PCR: Bangladesh: Northwest Crop Diversification Project

Completion Report

Project Number: 32193 Loan Number: 1782-BAN(SF) November 2011

Bangladesh: Northwest Crop Diversification Project

CURRENCY EQUIVALENTS

Currency Unit – taka (Tk)

At Appraisal At Project Completion 17 August 2000 12 January 2010 Tk1.00 = $0.019 $0.014 $1.00 = Tk54.00 Tk69.26

ABBREVIATIONS

ADB – Asian Development Bank BB – Bangladesh Bank BADC – Bangladesh Agriculture Development Corporation BARI – Bangladesh Agriculture Research Institute BME – benefit monitoring and evaluation BRAC – Bangladesh Rural Advancement Committee DAE – Department of Agricultural Extension DAM – Department of Agricultural Marketing FAO – Food and Agriculture Organization of the United Nations FFS – farmers’ field school FGD – focus group discussion GDP – gross domestic product GKF – Grameen Krishi Foundation HCI – head count index HDP – Horticulture Development Project HIES – household income expenditure survey – horticulture training and demonstration center HPI – human poverty index HVC – high value crop IFAD – International Fund for Agricultural Development kg – kilogram KRF – Krishi Rin Foundation LGED – Local Government Engineering Department MIS – management information system MMC – market management committee MOA – Ministry of Agriculture NCDP – Northwest Crop Diversification Project NGO – nongovernment organization O&M – operation and maintenance PKSF – Palli Karma Sahayak Foundation PIU – project implementation unit PLDP – Participatory Livestock Development Project PMU – project management unit PPER – project performance evaluation report PSU – project supervision unit RAKUB – Rajshahi Krishi Unnayan Bank RDRS – Rangpur Dinajpur Rural Service SCDP – Second Crop Diversification Project SFG – small farmer group

TA – technical assistance TOT – training of trainers WTO – World Trade Organization

NOTES

(i) The fiscal year (FY) of the government ends on 30 June. FY before a calendar year denotes the year in which the fiscal year ends, e.g., FY2009 ends on 30 June 2009.

(ii) In this report, "$" refers to US dollars.

Vice-President X. Zhao, Operations Group 1 Director General S. H. Rahman, South Asia Department (SARD) Country Director T. Kandiah, Bangladesh Resident Mission (BRM), SARD Team leader A. K. Saha, Senior Project Officer, BRM Team member M. N. Alam, Project Analyst, BRM

In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

CONTENTS

Page

BASIC DATA ii MAP vi I. PROJECT DESCRIPTION 1 II. EVALUATION OF DESIGN AND IMPLEMENTATION 1 A. Relevance of Design and Formulation 1 B. Project Outputs 2 C. Project Costs 6 D. Disbursements 6 E. Project Schedule 6 F. Implementation Arrangements 6 G. Conditions and Covenants 7 H. Consultant Recruitment and Procurement 7 I. Performance of Consultants, Contractors, and Suppliers 7 J. Performance of the Borrower and the Executing Agency 8 K. Performance of the Asian Development Bank 8 III. EVALUATION OF PERFORMANCE 9 A. Relevance 9 B. Effectiveness in Achieving Outcome 9 C. Efficiency in Achieving Outcome and Output 10 D. Preliminary Assessment of Sustainability 12 E. Impact 12 IV. OVERALL ASSESSMENT AND RECOMMENDATIONS 14 A. Overall Assessment 14 B. Lessons 14 C. Recommendations 15 APPENDIXES 1. Project’s Framework Analysis 16 2. Physical Progress: Target versus Actual 28 3. Highlights of Training and Extensions Activities 29 4. Mobilization and Credit Operation for High Value Crop Farmers 38 5. Adaptive Research conducted under the Project 42 6. Marketing Support and Market Construction 46 7. Activities under Pilot Agribusiness Credit Line 53 8. Project Implementation Schedule 57 9. Compliance Status of the Loan Covenants 60 10. Economic Analysis and Net Average Farm Income under Major Cropping Patterns Involving High Value Crops 70 11. Women Empowerment and Gender Quality Initiatives 81 12. Socioeconomic Impacts of Project Interventions 85

SUPPLEMENTARY APPENDIX 1. Household Survey Questionnaire 94

BASIC DATA

A. Loan Identification

1. Country Bangladesh 2. Loan Number 1782-BAN(SF) 3. Project Title Northwest Crop Diversification Project 4. Borrower People’s Republic of Bangladesh 5. Executing Agency (i) Department of Agricultural Extension (ii) Bangladesh Bank (BB) 6. Amount of Loan SDR35,710,000 7. Project Completion Report Number PCR:BAN 1288

B. Loan Data 1. Appraisal – Date Started 7 August 2000 – Date Completed 17 August 2000

2. Loan Negotiations – Date Started 11 October 2000 – Date Completed 13 October 2000

3. Date of Board Approval 21 November 2000

4. Date of Loan Agreement 18 December 2000

5. Date of Loan Effectiveness – In Loan Agreement 18 March 2001 – Actual 9 August 2001 – Number of Extensions 3

6. Closing Date – In Loan Agreement 31 December 2008 – Actual 12 January 2010 – Number of Extensions 1

7. Terms of Loan – Interest Rate 1.0% per annum during the grace period and 1.5% per annum thereafter – Maturity (number of years) 32 years including grace period – Grace Period (number of years) 8

8. Terms of Relending Government to BB: – Interest Rate 2% for crop production credit and 3% for agribusiness credit line – Maturity (number of years) 20 – Grace Period (number of years) 5 – Second-Step Borrower BB

9. Terms of On-lending BB to Rajshahi Krishi Unnayan Bank: – Interest Rate 1.5% below BB rate for crop production credit; BB rate for agribusiness credit line – Maturity No longer than 30 days of receipt from nongovernment organizations for crop production credit 2 years for agribusiness credit line

iii

10. Disbursements a. Dates Initial Disbursement Final Disbursement Time Interval 15 May 2002 17 December 2009 91 months

Effective Date Original Closing Date Time Interval 9 August 2001 10 January 2010 101 months b. Amount (SDR million) Category Last Net or Original Revised Amount Amount Amount Undisbursed Subloan Allocation Allocation Canceled Available Disbursed Balance 01 4.47 3.60 (0.87) 3.22 3.22 0.38 02A 0.37 0.40 0.03 0.39 0.39 0.01 02B 0.85 1.50 0.65 1.44 1.44 0.06 03 2.54 1.60 (0.95) 1.49 1.49 0.12 04 5.08 2.10 (2.98) 1.97 1.97 0.13 05 0.34 0.09 (0.25) 0.07 0.07 0.02 06 13.52 17.46 3.93 17.43 17.43 0.03 07 0.77 0.40 (0.37) 0.33 0.33 0.07 08 0.26 1.50 1.24 1.41 1.41 0.10 09 0.09 0.80 0.70 0.64 0.64 0.17 10 1.02 1.03 0.00 0.98 0.98 0.05 11 6.39 0.00 (6.39) 0.00 0.00 0.00 99 0.00 0.00 0.00 0.00 0.00 0.00 Total 35.70 30.48 5.24 29.37 29.37 1.14

11. Local Costs (Financed) - Amount ($) 27,324,367 - Percent of Local Costs 53% - Percent of Total Cost 40%

C. Project Data 1. Project Cost ($ million) Cost Appraisal Estimate Actual Foreign Exchange Cost 19.50 16.89 Local Currency Cost 46.70 51.32 Total 66.20 68.21 2. Financing Plan ($ million)

Cost Appraisal Estimate Actual Implementation Costs Borrower Financed 9.60 6.18 Beneficiary Financing 10.30 17.82 ADB Financed 45.00 42.71 Other External Financing 0.00 0.00 Subtotal 64.90 66.71 Interest During Construction Costs Borrower Financed 0.00 0.00 ADB Financed 1.30 1.51 Other External Financing 0.00 0.00 Subtotal 1.30 1.51 Total 66.20 68.22 ADB = Asian Development Bank.

3. Cost Breakdown by Project Component ($ million) Component Appraisal Estimate Actual A. Base Cost 1. Training and extension 12.70 7.90 2. Farmer mobilization and credit 25.80 43.69 3. Marketing support 8.60 5.42 4. Adaptive research 0.70 0.07 5. Pilot agribusiness credit 1.70 0.85 6. Project management support 3.30 8.78 Subtotal (A) 52.80 66.71 B. Contingencies 1. Physical 1.30 0.00 2. Price 10.80 0.00 Subtotal (B) 12.10 0.00 C. Interest During Construction Subtotal (C) 1.30 1.51 Total (A+B+C) 66.20 68.22

4. Project Schedule Item Appraisal Estimate Actual Date of contract with consultants September 2001 March 2003 Completion of engineering designs January 2004 December 2008 Civil Works Contract Date of award February 2003 November 2004 Completion of work July 2006 December 2009 Equipment and Supplies First procurement July 2002 June 2002 Last procurement June 2008 December 2009 Completion of equipment installation June 2008 December 2009

5. Project Performance Report Ratings Ratings

Development Implementation Implementation Period Objectives Progress From 31 December 2000 to 30 September 2005 S S From 1 October 2005 to 30 September 2006 S HS From 1 October 2006 to 31 December 2006 S S From 1 January 2007 to 31 December 2007 HS HS From 1 January 2008 to 31 January 2008 HS S From 1 February 2008 to 31 December 2009 HS HS HS = highly satisfactory, and S = satisfactory.

D. Data on Asian Development Bank Missions No. of No. of Specialization of Name of Mission Date Persons Person-Days Members Appraisal 7–17 August 2000 4 40 g, c, e, e Inception 8–12 September 2001 2 8 g, b Review 1 19–24 November 2001 2 10 g, b Review 2 17–27 November 2002 3 30 a, g, b Review 3 30 Nov–8 Dec 2003 5 25 a, b, g, d, h Midterm review 24 June–10 July 2004 4 40 a, g, b, b Review 4 11–30 January 2005 2 20 a, b Review 5 14–31 August 2005 2 20 a, b Review 6 26 Feb–15 March 2006 3 20 a, b, d Review 7 5–8 September 2006 3 9 a, b, d Review 8 27 March–10 April 2007 3 18 a, b, d Review 9 22 Oct–26 Nov 2007 4 32 a, b, g, h Review 10 27 April–12 May 2008 3 21 a, b, h Review 11 2 Oct–16 Nov 2008 2 16 a, h Special review 11–17 March 2009 2 10 a, d Review 12 17–25 August 2009 3 24 a, b, h Project completion review 3–19 April 2011 3 60 a, b, e a = agriculture specialist, b = project analyst, c = counsel, d = economist, e = procurement, or consultant specialist, f = control officer, g = program officer, and h = gender specialist.

89 o 00'E 91 o 45'E 89 o 00'E

INDIA BANGLADESH RANGPUR

NORTHWEST CROP 25 o 30'N Rangpur 25 o 30'N DIVERSIFICATION PROJECT Sylhet (as completed) RAJSHAHI Rajshahi BANGLADESH

I N D I A Dhaka INDIA PROJECT AREA TETULIA

Panchagarh INDIA Khulna PATGRAM PANCHAGARH Barisal ATWARI BODA Chittagong DOMAR o o DIMLA 22 00'N Sundarbans 22 00'N BALIADANGI BHURUNGAMARI DEBIGANJ HATIBANDHA Thakurgaon JALDHAKA NILPHAMARI THAKURGAON KALIGANJ Nilphamari ADITMARI NAGESWARI KHANSHAMA Bay of Bengal RANISANKAIL FULBARI KISHOREGANJ Lalmonirhat 89 o 00'E 91 o 45'E BIRGANJ GANGACHARA LALMONIRHAT KURIGRAM HARIPUR SAIDPUR PIRGANJ KAHAROL TARAGANJ KAUNIA RAJARHAT BOCHAGANJ Saidpur Kurigram CHIRIRBANDAR Rangpur T ULIPUR BADARGANJ e BIROL e Parbatipur RANGPUR PIRGACHA s t a ROWMARI Dinajpur PARBATIPUR MITHAPUKUR R . CHILMARI DINAJPUR R A N G P U R o o 25 30'N FULBARI SUNDARGANJ 25 30'N NAWABGANJ PIRGANJ SADULLAPUR RAJIBPUR GAIBANDHA BIRAMPUR N HAKIMPUR GHORAGHAT Gaibandha PALASHBARI FULCHARI PANCHBIBI GOBINDAGANJ 0 5 10 20 30 40 50 JOYPURHAT DHAMOIRHAT SHARPAHAR Joypurhat KALAI SAGHATA Kilometers PATNITALA PORSHA KHETLAL SIBGANJ SONATALA BADALGACHI Project Area MOHADEVPUR AKKELPUR BOGRA SARIAKANDI BHOLAHAT NAOGAON J Project District and Upazila GOMOSTAPUR DHUPCHANCHIA a GABTALI m Bogra u National Capital Naogaon ADAMDIGHI n NIAMATPUR KAHALU a Divisional Headquarters R SHAJAHANPUR DHUNAT . NACHOL MANDA RANINAGAR District Headquarters NANDIGRAM SHIBGANJ NAWABGANJ KAZIPUR Town/Municipality BAGMARA ATRAI Bhuapur TANORE SHERPUR Central Market Nawabganj R A J S H A H I MOHANPUR SIRAJGANJ Growers Market RAJSHAHI SINGRA RAIGANJ Wholesale Market GODAGARI NATORE TARASH PABADURGAPUR Sirajganj Gang Natore Nalka National Highway Rajshahi PUTHIA es R. GURUDASPUR KAMARKHAND Regional Highway BAGATIPARA CHARGHAT ULLAPARA BELKUCHI Zilla/Other Road Bonpara BARAIGRAM BHANGURA River LALPUR CHATMOHAR BAGHA FARIDPUR Upazila Boundary SHAHZADPUR District Boundary ATGHORIA ISHWARDI PABNA Divisional Boundary I N D I A SANTHIA Pabna International Boundary BERA Boundaries are not necessarily authoritative. SUJANAGAR KHULNA

This map was produced by the cartography unit of the Asian Development Bank. The boundaries, colors, denominations, and any other information shown on this map do not imply, on the part of the Asian Development Bank, any judgment on the D H A K A legal status of any territory, or any endorsement or acceptance of such boundaries, colors, denominations, or information. 89 o 00'E

11-2197 HR

I. PROJECT DESCRIPTION

1. In line with the priorities of the Government of Bangladesh, the Asian Development Bank (ADB) formulated the Northwest Crop Diversification Project (NCDP)1 to accelerate economic growth in the country’s northwest region through production of improved high-yield varieties of vegetables, fruits, spices, and other high value crops (HVCs)2 by small- and medium-scale farmers, supported by production credit and marketing assistance. The project was consistent with ADB’s country operations strategy. The project was designed based on an ADB-financed investment study in 1996 and a draft project preparation report completed by the Food and Agriculture Organization (FAO) in 2000 with ADB technical assistance.3 The design process included extensive consultation with the stakeholders and considered poverty levels, agro- ecological suitability, and the scope for promoting the cultivation of HVCs by small rural farm households when selecting the project areas.

