ASIAN DEVELOPMENT BANK TAR:OTH 37096

TECHNICAL ASSISTANCE

FOR

PROMOTING PARTNERSHIPS

TO ACCELERATE AGRICULTURE DEVELOPMENT AND POVERTY

REDUCTION IN THE GREATER MEKONG SUBREGION

June 2003

ABBREVIATIONS

ADB – CGIAR – Consultative Group on International Agriculture Research GMS – Greater Mekong Subregion TA – technical assistance WGA – working group on agriculture

NOTE

In this report, "$" refers to US dollars.

This Report was prepared by Masahiro Otsuka, Principal Project Economist,

Agriculture, Envrionment and Natural Resources Division, Mekong Department.

I. INTRODUCTION

1. The Asian Development Bank (ADB) provided small-scale technical assistance (TA)1 in April 2002 to facilitate consultations on regional issues in the agriculture sector in the Greater Mekong Subregion (GMS) and identify opportunities for increased cooperation among the countries in the GMS (Cambodia, Yunnan Province of People's Republic of China [PRC], Lao People's Democratic Republic, Myanmar, Thailand, and Viet Nam) in addressing such issues. The five countries and one province of the PRC actively participated in the activities of the small-scale TA. Under the TA, ADB also supported the subsequent dialogue and consultations among the GMS governments, the private sector, and the regional and international agricultural research organizations. Using these consultations, the GMS countries established a working group on agriculture (WGA) and agreed to implement the WGA's work program, which was endorsed at the first meeting of WGA in January 2003. At this meeting, the GMS governments also requested ADB to continue its support for implementing the work program. Broad understanding was reached with the GMS governments on the purpose, expected outputs, and implementation arrangements for the proposed TA. 2 The TA framework is in Appendix 1.

II. ISSUES

2. Despite the relatively strong economic performance and improved living conditions in the GMS countries over the last decade, 10–40% of the people still live below the poverty line. There are pockets of severe poverty and malnutrition, particularly in the rural areas. In view of the importance of the agriculture sector in the GMS, sustainable agricultural growth is crucial to reducing rural poverty and achieving the millennium development goals. Among the GMS countries, low and highly variable productivity in the agriculture sector is a particular concern, as it contributes directly to continued poverty and poor nutrition, and thus to increased mortality especially among infants. Low productivity also increases food prices in urban areas and depresses the demand for nonagriculture goods and services. In a report to the World Summit on Sustainable Development, the Consultative Group on International Agriculture Research (CGIAR) estimated that every dollar earned by farmers in low-income countries multiplies income in the whole economy by up to $2.60. Moreover, a strong agriculture economy will increase incentives to better protect and utilize agricultural resources in a sustainable manner. Thus, there are compelling reasons for actions to increase pro-poor agriculture development in the GMS.

3. However, several agriculture issues exist in the GMS. It is widely recognized that weak institutions, poorly developed land and factor markets, and regulatory barriers still constrain the sound development of agricultural input and output markets. Rural poverty exacerbates environmental pressures and leads to degraded forest resources. Limited access to productive resources often hampers the growth of potential agro-based industries. The GMS countries are seriously concerned that their abundant natural resources cannot be used effectively for agricultural development and overall economic growth. It is widely recognized that weaknesses in information sharing and cooperation to address policy, institutional, regulatory, and technical barriers to agriculture development increasingly constrain progress in sustainable agricultural growth in the region. The direct costs of such weaknesses include the following:

1 ADB. 2002. Technical Assistance for a Study on Subregional Issues in the Agriculture Sector in the Greater Mekong Subregion (GMS). Manila. 2 The TA first appeared in ADB Business Opportunities (Internet) on 8 February 2003. 2

(i) duplication of national efforts and external assistance in developing agricultural institutions and providing essential training, and in agricultural research and extension services; (ii) missed opportunities and suboptimal adoption of improved technology in the poorer GMS countries; (iii) suboptimal management and use of transborder resources in agriculture; (iv) weak operational framework to maintain adequate standards for food safety, the use of agrochemicals, biotechnology and genetically modified organisms, and agriculture education and research; and (v) missed opportunities in ensuring that the GMS concerns are recognized in the regional and international framework for the agriculture sector.

