of improving their capacity in analysis and preparation of development policies and programmes. The Department of Marketing in MTIC and the Department of Policy, Planning and Analysis in MAFS have been working closely together on the deregulation study. A residual benefit from the preparation of land policy and draft bill, as well as from the agricultural commodity analysis in DLSPP and the Department of Marketing, respectively, has been the improvement of working methods of their staff as a result of on-the-job training. 5. Major Factors Affecting Implementation and Outcome 5.1 Factors outside the control of government or implementing agency: Project effectiveness was delayed by about ten months mainly due to disruptions in government operations on account of civil disturbances in August/September 1998 (see also section 3.1). Delays in the signing of - 11 - contribution agreements by the different cofinanciers also affected project implementation. In addition, a state of famine was declared in the country in 2002 based on concerns about the impact of late frosts and early rains on crop production. Production, however, ended up being slightly below the long term trend average. The corresponding Government response program had significant negative impacts on project implementation, with the reversal of policy decisions on subsidies. 5.2 Factors generally subject to government control: Failure to implement the civil service reform and the decentralization of government functions inhibited the early restructuring of the MAFS, particularly at district level. A tendency of the Public Service Commission to transfer MAFS staff trained under the project to other GOL institutions is affecting the performance of MAFS, particularly that of the Department of Human Resources. Throughout the project implementation period, the Interministerial Steering Committee (ISC) has not performed as anticipated. With the exception of the Chamber of Commerce, the private sector was not involved in the ISC meetings, and most of the GOL members lacked sufficient interest/incentives to participate in its meetings, and were often represented by junior staff, who very often were not able to make important decisions on project management and implementation. As above, project progress would have been much better had the Government not instructed MAFS to involve its staff in the Famine Relief Program, including managing the distribution of subsidized inputs during 2001/2002. This task practically paralyzed other MAFS activities during the greater part of the year, with the extension staff spending about seventy percent of their time on the program. 5.3 Factors generally subject to implementing agency control: While the project rightly did not set up a project implementation unit (to prevent parallel management systems), but used the existing Ministry department structure, it did not benefit from the guidance and support of a strong project management system. Although no specific organizational set-up that details management functions was proposed at appraisal, the project deserved a full-time coordinator from within the Ministry with clear terms of reference. The coordinator should have benefited from a support team to be called on for planning and coordinating implementation, including from concerned staff outside MAFS, such as DLSPP. The large Technical Assistance Team could not be a substitute for management and implementation coordination, as they had essentially an executing role hence needing policy guidance themselves. Availability of a full time coordinator with the necessary facilities and consistent staff support would have reduced the difficulties faced by the project. This would have probably minimized the lack of project management attention lamented by DLSPP. 5.4 Costs and financing: At appraisal, total project costs were estimated at US$14.28 million, of which IDA would finance US$6.80 or about 48 percent of the total. The remainder was to be financed by four other donors (US$6.90 million), and by GOLS, US$0.58 million. Of the IDA funds, some 54 percent were allocated for the Change Process Management component, while in terms of category of expenditures about 45 percent were to be spent on consultancies and studies. At completion, total IDA disbursement was about US$6 million. Government contribution to the project was US$0.6 million. The project design used parallel cofinancing arrangements for participating donors (the African Development Bank (AfDB), the European Union (EU), the British Department for International Development (DFID); and the German Agency for Technical Cooperation (GTZ)) in which every donor managed the financing of its contribution independently, while at the same time, allowing the financing of a - 12 - number of activities jointly by several donors. This created difficulties when some donors delayed the approval of their contributions. Final donor commitments were agreed as late as September 1999 (GTZ) and June 2001 (DFID), with the DFID contributions awaiting Government confirmations on the future of Co-op Lesotho and the subsidy program. The EU withdrew its contribution altogether in November 2000, following agreement with GOL to transfer the funds to other sectors. 6. Sustainability 6.1 Rationale for sustainability rating: Likely: Although the project did not achieve its initial development objectives, the probability of maintaining the signficant achievements generated is high. For example - the project has produced many intermediate outcomes that, with continued implementation, will eventually reach all the development objectives. Being an institutional reform and capacity building project, sustainability of most of the restructuring, reforms and capacity-building systems and activities should depend on future GOL policies on the same. If there are no changes of direction by GOL, the elements related to land legislation and administration; market liberalization and the restructuring of MAFS are expected to continue to develop in a sustainable manner. Key risks are the extent to which Government adheres to its new subsidy policy, including the size of the TOU, and the continued implementation of the UES with the completion of the district and national office restructuring. Progress on decentralization and civil service reform would support this effort. These reforms now have government support to authorize the conclusion that they will be realized as originally intended. The sustainable operation of UES is also likely because the Ministry is pleased to be out of the multiform extension system, and eager to continue it under the restructured set-up, and is providing the staffing and budget required to realize it. One area of concern with regard to sustainability of project activities is the relatively high turnover of staff, particularly within DPPA and the Department of Human Resources as the result of resignations and transfers to other government institutions. If the present high demand by Public Service in transferring MAFS staff to other ministries is moderated, the proposed increases in grades of staff may assist MAFS in retaining its staff. The convictions on sustainability of project activities are based on observations of follow-on activities by MAFS. At present, the ministry is acting vigorously to deepen the achievements made under the project by continuing the redeployment and recruitment of high-calibre staff. Budget plans for the year 2003/2004 indicate that the Ministry is endeavoring to include funds that enable the districts to operate in line with the systems introduced by the project. Within MAFS headquarters, the restructuring proposals include upgrading staff positions to higher salary scales. All of these actions are good omens for sustainable future operations. The overall sustainability of project actions in continuing privatization and divestiture is dependant on Government committment. It is reasonable to assume that those items already sold to the private sector, would be operated in a sustainable manner, as observed with regard to the privatized tractors. 