2. Aligned with the project’s development goals of increasing farm incomes and poverty reduction, the project aimed specifically to (i) promote HVC production and more efficient marketing of HVCs, and (ii) establish a sustainable partnership between the public sector service agencies4 and nongovernment organizations (NGOs)5 to provide extension services, need-based training, and credit support to the targeted small farmers. The project components were (i) farmers’ training and extension, (ii) farmer mobilization and credit support, (iii) adaptive research, (iv) marketing support, (v) a pilot agribusiness credit line, and (vi) support for project management.

3. The project area comprised 16 districts and 60 administrative subdistricts, all under the then Rajshahi Division,6 and covered about 28.5% of the privately owned land area of Bangladesh and 5.75% of total farm holdings of the region.6

II. EVALUATION OF DESIGN AND IMPLEMENTATION

A. Relevance of Design and Formulation

4. The project design, including its components, activities, and envisaged outcomes, matched government and ADB’s operational priorities during preparation and remained fully relevant to their policies and operations at project completion.7 The design aligned with the

1 ADB. 2000. Report and Recommendation of the President to the Board of Directors for the Northwest Crop Diversification Project. Manila. 2 High value crops under this project are the designated crops that give a higher net return than high-yielding winter rice. 3 ADB. 1996. Technical Assistance to the People’s Republic of Bangladesh for the Northwest Region Investment Study. Manila. ADB. 1999. Project Preparatory Technical Assistance to the People’s Republic of Bangladesh for the Northwest Agriculture Development. Manila. 4 These included Bangladesh Bank (BB), the Department of Agricultural Extension (DAE), the Department of Agriculture Marketing (DAM), the Local Government Engineering Department (LGED), and Rajshahi Krishi Unnayan Bank (RAKUB). 5 The NGOs included the Bangladesh Rural Advancement Committee (BRAC), Proshikkhon, Shikkha, Kaj, (PROSHIKHA), the Rangpur Dinajpur Rural Service (RDRS), and the Grameen Krishi Foundation (GKF) 6 Government of Bangladesh, Bureau of Statistics. 2007. Agriculture Sample Survey of Bangladesh—2005, June 2006 and Statistical Pocket Book. Dhaka. Government of Bangladesh, Bureau of Statistics. 2007. Agriculture Sample Survey of Bangladesh—2005, June 2006 and Statistical Pocket Book. Dhaka. 7 ADB. 1999. Country Assistance Plan (2000-2002). Manila.

2 government’s development agenda, which aimed to ensure food and nutrition security for a growing population by increasing the income of small-scale farmers. However, the initial design did not make the role of the Department of Agricultural Extension (DAE) in technology dissemination sufficiently clear. Modifications during implementation after considering the situation on the ground overcame this shortcoming and successfully established a partnership between the DAE and its partner NGOs to extend services.

5. The project enhanced opportunities to produce HVCs. It also made it possible for all categories of people to consume those at reasonable prices. The income increases that resulted from HVC cultivation and marketing had a multiplier effect for all stakeholders in the value and supply chains. The rural economy experienced forward and backward linkage effects from greater demand for HVCs, which reduced poverty among small-scale and marginal farmers through increased employment and income from the cultivation and the post-harvest handling, marketing, transport, and storage of the crops.

B. Project Outputs

6. The project’s key outputs are discussed in paras.7–26 against original and revised targets where applicable. The project framework and actual achievements are in Appendix 1. Physical and overall achievements are shown in Appendix 2.

1. Farmer Training and Extension

7. Upgrading training centers. Eight training centers were upgraded as envisaged to improve training quality—four horticulture training and demonstration centers (s) at Rangpur, Pabna, Natore, and Chapai Nawabganj; the Rural Development Academy at Bogra; the Rangpur Dinajpur Rural Service Training Center in Thakurgaon; the DAE campus at Dinajpur; and the DAE campus at Rajshahi. Although this was not part of the appraisal plan, training facilities were also improved at the subdistrict field offices of these centers due to high demand for training in the field. The appraisal outputs were fully achieved and these improved facilities supported large-scale farmer training and institutional training under the project. More effective use could be made of the facilities, however, if proper planning and coordination was undertaken to allow them to be utilized in future for activities not connected to the project.

8. Formulation of training courses. Based on a needs assessment, training courses were formulated for different groups and different durations. They included training of trainers on various subjects, like daylong training for small farmers’ groups (SFGs) in villages, refresher training, and skill development on computer use. The project developed 30 training modules for the field, including flip charts on HVC production.

9. Institutional training. A total of 3,081 implementing staff, including 197 NGO officials, were trained under various training of trainers courses. Orientation training on market management practices was conducted for market management committee (MMC) members. The project arranged 549 stakeholder workshops and overseas study tours for relevant personnel for the exchange of experience and knowledge.

10. Technical skills training for farmers. Project farmers were trained primarily to upgrade their technical skills for producing seasonal, annual, and perennial HVCs.8 The major topics were production technologies, marketing, and post-harvest handling. The number of farmers

8 Bangladesh has three crop seasons: 16 October–15 March, 16 March–15 July, and 16 July–15 October.

3 trained under all the programs totaled 384,585—192% of the appraisal target. Of the beneficiaries, 51% were female. About 326,020 individuals were training on HVC production techniques in the day-long village programs.9

11. Other training programs not anticipated during appraisal but implemented due to practical needs at the field level included farmers’ field school (FFS), residential training, group leaders’ training, gender and development training, farmers’ field days, and motivational tours for leading and innovative farmers. 10 Of the 30,277 beneficiaries trained through the FFS approach 16,651 were male and 13,624 female. A 2-day residential training course on group management and the production, post-harvest crop handling, and marketing of HVCs was given to 18,750 group leaders. Special training on gender and development and production and marketing of HVCs was also organized for 5,490 women group leaders. The farmers’ field days were organized at the HVC demonstration sites to explain potential HVCs and their production technologies and to motivate farmers to adopt them.

12. Gender awareness and mainstreaming. Special efforts were undertaken during the project to empower women beneficiaries socially and economically. A gender action plan was implemented to promote gender equality in all project activities. Female group leaders received 2 days of training in gender awareness. Gender issues and awareness aspects were addressed in the daylong training courses for all project beneficiaries.

13. Extension activities. Although not many activities were envisaged at appraisal that involved mechanisms of the DAE, the project included demonstration trials and other extension activities using the DAE during implementation due to their potential for dissemination of production technologies. Around 42,600 trials demonstrating the use of HVCs were conducted in farmers’ fields across the project areas and played a key role in illustrating the potential and economic benefits of modern HVC technologies for project farmers. The project organized 450 motivational tours to enable project farmers to share experiences. In addition, the project designated some communities as NCDP villages to develop cultural affinity among HVC farmers in these villages and give the project momentum through a sense of common interest in enhancing livelihoods and living standards, as well as undertaking gender equality measures.

2. Farmer Mobilization and Credit Support

14. Farmer mobilization and formation of groups. Four partner NGOs undertook the mobilization activities and group formation in the selected villages in line with the appraisal criteria and in close collaboration with DAE field staff. The appraisal estimate and the revised targets for involving small farmers were 160,000 and 200,000, respectively. At completion, 12,415 SFGs had been formed, involving 240,430 farmers from 60 project subdistricts. The average group had 16–20 members. The farmers were separated into male and female SFGs, with female groups accounting for 50.4% of the total number of groups and women making up 50.3% of overall the SFGs’ membership. The achievements exceeded the appraisal and revised targets by 150% and 120%, respectively.

15. Credit operation. The project’s achievements in supporting project farmers with credit significantly exceeded both the appraisal (162%) and revised targets (129%). The project

9 258,577 include trainees at the initial stage of the project before group formation. Trainees that availed of training more than once are counted more than once. 10 Farmers’ field school dealt with modern and appropriate production technologies with hands-on training on suitable HVCs. Training for each batch was spread over 14 sessions covering a full crop season.

4 extended Tk2,514.46 million in need-based credit support to the 258,577 SFG members for production of HVCs.11 The credit came from two sources: (i) the original seed money for credit operations, and (ii) a revolving credit fund established after the project was physically completed. The cumulative recovered amount from both sources as of April 2011 was Tk1,739.95 million and the outstanding amount recoverable by October 2011 was Tk774.51 million. Due to higher than expected demand, Rajshahi Krishi Unnayan Bank (RAKUB) – the wholesale bank has asked Bangladesh Bank – the executing agency for credit operation to increase the limit of the revolving fund from Tk100 million to Tk150 million. About 95% of the SFG members had availed of a first loan as of March 2011 and the fact that the 514,182 loans extended far exceeded the number of SFG borrowers showed that many have availed of credit more than once. Current data confirmed an almost 100% recovery rate of loans from both the sources. More details on the credit operation are in Appendix 4.

16. Area under high value crops expanded. HVC production was started on about 153,331 hectares (ha) under the project, far exceeding both the revised objective of 85,000 ha and the 40,000 ha targeted at appraisal.12 This was testimony to the farmers’ own initiatives and to the efficiency of project extension services. Due to the project’s spillover effects and increased market demand, the area and production of HVCs are still increasing in the region, as is credit demand.

17. Increased cropping intensity. The project helped farmers practice improved cropping models and patterns that generated greater income. The benefit monitoring and evaluation (BME) studies reported an increase in HVC farm activities in the project areas, with average cropping intensity up to 240.97% at completion from 213.25% before the project.13 The net increase reflects the impact of the introduction of HVCs into the areas of traditional cropping patterns.

3. Adaptive Research

18. The adaptive research program was implemented as envisaged and generated results useful for the farmers. A needs assessment was done for the research capacity improvement initiative and the Project helped establish an electronic horticulture data bank at the Bangladesh Agricultural Research Institute (BARI). An NCDP website was developed with links to BARI databank and other relevant websites. Based on the needs of HVC farmers, BARI was also engaged to conduct 22 adaptive research projects on the production, post-harvest operations, processing, and marketing of HVCs (footnote 13).

19. The research results provided technical guidance for the use of better crop varieties and improving cropping patterns, crop protection, and crop quality production. The research also generated knowledge about post-harvest handling, processing, packing, storing and preservation, and transport. The results were made available to the project farmers through training, demonstrations, field days, exchange of visits, and partner NGOs. With the farmers made more aware of the research results, the application of this knowledge on the ground was reflected in increased yields and more income from HVC production and marketing. The topics and some results of the adaptive research are in Appendix 5.

11 This figure includes members that dropped out, particularly at the initial stage. 12 This includes areas supported by Project’s credit component only. 13 Rural Development Academy, Bogra. 2008. The Second Benefit Monitoring and Evaluation Survey Report. Bangladesh.

4. Marketing Support

20. The Department of Agriculture Marketing (DAM) was the implementing agency for this component and the capacity development initiatives were implemented as envisaged. They included staff training, consultant services, the provision of office equipment and vehicles, and effective dissemination of market information.

21. The implementing agency for construction of market infrastructure, the local government engineering department (LGED), built 76 markets on government owned land, as planned at appraisal: a central market at Gabtali, Mirpur in Dhaka, and 15 wholesale markets and 60 growers’ markets in 60 subdistricts of 15 districts in the northwest region. A planned wholesale market at Sadar in Kurigram District was not build due to a land ownership dispute, and the central market in Dhaka was added under a change in scope at midterm review.

22. Only 5 of the 15 wholesale market and 29 of the 60 growers markets are operational. The remaining markets are either partly operational or not operational. The failure to have all the project markets operating at completion is due to inadequate staff and resources and a lack of initiative of the DAM. The market constructed at Mundamala in Rajshahi District has not yet been handed over to the DAM.

23. The construction of central farmers’ market in Dhaka was added to the original scope to meet a need to give small-scale farmers access to upstream markets (para. 21). It was completed in June 2009 and turned over to the DAM in June 2010 but the DAM has been slow in undertaking the steps necessary to make it fully operational. To support the marketing of the farmers’ marketing groups (FMGs) set up by the project in the meantime, the project procured six small refrigerated trucks, one open truck, and two vans to begin marketing operations as part of original plan. One open truck and two vans have been rented out. The refrigerated truck and the remaining vehicles are in the process of being leased.

24. The project formed the 490 FMGs after the markets were built. The roughly 9,800 members were the leaders from the SFGs. About 3,600 were trained in various market operations skills. The project also supported establishment of a market management committee (MMC) for each market comprised of DAM and other stakeholders for operation of the constructed markets. 1,180 MMC members were trained in market operation skills, including maintenance, storing, cooling, transporting, and networking, as well as other activities associated with market development. The DAM is mandated to operate, supervise, and maintain market infrastructure and facilities through the FMGs as per the market management manual approved by ministry of agriculture (MOA). Details on the constructed markets are in Appendix 6.

5. Pilot Agribusiness Credit Line

25. Under this the pilot agribusiness credit line, the wholesale bank, RAKUB supported 14 agribusiness entrepreneurs, disbursing Tk60.38 million (46.58% of available funds) until end of 2009. The funds available under the pilot credit line totaled Tk129.63 million, Tk77.78 million from ADB and Tk51.85 million from RAKUB. Of the 14 entrepreneurs, 12 are in operation, and due to fund crisis and technical expertise, two were not able to remain in operation. The poor performance of this credit line was due to a lack of proactive support from RAKUB branch offices, procedural difficulties, and lack of ownership of RAKUB’s staff. Details on the credit line operations are in Appendix 7.