4. The WGA aims to address those issues and enhance regional cooperation in agriculture among the GMS countries. The terms of reference for the WGA are in Appendix 2. In this context, the WGA's initial work program includes proposals to promote GMS cooperation in (i) improving animal health in the livestock trade; (ii) effective use of agricultural biotechnology; (iii) upgrading sanitary and phytosanitary standards; (iv) improving agricultural extension and training for women farmers; (v) increasing use of information technology in empowering poor farmers; (vi) increasing returns through improved postharvest management of rice; (vii) sustainable soil nutrition management; (viii) study of demand for and supply of key agricultural products; and (ix) market research and business development. The proposed TA will support these initiatives based on the priority agreed upon by the GMS countries.

5. ADB will act as a catalyst in facilitating GMS cooperation in implementing the WGA's work program and transferring relevant knowledge and experience to the GMS countries. However, the responsibility for implementing the subregional activities of the WGA needs to be gradually transferred from ADB to sector institutions of the GMS countries. At present, ADB's financial and secretarial support is required for the WGA, and is requested by the GMS countries. The proposed TA will provide initial support and strengthen the momentum for subregional cooperation in agriculture so that subregional activities can become self-reliant and sustained with increased ownership by the GMS countries. The assistance will also help build partnerships, and identify and mobilize additional resources from the private sector and other external funding agencies to expand the WGA's activities.

III. THE TECHNICAL ASSISTANCE

A. Purpose and Output

6. The TA aims to help promote partnerships in accelerating agriculture development and poverty reduction in the GMS. It will contribute to increased regional cooperation to reduce barriers to sustainable agricultural growth and expand business opportunities in the agriculture sector.

7. The TA will cover the crop, livestock, fishery, and forestry subsectors. It will ensure that the benefits being generated under other GMS initiatives in the transport and energy sectors will enhance opportunities for the rural poor. The TA will (i) establish mechanisms for regular dialogue among agriculture experts in the GMS on research priorities and innovative opportunities for agricultural growth; (ii) establish agricultural information systems on GMS agriculture; (iii) provide opportunities to work on technical issues in the GMS cross-border movement of agricultural and agro-industrial products; (iv) support training workshops and seminars to share knowledge, information, and experience; (v) conduct high-level dialogue to 3 develop specific subregional strategies for dealing with GMS agriculture and rural development issues; (vi) organize subregional activities for joint applied research in agriculture and for dissemination of research results; and (vii) help increase business opportunities in the agriculture and agro-industry sectors.

B. Methodology and Key Activities

8. The methodologies and broad activities of the TA are to help WGA

(i) identify areas where increased subregional cooperation could accelerate sustainable agricultural growth and poverty reduction; (ii) formulate and implement the WGA's work programs for priority areas; (iii) carry out studies on specific subregional issues that form a common concern among the GMS countries; (iv) compile and refine information and data on agriculture and related activities in the GMS; (v) mobilize additional resources for the WGA's activities from the private sector and other external funding agencies involved in the agriculture sector in the GMS; and (vi) facilitate dialogue and organize meetings, workshops, seminars, and training on the priority issues in agriculture in the GMS.

9. The TA will be implemented over 2 years from June 2003 to June 2005. A comprehensive review of the progress and impact of the TA will be carried out during the second year when the need for further assistance to WGA is assessed.

10. Ownership of the WGA by the GMS countries is critical to the success of WGA activities. Close consultation between the GMS countries and ADB will be required to monitor the progress of TA implementation and resolve any operational issues that arise. The GMS countries and ADB need to jointly ensure that priority in the work program is established and activities implemented in a participatory manner. To maintain the strong sense of ownership of the WGA by the GMS countries, it is important to ensure that the GMS countries have a common understanding of the WGA and its activities, and to assure that the WGA activities can bring about tangible results. The TA is designed to move quickly in areas where there is broad agreement on the need for action, and where tangible results can be expected in a relatively short time.

11. To respond to the various needs and priorities of the GMS countries, the TA design has incorporated adequate flexibility and intensive supervision over the TA activities. Despite the need to mobilize an increasing amount of resources for sustainable agricultural growth, the available financial resources have been declining. Interested regional and international agricultural research institutions, and other external funding agencies will be invited to WGA meetings as appropriate so that active consultations for expanding WGA activities can be promoted.