6.2 Transition arrangement to regular operations: Project activities have been mainstreamed into the regular government set-up, and staff and other operating expenditures are already part of the existing government budget. The non-core activities that were moved from MAFS to other ministries were transferred with the related personnel and budget, and are permanently incorporated within these new institutions. All project activities that are in the process of being pushed further, such as the market liberalization and land legislation are being pursued as part of the normal tasks of the concerned departments. The UES and the restructured MAFS have been absorbed into the regular operations, and staffing and budgeting for the next fiscal year is based on these new realities introduced by the project. However, in order to ensure success of the project initiated activities, particularly those items that have been only partially completed, there is a need for strong political support by the government. - 13 - Deepening the achievements made in institutional restructuring may require more efforts in training the staff. 7. Bank and Borrower Performance Bank 7.1 Lending: Unsatisfactory: Bank preparation was unsatisfactory. Although Project identification and preparation began in 1993, it took place systematically by establishing dialogue with all stakeholders; this was changed during the pre-appraisal of the project, when IDA, together with other donors took the lead in putting together APCBP. The project objective and scope was changed rapidly from ASIP to a more modest project aimed at carrying out policy reform and capacity building. While there was nothing wrong in changing the project objective (once it was understood that reforms and institutional building were priority prerequisite for development), it is not clear why the project had to be loaded with so many activities, targets and donor disbursement conditions that are normally placed on sector-wide investment programmes. Bank support in project formulation and appraisal was deficient, at least on account of four considerations: (a) consultations on the new project (APCBP) were held mostly with the donors and senior Government officials, with little discussions with the concerned Ministry professionals and the project task force; (b) designing a project that was too complex in terms of multiplicity of tasks and activities and donor disbursement conditionalities; (c) establishing overly ambitious objectives and targets for the project timeframe, in spite of the capacity constraints that prevailed within the implementation agencies; and (d) leaving a number of tasks without adequate design preparation, obliging the project to engage, simultaneously, in duties related to preparation and implementation. The weaknesses in project preparation and appraisal are the main source of difficulties that the project had to face during implementation. 7.2 Supervision: Satisfactory: The Bank fielded 10 supervision missions, including one before the project was declared effective. Missions were regular (every 6 months) with a constructive blend of field visits and ministerial discussion. The specialization mix and the participation by the cofinanciers were adequate with consistency in team leadership (two since project effectiveness). With the gradual decline in the operating environment following the 1998 civil disturbances, the mission increased the intensity of supervision, and did raise the issue of project restructuring with Government and co-financiers once the project ran into difficulties. However, the Government requested retaining all components given their inter-relatedness, and ownership. The mission subsequently narrowed the focus of activities to the core project development objectives, which more appropriately focused capacity and resources. Implementation problems were addressed pro-actively making good use of the more flexible bilateral financing for short term needs. Donor co-ordination under the project was strong, with joint donor missions the Bank worked actively to integrate and mainstream the separate IFAD project into the CAPs and UES, so as the minimize parallel programs and overburden limited capacities. The Bank's management played an active role in monitoring implementation. Following the downgrading of the project to unsatisfactory, the outgoing mission met with World Bank Management to agree what minimum actions needed to be completed to retrain or upgrade the ratings, and then on their return discussed the mission findings and agreed on project ratings. Progress was made is a fairly difficult implementation environment. The performance of supervision was satisfactory. 7.3 Overall Bank performance: Satisfactory: The performance of supervision out-weighed that of preparation, hence the overall Bank performance rating is satisfactory. - 14 - Borrower 7.4 Preparation: Unsatisfactory: Borrower's performance in project identification and preparation was adequate until the time of pre-appraisal of the project. During this period, MAFS professionals were formed into a task force and were provided the opportunity to contribute significantly to project formulation. In particular, the departments of MAFS produced different technical papers, and presented their development proposals which were thoroughly discussed with IDA and other donors. After the pre-appraisal of the project, however, the level of engagement of MAFS professionals declined considerably, and the active participation that characterized the initial project preparation exercise started to fade away. Thus the reformulation of ASIP, or putting together APCBP, was largely carried out under the influence of donors, with little input from GOL technical staff. Apparently, in order to address the pressing problems that faced the agricultural sector then, GOL endorsed all APBCP proposals, in spite of the complexity of the project, in terms of number of activities and donor disbursement policy conditionalities, which were aggravated by the diverse requirements of the cofinancing donors. In particular, GOL should have realized that carrying out land legislation, privatization and divesture as well as market liberalization within three years, would be implausible, if account is taken of the effort and time needed for consultations with stakeholders. Therefore, borrower performance in preparation is also considered to be unsatisfactory. 7.5 Government implementation performance: Unsatisfactory: When implementation started, MAFS and other concerned ministries were put in a situation that was difficult to manage on several accounts. Firstly, the professional staff did not fully understand the project, and there was no backup from a strong project management team to initiate project activities by explaining the different tasks, as IDA funds were already available when the project was declared effective. Secondly, funds from other cofinanciers were not flowing as expected, because GOL delayed in complying with some of their conditions, particularly on subsidy policy. Thirdly, MAFS and MOLG later understood that the critical reform process would require considerable time to organize studies and consultation with stakeholders before they were presented to the government for approval. All these factors led to delayed realization of the ambitious targets set by the project. In addition, although it was clear that the project was struggling to undertake a wide range of activities in the context of weak management support, the Interministerial Steering Committee (ISC) did little to resolve the main problems of the project. Taking into account the nature of the tasks and the limited capacity within the ministries, it would not have been difficult to anticipate that many of the project components and subcomponents would require more time and support than allowed under the project. The introduction and design of the subsidies scheme in 2002 under the Famine Relief Program was a significant policy reversal from the stated Government posisiton at the begining of the project. GOL's decision to involve in a major way MAFS and its staff in the Famine Relief Program and the management of the input subsidy program virtually put a stop to project progress in that year, because the bulk of the Ministry staff at headquarters and in the field were involved in this task. This decision alone makes government implementation performance unsatisfactory. Nevertheless, this does not mean to ignore GOL's positive stance towards the project and flexibility in responding to the needs of enhancing implementation. Examples of these are improving the slow flow of project funds by allowing the operations through a commercial bank account, instead of treasury; agreeing to the restructuring of the MAFS at headquarters and in the districts; and upgrading salary scales of staff positions, which were important for expediting project implementation. 