6. Support to Project Management

26. In line with the project framework, a project management unit (PMU) was established at DAE and the Project received the required guidance from the inter-ministerial steering committee and project management coordination committee constituted by MOA to monitor progress.14 The PMU played a key coordinating and monitoring role and extended timely technical and budgetary support to the field offices.

C. Project Costs

27. The estimated base cost at appraisal was $52.80 million. Contingencies and interest during construction comprised $13.4 million, making the total estimated cost $66.20 million. The actual base cost at completion was $66.71 million. Interest during construction was $1.51, making the total $68.22 million. Including the contingency costs and exchange rate savings, the actual base cost increased by 26.45% over the appraisal estimate. Most of this increase related to greater demand than envisaged for rural credit. The extension of the loan closing date by 1 year increased project administration costs but a rise in the economic internal rate of return (EIRR) achieved (55%) over the appraisal estimate of 30.7% justified this increase (paras. 29 and 48). The actual local currency cost increased by $4.62 million from the appraisal estimate of $46.72 million. The actual foreign exchange cost was $16.89 million, compared with the appraisal estimate of $19.50 million.

D. Disbursements

28. Initial disbursement was made on 15 May 2002 and final disbursement took place on 17 December 2009. ADB disbursed $44.216 million as planned, which is 96.14% of the last revised allocation of $45.987 million. The cancelled amount was $8.327 million. The imprest advance and statement of expenditures worked well and no fund scarcity was reported.

E. Project Schedule

29. The loan was approved on 11 November 2000 and was made effective on 9 August 2001. The project activities started in late 2001 and were physically completed in June 2009. The loan account was closed on 12 January 2010. The project experienced a 14-month start-up delay, as well as implementation delays in most activities. This was due to late consultant recruitment and slow actions by the DAE (para. 33). Delays in training and extension, farmer mobilization, credit, and adaptive research were much smaller than those that affected the pilot agribusiness credit line and project management support. The project was extended for 1 year to complete its activities successfully. This was justified by an increase in the EIRR over that envisaged at appraisal. A chart illustrating actual implementation against the target schedule for major activities is in Appendix 8.

F. Implementation Arrangements

30. The DAE of the MOA was the overall executing agency. Bangladesh Bank was the executing agency for the project’s credit component. The PMU was at the headquarters of the DAE in Dhaka. The inter-ministerial steering committee at the line ministry level and the implementation and coordination committee at the department level provided guidance and

14 The inter-ministerial steering committee was chaired by the secretary of the MOA and the project management coordination was chaired by the director general, DAE.

7 supervision and monitored the project activities. The project covered 16 districts and 60 subdistricts of the northwest region of the country. The PMU was responsible for providing implementation support in the form of expertise, logistics, and budget to the field offices of the DAE in these areas. The implementation arrangements worked well as designed.

G. Conditions and Covenants

31. At completion, all but one of the loan covenants and conditions had been complied with. The covenant to make the s substantially self-financing was not achieved due to limited incentives for staff, weak accountability systems of s and centrally controlled accounting system. Although operations at the s improved significantly with the project’s support, their proceeds could not be returned to the centers due to the procedural complexity of the centrally controlled accounting systems. The operation of s also improved due to additional DAE support of seed money, but substantially self-financing objective could not be achieved. The status of compliance with covenants is in Appendix 8.

H. Consultant Recruitment and Procurement

32. Consultants. The project recruited consultants following ADB’s Guidelines on the Use of Consultants 2002. The recruitment was delayed by about 18 months due to postponed loan effectivity and delayed action by the executing agency. The consultants provided implementation support through expert inputs in several fields. From March 2003 to June 2009, the international consultants provided 103 of the 114 person-months of inputs originally allocated and the national consultants provided 351 of the originally allocated 429 person- months of services. The lower than envisaged use of consultants resulted from the recruitment delay.

33. Goods and services. The project procured goods and services without problems in compliance with ADB’s Procurement Guidelines, including cases where government rules acceptable to ADB were followed. The major items procured were equipment, vehicles, and inputs for undertaking various studies.

34. Civil works. The civil works included 76 markets and upgrading of eight training centers. The PMU, in collaboration with the DAE civil construction unit, upgraded training centers and the LGED was responsible for building the markets. Following ADB guidelines, national competitive bidding was followed in procuring the civil works. All planned civil works were completed as per design within the project period.

I. Performance of Consultants, Contractors, and Suppliers

35. The consulting services were generally useful and contributed to achieving the project’s envisioned outputs and outcomes. Under the marketing component, the consultancy inputs were not fully effective in developing capacity within the DAM due to DAM’s low absorption ability. The services of Grameen Krishi Foundation were poor at the initial stage due to internal management conflicts but later improved and the NGO continued providing services to the beneficiaries. The performance of the remaining partner NGOs was satisfactory. The performance of contractors and suppliers was generally satisfactory and no major problems or disputes were encountered in procurement or implementation.

J. Performance of the Borrower and the Executing Agency

1. The Borrower

36. The borrower was committed to promoting HVCs in the northwest region, provided the necessary counterpart funds and logistic and staff support, approved the government’s project proposal, and responded positively to the actions and recommendations of the ADB project review missions. The borrower also arranged a smooth flow of funds from ADB for the project, monitored the project activities, and provided guidance through an inter-ministerial steering committee that met regularly. The borrower’s overall performance during project preparation and implementation was satisfactory.

2. The Executing Agency

37. The DAE, which was the lead executing agency, deployed qualified staff and provided the required support to the PMU for project implementation. The DAE issued guidelines and directives to its field offices to implement the project activities effectively. The DAE field offices, in turn, carried out the training and extension work needed, including the organization of demonstration trials in farmers’ fields. Most field staff was found to be committed and to have contributed to the achievements and successes of the NCDP. Five different project directors were involved from project preparation to completion. The performance of the DAE is rated satisfactory. Bangladesh Bank—the executing agency for the project’s credit component—took timely action to ensure a smooth fund flow from Bangladesh Bank to the partner NGOs via RAKUB, the wholesale bank, and monitored the credit operation. Its performance was satisfactory. The overall performances of the implementing agencies—the DAM for the marketing component and RAKUB for the agribusiness pilot credit operation—were below expectation. The LGED performed well in the construction of the markets.

K. Performance of the Asian Development Bank

38. ADB provided a project preparatory technical assistance (TA) grant (footnote 3) to design the project to complement the government’s efforts for diversification of HVCs. ADB processed the project promptly in 2000 in line with the government’s priorities and ADB’s country assistance program. After the project was initially administered and supervised from ADB headquarters, it was delegated on 1 January 2004 to the Bangladesh Resident Mission. ADB fielded 14 missions at regular intervals to closely review project progress and acted promptly to ensure smooth fund flow and expedite implementation.

39. During its review missions, ADB interacted closely with the stakeholders, including beneficiaries, directly and intensively monitored feedback on project activities. The project had three different ADB mission leaders. ADB closely followed up on loan covenants and policy matters with the relevant ministries to facilitate early action and resolution of issues. The line ministry (MOA) and the executing agencies appreciated the faster response on implementation matters made possible by the delegation of project administration to the resident mission. The PCR rates ADB’s performance satisfactory.

III. EVALUATION OF PERFORMANCE

A. Relevance

40. As envisaged in its design, the project helped small farmers in the northwest region produce more HVCs to increase their farm incomes. This fully complemented the government’s efforts to ensuring food and nutritional security for a growing population by spreading and promoting the cultivation of HVCs and intensifying production of the major cereal (rice) through vertical yield increase.16 The project’s support and services also contributed significantly to the government’s priority agenda of extending needs-based support to the farmers in the form of modern technologies, credit, and marketing assistance and establishing an effective partnership between farmers, public agencies, and NGOs.17 At appraisal, the project was fully relevant to ADB’s food security and poverty reduction strategy and its country assistance plan for Bangladesh. It remained highly relevant at completion to Strategy 2020. 18 It was also fully relevant to the government’s poverty reduction and agricultural development strategies at appraisal and to the government’s existing Perspective Plan 2010–2021 at completion. The project is rated highly relevant.

B. Effectiveness in Achieving Outcome

41. The envisaged project outcomes were (i) increased production and effective marketing of HVCs among small farmers, and (ii) improved capacities and partnership between NGOs and public sector agencies to provide training and credit support for small-scale farmers. Comparing the project’s actual outcomes with those envisaged, the project design appeared to be reasonable and effective for all of the components except marketing and the pilot agribusiness credit line. The major actual achievements included operation of farmer groups, the attainment of higher yields from HVCs, a highly successful credit operation, an effective partnership between public agencies and partner NGOs for service delivery, useful results from adaptive research on HVCs, improved gender awareness among beneficiaries and stakeholders, strengthened s, the upgrading of markets, and the improvement of access to markets for the project farmers.19

42. The project is rated effective overall in achieving the intended outcomes, based on the envisaged results delivered during the project’s life (paras. 43–46) and indicators from several sources.20

43. The project undertook various interventions to disseminate information on production technologies for HVCs, including demonstration trials, motivational tours, technical training, and the establishment of NCDP villages (paras. 10–13). This enabled farmers to adopt new production technologies for new HVCs, mixed crop cultivation, seed production, storage, and post-harvest care. Project interventions increased annual production of HVCs by 2.7 million tons of fresh produce, mainly by increasing the area under HVCs by 153,330 ha and the adoption of modern high-yield technologies in the project area (footnote 13). The volume of HVCs marketed also increased and about 96.7% of the produce was sold at market. Considering that the

16 Government of Bangladesh, 1999. National Agricultural Policy. Dhaka. 17 Government of Bangladesh, 2010, Outline Perspective Plan of Bangladesh 2010-2021, Dhaka. 18 ADB. 1999. Country Assistance Plan (2000–2002). Manila. 19 Yield increase ranged from 5.9% for cauliflower to 90% for garlic. 20 The sources included benefit monitoring and evaluation reports, the project completion review mission’s small- scale socioeconomic survey 2011, focus group discussions with NGOs, back-to-office reports, progress reports, and a consultant’s report (Team Leader, NCDP Consultants’ Team, 2009: End of Assignment Report).

10 envisaged targets in area and production of HVC cultivation were greatly exceeded (para. 16), the project components for increasing production and marketing of HVCs were effective in achieving their outcomes. Small-scale farmers became more aware of HVCs and gained better knowledge about grading and value addition of products and packaging and post-harvest handling through training and demonstrations. About 25% of project farmers now grade their products. Post-harvest losses were also reduced from a national average of 30.0% to 7.5%– 23.0%, depending on the type of the produce.

44. Attempts were made under the project to help the project farmers market their HVCs efficiently and effectively. These included improving access to market information, upgrading marketing skills, and providing access to marketing infrastructure. Many markets built under the project are not operational. The intention to extend support to project farmers for efficient marketing was only partly achieved because of this. The obstacles to proper handover and operation of the inoperable markets can be attributed to hasty formation of the FMGs, lack of land ownership by the DAM, a failure to adequately consult local stakeholders in selecting market sites, and the supply-driven principle behind the provision of the facilities. The project design also lacked the vision to include participatory monitoring and evaluation of sociological and cultural elements that would guide farmers’ behavior in marketing their HVCs in addition to technical considerations. The project was therefore only less effective in achieving the expected outcomes in regards to providing effective marketing assistance during the project period. Further details are in Appendix 6.

45. The project supported capacity building within the executing agencies, implementing agencies, and the partner NGOs. Through training for staff and the provision of logistic and budgetary support to implement project activities, all staff members became more aware, committed, and responsive. During the implementation of such project activities as group formation, credit operations, extension services, technical training for the project farmers, and demonstration, the public agencies and the partner NGOs established good working relationships that continued to grow.

46. The credit operation under the project was rated highly effective. About 91% of SFG members received loans within 6 days of submitting their applications. The recovery rate of disbursed loans was maintained at 100%. Details are in Appendix 4. The results of the pilot agribusiness credit line are rated less effective because the entrepreneur beneficiaries were not able to operate properly due to a lack of operating capital and inadequate support from RAKUB. Details are in Appendix 7. The PMU was effective and played an effective coordination and monitoring role.

C. Efficiency in Achieving Outcome and Output

47. Investment Efficiency. The project’s EIRR was calculated during the PCR mission at 55%, compared with the appraisal estimate of 30.7%. The PCR rates the project highly efficient overall in achieving its outcome and outputs. The economic analysis is in Appendix 10. Focus group discussions (FGDs) during PCR mission indicated no negative economic or social consequences or project-induced increases in indirect costs—for example, the use of household child labor, greater physical and mental stress among women, mining of ground water for HVC irrigation, or a rise in pests or soil toxicity due to HVC culture.

48. HVCs production efficiency. Implementation was delayed initially but this did not waste resources or result in over expenditure. FGDs revealed that HVC cultivation benefits farmers in maintaining proper soil health and no adverse consequences were evident. The farmers gained

11 improved knowledge and skills through training on HVCs production technologies, particularly for suitable vegetables, fruits, spices, aromatic rice, mung beans, groundnuts, and for growing crops together (maize and potatoes, and maize and potatoes and mung beans). This activity contributed to higher productivity for the project farmers and was recognized as an efficient project investment.

49. A positive yield gain for HVCs of NCDP against non-NCDP farmers reflected the efficiency of the training component as a whole. The yield increase ranged from 5.9% for cauliflower to 90% for garlic. In addition, leadership skills and innovativeness of the group leaders also helped project farmers to adopt HVCs technologies. The project earned the year- end resident mission’s best performance award in 2006, 2008, and 2009.

50. Strengthening of four existing HTDCs in the project area helped farmers. The HTDCs provided improved seed and planting materials for high yielding horticultural crops, insights from on-site demonstrations, improved pest and diseases control, and technical knowledge on horticultural crops. However, the established storage facilities remained mostly underutilized.

51. Marketing support. The activities for providing marketing assistance to the project farmers were delayed. Delays in site selection, land acquisition, designing markets, bidding, construction, and hand-over all contributed to late operations of the marketing support component as a whole.

52. The design of this component was weak. Ownership of land for construction of markets was not transferred interdepartmentally to DAM through gazette notification and necessary legal procedure before construction.21 Adequate stakeholder consultation was lacking in the selection of sites for market construction. The capacity of the DAM to manage the activities properly was not fully assessed at appraisal. FMG and MMC formation was delayed; right representation was lacking resulting in partial operation of constructed markets, approved manual for market management lacked modalities for day to day operation and enforcement of regulations. The cultural and sociological dynamics likely to affect efforts to support marketing by the project farmers were not adequately assessed and incorporated in the design.