C. Cost and Financing

12. The total cost of the proposed TA is estimated at $356,000 equivalent, comprising $202,000 in foreign exchange and $154,000 equivalent in local currency. ADB will finance $300,000 equivalent on a grant basis from ADB’s TA funding program. The GMS governments will finance the remaining $56,000 in kind by providing counterpart staff, field transport, meeting 4 and seminar facilities, and other administrative expenses. The details of the cost estimates and financing arrangements are in Appendix 3.

D. Implementation Arrangements

13. ADB will act as the Executing Agency for the TA. In 2002, the GMS countries nominated their WGA coordinators, who act as national focal points for implementing WGA activities under the small-scale TA (footnote 1). Under the proposed TA, the WGA coordinators will, in consultation with the concerned GMS national coordinators,3 continue to be responsible for coordinating the views and relevant activities in the agriculture sector in the respective countries. Effective partnerships need to be developed with farmers, agribusiness, traders, and buyers, as well as with national, regional and international agriculture policy and research institutions. For this purpose, the GMS governments have already established working groups or committees headed by the WGA coordinators. In this context, active collaboration between the CGIAR institutions and the WGA will be encouraged during the TA. Balanced gender representation is crucial in the WGA activities.

14. The consulting services required for the TA comprise (i) 7 person-months of international consultants4 in regional planning and team leadership (4 person-months), information management systems (2 person-months), and advice on (1 person-month); and (ii) 12 person-months of domestic consultants in various fields of agricultural research and analysis to carry out short-term studies. The consulting services will be provided on an individual basis. The TA consultants will be selected and engaged in accordance with ADB's Guidelines on the Use of Consultants and other arrangements satisfactory to ADB for engaging domestic consultants. Outline terms of reference for the consultants are in Appendix 4. The detailed work plan and schedule of the consultants will be determined in consultation with the respective countries in the GMS.

IV. THE PRESIDENT’S DECISION

15. The President, acting under the authority delegated by the Board, has approved the provision of technical assistance not exceeding the equivalent of $300,000 on a grant basis for Promoting Partnerships to Accelerate Agriculture Development and Poverty Reduction in the Greater Mekong Subregion, and hereby reports this action to the Board.

3 The national coordinators were appointed by all the GMS countries to act as national focal points for the overall GMS subregional activities. 4 International consultants will visit the concerned GMS countries and ADB headquarters as required. Appendix 1 5

TECHNICAL ASSISTANCE FRAMEWORK

Performance Monitoring Assumptions Design Summary Indicators/Targets Mechanisms and Risks

Goal .

Accelerate sustainable Average agricultural Household income growth of agriculture, growth rate of about 3% surveys and poverty thereby contributing to per annum in the GMS assessments for GMS poverty reduction in the countries Greater Mekong Poverty incidence, Subregion (GMS) currently in the range of Sector and economic 10–40% work of the Asian Development Bank (ADB)

Progress and impact reports

Purpose

Promote partnerships Dissemination of Dialogue with key Sense of ownership of to facilitate subregional information and stakeholders in the GMS, WGA activities among the cooperation in the knowledge on best including the GMS countries agriculture sector practices Consultative Group on International Agriculture Continued commitment to Coordinated assistance Research (CGIAR) regional cooperation in the in agriculture institutions, and the GMS development in the GMS private sector Continued support from Meetings and workshops external funding agencies organized for the GMS and CGIAR institutions for working group on agriculture development in agriculture (WGA) the GMS

ADB missions

Progress and impact reports

Outputs

Mechanisms for regular Formal adoption of WGA Dialogue with the key Timely provision of dialogue between GMS mechanisms in the GMS stakeholders in the GMS counterpart support by the agriculture experts to countries GMS countries discuss research WGA meetings and priorities and innovative WGA's annual meetings workshops Effective coordination of opportunities and quarterly seminars or national views and workshops for special ADB missions activities in the GMS studies countries Progress and impact reports

6 Appendix 1

Performance Monitoring Assumptions Design Summary Indicators/Targets Mechanisms and Risks

Agriculture information Subregional database on Dialogue with the key Effective coordination with systems for the GMS, agriculture and related stakeholders in the GMS the existing databases and including a web-based activities other mechanisms for searchable database WGA meetings and information dissemination WGA publications workshops