7.6 Implementing Agency: Satisfactory: MAFS continued to struggle with the project throughout the implementation period due to - 15 - management difficulties. The main reason was a shortage of trained staff, since MAFS chose to manage the project with limited staff. While mainstreaming project management and leaving implementation to the relevant departments was appropriate, there should have been, nevertheless, a minimum coordination among these departments to ensure that expected project tasks were initiated, planned, budgeted, implemented and monitored as per an agreed strategy and programme. Some coordinating mechanism should have ensured that the project was steered as desired and not left to drift. Another difficulty faced by MAFS was the lack of strong political support and policy guidance from ISC. This committee failed to provide the project the expected policy level leadership to the agricultural sector. A number of project activities related to research, veterinary services were not carried out because the technical departments did not pursue these activities, and could have been avoided had there been a central authority, such as, ISC, that monitors activities and signals weaknesses for correction. The dissatisfaction expressed by the DLSPP, particularly in delaying actions to be taken by the MAFS project management is also related to the weakness of management. In spite of all the difficulties, however, MAFS has done its best under the prevailing circumstances, and is to be credited for the substantial part of the achievements made under the project, including the introduction of an HIV/AIDS programme within the Ministry. Its performance should, therefore, be considered as satisfactory. 7.7 Overall Borrower performance: Unsatisfactory: The overall performance of the Borrower was unsatisfactory mainly due to unrealistic project proposals, disruptive GOL assignment to MAFS in managing the input subsidy programme in 2001-2003, lack of effective guidance to the project by the ISC and lack of establishing strong and workable project coordination and management. 8. Lessons Learned · Set and focus on key realistic outcome indicators: The lack of core measurable outcome indicators can detract implementation activities from core objectives with the danger of becoming more narrowly focused on implementation of component outputs rather than on overall project development outcomes. Outcomes should be realistic within the implementation timetable. This may seem like an obvious point, but defining more explicit measurable outcome indicators had a significant impact on the implementation focus of this project. · Avoid complex technical project designs with a multiplicity of outputs: The simpler the project the easier the implementation. The overly complex design, in terms of the number of output indicators should be prevented as it overtaxes the Government's and the Bank's capacity to focus on key actions. Focusing on a core set of output indicators improves implementation focus, although not necessary reducing the scope of the project. A multi-donor approach can provided value added on both simple and complex technical designs: joint missions focused on one Government program which reduced transaction costs for Government, allowed pooling of donor expertise to address project issues and implementation, and allowed more instruments for addressing problems (some donor funds could be used more flexibly to meet shot term unanticipated expenditures). · Ensure project design matches implementation capacity: There is often a danger of designing a project which requires capacity levels far higher than exists in the beneficiary country with the assumption that it will be built up during the project. Given the flexibility of the labor markets, with South Africa as a neighbor, built up capacity seems to move fairly rapidly as higher skilled staff find jobs in the private sector or other parts of Government. The high turnover of staff in Ministry departments has made capacity building challenging. This suggests that project design should more - 16 - closely match implementation capacity which exists at the time of project preparation. · Reduce the amount of design issues required to be resolved during implementation: Delaying design issues for project implementation simply delays implementation and impact. This was particularly pertinent to the farmer and community support fund project which only began operations three years after project effectiveness. Once designed, implementation progressed fairly rapidly. · Undertake appropriate analytical work and consultation on policy issues to facilitate policy reform and prevent policy reversal: Policy change is often politically sensitive, with the losers of policy change often the more powerful and well connected, hence arguments for change need to be clear and convincing with broad consultation to ensure reform and to prevent reversal. · Ensure realism about agriculture potential: The relatively limited potential of agriculture in Lesotho, particularly in its contribution to overall economic growth, should be clearly recognized in the development objectives of future programs. · Establish a monitoring framework to guide decisions on project restructuring: When the enabling policy environment for effective project implementation begins to unravel in what had been a strongly performing country (as in the case of Lesotho after the contested elections in 1998), it is difficult to discern what is a temporary set back (warranting intensive supervision but only minor change in project design) versus a fundamental deterioration in government commitment and capacity (warranting significant changes such as suspension, cancellation, or restructuring). The rewrite of OP/BP 13.05 on Project Supervision has now strengthened the capacity of teams to respond in these situations, as it has made formal project restructuring a more acceptable and accessible option. A clear monitoring framework to guide decisions on project restructuring should be established, with continued management oversight. 