National Sericulture Report No: ; Type: Report/Evaluation Memorandum ; Country: India; Region: South Asia; Sector: Other Agriculture; Major Sector: Agriculture; ProjectID: P009996 The India National Sericulture project, supported by Loan 3065-IN and Credit 2022-IN for US$30 million and US$147 million equivalent respectively, was approved in FY89 and closed on schedule in FY97. Cofinancing equivalent to US$25 million was provided by the Swiss Development Corporation (SDC). A total of US$43.8 million was canceled from the credit and US$7.6 million of SDC cofinancing was not disbursed. The Implementation Completion Report (ICR) was prepared for the South Asia Regional Office by the FAO Cooperative Programme. Borrower comments are attached as an annex. The project files indicate that the ICR reflects the cofinancier's concerns. The project aimed to assist sericulture development in India by supporting increases in raw silk production, improvements in raw silk quality and support services to the industry, and expanded private sector involvement in silk production. As appraised, the project was complex. It contained 17 components and covered India's five major silk- producing states, with pilot actions in 12 additional states. In particular, the project sought to raise raw silk production, with a significant share coming from improved races of silkworms. The project also sought to enhance the role of women in sericulture, expand the involvement of non-governmental organizations (NGOs), and evaluate the project's impacts through bench-mark surveys and beneficiary assessments. The project failed to achieve its main objectives. Annual production of raw silk was expected to increase by 7,920 tons (from 9,220 tons to 17,140 tons) by 1996, with 4,170 tons directly attributable to the project. Actual production increased by 3,499 tons, below the estimate for the without-project scenario provided at appraisal. Silk production from improved silkworm races increased from 150 to 400 tons per year, below the targeted increase of 1,000 tons. Some improvements in basic seed production and in extension and training were achieved, but at considerable expense. The research component produced few improved mulberry varieties or silkworm races, and the 12 state pilot actions largely failed. The project successfully promoted the role of women in sericulture including training, improved access to institutional credit, participation in marketing, and deployment of female field staff. Large numbers of women benefited, but fewer than expected at appraisal and only a small proportion of the women in the project area. Numerous NGOs were involved in the project. They successfully supported group formation and training in self-help, but their performance of technical activities was weak. Beneficiary assessments were completed, but the bench-mark surveys were not, making assessment of actual progress achieved under the project problematic. Monitoring and evaluation of key production factors was unsatisfactory and data in the ICR are based on the results of an end of project workshop and field observations. Child labor emerged as an issue during implementation and some progress was made in tackling it in a few states, but the problem was not addressed comprehensively. The main reasons for weak performance were the steady decline in the price of silk that began shortly after project approval, a serious outbreak of a disease of silkworms, and the inability of the project to adjust to circumstances radically different from those expected at appraisal. The project should have been restructured at mid-term, or earlier, but the opportunity was not taken despite an extensive mid-term review. In addition, the project suffered from a weak appraisal and several components, including the quality improvement and pilot states components, failed for that reason. The project was prepared with the experience of a prior sericulture project (Kamataka Sericulture Project, Credit 1034-IN) in hand, but not all the lessons of the earlier project were reflected in the project's design. The foundation of the project's quantitative targets was weak and the structure of the project was complex, attempting to do too many things in too many places. The loan and credit agreements contain 68 covenants, many of which seek to compensate for weaknesses in preparation or lack of ownership by the borrower. The ICR rates project performance as satisfactory, institutional development as substantial, sustainability as likely, and Bank performance as satisfactory. OED disagrees with these ratings. OED rates project outcome as unsatisfactory because it failed to achieve its main relevant objectives. The revised economic rate of return of 14 percent (down from an appraisal estimate of 3 2 percent) is not well founded. OED rates institutional development as modest. While commercial seed production has been expanded, basic seed farms have capacity utilization problems, and technical service centers and extension have been little improved. OED rates sustainability as uncertain. Expected silk prices are considered unlikely to elicit the expansion of high quality raw silk demanded by the industry, and a competitive industry structure is not yet in place. The number of staff in state agencies remains excessive, straining public sector resources. Bank performance is rated as unsatisfactory because of low project quality at entry, the missed opportunity offered by the mid-term review to restructure the project, and supervision which provided sound recommendations but failed to induce necessary borrower actions. The first main lesson of the project is that quality at entry matters. Overly complex project designs and poorly grounded project objectives lower the likelihood of project success from the outset. Second, when the basic assumptions underlying a project's design are shown to be flawed during implementation the project should be restructured. The opportunity offered by a mid-term review to adapt a project to a changed project environment should be grasped. The quality of the ICR is unsatisfactory. The main conclusions are not well supported by the evidence presented and the conceptual basis for the ICR's ratings is incorrect. Performance should have been rated against the project's main relevant objectives, with and without the project. An audit is planned.