ADB missions

Progress and impact reports

Opportunities to work Seminars on cross- Dialogue with the key Continued commitment to on technical issues border technical issues stakeholders in the GMS regional collaboration in relating to GMS cross- on agriculture addressing cross-border border movements of WGA meetings and issues agricultural and agro- GMS cross-border workshops industrial goods and movements of goods and services services ADB missions

Progress and impact reports

Training workshops and Training seminars and Dialogue with the key Effective coordination with seminars to share workshops on the priority stakeholders in the GMS the ongoing training knowledge, information, GMS issues programs in the GMS and experience WGA meetings and workshops

ADB missions

Progress and impact reports

High-level dialogue to Specific strategies Dialogue with the key Political stability in the develop subregional agreed upon on the stakeholders in the GMS GMS countries strategies for dealing priority subregional with GMS agriculture agriculture and rural WGA meetings and and rural development development issues workshops issues Concrete actions based ADB missions on the agreed upon strategies Progress and impact reports

Joint applied WGA activities for joint Dialogue with the key Close interactions among researches organized researches stakeholders in the GMS the relevant agricultural in the GMS with the research institutions in the relevant national or Research results WGA meetings and GMS CGIAR institutions, and disseminated among the workshops dissemination of GMS countries research results ADB missions

Appendix 1 7

Performance Monitoring Assumptions Design Summary Indicators/Targets Mechanisms and Risks

Application of research Progress and impact results across borders reports

Increased business Activities of the GMS Dialogue with the key Favorable regional and opportunities in business forum and the stakeholders in the GMS international market agriculture and agro- private sector situation industries derived from the WGA activities Level of private WGA meetings and Political stability in the investment in the workshops GMS countries agriculture sector in the GMS ADB missions

Progress and impact reports

Key Activities

Planning and WGA's 2003 work Dialogue with the key Active participation of the implementing WGA program implemented stakeholders in the GMS GMS countries in planning work programs and implementing the WGA WGA's 2004 work WGA meetings and work program program prepared by workshops December 2003 ADB missions

Progress and impact reports

Implementing special Studies conducted on the Dialogue with the key Active participation of the studies on high-priority supply and demand for stakeholders in the GMS GMS countries in planning WGA concerns agricultural and agro- and implementing of based products in the WGA meetings and special studies GMS in 2003, and on workshops information needs in the agriculture sector in the ADB missions GMS in 2004 Progress and impact reports

Establishing agriculture Subregional database Dialogue with the key Timely provision of information systems for designed by December stakeholders in the GMS counterpart support the GMS 2003 and completed by March 2004 WGA meetings and workshops

ADB missions

Progress and impact reports

8 Appendix 1

Performance Monitoring Assumptions Design Summary Indicators/Targets Mechanisms and Risks

Catalyzing the Adequate resources Dialogue with the key Active support for WGA mobilization of mobilized for at least two stakeholders in the GMS activities among other additional resources for priority proposals by external funding agencies WGA activities October 2003 WGA meetings and workshops

ADB missions

Progress and impact reports

Working-level and high- Workshops attended by Dialogue with key Timely provision of level meetings and appropriate qualified stakeholders in the GMS counterpart support workshops to promote persons discussions on policy WGA meetings and and technical issues in workshops the GMS ADB missions

Progress and impact reports

Inputs

Consulting services 7 person-months of Dialogue with key Timely provision of international consultants stakeholders in the GMS counterpart support 12 person-months of domestic consultants WGA meetings and Meetings, workshops, workshops and seminars ADB missions Field surveys Progress and impact ADB Financing $300,000 reports TA grant

Government Financing $56,000 Counterpart support

Appendix 2 9

TERMS OF REFERENCE FOR THE WORKING GROUP ON AGRICULTURE

A. Introduction

1. During the Tenth Ministerial Conference of the Greater Mekong Subregion (GMS) in November 2001, the GMS countries reaffirmed the need to establish a working group on agriculture (WGA) to improve subregional cooperation in agriculture and to serve as an advisory body to the ministerial-level conferences on priority agriculture issues. The Asian Development Bank (ADB) provided technical assistance to facilitate the establishment of the WGA. In a workshop held in Vientiane in July 2002, the participants agreed on the establishment of the WGA, and on a general framework for initiating WGA activities and formulating a draft work program.