9. Partner Comments (a) Borrower/implementing agency: Background Information Lesotho is a landlocked Southern African country situated within the Republic of South Africa. Its area is approximately just over 30,000 km2 most of which is mountainous. It has four ecological zones distinguished by their height above sea level, they are Mountains, Foothills, Lowlands and the Senqu River valley. The climate in Lesotho is characterised by hot summers (November to January) and cold winters (May to July). Lesotho is divided into 10 administrative districts. The population is just over 2 million (Bureau of statistics, 2000). Over 80% of the population reside in rural areas. It is believed that majority of the rural dwellers earn their living from agriculture. The Project The Agricultural Policy and Capacity Building Project (APCBP) was a 3-year World Bank co-financed project. APCBP formed part of a long term Programme (15 years). The original completion date was December 2001 but an extension was granted to December, 2003. The total value of the funds was the Maloti equivalent of US$10.98 Million. It had 4 components and 15 sub-components. APCBP covered all the 10 districts in three of which a sister project was concurrently being implemented. The executing agency (ies) were the now ministries of Agriculture and Food Security; Local Government; Forestry and - 17 - Land Reclamation; and Trade, Industry and Co-operatives and Marketing. Objective of APCBP The objective of the APCBP was to put in place improved institutional and policy arrangements for sustainable and efficient management, financing and delivery of public and private agricultural services in Lesotho. The project was expected to assist in redefining the core public roles of the ministry in view of facilitating increased participation of the private sector in provision of agricultural support services. Co-financiers APCBP was co-financed by the World Bank (IDA), ADB, GTZ and DFID Performance The key performance areas of the project are as stipulated below as well as the extent to which there was success in achieving them (highlighted under the component section). They include: l Operationalisation of the UES throughout the districts, l Development of an enabling policy (including Land Policy) environment, l Institutional restructuring of the ministry, including, increasing private sector participation through privatisation of certain enterprises, Some of the benchmarks are inter-mediate and facilitatory while others are end products. Appropriateness of the Project As stated earlier the APCBP was the first phase of a long-term programme of support to the sector. The Project Concept was therefore logical, as it would not have been prudent to engage in a long-term investment programme (the focus of the initially proposed ASIP) without enhancing the existing capacity of the implementing agencies (a focus of the APCBP). The Objective of the project, as stated above, also appears to have been appropriate. The manner in which the ASIP was scaled down to the APCBP may not have been the most appropriate approach. The change from the initially envisaged ASIP to APCBP was not very well communicated by the management to their respective individual ministry departments. This left the implementing professionals indecisive and frustrated. These circumstances contributed to the delay in project start-up. There were also concerns about the initial project duration of three years raised by Departments. A general feeling was that enhancing capacity for future programmes was appropriate, however, the time allocated seems to have been insufficient for what the project was expected to achieve. For example, the Unified Extension Programme is a process which needed more time for Government to determine whether it was working properly or not. The Ministry did not, initially get all the relevant guidance from the World Bank. The project did not have a launching workshop from which the implementers could have gained a clear understanding of the World Bank procurement and disbursement procedures. This resulted in both the management and district staff not understanding these procedures, which further delayed implementation. When the project finally started, many initiatives had to be undertaken simultaneously by the same staff which made time even more limited. The baseline surveys were carried out at a late stage of the project with the follow up evaluation survey being carried out too soon thereafter which did not allow enough time between the two for informative conclusions regarding the impact of the APCBP on farmers. - 18 - Quality of Financial Analysis/Treatment of Fiduciary Aspects Some of the activities, which were co-funded, were delayed by the varying procurement requirements of different financiers. DFID joined the other financing donors late in the project which created uncertainties and inhibited progress. The Central Tender Board did not, at the beginning, understand the World Bank procedures, which resulted in delays. Procurement procedures seemed to be slowed by delays in granting `No Objections', both by the Central Tender Board and the World Bank. In addition, it was expected that the project funds would be disbursed through the Treasury System, which could not accommodate the World Bank procedures adequately. This delayed implementation by almost two years. A decision was eventually reached to open a Current Account for the project and consequently the flow of funds improved tremendously. Procurement and disbursement staff needed to be trained and this took time. A Financial Management Adviser initially selected as part of the international technical assistance was also not very helpful. An important lesson from this is that all the co-financiers should find ways to harmonise their varying procurement and disbursement procedures and start project implementation at the same time to avoid delays that may result if they start at different times. Treatment of Environmental Aspects Under APCBP a consultancy, which proved to be useful, was carried out on Environmental Planning and Management. The objectives of this study were to: l Provide a framework for integration of Environmental Planning and Management in the newly developed District Economic Strategies (DESs), l Develop practical guidelines for conducting environmental analysis in line with the existing legislation on environment and other related documents, l Review Institutional arrangements in the National Environment Secretariat (NES) and the Ministry of Agriculture, both HQ and district level and make recommendations to strengthen the integration of environmental planning in the sector, and l Conduct training sessions for the staff in these institutions. Components Sector Strategy and Management Much was achieved in this component. An Agricultural Sector Strategy was developed which included departmental, divisional and subsidy policies. It is worth noting that some of the activities undertaken were not necessarily part of the pre-set objectives of the project but proved to be crucial as implementation continued. The monitoring and evaluation guidelines were developed. A baseline study was undertaken and a follow-up study was also carried out. The time lapse between these two, however, is viewed as insufficient to make evaluation conclusions on project impact. Staff turnover inhibited continuity of some activities of this component. Agricultural Support Services The Unified Extension System, the main element of this component, is operational countrywide, together with the Community Action Plans (CAPs), which are now well appreciated by the extensionist staff, NGOs and the farmers. About 170 Farmer Community and Support Fund (FCSF) Projects were implemented. Several civil works were also completed under this component. An office block was constructed for the - 19 - DAO Maseru, a veterinary clinic built in Mafeteng and a soils lab constructed for agricultural research. Some tasks, such as research studies, were not performed satisfactorily as different procedural measures from different co-financiers resulted in major delays. A livestock marking and registration process was initiated which was a very beneficial exercise even though it was not originally part of the APCBP objectives. A post mortem lab was also constructed. A study on Market Liberalisation was also completed. The most consultative national forum on liberalisation was held following ten district consultations. Subsequent to this, policies were developed and are part of the Agricultural Sector Strategy. Land Management and Administration A draft Land Policy was prepared, following the Land Policy Review Commission's report. A draft Land Bill has subsequently