The World Bank 1818 H Street N.W. (202) 477-1234 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Washington, D.C. 20433 Cable Address: INTBAFRAD INTERNATIONAL DEVELOPMENT ASSOCIATION U.S.A. Cable Address: INDEVAS OFFICIAL DOCUMENTS _,2018 Hon. Matia Kasaija Minister of Finance, Planning and Economic Development Ministry of Finance, Planning and Economic Development P. 0. Box 8147 Kampala Uganda Honorable Kasaija: Re: Republic of Uganda: Credit Number 5611-UG (Agriculture Cluster Development Project) We refer to the Financing Agreement ("Agreement") between the Republic of Uganda ("Recipient") and the International Development Association ("Association"), dated September 26, 2016, for the above-referenced Project. We also refer to your letter dated May 21, 2018, requesting changes to the Agreement. We are pleased to inform you that the Association agrees to your request and hereby proposes to amend the Agreement as follows: 1. Schedule 1 is deleted and replaced with the one in Annex I to this letter. 2. Sections I. B. 2 (Annual Work Plan and Budget), I. D. (Subprojects under the Project) and I. E. (Matching Grants under the Project) are amended as follows: - All references to "Part 3(b)" should read "Part 2(c)"; and - All references to "Part 3(c)(ii)" should read "Part 2(b)". 3. Definition No. 27 is amended as follows: - The reference to Part 3(c)(ii) should read Part 2(b) 4. Definition No. 48 is amended to read as follows: - The reference to "Part 3(b)" should read "Part 2(c)"; and - The reference to "Part 3(c)(ii)" should read "Part 2(b)". 5. The table in Section IV.A.2 is deleted and replaced with the on one in Annex II to this letter. All provisions of the Agreement which are not expressly modified in accordance with this letter remain unchanged. Please indicate your agreement with the foregoing, by countersigning and dating the two original copies of this letter and returning one countersigned original copy to the Association. Upon receipt by the Association of said original countersigned by the authorized representative of the Recipient and dated, this amendment shall become effective as of the date of countersignature of this letter. Very truly yours, INTERNATIO EV OPMENT SOCIATION C. Felip Ja 11o Country Director for Eritrea, Ke a, Rwanda and Uganda Africa Region AGREED: REPUBLIC OF(UGANDA By: , A obrized kepresentative Name: frA A VASY Title:/IA 6' Date: Attachments: Annexes I and II Annex I of II SCHEDULE 1 Project Description The objective of the Project is to raise on-farm productivity, production, and marketable volumes of selected agricultural commodities in specified geographic clusters. The Project consists of the following parts: Part 1: Support for Intensification of On-Farm Production Carrying out of a program of activities designed to support intensification of on-farm production of Targeted Commodities by Eligible Farmers in Targeted Clusters, in particular: (a) Scaling-up provision of eVouchers to Eligible Farmers with a view to subsidizing the cost of Eligible Inputs for production and storage of Targeted Commodities. (b) Scaling-up provision of Training to Eligible Farmers and farmer organizations on effective and efficient use of Eligible Inputs. (c) Supporting development of agricultural input markets for, inter alia, Targeted Commodities, through: (i) strengthening the capacities of accredited input suppliers to coordinate, operate effectively and scale-up supply of, inter alia, Eligible Inputs through provision of Training; and (ii) promoting and facilitating the bulking of demand for inputs of fertilizer and agro-chemical, and seed supply. Part 2: Value Addition and Market Access Carrying out of a program of activities designed to improve market linkages, market access, post-harvest handling, storage, and value addition including, inter alia, capacity of farmers, producer organizations and traders' networks, and measures to eliminate bottlenecks and trouble spots in rural community access roads in the Targeted Clusters, in particular: (a) Supporting institutional and capacity development of producer organizations and value chain actors through: (i) strengthening the capacities of the area-based commodity cooperative enterprises, rural producer organizations and farmers' co-operatives to manage their businesses effectively and to scale up their operations; (ii) strengthening the capacities of apex farmers' associations at the national levels. (b) Provision of Matching Grants to Beneficiaries for developing facilities for post- harvest handling, grading, bulking, warehousing, storing and processing of farm produce for value-addition. (c) Carrying out of specific development projects to construct and rehabilitate priority rural farm access/feeder roads with a view to removing bottlenecks ("Subprojects"). W__ C Part 3: Policy, Regulatory and Institutional Support (a) Carrying out of a program of actions designed to strengthen the policy and regulatory functions of MAAIF relating to agricultural input and output markets, in particular: (i) Undertaking comprehensive reviews of regulatory frameworks, in particular: (A) harmonizing the Agricultural Seeds and Plant Act and associated regulations with key EAC Instruments; (B) developing guidelines and procedures for inspection and certification of vegetative planting materials; and (C) developing plant variety protection regulations with a view to promoting private investment