53. Farmers’ social and cultural barriers in improved marketing were not adequately assessed and incorporated in the design. Considering the complexities involved and the fact that the project farmers were not primarily traders and will need a long time to adopt the necessary skills and attitudes in the socio-cultural context of rural Bangladesh, and weighing remaining deficiencies against overall achievements, this component is rated less efficient in achieving its intended outcomes and outputs.

54. Credit operation. The almost 100% recovery rate and the growing demand for HVC production loans demonstrated the efficiency of the credit program. About 95% of the members of the farmers’ groups took an initial loan and many availed of credit more than once. Due to high demand, the credit fund had revolved nine times from April 2004 to by May 2011. Project farmers benefited immensely and were inspired to scale up their HVC production due to the credit support in particular. The credit operation was highly effective.

55. Pilot agribusiness. The activities under this component suffered because commercially viable clients able to compete in the agribusiness marketplace and make effective use of the credit funds were not available. The component design was weak because it lacked market

21 Government of Bangladesh, Ministry of Land. 1997. Immovable Property Acquisition Manual. Dhaka. pp. 71–84.

12 studies to allow it to target efficient, strong applicants and viable businesses. RAKUB closed three entrepreneurs’ accounts, which repaid their loans fully. Most of the enterprises faced operational fund crisis, and were marked as underperforming. Of the 14 that received credit, RAKUB marked six entrepreneurs’ loans as bad, four as unclassified, one was written-off classified, and three as fully repaid. The total credit disbursed was Tk60.38 million against a total sanction of Tk70.88 million. A failure by RAKUB to take timely action to deliver operational funds and technical support contributed to the underperformance of the enterprises. The component was less efficient.

D. Preliminary Assessment of Sustainability

56. In the project area, the NCDP has resulted in (i) increasing demand for HVCs due to increasingly greater income for medium- and high-income groups; (ii) greater initiative on the part of farmers, which is demonstrated by higher demand for involvement in HVC production; (iii) gradual integration of NCDP farmers into interactive partnership with other microfinance programs of the NGOs; (iv) gradual growth in the opening of small private sector enterprises to process HVC products; (v) forward and backward linkage in HVC production and trading; (vi) increasing demand from non-NCDP farmers to join NCDP groups to avail of HVC production facilities, as well as integration of NCDP groups into the DAE’s own core group, and (vii) better participation and integration of NGOs in technology transfer, credit delivery, information on inputs, and motivation with public sector agencies at the local level. The revolving credit fund for the project farmers is likely to contribute substantially to sustaining project activities at the ground level for at least another 10 years.

57. The project’s inclusion of more women beneficiaries than might usually participate in such an undertaking in Bangladesh has strengthened its sustainability. The sociological and economic factors contributed by the project that support this sustainability include (i) the empowerment of women through economic power sharing with male counterparts; (ii) their right, as earners, to spend incremental income from HVCs; (iii) better nutrition and health welfare for family members gained directly from the consumption of HVCs and indirectly from the enhanced purchasing power of women derived from the higher income from HVC production; (iv) the elevation of the social dignity of women as partners in local development, which is also enhanced by a new respect and zest for earning that have become hallmarks of the culture in NCDP villages.

58. The attempts made under the project to make the HTDCs substantially self-financing did not produce full positive results due to limited incentives, the weak accountability of HTDC staff, and a centrally controlled accounting system (para. 32). Nonetheless, all the HTDCs substantially increased the production and supply of seeds and planting materials for HVCs and services to farmers.

59. Overall, the project outcomes are rated likely to be sustainable.

E. Impact

60. Enhanced income of beneficiaries. The net average annual incremental income of project farmers from HVC production and marketing increased substantially at completion compared to the income before project start but depends on crop combination and project’s support and services. The increases ranged from 21% to 56% for 0.5 ha farms that made use of five cropping patterns. The increase depended on how much land was under HVC cultivation and what types of crops were grown. The average net income increase for 0.5 ha farms was

Tk16,794 annually. Small farmers who could afford to cultivate crops like mango, maize, pulses, and potatoes over the cropping period benefited substantially. The second BME study showed that the incomes of farmers growing vegetables increased by 20.29% (footnote 13). Those growing maize increased their incomes by 25.74%. Details on the incremental gains of average net income of the project farmers compared with the incomes of non-project farmers are in Appendix 10.

61. Empowerment of women and gender equality. The socioeconomic empowerment of women and gender equity were achieved under the project by integrating the voice of women in decision making and made them equal participants through (i) resource sharing and management; (ii) recognition of value addition through participation in productive and reproductive labor, entrepreneurship, acquiring resources for HVC production, innovativeness in day-to-day HVC agriculture; (iii) earning skill in post-harvest HVCs handling, sorting, management, marketing and storing; and (iv) improving their fall-back position.

62. The positive effects of gender mainstreaming under the project were visible in the participation of women beneficiaries in group formation, training activities, demonstration trials, bookkeeping of group activities, weekly group meetings, decisions on HVC selection, cultivation, and marketing, and managing post-harvest activities. They played a key managerial role in HVC cultivation in many cases, and an important part in deciding household expenditure. Details are in Appendix 11.

63. Increased land value. The greater appreciation of the value of land in the project area, when compared with land values outside the project area, was one of the major economic project gains. These higher real property values offer farmers better credibility in the market for capital investment. The rise in project land prices has ranged from 25% to 100% and is due to the increased cropping intensity provided by HVCs.22

64. Employment generation. The project farmers cultivating HVCs generated an average of an additional 153 person-days of paid employment per hectare annually. About 60% of the additional work went to hired laborers and 40% to family members (footnote 13).

65. Better access to improved amenities. Higher incomes have given project farm households access to better hygienic facilities and housing than non-project farmers in the same localities. A growing number of brick houses are visible in the project area, as are more household tube wells to provide safe drinking water. The FGDs revealed an increase in hygienic latrines.

66. Increased land ownership. A slow but steady impact of the project has been the acquisition of land and non-land capital by project farmers with the help of their increased income from HVCs. They have acquired such assets at a faster rate than non-NCDP farmers, often buying or leasing land, livestock, and/or poultry from large land owners. Details are in Appendix 12.

67. Stronger linkage between government extension services and farmers. The project activities established good coordination between the DAE and BARI in disseminating HVC production technologies in the project area. As a result, the access of project farmers to improved seed and seed materials and other production technologies increased significantly.

22 Source: Focus group discussions with non-government organizations.

68. Increased benefit distribution scope. Project support and services created greater scope for distributing the benefits of improved agricultural technology between farmers, traders, processors, and consumers in the supply chain.

69. Greater stake of partner nongovernment organizations. Based on lessons learned and experiences gained in working with the NCDP farmers, the partner NGOs have developed a stronger stake in sustaining HVC cultivation and in the operations of the revolving credit fund resources. This will contribute to higher HVC production.

70. Other impacts. The project’s support and services had positive impacts on the education of children, health care for women and children, food intake, livestock rearing, housing, living conditions, and improved community relationship in general. The details are in Appendix 12.

IV. OVERALL ASSESSMENT AND RECOMMENDATIONS

A. Overall Assessment

71. The project implementation largely followed the appraisal design. The minor scope changes comprised the construction of a central market in Dhaka, undertaking some extension activities involving the DAE mechanisms, and the 1-year project extension. Based on the evaluations of relevance, effectiveness, efficiency, and sustainability as highly relevant, effective, highly efficient, and likely to be sustainable, the project is rated successful overall. This is despite the less than satisfactory results of the marketing support and pilot agribusiness components, which suffered from deficiencies in design and need assessments.

B. Lessons

72. Project implementation provided six key lessons:

(i) Project delays could have been reduced significantly by identifying and deploying qualified staff during project preparation, keeping those staff throughout implementation, obtaining early government approval for the project, and taking advance action on the recruitment of consultants before the loan agreement was signed (para. 29).

(ii) The issues of land ownership and operational responsibilities needed to be clearly settled between public ministries and departments before the project embarked on market construction. This was particularly important for revenue-earning infrastructure like markets. More time than was envisaged at appraisal was needed to form output-oriented FMGs and to put them into operation (para. 24).

(iii) To ensure that the markets to be built under the project would be successful, the project needed to seek the participation and take into account the opinions of local stakeholders when selecting the sites for market construction (para. 53).

(iv) All project components should have been based on need assessment. This was particularly true of the activities for agribusiness credit piloting and infrastructure for marketing and the facilities at the HTDCs. Failure to assess needs and conditions for these components adequately meant that the outputs were not used fully or successfully (para. 7, 23, and 25).

(v) Post-project monitoring and evaluation systems need to be designed for the project during the planning phase to ensure ongoing innovation and sustainability of the project impacts.

(vi) The selection of capable NGOs was critical to ensuring effective delivery of services and for sustaining project activities (para. 35)

C. Recommendations

73. This report has six recommendations:

(i) The monitoring of the NCDP activities should be organized under the DAE as a core activity, with support from the Bogra regional office supported under the Second Crop Diversification Project (SCDP).23 The MOA should make provision for funds under the ongoing SCDP for this purpose. The post-project monitoring and evaluation system has to be continued and integrated into the core program of the DAE to ensure sustainability of project impacts.

(ii) The project-supported facilities at the HTDCs that remain underutilized or not utilized at all have to be put to effective use to ensure strong services to the farmers and to make the HTDCs substantially self-financing. A time-bound action plan for each HTDC should be prepared to ensure this happens, with support from the SCDP.

(iii) The MOA’s initiatives to make all the markets developed under the NCDP functional must be expedited through a time-bound action plan for each market. District administrations and local, subdistrict, and union parishad functionaries can be involved in this effort.24 Ownership of the markets needs to be resolved with the help of local deputy commissioners.25 The results of the initiatives can be assessed during preparation of the project performance evaluation report (PPER).

(iv) The dissemination of HVC production technologies to farmers should be further streamlined. It should be integrated into the core programs of the DAE through its field offices. The MOA and the DAE should arrange an adequate budget for these activities. The PPER can review this.

(v) The request for increasing current ceiling of Tk100 million revolving credit fund to Tk150 million needs to be approved to meet higher demand from the borrowers.

(vi) The PPER can be prepared by 2013.

23 ADB. 2010. Second Crop Diversification Project. Manila. 24 Union parishad – the lowest tier of administrative unit in Bangladesh. 25 Deputy Commissioner – the head of the district administration.

PROJECT’S FRAMEWORK ANALYSIS Appendix

Design Summary Verifiable Indicators Means of Verification Assumptions/Risks Accomplishments and Remarks

Sector/Area Goal

To raise farm incomes, Increase in incomes of Beneficiary surveys by Willingness of Income of the project’s small-scale farmers alleviate poverty, and participating small- participating non- potential beneficiaries increased 21%–56%, depending on the stimulate the region's scale farmers (owning government organizations to participate; effective HVC cropping models involved, according economy by tapping the between 0.2 and 1.2 (NGOs) and independent project implementation to the socioeconomic survey conducted for potential for high value crop ha) by 30 percent verification through benefit the project completion review (PCR) (HVC) production monitoring and evaluation mission. As per the second BME study in (BME) 2008, the Northwest Crop Diversification Project (NCDP) farmers increased their income by about 57% in 2007 over baseline year 2003 through production and marketing of HVCs.

This increased income contributed to improving their livelihoods. The region's economy gained impetus due to increased crop diversification and adoption of HVCs. This was facilitated by effective technology transfer and need-based credit support for HVC cultivation.

Strong monitoring, demonstration trials at farmers’ field, on-site advice by Department of Agricultural Extension (DAE) and NGO field workers and credit support have brought about these successes. Interest of the beneficiary farmers and market demand were the key driving forces behind these achievements.

The project has achieved or is on the way to achieve its envisaged goals adequately.

Design Summary Verifiable Indicators Means of Verification Assumptions/Risks Accomplishments and Remarks Purpose Promotion of production Overall increase in the Village and sub-district Markets remain stable, Additional areas totaling 153,330 hectares and marketing of HVCs production of HVCs statistics, BME result training and credit (ha) were brought under HVCs, with an among small-scale farmers programs are effective estimated increase in production of about 2.7 million tons of fresh produce. The second BME study found that during 2003–2007 cropping intensity increased by 27.7% mainly due to adoption of profitable cropping patterns and models by a large number of project farmers.

Overall increase in the Post-project market Planned training, Credit amounting to Tk2,514.46 million volume of HVCs surveys, market adoption, and was disbursed to 258,5771 project farmers. reaching local markets monitoring through fee production levels are Timely and adequate credit support to collection, BME met; no major natural farmers played a key and effective role in disasters promotion of HVCs. The project’s credit support has helped small farmers to cover the additional 153,330 ha of land with HVCs, which was 283% higher than envisaged target of 40,000 ha at appraisal.

Increases level of Progress reports and Entrepreneurs are During 2003-2007, market volume of agro-processing reviews of marketing credit willing to invest, banks HVCs increased significantly and about component are willing to 96.7% of the produce was sold to the participate markets.

Farmers learned improved post-harvest handling practices, which helped reduce post-harvest losses 7.5%–23.0%, compared with a national average of 30%. More project farmers (about 25%) are grading their products and have improved

Appendix Appendix their packaging system.

1 Includes dropouts particularly at the initial stage. 17

Appendix Appendix Design Summary Verifiable Indicators Means of Verification Assumptions/Risks Accomplishments and Remarks Build NGO and public Functional training, Progress reports, review The horticulture A good working partnership between sector capacities and extension, and credit mission, project training and public (BB, DAE, DAM, RAKUB, and

partnerships to provide programs for small- completion reports, post- demonstration centers LGED) and private service providers training and credit support scale farmers in place project performance audit (s) built as required, (NGOs) was established. The partnership for small-scale farmers and operating reports training program between government agencies and NGOs formulated, good led to cooperation and mutual respect and relations prevail success in the project’s training, credit, between NGOs and and demonstration activities. DAE. The project farmers were trained in HVC production technologies and modern technologies for HVCs were disseminated to the farmers through 42,600 demonstration trials in farmers' field.