been prepared and is ready for further discussion and adoption at the political level (parliament). The Land Acquisition and Compensation Bill together with the revised Town and Country Planning Bill have also been drafted but consultations are still on-going before they can be submitted to the Attorney General Chambers. Several civil works were completed, these were office blocks in Botha-Bothe, Berea and Mafeteng. Change Process Management The Ministerial Strategic Plan was prepared on which basis the Ministry was restructured and rationalised resulting in the total reduction of the Ministerial establishment by over 30% in 2003/2004 and envisaged 68% by the end of 2005/2006 with a Headquarter to District ratio of 20%:80%. Disbursement (2), procurement (2) and accounting (11 - Project Accountant, Financial Controller and 9 districts Senior Accountants) staff were trained in accounting computer software known as FINPRO/TOMPRO from which periodic financial reports are produced. In addition, 358 and 291 employees were trained in Employee Counselling and Entrepreneurial Skills respectively. Lack of prompt honouring of the WAs on the part of ADB also became a delaying factoring in this component as was often the case in others. Sustainability of Achievements The UES and FCSF activities will be sustained as they were budgeted for in FY 2004/05. Provision has also been made to continue with privatisation of the remaining enterprises, and deregulation of the remaining commodities. The process is therefore on-going. Continuation of Livestock Marking and Registration has been budgeted for, and the process is on-going. Lessons learned l The implementation experience of this project suggests that synchronicity on the part of donors in future will be of great importance. l The expectations/objectives of the project should not be too ambitious. l Key personnel should be identified for key positions in the Ministry. l Capacity of personnel should be sufficient to achieve the intended objective. (b) Cofinanciers: (c) Other partners (NGOs/private sector): - 20 - 10. Additional Information - 21 - Annex 1. Key Performance Indicators/Log Frame Matrix Outcome/Impact Indicator: Indicator Projected in PAD Actual/Latest Estimate Operationalization of Unified · Operational in all 10 districts · Operational in 10 districts Extension System (UES) Improved land legislation · Improved land legislation in place · Land Reform process has been approved by Cabinet. The Bill had not yet been submitted to Parliament. Institutional restructuring of MOA · Headquarters · Restructured with removal of · Non-core units have been transferred; new non-core units national structure has not yet been approved by MoPS · District offices [including staff · 10 offices restructured · 65 percent of all positions in newly decentralization] approved district office structure have been filled · Technical services · Rationalized · Background studies complete · Privatization · 16 enterprises privatized · 4 enterprises liquidated; 1 privatized MAFS recurrent expenditures · 15 percent reduction · 20 percent decline (priori to split of Ministry) · 60 percent spent at district level · 53 percent Financial Management · Disaggregated accounting system · Accountants have been posted in each for districts operational district · Dissaggregated accounting system in place Public expenditure review · Completed · Completed Output Indicators: Component 1: Sector Strategy and Management Policy Analysis Government interventions · Tractor hire services · Phased out · Tractors in TOU reduced by 70 percent · Restrictive import licenses · Phased out · Deregulation schedule has been submitted to Cabinet for approval · Fertilizer supply · Phased out · Cabinet has issued a policy directive on · Distortionary use of commodity · Phased out the use of input subsidies aid (Agricultural) Economic Strategy · Prepared · Strategy completed Incentive framework and supporting · In place · New UES program development extension services to promote · Improving incentives through policy environmentally-sustainable land use change is on-going Planning and budgeting Agricultural planning and budgeting · Conforms with district · Guideline prepared and are operational, development planningand although there is still a disconnect between budgeting districts and national level on activity based budgeting Public expenditure review · Public expenditure analysis undertaken · Prepared and medium-term framework developed - 22 - Long-term policy framework · Agricultural Strategy developed · Updated annually Monitoring/Management Information M&E and MIS system · Operational · Operational Baseline surveys for UES · Undertaken · Baseline and follow-up survey undertaken Sector performance analysis/data · Prepared annually · Partially completed Component 2: Agricultural Support Services Extension District (Agricultural) Economic · Prepared · 10 district strategies completed Strategies Operationalization of Unified · Operational in all 10 districts · Operational in 10 districts Extension System (UES) Work-planning and reporting system · Clear system in place · System in place Community Action Plans · Not specified · 162 prepared, 95 under implementation Farming and Community Support · Not specified · 140 projects approved and implemented Fund Extension service delivery outsourced· 20 percent outsourced · Not yet commenced Research Research agenda · Agreed based on (i) client's needs · No agreement reached formulated under the DESs; and (ii) other pertinent factors available contributions from SA research, staffing/incentives and climatic constraints Institutional arrangements to carry · Finalized · Not yet finalized out research, including outsourcing Component 3: Land Management and Administration Land Policy Land Policy Review Commission · Appointed · Appointed and work completed Deeds registry and Land Use · Transferred to MOLG · Transferred to MoLG Planning · Improved land legislation in place · Land Reform process has been approved Improved land legislation by Cabinet. The Bill had not yet been submitted to Parliament. Land information system · Improved and established · Not complete Land information system · Modernized and updated · Not complete Land records Land use planning · Elaborated and piloted · Incomplete Land use planning guidelines Component 4: Change Process Management Institutional restructuring Institutional location of MOA · Reviewed with action plan for · Completed together with transfer non-core units transfer District offices · 10 offices restructured reflecting · 65 percent of all positions in newly needs of DESs approved district office structure have been Research institutions · Rationalized filled · Functioning as APCBP steering · Not yet complete. The plan is to merge committee agricultural research with the agricultural college District Development Committee · Not yet accomplished Human Resource Management Staff inventory for HQ and districts · Completed · Completed Ghost workers · Eliminated · Significant progress. Ongoing Human resource management policy · Defined and approved · Defined and approved Benchmarks for staffing levels and · Completed · Completed staff rationalization - 23 - Staffing rationalization · Meet defined benchmarks annually · Ongoing Financial Management Accountants · Posted in 10 ditricts · Posted in 10 ditricts Disaggregated accounting system · In place · In place Privatization and divestiture Privatization · 16 enterprises privatized · 4 enterprises liquidated; 1 privatized Veterinary services · Privatization framework, including · Studies completed legal aspects in place · 50% of clinical veterinary services · Not achieved and 100% of drug supply delivered by private sector Paravets · Operatinal in 10 districts · Not achieved Co-ordination Change Management Team (local · In place · In place but replaced by Change and external) Leadership Committee Representatives of civil society and · Included in APCBP