People's Republic of China Southwest Anhui Integrated Agricultural
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PROJECT EVALUATION People’s Republic of China Southwest Anhui Integrated Agricultural Development Project Completion Evaluation September 2006 Via del Serafico 107 - 00142 Rome, Italy Tel: +39 06 54592048 - Fax: +39 06 54593048 E-mail: [email protected] Web: www.ifad.org/evaluation Document of the International Fund for Agricultural Development People’s Republic of China Southwest Anhui Integrated Agricultural Development Project Completion Evaluation September 2006 Report No. 1785-CN Photo on cover page: People’s Republic of China Farmers dispossessed by the creation of reservoirs have been trained in fish farming as an alternative means of livelihood. Photo by Roger Norman People’s Republic of China Southwest Anhui Integrated Agricultural Development Project Loan No. 451-CH Completion Evaluation Table of Contents Exchange Rate iii Weights and Measures iii Abbreviations and Acronyms iii Map v Agreement at Completion Point vii Executive Summary xi I. INTRODUCTION 1 A. Background of the Evaluation 1 B. Approach and Methodology 2 II. MAIN DESIGN FEATURES 2 A. Project Rationale and Strategy 3 B. Project Area and Target Group 3 C. Goals, Objectives and Components 4 D. Implementation Partners and Arrangements 5 E. Major Changes in Policy and Institutions during Implementation 5 F. Design Changes during Implementation 6 III. SUMMARY IMPLEMENTATION RESULTS 6 IV. PERFORMANCE OF THE PROJECT 10 A. Relevance of Objectives 10 B. Effectiveness 11 C. Efficiency 12 V. IMPACT ON RURAL POVERTY 14 A. Impact on Physical and Financial Assets 14 B. Impact on Human Assets 16 C. Impact on Social Capital 17 D. Impact on Food Security 17 E. Impact on the Environment and Communal Resource Base 19 F. Impact on Institutions, Policies and the Regulatory Framework 20 G. Impacts on Gender 20 H. Sustainability 22 I. Innovation and Replication 23 J. Overall Impact Assessment 24 VI. PERFORMANCE OF PARTNERS 24 A. Performance of IFAD 24 B. Performance of the Cooperating Institution 24 C. Performance of the Government and its Agencies 25 D. Performance of Non-Governmental and Community Based-Organizations 25 E. Performance of the Cofinancier 26 VII. OVERALL ASSESSMENT AND CONCLUSIONS 26 VIII. RECOMMENDATIONS 27 A. Strategic Issues 27 B. Agricultural Development 28 C. Environmental Issues 28 D. Women’s Development 28 E. Credit Operations 29 F. Management Issues 29 TABLES 1. Investment by Component 5 2. Principal Physical Achievements 7 3. Summary of Loan Details during Project Cycle 9 4. Estimated Number of Beneficiary Households by Component 14 5. Percentage Increases in Per Capita Income and Grain Availability by County, 1997-2003 15 6. Movements between Poverty Categories 18 7. Women’s Share of Loans 21 8. Project Performance and Impact Ratings 27 APPENDICES 1. Implementation Results (tables) 31 2. Credit Management under the SWAIADP 37 3. Agricultural Extension Services in the Project Area 43 ii Exchange Rate Local Currency = Yuan (Y) USD 1.00 = Y8.2 (July 2005) Yuan = USD 0.12 (July 2005) Weights and Measures 1 hectare = 15 mu 1 mu = 0.066 ha 1 kg = 2 jin 1 jin = 0.5 kg Abbreviations and Acronyms ABC Agricultural Bank of China ACWF All-China Women’s Federation AWPB Annual Work Plan and Budget GDP Gross Domestic Product FCSU Finance and Credit Support Unit IFI International Financial Institution IGA Income Generating Activity LGOPA State Council Leading Group Office for Poverty Alleviation and Development M&E Monitoring and Evaluation MOA Ministry of Agriculture MOF Ministry of Finance PCR Project Completion Report PBC People’s Bank of China NRDC National Development and Reform Commission PLG Project Leading Group PMO Project Management Office PRA Participatory Rural Appraisal RCC Rural Credit Cooperative RCF Revolving Credit Fund SAR Staff Appraisal Report SOCB State-Owned Commercial Bank SWAIADP Southwest Anhui Integrated Agricultural Development Project TVEs Township and Village Enterprises UNOPS United Nations Office for Project Services VDP Village Development Plan VIG Village Implementation Group WFP World Food Programme iii iv v vi People’s Republic of China Southwest Anhui Integrated Agricultural Development Project Completion Evaluation Agreement at Completion Point I. INTRODUCTION 1. The Southwest Anhui Integrated Agricultural Development Project (SWAIADP) co-funded by the Government of China, the International Fund for Agricultural Development (IFAD) and World Food Programme (WFP), was implemented between December 1997 and June 2004 and aimed at reducing the chronic food shortages among half a million people living in the poorest mountainous areas of Anhui province. IFAD’s Office of Evaluation (OE) undertook an evaluation of SWAIADP between May and September 2005, with fieldwork conducted between 23 June and 15 July 2005. 