The partner NGOs provided need-based credit support to the beneficiaries in coordination with the PMU. The credit support will continue for at least 10 years after project completion. Capacity building training was given to the DAE, the DAM, and line ministry officials. Stakeholder workshops and periodic coordination meetings improved partnerships. Components-Outputs

Training centers upgraded, Eight training centers Physical observation, Efficient Eight training centers in Rangpur, Natore, courses formulated, upgraded; courses review missions, progress implementation of Chapai Nawabganj, Pabna. Thakurgaon, institutional training and formulated; 600 DAE reports, project completion physical works; Bogra Dinajpur and Rajshahi were follow-up extension and NGO staff trained; report appropriate training upgraded. A total of 4,587 implementing undertaken 200,000 farmer courses formulated on staff, including 197 NGO staff member, participants trained by a timely basis; farmers were trained. 2008 organized and selected; training Village-based, group leader, farmers’ field courses run school (FFS), gender and development

Design Summary Verifiable Indicators Means of Verification Assumptions/Risks Accomplishments and Remarks competently (GAD), and HVC marketing training courses were given to 384,585 farmers.2 326,020 beneficiaries were given training under the daylong program. The number of trainees exceeded the number of small farmers’ group members because of inclusion of trainees at the initial stage before group formation and trainees availed training more than once.

Courses of HVC production, marketing, post-harvest handling, and GAD were formulated. Course manuals and modules and extension literature, production manuals, and flip charts were prepared, distributed, and used.

In this component, the achievements against anticipated targets were fully satisfactory.

Farmers mobilized and 160,000 small farmers Progress reports, credit Participating farmers The partner NGOs (BRAC, GKF provided with credit join farmer groups, disbursement reports, receive adequate PROSHIKA, and RDRS) formed 12,415 receive training, credit review missions training; NGOs and groups and inducted 240,431 targeted packages, guidance in DAE organizers and farmers as members, compared with crop production and in trainers work revised targets of 12,500 groups and marketing by 2008 effectively 200,000 farmer members.3

Tk2,554 million in credit support was disbursed to 258,577 project farmers, who have maintained an almost 100% repayment rate. This amount included the

Appendix Appendix original credit fund and disbursements of the revolving credit fund. The loans totaled 514,182, indicating that some beneficiaries

2 Includes trainees at the initial stage of the project before group formation; trainees who availed of training more than once are counted more than once. 3 Revised target was agreed at mid-term review. 19

Appendix Appendix Design Summary Verifiable Indicators Means of Verification Assumptions/Risks Accomplishments and Remarks availed of credit more than once.

40,000 incremental ha Field surveys Through the extension of production credit of HVC cultivated and other supports, an additional area of about 153,330 ha was brought under HVCs by May 2011. The appraisal and revised targets for HVC area expansion were 40,000 ha and 85,000 ha, respectively. Adaptive research program Physical facilities of Physical observation, Upgrading needs of BARI was contracted to conduct adaptive implemented research centers progress reports funding research centers research on HVCs to meet the pressing upgraded; adaptive reports from research properly identified, needs of the HVC farmers. Of 26 research research on HVCs fund, research output research fund schemes, 22 were completed. Several undertaken with supervisory committee transferable technologies (pre- and post- financing from staffed with competent harvest practices for litchi, reduction of research fund personnel transport losses in late tomatoes, improved bitter gourd lines, control of rhizome rot in ginger, reduction of post-harvest loss in mango) have been developed, disseminated, and documented.

The results of this adaptive research component were useful to the project farmers. Marketing support provided Capacity of DAM Enhanced provision of Competent Market information collection and improved to provide market information by consultants recruited, dissemination capabilities of the DAM were timely and accurate DAM (e.g., radio and TV DAM personnel improved. Provided computer and market information broadcasts) amendable to revised computer network with Internet facilities in role DAE district offices in the project area. International and domestic consultancy inputs were provided. These experts contributed to generating and disseminating market information. 16 growers' markets Physical observation Markets sites Fifteen wholesale markets at the district and 60 village markets progress reports, review appropriately level and 59 growers markets in upgraded missions identified, good quality subdistricts have been constructed. In and effective addition, 1 farmers' central market has construction by the been constructed, and spaces allocated to

Design Summary Verifiable Indicators Means of Verification Assumptions/Risks Accomplishments and Remarks Local Government NCDP FMG members. Engineering Department (LGED), The partners NGOs have formed 490 markets properly farmers’ marketing groups (FMGs). 59 managed and growers’ markets, out of the total 60, have maintained been constructed and handed over to the DAM and at least 50% of the space in most markets has been allotted to the NCDP FMGs. About half of the growers’ markets are fully operational.

All of the 15 wholesale markets have been handed over, 5 are fully operational, and 5 are partly operational. The government is taking steps to make the 5 remaining markets operational.

One central farmers’ market was constructed at Gabtali in Dhaka to link project farmers with growers’ wholesale, and central markets. 4 This was included under the project scope revision.

Overall, around half of the constructed markets are in operation and remaining ones are in varied operation level. Actions are underway by ministry of agriculture (MOA) to make all the markets fully operational.

The outcomes of this component were assessed as partly achieved.

Appendix Appendix

4 Construction of central farmers’ market in Dhaka was agreed upon during the mid-term review. 21

Appendix Appendix Design Summary Verifiable Indicators Means of Verification Assumptions/Risks Accomplishments and Remarks Pilot agribusiness credit line Agribusiness ventures Progress reports, physical Entrepreneurs willing RAKUB approved 14 enterprises for disbursed operating inspection and interested in project funding under this pilot credit line.5

investment in The total sanctioned amount was agribusiness ventures Tk770.88 million and Tk60.38 million was disbursed. After project completion, all these enterprises were integrated into RAKUB’s own financed program.

This component suffered from unavailability of commercially viable and competitive clients for accessing and utilizing the credit fund effectively. The design of this component was weak due to lack of market studies for targeting efficient and strong clients or applicants for viable business.

Of the 14 enterprises, 12 are in operation currently; three entrepreneurs have repaid fully and remained in operation. RAKUB marked six entrepreneurs’ loans as bad, four were unclassified, one rated written- off classified, and three as fully repaid.

Total credit disbursed was Tk60.60 million against a total sanction of Tk75.85 million. Lack of timely initiatives from RAKUB and lack of operating capital contributed to poor performance of these selected enterprises.

5 Rajshahi Krishi Unnayan Bank (RAKUB).

Design Summary Verifiable Indicators Means of Verification Assumptions/Risks Accomplishments and Remarks Project management unit Incremental staff and The PMU, with all the supporting staff was (PMU) established and consultants to place established at the inception phase (2001– operating and working 2002) of the project. Consultants began work March 2003 and completed it in June 2009. , a total of 351 person-months (domestic) out of 429 person-months and 103 person-months (International) out of 114 have been utilized.

The PMU played its coordinating and monitoring role effectively and provided technical and implementation support, including logistics to the designated field offices.

Appendix Appendix

Appendix Appendix Activities Inputs Verifiable Indicators Assumptions/Risks Accomplishments and Remarks 1. PMU set up and Increment staff, Progress reports and Potential beneficiaries The PMU was headed by a project operating equipment, office space project reviews are interested director and acted as the coordinating unit

provided for administration and support services for NCDP activities. As per plan, consultants and incremental staffs were appointed. The DAE provided adequate office space the necessary equipment was procured.

PMU worked satisfactorily. All the progress reports, publications, documents, review reports are available from the DAE. 2. Expansion of training Civil works and NGO disbursement Civil works Eight training centers were upgraded (4 facilities equipment provided records appropriately identified, HTDCs at Rangpur, Natore, Chapai properly bid and Nawabganj, and Pabna; one training competently center at the RDRS at Thakurgaon; one undertaken at Rural Development Academy (RDA) at Bogra; and two DAE training facilities at Dinajpur and Rajshahi).

The necessary equipment was provided for these centers to provide good quality training. DAE subdistrict training facilities were also upgraded. 3. Formulation of training Local and international Training packages Competent consultants Thirty crop production training modules programs consultants prepared recruited and technical leaflets were developed, used for training of NCDP farmers, and supplied to the field offices. 4. Development of 50 DAE staff, local and Participating bank Potential beneficiaries Thirteen flip charts and transparency complete visual international disbursement records are interested sheets for HVCs were provided to the technology packages consultants field offices. 5. Training of NGO and DAE trainers assisted Progress reports Consultant recruitment 4,587 implementing staff, including 197 DAE staff by local and foreign procedure proceeds NGO officials, were trained under a consultants efficiently and variety of training of trainers (TOT) effectively courses in specialized areas (post- harvest handling, marketing, computer literacy, GAD).

Activities Inputs Verifiable Indicators Assumptions/Risks Accomplishments and Remarks 6. Mobilization of farmers NGO and DAE staff Procurement and NGOs committed to As of June 2009, 12,415 small farmers by NGOs time plus transport and reimbursement requests program groups were formed (99.3% of the target), administrative support with a total of 240,431 members (96.2% of the target).

7. Training of farmers staff, DAE staff, NGO records Potential beneficiaries 384,585 farmers (including repeaters) staff plus administrative Farmer surveys are interested were trained under village-based training, support group leaders’ training, FFS training, gender training, and marketing training.

8. Provision of credit to Credit funds, NGO staff NGO disbursement NGOs committed to Tk2514.45 million, including Tk200 million farmer trainees plus administrative records program from the revolving credit fund, was support disbursed to 258,577 farmers for HVC production.6

9. Follow-up assistance DAE staff, NGO staff, A total of 490 FMGs were formed to during production and DAM improve marketing of produce through marketing NCDP markets and to establish market channels for distant marketing. 3,600 FMG members were trained.

10. Upgrading of DAM staff Local and international Participating public 225 DAM staff members were trained in and activities consultants sector agencies computer use, accounting, and market received appropriate information collection and dissemination. budget and are adequate staff

11. Identification of primary DAM staff, DAE staff, Growers and wholesale market sites were and growers markets NGO staff, local selected and construction was completed for upgrading authorities and LGED as envisaged, with the exception of one staff wholesale market at Kurigram.

Appendix 12. Market construction Civil works supervised As per revised target, out of 78 markets and upgrading by LGED (1 central, 16 wholesale, and 60 growers), 76 markets (1 central, 15 wholesale, and

60 growers) were constructed, of which

6 Includes dropouts at the initial stages. 25

Appendix Appendix Activities Inputs Verifiable Indicators Assumptions/Risks Accomplishments and Remarks 75 were handed over to DAM. One growers market at Mundumala, Rajshahi,

is yet to be handed over to DAM due to an interdepartmental dispute. Construction of one wholesale market at Kurigram Sadar was not possible due to a land ownership dispute.

13. Market management DAM staff and local A total of 1,180 members of market authorities management committees were trained for implementing prescribed market management practices.

14. Upgrading needs at MOA staff, agency Funding approvals and Research capabilities upgrading needs horticulture research staff, civil works and research output were identified. Electronic data bank was agencies identified and equipment set up and linked with NCDP website. undertaken Researchable issues identified through farmers needs assessment and research extension linkage mechanism for undertaking adaptive research. BARI was contracted to conduct these identified research schemes.

15. Administration of MOA staff, research Competent proposals Agreement between NCDP and BARI horticulture adaptive funds ($1.2 million) are prepared by was finalized in December, 2003 for research fund research bodies and conducting adaptive research. Funds for submitted for funding 22 adaptive research trials were provided to BARI.

The research trials were completed. Results were compiled and a final report submitted. The research generated useful results.

16. Agribusiness ventures Rajshahi Krishi Fourteen enterprises were identified and identified Unnayan Bank supported under agribusiness pilot credit (RAKUB) staff line by RAKUB.

Activities Inputs Verifiable Indicators Assumptions/Risks Accomplishments and Remarks 17. Agribusiness credit RAKUB staff Fourteen agribusiness enterprises were disbursed and supported. The total amount disbursed supervised up to 2009 was Tk60.38 million against a sanctioned amount of Tk70.88 million. The total fund available under the pilot credit line was Tk129.63 million (ADB Tk77.78 million and RAKUB Tk51.85 million).

The total disbursement was 46.75% of available credit fund. The entrepreneur borrowers were not able to perform as expected at appraisal and the outcomes have not been satisfactory for a variety of reasons, such as a lack of initiative from RAKUB branch offices, procedural difficulties, and lack of ownership of the RAKUB staff.

Appendix Appendix

28 Appendix 2

PHYSICAL PROGRESS: TARGET VERSUS ACTUAL

Actual Components, Outputs, and Key Activities Target Achievement Achievement at Project (%) Appraisal Revised Completion 1 Farmers Training and Extension Output: Training centers upgraded, courses formulated, institutional training, village training, and follow-up extension undertaken a. Capacity improvement of training centers (No.) 4 8 8 100.00 b. Village-based day-long technical training for 200,000 250,000 326,020 130.41 project beneficiaries (person) c. Beneficiary training - GAD, PHM, and marketing of NS 28,000 28,290 101.04 HVC for group leaders, and agricuture marketing (person) d. Season-long farmers field school (person) NS 30,275 30,275 100.00 e. DAE, DAM, and NGO staff training (person) 600 600 4,347 724.50 f. Incremental HVCs cultivation (ha) 40,000 85,000 153,330 180.39 2 Farmer Mobilization and Credit Support Output: Farmers moblized and provided with credit a. Group formation by NGOs (No.) 8,000 12,500 12,415 99.32 b. Credit packages (loanee - person) 160,000 200,000 258,577 129.29 3 Adaptive Research Output: Adaptive research program implemented a. Upgrading horticulture stations (No.) 4 4 4 100.00 b. Horticulture databank (No.) 1 1 1 100.00 c. Contracted research (No.) NS 26 22 84.62

4 Marketing Support Output: Marketing support provided a. Central market (No.) - 1 1 100.00 b. Wholesale markets (No.) 16 16 15 93.75 c. Growers market (No.) 60 60 60 100.00 d. Support to DAM i) Vehicle including refer van and service 3 10 10 100.00 truck (No.) ii) Training and office equipment (No.) NS 177 177 100.00 5 Pilot Agribusiness Credit Line Output: Pilot agribusiness credit line disbursed a. Credit packages (subproject No.) NS NS 14 6 Project Management Support Output: Project management unit established and operating a. Vehicle, including motorbikes (No.) 62 96 96 100.00 b. Equipment (No.) 666 666 597 89.64 c. Consulting services (person-month) 682 682 441 64.66 DAE = Department of Agricultural Extension, DAM = Department of Agricultural Marketing, GAD = gender and development, ha = hectare, HVC = high value crop, NGO = nongovernment organization, No. = number, NS = not specified, - = not included in original scope, and PHM = post-harvest management.