steering · Not carried out. Only the Chamber of private sector committee Commerce was included - 24 - Annex 2. Project Costs and Financing Project Cost by Component (in US$ million equivalent) Appraisal Actual/Latest Percentage of Estimate Estimate Appraisal Component US$ million US$ million Sector Strategy and Management 0.56 1.46 261 Agricultural Support Services 0.58 2.46 424 Land Administration and Management 1.58 0.80 51 Changes Process Management 4.08 1.89 46 Total Baseline Cost 6.80 6.61 Total Project Costs 6.80 6.61 Total Financing Required 6.80 6.61 The significant differences between component costs envisaged at appraisal and the actual costs by project end was due to the uncertainty of donor commitments at the start of the project, with the EU eventually pulling out altogether. Once donor financing had been finalized after effectiveness, the estimates for Sector Strategy and Management, Agricultural Support Services, Land Administration and Management, and Change Process management were 1.22; 1.67; 1.12; and 2.79 respectively; of which cost by project end, as a percent of these estimates were 120%; 147%; 71%; and 68%. Project Costs by Procurement Arrangements (Appraisal Estimate) (US$ million equivalent) 1 Procurement Method Expenditure Category ICB NCB 2 N.B.F. Total Cost Other 1. Works 0.00 0.29 0.00 0.41 0.70 (0.00) (0.00) (0.00) (0.00) (0.00) 2. Goods 0.42 0.23 0.00 0.57 1.22 (0.00) (0.00) (0.00) (0.00) (0.00) 3. Services 0.00 0.00 1.22 1.56 2.78 (0.00) (0.00) (0.00) (0.00) (0.00) 4. Training/work shops 0.00 0.00 0.17 0.33 0.50 (0.00) (0.00) (0.00) (0.00) (0.00) 5. Operating Costs 0.00 1.02 0.00 0.58 1.60 (0.00) (0.00) (0.00) (0.00) (0.00) 6. Unallocated 0.00 0.00 0.00 0.00 0.00 (0.00) (0.00) (0.00) (0.00) (0.00) Total 0.42 1.54 1.39 3.45 6.80 (0.00) (0.00) (0.00) (0.00) (0.00) - 25 - Project Costs by Procurement Arrangements (Actual/Latest Estimate) (US$ million equivalent) 1 Procurement Method Expenditure Category ICB NCB 2 N.B.F. Total Cost Other 1. Works 0.00 0.97 0.00 0.00 0.97 (0.00) (0.00) (0.00) (0.00) (0.00) 2. Goods 0.74 0.00 0.53 0.29 1.56 (0.00) (0.00) (0.00) (0.00) (0.00) 3. Services 0.00 0.00 3.01 0.00 3.01 (0.00) (0.00) (0.00) (0.00) (0.00) 4. Training/work shops 0.00 0.00 0.53 0.00 0.53 (0.00) (0.00) (0.00) (0.00) (0.00) 5. Operating Costs 0.00 0.00 0.54 0.00 0.54 (0.00) (0.00) (0.00) (0.00) (0.00) 6. Unallocated 0.00 0.00 0.00 0.00 0.00 (0.00) (0.00) (0.00) (0.00) (0.00) Total 0.74 0.97 4.61 0.29 6.61 (0.00) (0.00) (0.00) (0.00) (0.00) 1/Figures in parenthesis are the amounts to be financed by the Bank Loan. All costs include contingencies. 2/Includes civil works and goods to be procured through national shopping, consulting services, services of contracted staff of the project management office, training, technical assistance services, and incremental operating costs related to (i) managing the project, and (ii) re-lending project funds to local government units. Project Financing by Component (in US$ million equivalent) Percentage of Appraisal Component Appraisal Estimate Actual/Latest Estimate Bank Govt. CoF. Bank Govt. CoF. Bank Govt. CoF. Sector Strategy and 0.56 1.46 260.7 Management Agricultural Support 0.59 2.46 416.9 Services Land Management and 1.58 0.80 50.6 Administration Change Process 4.08 1.89 46.3 Management - 26 - Annex 3. Economic Costs and Benefits See Section 4.3. During implementation a number of useful economic analyses were undertaken including on: l Costs and benefits of the liberalization of various commodities: An economic analysis was undertaken on the costs (losers) and benefits (winners) of deregulation of commodity marketing for thirteen commodities. Following ten district consultations (with farmers, traders and consumers) to solicit views on the proposed de-regulation, a draft review report was prepared including recommendations for each of the controlled commodities. The report findings were based on a fairly thorough process, reviewing the case for liberalization with recommendations being made on the way forward for each. The general conclusions from the study are that: (i) in most cases where regulations were put in place to encourage increased output, very little success has been achieved in terms of positive impact on promoting local production and price incentives for producers (borders are long and porous); (ii) costs of administering and enforcing protection and the costs of protection of the consumer in terms of higher prices, are generally not off-set by the benefits; (iii) import protection is not an efficient means of dealing with the problems that exist in the sector; and (iv) complementary intervention on ensuring fair trade practices and food safety are needed. The recommendations group the proposals into: immediate liberalization (bread, fruits and vegetables, pulses, pullets and day old chicks, chicken meat and eggs), regulation still required (livestock, read meat, wool and mohair), changes needed in the nature of the regulation (milk and dairy products), and no change recommended (sugar and hides and skins). The results were presented to a national workshop submitted to Cabinet for approval. The process of preparing the deregulation schedule has been long but useful in terms of building consensus for change and providing a useful learning experience to those associated staff who worked on the review within the Department of Policy and Planning in the MAFS, and the Department of Marketing in the MTICM. While the analysis would have been useful during preparation, it was appropriate to be undertaken during implementation, as one of the key focus areas was policy and capacity building on which this activity focused. As the reforms are yet to be implementation, an ex-post economic impact evaluation was not possible. l The economic impact of the 2002 subsidy program: A study of crop input subsidies was undertaken in 2002/3 in an effort the re-evaluate their rationale. The study reviewed the costs and benefits of past subsidy schemes, with a detailed review of the subsidy program implemented in 2002/03 in response to the food situation. The program provided a 50 percent ploughing, fertilizer and seed subsidy (100 percent subsidy upfront with 50 percent repayment at the end of the season). The program attempted to plough and plant every field in Lesotho. The cost of the subsidy program was as large as the budget for the MAFS. The review highlighted several failings of the 2002 scheme. The program was: untargeted and operated on a first come first serve basis which significantly increased the cost of the program with benefits less likely to be captured by the most needy farmers; fiscally unaffordable with the program being downsized significantly even after a 10 percent reallocation from other Ministries for the Government response, together with a freeze on special expenditures; it had an adverse private sector impact on fertilizer and seed distributors in the country and did not adequately include the private sector in the design of the program; promoted production on marginal lands which without subsidies was unprofitable, inhibiting diversification by perpetuating a particularly type of production practice; and continued dependency and expectations of farmers. The Government response turned out to be an almost implicit 100 percent subsidy (free ploughing, seeds and fertilizer) with extremely low recovery rates. Although crop production last year was slightly lower than the previous two years, it was only - 27 - marginally below the long term average. The review could have been more quantitative, however was useful in generating further debate on future subsidy programs. Subsequently a new subsidy policy was prepared and submitted to Cabinet, providing a valuable basis for future decisions on support to the sector. The policy's general principles are that subsidies will be transitional and cost effective and will be used to achieve poverty reduction, food security, and foster private