B. WGA Goal and Objectives

2. The WGA will be a forum for identifying and realizing opportunities to increase cooperation in agriculture among the GMS countries. Regional cooperation is critical in (i) reducing poverty in the GMS, (ii) promoting equitable economic growth, (iii) promoting the sustainable use of natural resources for agricultural growth, and (iv) ensuring that the benefits of GMS infrastructure development reach rural communities.

C. Membership

3. Membership in the WGA is initially limited to the GMS governments. Representatives of regional and international institutions can be invited to attend the WGA meetings as appropriate, depending on the issues to be discussed. The private sector and relevant nongovernment organizations will be consulted in planning and implementing WGA activities. The GMS countries designated their focal points for WGA activities, and established working groups or committees to coordinate national participation in the WGA.

D. Chairperson and Venue

4. The WGA members will determine the venues for WGA meetings. A representative of the host country will serve as the chairperson of the particular WGA meeting. The chairperson will provide the necessary technical and administrative support for the WGA activities. Initially, ADB will act as the WGA secretariat and help facilitate WGA deliberations. The WGA will meet at least once a year to discuss and agree on its annual work program.

E. Criteria for Selecting of WGA Proposals for Action

5. The criteria for selecting proposals to be taken up under the WGA work program follow:

(i) The WGA initiative addresses policy or technical issues in agriculture that have the potential to increase farmers' income-generating opportunities, and contribute to poverty reduction and sustainable economic growth in the GMS. (ii) The initiative will contribute to improving the sustainability of agriculture production in the GMS. (iii) The WGA initiative needs to benefit, and be requested by, two or more GMS countries. (iv) It must be clear that the issue and opportunity being addressed can be addressed more effectively at the regional than at the national level.

10 Appendix 2

F. Scope of Work and Priorities

6. The WGA will be responsible for establishing priorities for WGA activities, help mobilize resources to implement these studies, and facilitate implementation of the studies. The initial steps in developing concept papers for consideration follow

(i) Study options for GMS cooperation in training and educating agricultural technicians and professional staff. (ii) Develop an action plan for increased cooperation in research and development within the GMS, with focus on cooperation in biotechnology and technology- transfer mechanisms. (iii) Review options, and propose mechanisms, for effective information dissemination and improved coordination of support to agricultural research and development. (iv) Review options for GMS cooperation in developing market institutions to serve farmers and promote commercial investment in agricultural production and agro- industries, with focus on the linkage with the GMS flagship projects. (v) Identify linkages in agricultural production and trade among the GMS countries and highlight the opportunities for increased investment in subregional production networks. (vi) Evaluate and raise awareness of the potential impacts of an increasing demand for higher quality, food safety, and environmental standards and certification in food-importing countries. (vii) Develop strategies for GMS cooperation to address priority issues in agriculture. (viii) Review current initiatives and develop strategic options for cooperation in managing natural resources and biodiversity to ensure sustainable agriculture development. (ix) Undertake pilot studies on practical commercial opportunities and barriers to increased flows of information and goods and services in the agriculture sector. (x) Study the scope for increased cooperation in sharing research and technology relating to agricultural mechanization. (xi) Help develop a vision for enhancing poverty reduction in the GMS through sustainable agriculture development that reflects changing comparative advantages in agriculture and agro-industries in the GMS.

Appendix 3 11

COST ESTIMATES AND FINANCING PLAN ($)

Foreign Local Total Item Exchange Currency Cost

A. Asian Development Bank Financing 1. Consultants a. Remuneration and Per Diem i. International Consultants 168,000 0 168,000 ii. Domestic Consultants 0 36,000 36,000 b. International and Local Travela 12,000 10,000 22,000 c. Reports and Communications 2,000 0 2,000 2. Meetings and Seminarsb 0 36,000 36,000 3. Field Surveysc 0 4,000 4,000 4. Miscellaneous Administrative Costsd 0 5,000 5,000 5. Contingencies 20,000 7,000 27,000 Subtotal (A) 202,000 98,000 300,000

B. Government Financing 1. Remuneration and Per Diem of Counterpart Staff 0 36,000 36,000 2. Field Transport 0 3,000 3,000 3. Meeting and Seminar Facilities 0 12,000 12,000 4. Other Administrative Expenses 0 5,000 5,000 Subtotal (B) 0 56,000 56,000 Total 202,000 154,000 356,000 a Including costs for hiring vehicles and motorcycles, and domestic airfare. b Including costs for consultative meetings, seminars, and workshops. c Local subcontracts for surveys, including expenses for enumerators. d Including office utilities and supplies, and secretarial expenses. Source: Asian Development Bank estimates.