Appendix 3 29

HIGHLIGHTS OF TRAINING AND EXTENSION ACTIVITIES

1. The Northwest Crop Diversification Project (NCDP) was undertaken to promote high value crops (HVCs). It aimed to make use of current opportunities and to open up new avenues for increasing the income of marginal small- and medium-scale farmers in the northwest region of Bangladesh. The poverty level is comparatively high in the region and small-scale farmers in particular have limited access to improved production technologies. To harness untapped agricultural potential and boost the regional economy, the project was intended to deliver the support and services small-scale farmers needed.

2. To achieve the project’s goals and objectives, all the stakeholders, including the targeted farmers, had to be prepared for effective capacity building and to make good use of the NCDP’s support for the production of HVCs. The NCDP program therefore focused on building the capacity of all stakeholders through a three-tier training program, targeting the small-scale farmers as the ultimate beneficiaries. Effective training programs based on the needs of the farmers were designed to achieve the envisaged outputs and outcomes.

3. The comprehensive plan had four major categories of training: (i) training of trainers (TOT); (ii) technical training for implementing staff for follow-on extension support; (iii) specialized training on agribusiness, post-harvest operations, and marketing, and (iv) village- based farmers’ training under the four subcategories:

(i) training on HVC cultivation using modern technologies, (ii) training on gender and development (GAD), (iii) intensive crop management training on HVCs following the farmer’s field school approach in farmers’ fields in 14 sessions through a full crop season, and (iv) HVC field demonstration exposure training (a daylong field trip).

4. The key activities envisaged under this component were to (i) train up 200,000 farmers/ target beneficiaries (revised target) in the production and marketing of selected HVCs to improve their income through the adoption of modern technology; (ii) plan, design, and implement specific programs and activities to train officers of the Department of Agricultural Extension (DAE) and partner non-government organizations (NGOs) as master trainers and technical field staff to train and advise staff of the DAE, the Department of Agriculture Marketing (DAM), and NGOs to provide follow-on extension support; (iii) formulate and develop training programs on HVC production, post-harvest handling, marketing, and gender awareness in a three-tier approach that would make use of a core group of master trainers from among the DAE and NGO field officials and staff to target project farmers; and (iv) upgrade training facilities of horticulture training and demonstration centers and other training centers.

5. Institutional capacity building training. The TOT program was an integral part of the capacity building of the executing agencies. Considering the importance of skilled trainers in providing quality training to project beneficiaries, a TOT course was organized for officers and field staff of the DAE, the DAM, and the NGOs to update their knowledge of effective training methodologies and HVC production and of the post-harvest handling of HVCs in general and their marketing in particular. Measures to make sure the training was effective included advance planning, training module preparation, the inclusion of practical hands-on components, the use of visual aids, and evaluation of trainees before and after the courses. A total of 326 staff participated in the training program. The consultants team monitored overall quality of the training programs implemented in the field. Considering the delivery of inputs, outputs achieved,

30 Appendix 3 quality and application of technical knowledge gained, the overall training component was rated successful.

6. Overseas study tour. To upgrade knowledge and gain experience, overseas study tours were organized under the project to five countries (Australia, the People’s Republic of China, Malaysia, Thailand, and Viet Nam) for 71 project-related personnel, including relevant public representatives.

7. Training facilities development. To improve the quality of the training, training facilities were upgraded at the subdistrict level and at eight training centers and training materials, including flip charts, were developed and supplied to the field. The centers upgraded were (i) four horticulture training and demonstration centers at Rangpur, Pabna, Natore, and Chapai Nawabganj; (ii) the Rural Development Academy, Bogra; (iii) the Training Center of Rangpur Dinajpur Rural Service, Thakurgaon; and (iv) the DAE facilities in the DAE campus, Dinajpur and Rajshahi. In addition, the DAE subdistrict training facilities were improved by providing needs-based support under the project.

8. Farmers’ training. A total of 326,020 beneficiary farmers, 51% of them women, were trained on HVC production under a daylong program.1 The project also organized a 2-day residential training course on group management, HVC production, and post-harvest crop handling and marketing of HVCs for 18,750 group leaders. Special training on gender and development, as well as HVC production and marketing, was also given to 5,490 women’s’ group leaders. In addition, 30,277 beneficiaries—16,651 men and 13,624 women—were trained using the farmer’s field school approach in 14 sessions over a single crop season. Various items including on-the-jobs, pictorial, field visits, supply of training materials, were included in the training course.

9. Training materials development. The project produced 30 crop production training modules for trainers in three separate bound books. They were distributed to all of the NCDP trainers at the subdistrict and district levels. Flip charts, transparency sheets, video clips on HVC production, and success stories were developed and supplied to the field to disseminate HVC production technologies.

10. A summary of the training is in Table A3.1.

1 Beneficiaries who took more than one training courses are counted more than once.

Appendix 3 31

Table A3.1: List of Training Courses, Duration, and Number of Participants

Duration Total Category Courses Participants (days) Participants Staff Training A (i) TOT on orientation of NCDP DAE staff 2 326 (ii) Gender and development DAE staff 1 60 (iii) TOT on maize-potato cropping DAE staff 1 90 pattern (iv) TOT on production of HVC DAE staff 3 1,046 (v) Computer skill development DAE staff 14 20 (vi) TOT on post-harvest handling and DAE staff 3 210 marketing (vii) Post-harvest management, DAE and DAM 1 255 agribusiness, and marketing orientation (viii) TOT on processing of fruits and DAE/DAM/NGO 3 15 vegetables (ix) TOT on orientation of NCDP DAE 3 197 Subtotal 3,033 B (i) Technical training on NCDP DAE field staff 2 1,510 (ii) TOT on season long FFS (sub-assistant 90 150 (iii) TOT on production of HVC agriculture officer 3 835 (iv) TOT on post-harvest handling and and sub-assistant 3 90 marketing of HVC plant protection (v) TOT on FFS (refresher) officer) 5 122 (vi) Introductory training on FFS 3 326 implementation Subtotal 2, 248 C (i) Skill development in computer DAE office 14 120 application assistants Subtotal 120 Farmers/Beneficiaries Training D (i) Village based training SFG members 1 326,020 a (ii) Season long FFS on 5 selected SFG members 14 30,275 HVCs (iii) Gender and development SFG member 1 5,490 (iv) HVCs and marketing SFG group leader 1 18,750 (v) Marketing of HVCs SFG members 1 3,600 E (i) Post-harvest management and FMG group 2 450 HVCs marketing leaders Subtotal 384,585 DAE = department of agricultural extension, DAM = department of agricultural marketing, FFS = farmers’ field school, FMG = farmers marketing group, HVC = high value crop, NGO = nongovernmental organization, SFG = small farmers’ group, and TOT = training of trainers. a Includes trainees at the initial stage before group formation and trainees availed training more than once counted more than once.

Source: End of Assignment Report, Team Leader and Agriculture Project Management Specialist, NCDP Consultants Team, 2009, P-12.

32 Appendix 3

11. Demonstration trials. The demonstration of transferable HVC technologies was one of the most important extension activities. As the project embarked on profitable crop production, which was followed by processing, marketing, and enterprise development, it sought to introduce new scientific advances in HVC production. Demonstrations of new technologies were made for fruits, spices, vegetables and cereal. The fruits included jujube (plum), mango, high- density tissue culture banana, papaya, litchi, and mandarin orange. The spices demonstrated were chili, summer onion, and zero tillage garlic and ginger. Technologies for such vegetables as okra, late tomato, French bean, bitter gourd, potato-maize relay, brinjal, and bottle gourd were also demonstrated. Aromatic rice and potato-maize relay were the cereals used in demonstrations.

12. More than 42,600 field demonstration trials were conducted under the project.2 They are summarized in Table A3.2.

Table A3.2: Summary of Demonstration Trials

FY2002–FY2003 Target Achievement Season (No.) (No.) Coverage of HVCs Rabi … 4,800 20 HVCs: Carrot–300, tomato–300, cabbage–300, (16 October – cauliflower–300, brinjal–300, okra–300, pea–120, red 15 March) amaranth–300, French bean–240, bottle gourd–120, bitter gourd–300, cucumber–300, spinach–180, broccoli–120, chilli–300, onion–300, coriander–300, sunflower–60, watermelon–120, maize–120, pattern 1–60, and pattern 2–60.

Kharif I … 3,280 18 HVCs: Lal shak–60, data shak–180, okra–180, (16 March – bitter gourd–240, ribbed gourd–120, white gourd–120, 15 July) snake gourd–180, sweet gourd–120, brinjal–120, cucumber–120, cabbage–120, chilli/pepper–180, onion–120, turmaric–120, aroid–120, kangkong–120, hybrid maize–940, and sticky maize–60. Subtotal 8,080

FY2003–FY2004 Target Achievement Season (No.) (No.) Coverage of HVCs Kharif II … 9,906 Covering 15 HVCs: Tomato–600, cabbage–600, (16 July – sweet gourd–120, white gourd–180, country bean– 5 October) 1200, mango–600, sobarna rekha–600, litchi-1200 (China 3–600, Bombai–600), guava–300, kazi piara– 300, IPSA piara–300, sapota–600, wood apple–600, aonla–900, Indian olive–600, carambola–600, lemon–600, banana–6. Subtotal 9,906

2 Size of the trials varies with the crop and technology ranging from 500 to 1,000 square meters.

Appendix 3 33

FY2004-FY2005 Target Achievement Season (No.) (No.) Coverage of HVCs Kharif II 523 523 Covering 6 HVCs: Summer onion–333, litchi (China (16 July – 3)–60, mango–30, banana–40, mandarin-10, and 15 October) pumelo–3.

Rabi 360 360 Covering 5 HVCs: Aromatic rice–90, French bean– (16 October – 60, potato+maize–90, chilli–90, and garlic–90. 15 Mar)

Rabi 6,272 6,272 Covering 4 HVCs: Jujube–6100, chilli–90, bitter (16 October – gourd–7, and summer onion–75. 15 March) Sub-total 7,155 7,155

FY2005–FY2006 Target Achievement Season (No.) (No.) Coverage of HVCs Rabi 454 454 Covering 12 HVCs: Banana–38, zero tillage garlic– (16 October – 56, summer onion seed production–11, bitter gourd– 15 March) 51, late tomato–12, pumkin–40, French bean–6, brinjal–30, potato+maize–90, chilli–70, and aromatic rice–50. Kharif I 6416 6416 Covering 7 HVCs: Tissue culture banana–30, (16 March – ginger–7, summer onion–75, apple kul–6100, late 15 July) tomato–14, okra–100, and chilli–90. Kharif II 427 427 Covering 6 HVCs: litchi–96, mango–128, banana–26, (16 July – onion–80, late tomato–7, and aromatic rice–90. 15 October) Perennial 6,315 6,315 Jujube (plum) budding in the homesteads of the project beneficiaries Sub-total 13,612 13,612

FY2006-FY2007 Target Achievement Season (No.) (No.) Coverage of HVCs Kharif II 404 404 Covering 6 HVCs: Mango–128, litchi–92, summer (16 July – onion–78, papaya–4, summer tomato–12, and 15 October) aromatic rice–90. Rabi 513 513 Covering 13 HVCs: Chilli–51, onion seed production– (16 October – 5, brinjal–51, bottle gourd–26, French bean–8, zero 15 March) tillage garlic–44, potato+maize+mung bean relay crop–10, aromatic rice–91, potato+maize relay crop– 102, onion–27, late tomato–22, bitter gourd–35, potato+maize+aromatic rice–13, and tissue culture banana–18. Kharif I 317 317 Covering 10 HVCs: Late tomato–14, brinjal–35, (16 March – ginger–33, summer onion–60, tissue culture banana– 15 July) 19, latiraj kachu–12, ladies finger–59, bitter gourd– 40, ground nut–11, and mung bean–34. Sub-total 1,234 1,234

34 Appendix 3

FY2007-FY2008 Target Achievement Season (No.) (No.) Coverage of HVCs Kharif II 639 639 Covering 7 HVCs: Mango orchard–75, litchi orchard– (16 July – 79, apple kul orchard–26, mango+sweet gourd–125, 15 October) litchi+mung bean–91, summer snion–118, summer onion (block)–123, and tissue culture banana–2. Rabi 660 660 Covering 12 HVCs: Brinjal (eggplant)-66, chilli–137, (16 October – bitter gourd–84, tissue culture banana–11, aromatic 15 March) rice–47, bottle gourd–55, maize+potato+mung bean– 96 zero tillage garlic–23, mung bean–70, ground nut–17, onion–36, late tomato–18. Kharif I 658 658 Covering 11 HVCs: Brinjal (eggplant)–53, bitter (16 March – gourd–57, tissue culture banana–20, summer onion– 15 July) 103, summer onion (block)–30, papaya–75, okra–57, mung bean–46, ground nut–21, latiraj kochu–55, ginger–31, and apple kul orchard–110. Sub-total 1,957 1,957

FY2008-FY2009 Target Achievement Season (No.) (No.) Coverage of HVCs Kharif II 423 423 Covering 5 HVCs: Tissue culture banana–4, onion (16 July – (block)–5, liichi+mung bean–66, high density 15 October) mango+ sweet gourd–216, and apple kul+mung bean–132. Rabi Covering 6 HVCs: Bitter gourd-67, late tomato–18, (16 October – 282 282 mung bean–40, zero tillage garlic–15, chilli–67, and 15 March) potato+maize+mung bean–75. Kharif I (16 March – None 15 July) Subtotal 705 705 Total 42,649 HVCs = high value crops, No. = number, and … = data not available. Source: Project’s progress reports.