sector driven agricultural development through improved efficiency and sustainability. l The economic implications of the new land act: An analysis of the economic implications of the proposed new land act was undertaken. The greatest impact of the policy will likely be on commercial and industrial development which is expected to occur in two main ways. First, by facilitating the development of an efficient land/property market; and second, by giving greater scope to foreign investors to acquire leases. Presently, the land/property market barely exists, not for its lack of potential, but because it is inhibited by the present legislation and land administration system. Removing these constraints would improve investment opportunities for property values, and by extension for the banking sector. Secondary impact of freeing up the urban/peri-urban property market would also be significant, not least being the realization of greater revenue from property rates and transfer duties. The land act will also facilitate urbanization in Lesotho and provides prospects for large increases in land related revenues. The agriculture sector will also benefit, but to a lesser extent, although it could have a significant impact on improving rangeland management. It was commendable that the analysis was undertaken during the preparation of the new Land Act to assist in guiding its preparation. While a cost-benefit analysis would have been useful, the full costs of implementation of the Act will only be known once the local government structures have been finalized, following, local government elections and reform. Nevertheless, not withstanding its usefulness, the analysis could have benefited from additional quantitative analysis. l The cost effectiveness of various implementation modalities of the UES: A detailed ex-ante cost-effectiveness analysis of using Farmer Resource Centres for the delivery of the UES was undertaken. The cost per hour of contact time was calculated under various scenarios including: no farmer resource centres or sub-centres (i.e. operating from district level); farmer resource centres but no sub-centres; and both farmer resource centres and sub-centres. The study findings indicated that it is not cost-effective for the extension service to operate only from the District headquarters, the relative cost effectiveness of sub-centre and farmer resource centres depend on travel conditions to the target population in individual districts. Hence a blended approach was suggested dependant on geographic location. The recurrent budget estimated for the scenarios were close to the annually budgeted amounts for district level expenditures suggesting that the establishment of resource centres and sub-centres were sustainable under prevailing Government budgets. The analysis directly contributed to the design and implementation of the UES, and hence was useful, again not only for the UES but for capacity building on policy analysis for the Department of Planning and Policy Analysis. The analysis was quantitatively rigorous, more so than the three studies listed above. l The quantification of the impact of restructuring plans on the Ministry of Agriculture budget: A detailed analysis of the impact of restructuring plans (aligning district agricultural offices to the needs of the District Economic Strategies, and privatization and divestiture). The analysis provided expected trends in the MAFS budget and its split between national and district level to determine if restructuring - 28 - was financially feasible. The analysis suggested that the savings of the implementation of the privatization/divestiture program could be used to restructure the district offices; costs of restructuring districts offset in part the savings generated by a concomitant restructuring of central headquarters; and costs of implementing the UES in districts was off-set by savings generated by a dismantling of existing structures. - 29 - Annex 4. Bank Inputs (a) Missions: Stage of Project Cycle No. of Persons and Specialty Performance Rating (e.g. 2 Economists, 1 FMS, etc.) Implementation Development Month/Year Count Specialty Progress Objective Pre-appraisal October 1997 14 Agricultural Economist (1), Agriculturist (1), Land Policy & Manag. (1), Budget and Costs (1), Sector Policy & Strategy (1), Financial Management (1), Decentralization Special. (1), Planning/Budgeting-DFID (2), Institutional Restructuring-DFID (2), IFAD Representative (1), EU Representative (1), AfDB Representative (1) Appraisal/Negotiation May 1998 17 Agricultural Economist (1), Agriculturist (1), Costing/Budgeting (1), Land Tenure (1), Financial Management (1), Legal Counsel (2), Procurement (2), Environment (2), Decentralization (2), Donor Representations (4) Supervision February 1999 9 Agriculturist (1) U S Land (1) Financial Management (1) Policy (1) Economist-DFID (1) Land Reform-GTZ (1) Privatization-DfDB (1) Policy/Institutions-EU (2) December 1999 8 Agriculturist (1) U S Financial Management (1) Economist (1) Policy/Institutions-DFID (1) Economic Policy-DFID (1) Land Reform-GTZ (1) Agricultural Services-GTZ (1) Policy-EU (1) July 2000 6 Economist (1) S S - 30 - Financial Management (1) Policy/Institutions-DFID (1) Land Reform-GTZ (1) Privatization-AfDB (1) Policy-EU (1) December 2000 6 Agriculturist (1) S S Privatization-AfDB (1) Policy/Institutions-DFID (1) Policy-EU (1) Land Reform-GTZ (1) Agricultural Services-GTZ (1) July 2001 7 Economist (1) S S Financial Management (1) Agriculturist (1) Land (1) Policy/Institutions-DFID (1) Land Reform-GTZ (1) Agricultural Services-GTZ (1) November 2001 6 Economist (1) S S Policy/Institutions-DFIF (1) Land Reform-GTZ (1) Agricultural Services-GTZ (1) Privatization-AfDB (1) Policy/Agr. Services-IFAD (1) July 2002 11 Economist (1) S S Agriculturist (1) Financial Management (1) Land (1) Environment (1) Policy/Institutions-DFID (1) Land/Decentralization-GTZ (1) Agricultural Services-GTZ (1) Agricultural Services-UNOPS (2) Privatization-AfDB (1) December 2002 7 Economist (1) U U Agriculturist (1) Financial Management (1) Environment (1) Policy/Institutions-DFID (1) Land/Decentralization-GTZ (1) Agricultural Services-GTZ (1) July 2003 8 Economist (1) U U Agriculturist (1) Land (1) Financial Management (1) Policy (1) Policy/Institutions-DFID (1) - 31 - Land/Decentralization-GTZ (1) Agricultural Services-GTZ (1) December 2003 3 Economist (1) U U Policy/Institutions - DFID (1) Financial Management (1) ICR November 2003 2 Economist (1) U U Institutions Specialist (1) (b) Staff: Stage of Project Cycle Actual/Latest Estimate No. Staff weeks US$ ('000) Pre-appraisal 385.5 1,094.5 Appraisal/Negotiation 13.4 100.4 Supervision 106.5 667.6 ICR 10.0 55.0 Total 515.4 1,917.5 - 32 - Annex 5. Ratings for Achievement of Objectives/Outputs of Components (H=High, SU=Substantial, M=Modest, N=Negligible, NA=Not Applicable) Rating Macro policies H SU M N NA Sector Policies H SU M N NA Physical H SU M N NA Financial H SU M N NA Institutional Development H SU M N NA Environmental H SU M N NA Social Poverty Reduction H SU M N NA Gender H SU M N NA Other (Please specify) H SU M N NA Private sector development H SU M N NA Public sector management H SU M N NA Other (Please specify) H SU M N NA - 33 - Annex 6. Ratings of Bank and Borrower Performance (HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HU=Highly Unsatisfactory) 6.1 Bank performance Rating Lending HS S U HU Supervision HS S U HU Overall HS S U HU 6.2 Borrower performance Rating Preparation HS S U HU Government implementation performance HS S U HU Implementation agency performance HS S U HU Overall HS S U HU - 34 - Annex 7. List of Supporting Documents Project Documents 1. Pre-Appraisal Aide-Mémoire (October 1997) 2. Development Credit Agreement (October 7, 1998) 3. Project Appraisal Document (May 28, 1998) 4. Supervision Reports (see Annex 4a) Background Studies/Reports 5. Sectoral Round Table Consultation ­ Agriculture: A Strategic Programme of Action, Ministry of Agriculture, Cooperatives and Marketing, March 1996. 