THE KAIW DEVELOPMENT lDKOJECT FINAL EVALUATION (Project No. 367-0155) Prcpad for: USAID/Nepal Under the AgrkuOIure & Food Sysletns IQC wifh I~~ternatiorralScience & Technology I~rstitute,Inc. by: John Mellor Associates, Inc. Washington, D.C. and Institute for Integrated Development Studies Kathmandu, Nepal CONTENTS List of Tables iii List of Figures v Project Identification Data vii Executive Summary ix Acknowledgement XXV Acronyms xxvii Rapti Zone Project Objectives Strategy and Approach Implementation History Method of Evaluation Project Output Areas Farm and Forest Productivity Local Group and Private Fnterprise Capacity District Institutional Development Pmject Input Areas HMG Line Agencies Project Coordination Office Technical Assistance Evaluations and Special Studies Training Integrated Activities Local Involvement Policy Project Design 6. Budget History 7. Conclusion and Recommendations Institutional Development Local Involvement Forestry and Soil Conservation Agriculture Other Issues Annaxes Annex 1 - Evaluation Scope of Work Annex 2 -- Evaluation Team Annex 3 - People Contacted Annex 4 - Organization (Planning and Monitoring Pmsof RDP) Annex 5 - Tables 1-27: Am, Production and Yield of Cerds and Cash Crops Annex 6 - Maps: Physiographic Region LIST OF TABLES 2-1. Increase in Production of Major Field Crops, Terai and Dang District, 1976177 to 1990191 2-2. Increase in Production of Major Field Crops, Hills, Rapti and Salyan District, 1976177 to 1990191 2-3. Proportion of Households Achieving Food Self-sufficiency, 1989190 and 1992193 2-4. Cash Income by Sources, 1989190 to 1993,193 2-5. Percent Increase and Cash Income by Source, 1989190 to 1992193 2-6. Crop Cut Yield and Net Income, Thapagaon and Chakhaura 2-7. Yield of Rice, Maize and Wheat, Nepal, Rapti Zone and Five Districts 1987188 to 1991192 2-8. Yield of Cash Crops, Nepal, Rapti Zone and Five Districts, 1987188 to 1991192 2-9. Land Use, Nepal, Rapti Zone and Districts, 1986 2-10. Growth Rates, Commercial Production and Cash Sales, Vegetables, Fruit, and Cash Crops, Rapti Zone, 19894993 3-1 1. Agriculture Expenditure and USAID Contribution, 1987188-1993194 73 3-12. DevresfNew Era/ Winrock Technical Assistance Level. of Effort, l99O/91- 1994195 79 3-13. Agricultural Development Bank Appropriate Technology and Private Enterprise Development Center, Dang , Achievement and Impact, 1989- 1994 82 6-14. Cumulative Rapti Development Project Financial Status, 1994 104 6-15.Summary of Rapti Zone Rural Area Development Project Expenditures, Phase I 105 LIST OF FIOURES Figure 2-1. Map Showing the Gend Spread of Forestry and Soil and Water Conservation Activities in Rapti Zone. Figure 2-2. Map Showing the General Spread of Agriculture, Horticulture and Livestock Activities in Rapti Zone. Figure 2-3. Map of Rapti Zone Showing Road Network. PROJECT IDENTIFICATION DATA aunhy : Nepal Project lltle : Rapti Development Project Project Ndr : 367-0155 a. First Project Agreement : July 13, 1987 b. Project Assistance Completion Data : July 30, 1995 c, Last Obligation Made : April 27, 1993 d. Total Obligation Made : 18.2mlllion Original Project Funding a. AID Bilateral Funding : $18.8million b. Peace Corps : 1.9 million c. His Majesty's Government (HMG) of Nepal : 8.6 million Revised Project Funding (under SLUE Program) a. Date of Agreement : April 21, 1992 b. AID Bilateral Funding : $47.5million($18.8mRapti) c. Peace Corps : 1.9 million d. HMG Nepal : 16.9 million e. PACD : April 31,2802 Mode of Implementation: a. Ministry of Local Development (MLD) is the lead HMO agency coordinating the work of GON implementing agencies through Rapti Project Coordinator's Office (PCO) in Tulsipur for all project activities. b. USAIDIN'S Agriculture and Rural Development Office is directly responsible for managing the project within the AID Mission. c. The Rapti Development Project (RDP) is implemented in the five districts of the Rapti Zone by the district offices of HMG with the technical support provided by USAIDIN'S contractors and grantee. Technical assistance are provided by DevresINew Era, No-Frills; CARElNepal and National Cooperative Business Association (NCBA). Project Designers: IJSAIDlNepal; HMG, and consultants (PADCO, Devres, No-Frills, CAREINepal, NCBA, Sheladia Ibsociates, and Tribhuvan University). Responsible Mission OBcials: a. Mission Directors David M. Wilson, Kelly Kammerer, Philip M. Gary b. Project Design OtKcers Benjamin A Stoner, USAIDIARD Robert V. Thurston, USAIDIARD James L. Gingerich, USAIDIARD c. Project Ofiicers Charles L. StricklandlShaubhagyaShrestha Roger A. Bloom/Harsha M. Bajracharya vii EXECUTIVE SUMMARY SINCE 1970, THJ3 RURAL RESOURCES OF NEPAL have come under immense pressure. The population has nearly doubled to the current estimated 21 million