Appendix 3 35

13. The crop-wise list of adopted and successful technologies including major observations/ remarks is summarized below:

Table A3.3: Summary of High Value Crop Technologies Adopted under Project

Technology Crop Demonstrated Remarks/Observations Vegetables Tomato Cultivation in late Rabi Highly profitable (cost–benefit ration: >3). High potential for season area expansion and for substituting for imports to meet local demand. Specifically suitable in Dinajpur and Panchagar area. Average yield was 16.45 t/ha Bitter gourd New high yielding Good potential because of higher production & profitability variety Bottle gourd Improved variety High acceptability, particularly by women farmers Eggplant Production manage- Highly profitable (Brinjal) ment and new variety (uttara) introduction Aroid (latiraj Production Highly profitable and introduced to other areas of northern kachu) management region Okra (lady's Improved BARI variety Moderately profitable finger) Cereals Aromatic rice Introduction and Highly profitable (cost–benefit ratio: >3.5). Good domestic as management well as export market. Specialized milling systems suitable for long grains need to be established at the local level Hybrid maize Intercropped with Highly profitable (cost–benefit ratio: >3.0). High demand and potato high potential for expansion Hybrid maize, Intercropped with Highly profitable (cost–benefit ratio: >3.0). High demand and potato and potato followed by high potential for expansion mung bean mung bean Fruits Banana High density-high Highly profitable (cost–benefit ratio: >3.0). Beneficiaries input cultivation showed great interest in this technology. Mango Establishing new High cost-intensive and late in revenue generating. orchards with good Expanding when supported with high yielding variety having management early bearing quality grafts and when profitable intercrops are grown. Expanding in Rajshahi and Dinajpur areas Litchi Establishing new High cost and expanding when supported with good variety orchards with good grafts and when profitable intercropping is practiced. management Expanding in project areas Apple Kul, Establishing new Highly profitable and expanding fast Chinese and orchards with good Thai Kul management Guava Establishing new Profitable and expanding fast orchards with Thai/ appropriate variety Spices Garlic Zero tillage cultivation Highly profitable (cost–benefit ratio: >4). High potential for as an extra crop expansion in the Haor and Beel areas just after receding of flood water. >= greater than, and t/ha = ton per hectare.

36 Appendix 3

14. Demonstration impacts. Benefits from the extensive demonstration trials appeared first in 2004–2005. The knowledge is now embedded in the project farming communities and has spillover effects on non-project farmers. Demonstration results showed yield increases of 200%–400% in tomato, bottle gourd, eggplant (brinjal), and banana. Spice crops like ginger, summer onion, and garlic showed a spectacular increase in yield. The project progress report for 2005–2006 said that due to these interventions the combined production of winter and summer onion could meet the domestic demand in near future.3 The areas of success due to demonstration activities included (i) high density tissue culture banana, (ii) bitter gourd new cultivar, (iii) late tomato production, (iv) zero-tillage garlic cultivation, (v) potato-maize relay cultivation, (vi) summer onion seed production, (vii) aromatic rice production, (viii) hybrid chili production management, (ix) growing of French bean, (x) improved cultivar of bottle gourd, and (xi) production management of eggplant (brinjal).

15. The other activities under demonstration and training got good acceptance from the farmers included: (i) top working of local species to improve varieties of jujube, (ii) promotion of quality orange in Panchagarh District, (iii) high density mango production and orchard establishment with improved and elite variety, (iv) production management package for papaya with improved varieties, (v) production management for high-density planting of elite variety of litchi, aiming at high income, and (vi) introduction of aromatic basmati rice.

16. Other activities. The other extension activities included holding 549 stakeholder workshops and 450 motivational tours for the beneficiaries for experience sharing.

17. Preliminary outcomes. The outcomes of demonstration trials on vegetables, cereals, fruits, spices were found to be positive and successful. The demonstration trials on tomato, bitter gourd, bottle gourd, brinjal, and aroid were profitable and technically suited to the field conditions. The trials on aromatic rice, hybrid maize, potato, mung bean were also found to be suitable. A new management system and intercrop culture was proved possible, except for aromatic rice. Mango, litchi, and jujube demonstrations were profitable with good management. . High-density banana was found to be highly profitable. Zero-tillage garlic has been a boon for low-lying areas like Chalan Beel area in Rajshahi, with a cost-benefit ratio of around 2. Summer onion, ginger (hill variety), and hybrid chili proved to be attractive from both the economic and the technical points of view.

18. Overall impacts. The overall outcome and impacts of these extension activities have included: (i) a shift in cropping pattern from traditional crops alone to HVCs and traditional crops, (ii) an increase in cropping intensity from 213% to 240%, (iii) reduction of post-harvest losses by about 4% in the case of papaya, eggplant (brinjal), banana, potato, and bottle gourd, and (iv) a reduction of marketing costs of various crops by 1.57%–5.17%.4

19. Lessons learned. The key lessons learned under the training and extension activities component are the following:

(i) Needs-based training is the more effective than pre-conceived training. Training modules prepared to address problems in the field for particular HVCs was very effective because trainees benefitted directly from the

3 Department of agricultural extension, Northwest Crop Diversification Project: Annual Progress Report, 2005-06, Dhaka. 4 End of Assignment Report, Team Leader and Agriculture Project Management Specialist, NCDP Consultants Team, 2009

Appendix 3 37

results of training in terms of better yields, less crop damage, better quality crops, and higher prices.

(ii) Continuation and upgrading of training is needed to improve and refresh the knowledge of farmers. Ending training schedule with the close of the project could constrain the natural both the vertical and horizontal growth of HVC production. Demand is high among the project farmers for refresher courses to update the knowledge they gained from earlier training. Other farmers have also demonstrated great interest in such training from the DAE.

(iii) Training and demonstration activities undertaken by the project should not end when the project does. These should continue as core DAE activities to sustain the benefits reaped so far and extend these benefits to further boost economic growth in the region at large.

20. Recommendations. The project completion report makes the following recommendations to make the DAE’s training and extension activities more effective:

(i) The DAE should strengthen its training activities under its core program and include NCDP and other farmers in the promotion and development of HVCs across the country, using lessons from the NCDP. Since the ADB’s ongoing follow-up Second Crop Diversification Project has included a number of potential subdistricts from the northwest region, the DAE can develop a collaborative activity with technical support from the Second Crop Diversification Project for promotion and development of HVCs in the non-NCDP and NCDP subdistricts (main text footnote 22). This will help continue support services for the NCDP subdistricts;

(ii) Since the HVC credit program has been continuing under revolving fund, the NCDP-farmer-DAE linkage may be reinforced through extending administrative and field level support by DAE, and coordination with NGOs;

(iii) An adequate operational budget with strong monitoring and accountability should be placed at the DAE field offices by MOA for HVCs demonstration trials in the farmers’ fields across the country based on the NCDP’s lessons; and

(iv) Recent initiatives of the central bank (Bangladesh Bank) to extend agricultural credit for financing for HVCs production by small-scale farmers in particular should be closely pursued by MOA. The DAE can be involved in the process.

38 Appendix 4

MOBILIZATION AND CREDIT OPERATION FOR HIGH VALUE CROP FARMERS

1. Farmers in Bangladesh have very limited access to credit support. This is particularly true of small-scale farmers and especially hinders the cultivation of high value crops (HVCs), which have a comparatively high cost of production. Ensuring timely credit support to these farmers is a huge challenge but also essential for successful HVC production in most situations. The Northwest Crop Diversification Project (NCDP) engaged four qualified nongovernment organizations (NGOs) to mobilize targeted farmers and extend needs-based credit support for production of HVCs.1

2. In close collaboration with department of agricultural extension field staff, the partner NGOs mobilized farmers following the project criteria and formed groups. One member from each targeted household was inducted into a group and a gender balance was more or less maintained. At completion, the small farmers’ groups (SFGs) totaled 12,415, with overall membership of 240,430 and an average group size of 16–20 members. Women constituted 50.29% of overall membership.

3. The formation of the SFGs led to actual HVC production efforts in the field. Other activities also moved farmer mobilization forward. These included awareness raising, regular weekly group meetings, and technical training. Participating in a daylong technical training session on HVCs was mandatory for eligibility for credit support from the project for HVC production with new technology package.

4. The NCDP aimed at increasing income of small-scale farmers through increased HVC production and marketing. These target groups have a dearth of cash to buy inputs and maintain production targets at the farm level. The project design rightly included credit support for them. The Bangladesh Bank was the executing agency for the credit operation and Rajshahi Krishi Unnayan Bank (RAKUB) was selected as the wholesale bank to disburse the credit. Four partner NGOs were involved to support the HVC farmers with credit operation in the field after completing group development and training activities.

5. The SFG members, having gained eligibility for HVC production credit through their training were provided with credit support through the four NGOs. These NGOs extended credit support to SFG members until the project’s physical completion in June 2009. To allow the credit operation for the SFGs to continue for at least 10 years after physical completion, a revolving credit fund was created at RAKUB from the repayment installments from the NGOs. The fund was under the supervision of Bangladesh Bank, in line with a provision in the report and recommendation of the President for the project (main text, footnote 1). New agreements were signed between RAKUB and the NGOs for continuation of credit support to the NCDP farmers. The revolving credit fund has been operating successfully.

6. As of 26th installment of original credit seed fund and 9th installment of revolving credit fund in April 2011, the Project had disbursed 514,182 loans amounting to Tk2,514.45 million to 258,577 project farmers. The repayment of loans from the beneficiaries and from the NGOs has been 100%. The effectiveness of the credit operation has been ensured by the demand for credit for HVC production.

1 The partner NGOs were Bangladesh Rural Advancement Committee (BRAC), Grameen Krishi Foundation (GKF), PROSHIKA – it is a combination of 3 Bangla words for – training (proshikkhon), education (shikkha), and work (kaj), and Rangpur Dinajpur Rural Service (RDRS).

Appendix 4 39

7. The credit fund has revolved nine times so far, maintaining a sustained efficiency since 2008. RAKUB, with its NCDP credit management experience, applies a flexible standard in allocating revolving funds to NGOs according to their demand and their performance on repayment. For example, BRAC obtained 50% of the total fund for distribution up to fourth installment (November–December 2009) but its share was reduced to 40% and 45% in later installments. PROSHIKA, RDRS, and GKF stood second, third, and fourth, respectively, in usage of the fund. The latest distribution schedule showed that Tk75 million was allocated to three NGOs and the remaining Tk25 million could not be allocated in time to PROSHIKA due to a delay in submission of a statement of expenditures for the seventh installment.

8. Credit disbursement to partner NGOs increased over time due to increased confidence and trust between the NGOs and RAKUB, as well as in the demand in the field. The efficiency and interest of the project farmers contributed substantially to the increase. Interest, effective demand, and sincere commitment by SFG members helped the partner NGOs recycle the credit flow in greater volumes and with increased frequency over time. Among the NGOs, BRAC borrowed the most, followed by PROSHIKA. This was determined by the number of SFGs under their management. An indication of the disbursement trend is shown in Table A4.1.

Table A4.1: Credit Disbursement, March 2004-November 2009 (taka million)

NGO Installment 1 Installment 26 BRAC 17.34 56.52 PROSHIKA 6.20 45.00 GKF 4.56 17.50 RDRS 1.00 17.50 Total 29.10 136.52 Source: Rajshahi Krishi Unnayan Bank (RAKUB).

Credit operation norms, including a standard average amount of production cost developed by Bangladesh Bank for each of the 33 HVCs, were followed to guide crop loan limits for farmers by the partner NGOs. The second benefit monitoring and evaluation survey reported that the average amount of credit utilization increased every time successively due to increasing effective demand.

9. Table A4.2 shows credit disbursement by NGOs to project beneficiaries.

Table A4.2: Credit Fund Disbursement by Nongovernment Organizations (taka million)

Original Credit Revolving Credit NGO Fund Fund Total BRAC 836.13 365.00 1,201.13 PROSHIKA 437.95 162.00 599.95 GKF 239.78 120.00 359.78 RDRS 225.59 128.00 353.59 Total 1,739.45 775.00 2,514.45 Source: Rajshahi Krishi Unnayan Bank (RAKUB).

40 Appendix 4

10. As of March 2011, borrowers under the project totaled 258,577. The number of loans, at 514,182, showed that many beneficiaries had availed of credit more than once. Higher demand for credit in the field has forced the NGOs to approach RAKUB for an increase in the revolving credit fund from Tk100 million to Tk150 million. The proposal is currently being reviewed by Bangladesh Bank. Total loans and borrowers are shown in Table A4.3.

Table A4.3: Total Loans and Borrowers, April 2004-December 2009

Loan Borrowers HVC Coverage NGOs (No) (No) (Ha) BRAC 150,074 103,889 47,642 PROSHIKA 112,504 57,328 28,634 GKF 141,608 73,105 18,798 RDRS 109,996 24,255 58,257 Total 514,182 258,577 153,331 Source: Rajshahi Krishi Unnayan Bank (RAKUB).

11. Potato, maize, and eggplant (brinjal) are the three crops found to be cultivated most with credit support. Other crops with moderate credit support are banana, tomato, green chili, onion, garlic, aromatic rice, ginger, and country bean.2

12. About 91% of the farmers in the SFGs received a loan within 6 days of submitting an application. The other 9% received loans within 1 week to 2 months of their applications. (Footnote 2)

13. The establishment of the revolving credit fund was an effective example of how credit support to project farmers can be continued after project completion to carry on delivery of higher economic returns, especially in such countries as Bangladesh, where credit for agriculture has been rare. Production support for HVCs has been recognized as having high potential for effective development because of the high potential returns. A good partnership and cooperation between government agencies and the NGOs helped make the credit operation successful and make the most of agricultural extension services including technology transfer and research results effective in the farmers’ field.

14. The NGOs supported the credit operation by using their local staff to help farmers obtain training in crop production skills, side by side with the DAE functionaries. Dissemination of technology was more effective when DAE and NGO collaboration was close and cordial. All the NGOs felt that they were competent to conduct the credit operation and social mobilization on their own but their interest in increasing the income of their farmer group members through HVC production and marketing inspired them to cooperate with technical experts of the DAE.

15. The recovery rate of the disbursed loans from the partner NGOs was about 100%, with no unrealized dues. All planned activities are on track. This reflects active HVC production practices with good returns from investment for the small farmers, who have been repaying their loans on time and in full. The dates for recovering the remaining credit are October 2011 and August 2012 for original credit and revolving credit fund sources, respectively. The total recovered amount as of April 2011 stood at Tk1739.94 million and the recoverable amount by October 2011 is Tk774.51 million. The repayment status is shown in Table A4.4.