in genetic improvement of crops (including the Targeted Commodities); (ii) strengthening the capacity of MAAIF for collection, analysis and provision of practical and timely agricultural input market information to accredited suppliers aimed at, inter alia, enabling suppliers of Eligible Inputs to better anticipate and respond to farmers' needs; (iii) Strengthening the capacity of the Crop Inspection and Certification Department for, among others: (A) the effective review and/or implementation of: the Plant Protection Act; the Agricultural Seeds and Plant Act; the Agricultural Chemical (Controls) Act; and the Plant Variety Protection Act, respectively, and related regulations; (B) developing regulations on quality assurance and certification for planting materials, including pest and disease control, and plant quarantine; and (C) developing standards on manufacturing, processing, registration, quality assurance, handling and safe use of agro-chemicals and safe labor-saving technologies; (iv) Strengthening the capacity of the Phytosanitary and Quarantine Service for enforcing regulations on quarantined pests and diseases, as well as quality assurance of seed imports and exports, all in accordance with national, regional and international guidelines and protocols; and (v) Strengthening the capacity of the National Seed Certification Service with a view to: (A) facilitating its accreditation with ISTA and OECD, respectively; and (B) facilitating provision of training, implementation and enforcement of seed certification at the national level. (b) Carrying out a program of actions designed to support the preparation for agricultural water management investment, in particular; (i) Undertaking feasibility studies and preparation of comprehensive designs for development of priority lowland rice irrigation schemes (including, inter alia, proposed investments in irrigation and drainage infrastructure, internal and access roads of existing lowland rice fields for up to 6,400 hectares, associated detailed engineering designs, tender documents and appropriate environmental and social due diligence), and catchment management plans for selected Targeted Clusters; (ii) Strengthening the capacities of existing water user groups in priority lowland rice irrigation schemes (including, registration thereof), all through the provision of technical assistance and Training; and (iii) Carrying out of feasibility studies and preparation of appropriate designs for integrated soil and water conservation and management measures (including, inter alia, watershed protection, climate-smart flood regulation, community wetland management, sediment control, drainage and other soil conservation measures) in irrigation areas and associated buffer zones in Targeted Clusters. (iv) Carrying out feasibility studies and development of irrigation models for small-holder irrigated coffee. (c) Supporting investments, including ICT equipment and human resources required to strengthen the capacity of the Agricultural Statistics Unit (ASU) in MAAIF, in particular: developing the system for collecting data at the national and district levels, analyses and dissemination; and supporting efforts to link ASU's data with the Uganda Bureau of Statistics. (d) Supporting the management of Fall Army Worm (FAW) through: surveillance and mapping of FAW infestation, research on integrated pest management of FAW (including the search for natural enemies for biological control purpose), testing of various agro- chemicals for controlling FAW, and purchase and distribution of chemicals to combat FAW during outbreaks. Part 4: Coordination, Project Management, and ICT Platforms (a) Supporting the establishment and operationalization of the Project Coordination Unit within MAAIF, the National Project Steering Committee, the Cluster Multi-Stakeholder Platforms, and overall coordination of implementation, all through the provision of technical assistance, Training, Operating Costs and acquisition of goods for the purpose. (b) Supporting the undertaking of project monitoring and evaluation and impact evaluation through: the collection of data, analysis and reporting on project implementation performance; and supporting impact evaluation studies to evaluate the transformational impact of the Project and inform policy decision-making process. (c) Supporting investments for scaling-up development and implementation of an ICT- based agriculture information platform in MAAIF, including, inter alia: (i) supply and installation of appropriate ICT, including, hardware/infrastructure, software, internet connectivity, local area networks, voice communication systems, mobile telephone technology support, among others; (ii) provision of Training on information technology skills to users; and (iii) provision of Operating Costs for the purpose. Annex II of II Percentage of Amount of the Expenditures to be Financing Allocated Financed Category (expressed in SDR) (inclusive of Taxes) (1) eVouchers under Part 1(a) and 59,750,000 100% Training under Parts 1(b) and I (c)(i) of the Project (2) Goods, non-consulting services, 15,450,000 100% consultants' services, Training and Operating Costs under Parts 1(c)(ii), 2 (a), 3 and 4 of the Project (3) Works, consultants' services 11,350,000 100% and Operating Costs under Part 2(c) of the Project (4) Matching Grants under Part 19,850,000 100% 2(b) (ii) of the Project TOTAL AMOUNT 106,400,000