people. Yet the significant increase in per capita income that reflects sustained growth and helps keep fertility rates low has failed to materialize. It is imperative that the next 30 years not see population pass 42 million, still without the basis for sustained improvement for the rural people of Nepal. The essential shift to a high-growth strategy is now fmible. It requires a sharp departure from past practices and growth rates. The RDP has effectively demonstrated that sharp break. Particularly since the midterm review, the project has emphasii the commercialization of hill agriculture through high-value cash crops such ;is fruits and vegetables, promulgated in intensive, geographically defined development pockets, set forth in a sustainable and reproducible context. That strategy has been supported by income generation through community forestry, soil consmation programs, and the development of local self-government through the hmer user group, and other village and district institutions. The project played an important role in forming user groups and helping them focus on a few priorities that they could achieve with limited individual and project resources. In part, they concentrated on improving the operation of private institutions and used public resources to increase the magnitude and effectiveness of those private operations. Thus, the project is s prototype for sustained development not only in the Rapti Zone, but throughout Nepal. The Rapti prototype is critical to the success of the hill and mountain priority of the Agriculture Perspective Plan (APP). That plan differentiates a hill and mountain strategy based on rapid growth in commercial high-value crops and livestock production. The priorities are vegetables and vegetable seeds, apples, citrus, and dairy products. With the exception of citrus, these have been the successful priorities of the RDP. The APP ahgives high priority to forest development, primarily through community forestry. The RDP has pioneered in this effort turning many hectares of forestlands over to community groups. Hill agricultural roads are the critical input priority for hill development in the APP. The RDP has also pioneered in self-help projects designed to build the institutional capacity required for the local development and maintenance of agricultural roads. And, it has provided a model for involving national line agencies in building agricultural roads to major pockets of cash-crop production. Thus, the RDP has been out front in developing and testing the implementation of the most important priorities in the APP, particularly for the difficult hill regions. The pmjat needs to press on with solving the second-generation problems in these priority areas. This report draws attention to new problems arising in the Ralpti Zone itself as a result of project activities and points to the need to keep the RDP in a dynamic mode. Its recommendations for next phase of the project respolnd to that need. The RDP has fostered grass roots &mratization by organizing democratic user groups orientwi to the concerns sf their members. It has taken a new part in the development of district and village-lcvd competence designed to raise and manage rcsourms for locarl needs. There is now ail extraordinary opportunity to build on that cxpcriencc in the context of a massive government expansion of resources for village- lev& programs. Such expansion could have an immense favorable impact on rural dsmocratization and development. At the: same time, steps would have to be taken to guard against wasting those funds and, more important, to prevent mismanagement, which could act back both rural democratization and development. USAID stands before an unusual window of opportunity. The fact that Rapti is seen as the prototype for the cmnt expansion of village development programs throughout Nepal gives USAD a chance to create a much larger impact. This report's evaluation team was continually impressed by the way in which the RDP brought the cutting edge of democratization to tht; district and local levels of Nepal. Environmental enhancement is one of the major success stories of the RDP particularly, the handwer of forests to user groups and the plan developed for soil conservation and management. So far 10 percent of the forest suitable for community forestry has been turned over in the Rapti Zone, and 42 percent in Salyan district. By contrast, only 2 percent hm been handed over nationwide. Now that this critical mass has been achieved in Rapti, the next challenge is to accelerate the rate of turnover by a factor of three or more, so as to have a complete turnover in a period of 20 years. Management and utilization also needs to be improved. Although the same critical level has not been achieved