6. Pathway Out of Poverty ­ An Action Plan for Lesotho, Government of Lesotho, Lesotho Council of NGOs, World Bank, USAID and EU, March 1996. 7. Lesotho ­ Development in a Challenging Environment: A Joint World Bank-African Development Bank Evaluation, Fareed M.A. Hassan, 2002. Project Studies/Reports 8. Agricultural Sector Strategy ­ Statement of Policy and Strategy in the Agricultural Sector, Ministry of Agriculture and Food Security, August 2003. 9. Subsidies in the Agricultural Sector ­ Policy Statement and Implementation Framework, Ministry of Agriculture and Food Security, May 2003. 10. The Liberalization of Agricultural Commodity Production and Marketing, Ministry of Industry, Trade and Marketing, Ministry of Agriculture, Cooperatives and Land Reclamation, Draft, February 13, 2003. 11. District Economic Strategy 2002-2007, Mokhotlong, Ministry of Agriculture, Cooperatives and Land Reclamation, 2002. 12. District Economic Strategy, Botha Bothe, Ministry of Agriculture, Cooperatives and Land Reclamation, April 2002. 13. Farming and Community Support Fund Guidelines, Ministry of Agriculture, Cooperatives and Land Reclamation, Revised, February 2002. 14. Guidelines for Action Learning Cycle, Ministry of Agriculture, Cooperatives and Land Reclamation, May 15, 2002. 15. Guidelines for Monitoring and Evaluating Agricultural and Related Activities, Ministry of Agriculture, Cooperatives and Land Reclamation, November 2001, revised September 2002. 16. Baseline Survey Report, Ministry of Agriculture, Cooperatives and Land Reclamation, 2001. 17. Report on Change Management Consultancy, Colin Risner, February 2002. 18. Strategic Planning Framework 2001-2004, Ministry of Agriculture, Cooperatives and Land Reclamation, July 2001. 19. Unified Extension System for Lesotho, Ministry of Agriculture, Cooperatives and Land Reclamation, March 2001. 20. APCBP Progress Reports, Ministry of Agriculture, Cooperatives and Land Reclamation. 21. Draft Land Legislation, Ministry of Local Government. - 35 - Annex 8: Operationalization of the Unified Extension System Table 2: Extension Training, Community Action Plans, and Farmer and Community Support Funds Projects by District District Extension Staff Number of CAPs CAPs under Number of FCSFs Trained in RCs/ EAs prepared implementation RCs/EAs were Implemented Action CAPs are under Learning implementation Cycle (%) Leribe 100 7 10 6 6 5 Mafeteng 100 7 17 8 5 11 Mokhotlong 90 6 13 11 6 14 Botha Bothe 100 6 22 11 6 25 Berea 100 6 22 8 6 15 Thaba Tseka 100 6 8 7 6 6 Maseru 100 7 13 10 5 8 Qacha's Nek 90 6 26 8 2 12 Mohale's Hoek 90 8 20 15 7 30 Quthing 100 7 11 11 7 14 Total 96 66 162 95 56 140 Table 3: Main type of Farmer and Community Support Fund Projects Grouping Number Percent Livestock 66 47 Fruit and vegetables 31 22 Tree nurseries 23 17 Conservation 11 8 Other 9 6 Total 140 100 The top six projects include: irrigation/vegetable production; poultry; tree nursery; veterinary services; small stock and conservation which accounts for about 80 percent of projects. - 36 - Annex 9: Land Reform Seq Date Activity Comments 1 28/12/1999 Date for the gazette establishing the Land The official date for the commencement of Policy Review Commission (LPRC) the Land Management and Administration component 2 January 2000 Consultations to initialize the review process and develop a work schedule and budget for the LPRC 3 Feb ­ Sep 2000 Nationwide Land Policy review process Consultations included 191 public gatherings including international study tours to Germany, and 253 oral and written submissions Malaysia and Uganda. 4 28/09/2000 Report of the LPRC was submitted 5 30/10/2000 LPRC's Report adopted as official Government Report published and distributed by working document LSPP 6 Feb 2001 Development of first draft land policy Local team supported by DFID consultants 7 25/03 ­ 03/04/2001 Study tour to Botswana by Land Policy Team 8 April 2001 Consultations in Mafeteng on adoption of the The outcome was a matrix detailing issues recommendations of the Land Policy Review for adoption and rationale thereof Commission 9 June ­July 2001 Development of Draft White Paper on Land Including lessons from Botswana and Policy 2nd Version Mafeteng consultations 10 29/08/2001 Presentation of Draft Land Policy at Informal Cabinet meeting 11 29/09/2001 Second Presentation at Informal Cabinet meeting 12 17/12/2001 Third Presentation at Informal Cabinet meeting Number of inputs from the meetings noted 13 July 2002 Land Policy vision developed Misunderstanding of Cabinet requirement of Land Law as priority rather than Land Policy 14 November 2002 Working session lead by Hon. Minster of Local The new matrix formed the Ministry's inputs Government to review the Matrix on issues to be in the development of the land legislation, adopted from the Land Policy Review supported and facilitated by GTZ Commission's recommendations. 15 Feb ­ Dec 2003 Land Code development covering Land Bill, Land Bill is currently with Parliamentary Land Acquisition and Compensation Bill, Counsel for tabling in Parliament soon, and revised Town and Country Planning Consultations on Land Acquisition Bill are Act ongoing and Town and Country Planning Act is being finalised 16 February ­ July 2003 Development of options for Resourcing and The role of Local Authorities within the Financing of the implementation of the new Land Local Government Act 1997 guiding the Act institutional arrangements and the Land Bill. 17 Feb ­ July 2003 Finalizing the National land Policy inline with The Policy will be adopted to reflect the final the Land Bill. version of the Land Act (i.e. provide for incorporation of all changes emanating from Parliament in the Land Act) 18 December 2003 Translation into Sesotho of LPRC's report - 37 - Annex 10: Institutional Restructuring Total Change in Ministry of Agriculture Structure: The actual number of staff employed by MOACLR has declined by about 35 percent. Table 4: Summary of Headquarters Restructuring Transfers from Ministry of Agriculture Co-operartives and Land Reclamation: Department of Youth Affairs to the Ministry of Gender, Youth and Sports Lesotho Agricultural College to the University Land Use Planning to Ministry of Local Government Marketing Department to the Ministry of Industry, Trade and Marketing Conservation and Land Reclamation to Ministry of Forestry and Land Reclamation Department of Co-operatives to Ministry of Industry, Trade and Marketing Table 5: Summary of Privatization and Divestiture Enterprise Status Privatization 1. Mejametalana Vegetable Farm Privatized (leased for twenty year period) 2. Tsalitlama Vegetable Farm Re-tendering for privatization 3. Molimo Nthuse Pony Trekking Center Re-tendering for privatization 4. Woolsheds Negotiations underway with Wool and Mohair Association for privatization 5. Mokhotlong and Quthing Sheep Studs Negotiations underway with Wool and Mohair Association for privatization 6. Feedlot To be privatized by Privatization Unit Liquidation 8. Thaba-Tseka National Stud Farm Liquidated 9. National Pig Breeding Farm Liquidated 10. Bots'abelo Dairy Farm Liquidated 11. Tsakholo Fish Farm Liquidated 12. Technical Operations Unit Partially divested 13. Forestry Sale Yards & Treatment Plants Partially divested 14. Poultry Plant Transferred to NUL, but the retransferred back to MAFS Woodlots Envisaged that transfer of woodlots to communities will commence in 2005 Restructuring 15. Veterinary Services Awaiting conclusion of Reform and Restructuring Review 16. Farmer Training Centers To be transferred to local authorities following local government elections Table 6: Changes to the Technical Operations Unit (TOU) over Project Lifetime 1998/9 2003/4 % Change Number of Tractors 200 59 -70 Number of Combine Harvesters 20 20 0 Total budget (Nominal) M7.2 million M5 million -30 Share of Ministry of Agriculture Budget 30-35 6-7 -25 - 38 - - 39 -