2. For this completion evaluation a Core Learning Partnership (CLP) was set up, consisting of the people and institutions that would have a stake in the recommendations of the evaluation and/or responsibilities and decisional power to implement them. This CLP has provided overall guidance to the evaluation team at different stages. In particular, it was invited to review and comment on the proposed evaluation process and methodology, participate in key discussions, as well as review and comment on various outputs from the evaluation such as the approach paper and draft evaluation report. The CLP consisted of representatives of the Ministry of Finance, the Anhui province Commission of Agriculture, the Project Management Offices (PMO) of Jinzhai, Huoshan, Yuexi, Qianshan, Taihu counties, WFP, UNOPS, and IFAD’s Division for Asia and the Pacific. 3. This Agreement at Completion Point is the final step in the evaluation process, and defines the main findings and recommendations drawn from the evaluation, agreed upon by the Ministry of Finance, the Commission of Agriculture of Anhui province and IFAD’s Division for Asia and the Pacific. OE has facilitated the process leading up to the conclusion of this agreement. II. MAIN EVALUATION FINDINGS 4. The SWAIADP was a successful project: well-designed, well-managed and effectively implemented. It has been of great benefit to the project area as a whole, and to the vast majority of the households living within it. The keys to its success were the commitment and efficiency of government departments at all levels, and the very good lines of communication, official and unofficial, combined with true partnerships and a strong sense of ownership by all, including the beneficiaries. Moreover, the design of SWAIADP was highly relevant, partly because the idea for the project and its chief elements were home-grown and also because the formulation was carried out largely by local consultants with a close understanding of how things function at the various levels of the administration. A. Strategic Issues 5. Reaching the poor. The project targeted the rural poor geographically, as it was carried out in the 34 poorest townships of the five poorest counties of Anhui province. Project assistance, particularly credit, was not directed towards the poorest households in the first place. Instead, an approach was used where active, progressive, and often better-off farmers were directly involved in project activities to serve as models for poorer households. Because this approach was used in a relatively homogeneous area as far as poverty is concerned, with relatively few inequalities between households, also because the poorer households were consulted for the preparation of the Village vii Development Plans through Participatory Rural Appraisal techniques, and, finally, because measures were put into place to ensure that poorer households had access to project services (food-for-training, collateral-free loans…) the SWAIADP was gradually capable of reaching the poorer households. 6. Learning and replication. IFAD’s initiative in attempting to mainstream loan funds through the existing network of Rural Credit Cooperatives (RCC), instead of utilizing government bureaus, has been a significant contribution to the development and sustainability of the rural finance sector in China, clearly recognized by the Ministry of Finance as well as the provincial finance bureaus. While the PMOs bore the credit risk and kept a final say in the approval of loans, the RCCs in the project area have enhanced their loan management capacity and enlarged the scope of their activities to include the delivery of a microfinance service to poor households. Later IFAD-funded projects such as the ongoing Rural Finance Programme have learned from the SWAIADP experience, putting even more emphasis on strengthening RCC capacities and enabling RCCs to independently provide microfinance services under a poverty reduction programme. B. Operational Issues 7. Market risks. In some townships there are indications that market saturation of raw silk and tea may pose a risk to the economic sustainability of project interventions. The Government is aware of this risk, and has prepared certain measures to safeguard the cultivators. Some townships are planning to re-direct the focus of loans away from these two commodities. 8. Agricultural extension. With the increasing cultivation of various new cash crops in the project area and the need for continued diversification, greater resources and capacities are required for extension services. The approach to extension has also been changing rapidly to reflect the needs and priorities of farmers operating within a market economy. 9. Training for women. Training programmes for women were popular