12 Appendix 4

OUTLINE TERMS OF REFERENCE FOR CONSULTAN TS

A. International Consultants

1. Regional Planning Specialist and Team Leader (4 person-months)

1. The regional planning specialist will act as team leader for the Technical Assistance (TA). The specialist must have (i) extensive experience in the Greater Mekong Subregion (GMS) countries; (ii) extensive experience in rural development planning and policy analysis; (iii) experience in private sector development; (iv) experience in addressing issues in agriculture in the GMS; (v) relevant postgraduate training; (vi) strong report writing, organizational, and leadership skills; and (vii) proficiency in writing and reading in English. The specialist will also organize and facilitate seminars and workshops of the Working Group on Agriculture (WGA).

2. The specialist will have the following tasks:

(i) Provide the GMS countries with technical support in WGA-related activities and discussions. (ii) Work with the GMS countries in preparing and reviewing the WGA's annual work programs. (iii) Help carry out close consultations and dialogue among the GMS countries and a wide range of key stakeholders, including the private sector, to develop and refine the WGA work programs. (iv) Help prepare detailed concept papers, proposals for priority initiatives, and background papers for WGA seminars and workshops. (v) Organize and conduct training workshops and seminars for the priority subregional issues, and help facilitate other WGA meetings and high-level dialogue. (vi) Advise on the design and implementation of selected priority WGA studies, including the supply of and demand for key agriculture and agro-based commodities in the GMS. (vii) Promote the WGA's joint applied researches with the relevant national or the Consultative Group on International Agricultural Research (CGIAR) institutions. (viii) In collaboration with the information management systems specialist, design and formulate subregional web-based information systems on GMS agriculture and related activities. (ix) Assist WGA in facilitating private business activities in the GMS agriculture and agro-industries sectors. (x) Submit progress and impact reports, and draft final and final reports on the TA activities.

2. Information Management Systems Specialist (2 person-months)

3. The information management systems specialist must have (i) practical and verifiable experience in designing and maintaining information management systems and web sites; (ii) regional and international experience in developing agricultural information networks in the GMS; (iii) relevant tertiary qualifications in developing information systems; and (iv) good English writing and reading skills. Ideally, the specialist should have (i) experience in working in GMS countries, (ii) experience in working with regional and international agricultural research institutions, (iii) experience in developing information systems that require cooperation between Appendix 4 13 several countries and demonstrated experience in implementing consultative processes, and (iv) good report writing and organizational skills.

4. The specialist will undertake the following tasks:

(i) In collaboration with the team leader, review the existing data and information systems, and consult closely with the GMS countries and a wide range of stakeholders, including the private sector, to identify issues and priorities in establishing agricultural information systems. (ii) Develop for the GMS a web-based subregional agricultural information system that includes information on (a) subregional initiatives in the GMS by international agriculture and external organizations, (b) institutional and individual expertise in the agriculture sector in the GMS, and (c) agricultural research and extension materials on agriculture development. (iii) Provide the GMS countries technical guidance in developing and improving their national agricultural information systems. (iv) Submit a technical report on the proposed agriculture information systems.

3. Agricultural Policy Advisors (1 person-month)

5. Regionally renowned experts will be recruited to (i) act as resource persons in the training seminars and workshops organized under the TA, and (ii) advise on the design and conduct of specific studies to be carried out under the TA. The needed expertise will depend on the priorities identified by the GMS countries. The experts will be drawn from a pool of individuals with high-level practical experience in agricultural policy analysis, rural development, agricultural research, and agribusiness development.

B. Domestic Consultants

6. Domestic consultants in the GMS countries will be recruited to undertake national studies that will feed into applied subregional studies and research proposals. They will work with the WGA focal points and international consultants to design studies, and will take primary responsibility for implementing the national subcomponents of subregional activities. The required expertise will depend on the priority studies identified. However, given the importance and nature of the studies involved, domestic consultants should be nationally renowned as experts in their fields, and have extensive experience working in agriculture and agro-industries in the GMS and in regional cooperation programs. They should have sufficient operational skills in the English language.