2 The Second Annual Benefit Monitoring and Evaluation Report: 2008; Rural Development Academy, Bogra, PP- 130-131.

Appendix 4 41

Table A4.4: Nongovernment Organizations Repayments to Rajshahi Krishi Unnayan Bank, as of April 2011 (taka million)

Original Credit Revolving Credit Total NGO Fund Fund Repaid BRAC 726.62 100.00 826.62 PROSHIKA 402.95 47.00 449.95 GKF 222.28 30.00 252.28 RDRS 188.09 23.00 211.09 Total 1,539.94 200.00 1,739.94 Source: Rajshahi Krishi Unnayan Bank (RAKUB).

16. The increasing trend in the average credit extended per farmer is shown in Figure A4.1. It appears from the graph that the actual credit received by farmers increased by 54% in the second year over the first year of credit operation, by 31% in the third year over 2nd year, and by 23% and 15% in fourth and fifth years. A similar trend in rising credit demand continues, resulting in the request by RAKUB for the increase in the revolving credit fund (para. 10). This is required for faster HVC promotion, farmer income increases, and poverty reduction. In many cases, partner NGOs have used their own funds to meet the growing demand.

Figure A4: Increasing Average Credit Amount per Farmer (taka) 16000 14000 12000 10000 8000 6000 4000 2000

Amount in Taka of Credit Amount 0 1st time 2nd time 3rd time 4th time 5th time Times a Farmer Received Credit

Source: Second Benefit Monitoring and Evaluation (BME) Report, RDA: 2008

17. Another impact of the project was the emergence of a RAKUB-NGO linked wholesale microcredit program in 2010. This resulted in part from the effective partnership between RAKUB and the NGOs nurtured under the project. RAKUB has developed policies to work with the NGOs in the wholesale agriculture credit program, which is particularly aimed at small-scale farmers and has the ultimate goal of reducing poverty. RAKUB has based the policy on its experience during the NCDP in supporting HVCs and plans to make the NCDP-type program region-wide to meet the fast- growing demand for credit from non-NCDP farmers.

18. While few commercial banks were previously interested in agricultural crop loans, Bangladesh Bank recently made it mandatory for all scheduled commercial banks to extend crop credit to small farmers, particularly for HVC production. This can be viewed as endorsing country- wide application of the good practices and experience of the NCDP in enhancing the economic conditions of small-scale farmers. Promotion of crop diversification and HVC production has become an attractive sector for many banks and NGOs in the wake of the NCDP’s success.

42 Appendix 5

ADAPTIVE RESEARCH CONDUCTED UNDER THE PROJECT

1. High value crops (HVCs) are integral parts of the daily diet and are important to balanced nutrition. In Bangladesh, HVCs have been cultivated for a long times through traditional approaches and methods. The development of modern HVC production technologies has created great opportunities for farmers in general and small-scale farmers in particular to produce better yields and higher incomes. The improved production technologies available for most HVCs are being updated continuously by research organizations. As a general practice, technologies developed through this research are tested in the fields.

2. The first step in the process is to identify transferable technologies that may bring economic benefits to farmers. A strong link between research and extension is a key to disseminating useful modern production technologies such as HVCs. The aim of the adaptive research component of the project was to strengthen existing cooperation and linkages between the Department of Agricultural Extension (DAE) and such research institutions as the Bangladesh Agricultural Research Institute (BARI) and thereby make the latest technologies available to the project farmers. Enriching the knowledge and skill of the project farmers through training on the latest HVC production technologies intended to help them increase their incomes. The project organized demonstration trials of HVCs in the farmers’ fields of new, more economically beneficial production technologies to show how they could be put to practical use and to convince the farmers to adopt them because of their benefits.

3. The project undertook needs-based adaptive research, in partnership with BARI, to address the areas where the farmers most needed to increase yields by cultivating HVC that would fetch better prices. This research kept local agro-ecological and socioeconomic conditions in mind.

4. The component included capacity building for BARI based on a needs assessment. It involved establishing an electronic database on HVCs and website development. The project also engaged BARI for the adaptive research in those areas seen to be priorities of the project farmers with the aim of testing and demonstrating better technologies to supplement the project’s extension activities and training programs. BARI conducted 22 adaptive research schemes.

5. These adaptive research schemes generated positive results that promised economic gains through the technologies tested. The research successfully tested post-harvest handling methods (i) reducing loss of perishable vegetables and fruits during harvest, post-harvest storage, and transport; (ii) improved post-harvest practices for litchi and mango to meet local and export standards; (iii) better post-harvest treatment for mango, water melon, and litchi to control fruit borer and trips; (iv) controlling gummosis diseases in Mandarin orange; and (v) high-density planting of banana. Other benefits of these adaptive research schemes followed, bringing better quality produce, yield increases, and higher prices for crops in the market brought about by better technologies. The results of the adaptive research were brought to the field and successfully demonstrated. Most farmers accepted the results, which added value to the HVC commodities in the market.

6. The results of most research schemes were encouraging and beneficial for the farmers. Wider demonstrations and awareness raising among farmers are required to improve quality and reduce post-harvest losses for perishable vegetables and fruits. The research topics and the results are in Table A5.1.

Appendix 5 43

Table A5.1: Adaptive Research Component Topics and Results

Research Topics Results in Brief (i) Long distance transport loss of Successfully completed. Plastic crates were mango and banana recommended for long distance transport of mango and banana to minimize transport cost.

Physical injury was minimum in plastic crates than bamboo baskets and non-packed bunches. (ii) Pre-harvest and post-harvest Zinc and boron spray along with bagging and cooling practices of litchi for export. treatments gave good results for export quality litchi. (iii) Studies on the fruit borer control in Nimbicine + bagging was not effective to keep fruit litchi borer away from litchi (iv) Studies on control of mango fruit Neem-oil @ 1/ml/L water was found effective against borers mango fruit borer (v) Studies on the control of thrips in Cymbush spray @ 1 ml/L or neem oil and trix @5 ml/L watermelon were effective in controlling thrips in watermelon. (vi) Mass production of active compost Highest yield of okra was recorded. and its use in vegetable production (vii) Adaptive trial of improved bitter BT(K) line of bitter gourd had excellent performance. gourd lines About 10-15 t/ha yield is considered really a good yield. (viii) Selection of tomato varieties for Completed, but results were not satisfactory due to late planting in Rangpur smaller fruits. (ix) Planting time and materials Trial failed due to non availability of required inputs requirements for onion production and no results were available. (x) Control of gummosis disease in Ridomil gold and Indofil Z78 were proved to be mandarin orange through effective against gummosis disease in mandarin bordeaux pest in Panchagarh orange. (xi) Control of rhizome rot disease in Soil treatment with Ridomil gold together with poultry ginger by chemical and soil refuse @10 t/ha was recommended amendment (xii) Studies on pre-harvest practices Maximum weight loss of 78.8% was recorded in on post-harvest losses of onion storage of BARI-1 onion, storage in concrete building and garlic was better than in shed for reduction of weight loss. Netted bags proved to be better than rack. Fungicide spray could reduce rot due to fungus attack. In garlic, hanging was most effective. (xiii) Studies on maize-okra- This pattern had better performance than maize- transplanted aman (rainy season sesame–T. aman. But okra had disease problem, so rice) cropping pattern farmers did not like it. Sesame was recommended between maize and T. aman. The cropping pattern was not accepted by farmers for okra having some problems. So maize-sesame-T. aman was recommended (xiv) Effect of boron on cauliflower Cauliflower curds were shining white, attractive and production large due to boron application at the rate of 1 to 1.5 kg per bigha (33 decimal). This rate was recommended for boron deficit area like Rangpur and Nilphamari.

44 Appendix 5

Research Topics Results in Brief (xv) Adaptive trials of high density 1.5 X 1.5 m spacing in banana (BARI Kola-1) was planting of banana found better than 2 X 2 m spacing in producing higher number of bunches. The fruit size was a bit smaller in this spacing. Maturity of fruits was 15 days longer in 1.5 X1.5 m spacing than in 2X2 m space. Total yield was higher in the closer spacing. (xvi) Adaptive trial on pointed gourd BARI pointed gourd line PGO 020 yielded 14.4 t/ha lines with 130 fruit/plant whereas higher yield was noticed in PGO 25 line where yield was 19.44 t/ha and number of fruits per plant was 153.

A local cultivar on the other hand produced only 8.28 t/ha and 94 fruits per plant. BARI developed pointed gourd lines were found superior in all respects. (xvii) Minimization of post-harvest Matured mango after washing and hot water treatment loss of mango adapting improved in 550 for 5 minutes increased the quality of post-harvest practices appearance and shelf life by 10–15 days. Post-harvest loss was minimum.

Plastic crates were suggested as better package materials for transportation. (xviii) Standardization of pre-harvest After wrapping in perforated poly bags in plastic crates practices of litchi for local and increased the shelf life for 3-4 days without export market deterioration of the market quality of litchi. (xix) Minimization of long distance Lately produced tomatoes were transported to Dhaka transport loss of late tomato using from Dinajpur and Panchagarh in bamboo baskets, suitable packages wooden boxes, and plastic crates. Plastic crates were found as the best packages in terms of durability, cost and transportation.

Roma VF variety was better than surakkha variety in terms of keeping quality and transportation loss factor (22% loss in Roma VF and 13% in surakkha) (xx) Effect of poultry manure in Poultry manure is a good supplier of plant nutrients. combination with fertilizers on the Therefore 4 t PM ha-1 along with 20 kg N and 45 kg P yield and nutrient uptake of per ha along with the blanket dose S20 K50Zn2B1 may groundnut be recommended for the cultivation of groundnut in northern region of Bangladesh. (xxi) Nutrient availability through Lime played major role in augmenting the yield. Poultry application of poultry manure and manure @ 6 t/ha along with 2 t/ha dose of lime lime and their effects on the yield provided the highest yield. of maize (xxii) Technology of production of Farmers showed their reluctance to plant seed bulb onion all year round by using local during heavy rainfall condition, as onion could not seeds and seedlings withstand water logging. After cessation of rainfall the performance of the crop was excellent. Planting may be conducted at varying dates up to November. BARI = Bangladesh Agricultural Research Institute, B = boron, K = potassium, ml/L = milliliter per liter, N = nitrogen, P = phosphorous, t/ha = ton per hectare, and Zn = Zinc.

Appendix 6 45

MARKETING SUPPORT AND MARKET CONSTRUCTION

1. Marketing of fresh agricultural produce and ensuring fair prices to the producers has been an historical problem worldwide and for perishable items and developing countries in particular. The prime factors for poor returns for producers have included lack of transport, the perishability of the items, lack of updated knowledge on consumer preference and the potential for adding value, an absence of adequate capital for marketing, little timely price information at the growers’ level, and the growers’ poor bargaining position and skills at wholesale and assembly points. In Bangladesh, most farmers are traditionally subsistence growers who are being oriented slowly to commercial agriculture.

2. Farmers normally use weekly village market places to sell their produce. Consumers, retailers, commission agents, wholesalers, middlemen, and outside buyers often come directly to the growers’ fields or homes to buy high value crops (HVCs). Because transport costs are high, many farmers in the project areas usually sell their produce at the farmyard (51.4%) and in nearby village markets (39.5%).1 Marketplaces are at least 6 kilometers–10 kilometers from the growers’ villages and road conditions are mostly poor (footnote 1). HVCs such as vegetables, spices, fruits, and aromatic rice and maize are also in demand locally. It is a recognized fact that availing of opportunities to sell the HVCs at the right time with good quality maintained by efficient post-harvest management and storing can increase revenue from the farmers’ crops.

3. Quality and price are interlinked and the quality of vegetables can make a 20% to 30% difference in the price in the market. Deferring sale of a particular crop by a few weeks or months can also substantially increase a farmer’s income.

4. For example, the average wholesale prices of three HVCs—tomatoes, garlic, and onion—varied significantly from month to month during 2004–2008, as shown in Tables A6.1, A6.2, and A6.3. During harvest months, the prices remained comparatively low. They increased in other periods, depending on such factors as availability and demand in the market. Marketing assistance to farmers in terms of storage facilities, transport, connectivity, access to market infrastructures, and access to market information can be useful and give them a better margin of income from HVCs.

1 Rural Development Academy. 2008. Second Annual Benefit Monitoring and Evaluation Report. Bogra, Bangladesh. p. 142.

46 Appendix 6

Table A6.1: Monthly Wholesale Price of Tomatoes (taka per quintal)

Year Months 2003 2004 2005 2006 2007 2008 January … 1,262.00 912.00 1,252.00 1,151.00 1,156.00 February … 790.00 619.00 829.00 791.00 1,099.00 March … 583.00 550.00 745.00 797.00 740.00 April … 700.00 1,135.00 1,064.00 631.00 1,342.00 May … 1,077.00 1,856.00 1,599.00 1,380.00 2,264.00 June … 1,868.00 1,790.00 2,054.00 2,004.00 … July … 3,079.00 2,925.00 3,768.00 2,132.00 … August … 3,813.00 4,572.00 3,757.00 … … September … 3,661.00 4,161.00 4,780.00 … … October … 4,349.00 4,932.00 5,125.00 5,471.00 6,868.00 November … 3,878.00 4,214.00 4,373.00 4,982.00 6,481.00 December … 1,818.00 2,434.00 2,325.00 2,425.00 2,187.00 Yearly Average … 2,239.83 2,508.33 2,639.25 2,176.40 2,767.13 … = data not available Source: Bangladesh Department of Agricultural Marketing.

Table A6.2: Monthly Wholesale Price of Garlic (taka per quintal)

Year Months 2003 2004 2005 2006 2007 2008 January 4,226.00 3,349.00 3,051.00 5,116.00 9,432.00 3,633.00 February 3,294.00 3,372.00 2,816.00 4,287.00 5,620.00 3,595.00 March 2,485.00 2,095.00 2,126.00 3,254.00 3,910.00 2,692.00 April 2,415.00 2,193.00 2,418.00 4,160.00 4,143.00 2,643.00 May 3,006.00 2,735.00 2,771.00 5,440.00 4,628.00 2,789.00 June 3,044.00 2,725.00 3,025.00 5,897.00 4,466.00 2,802.00 July 3,034.00 2,681.00 3,599.00 5,767.00 4,267.00 2,815.00 August 2,979.00 2,766.00 4,016.00 6,155.00 4,388.00 2,768.00 September 2,892.00 2,908.00 4,170.00 7,548.00 4,497.00 2,639.00 October 2,974.00 3,270.00 4,247.00 8,060.00 4,281.00 2,481.00 November 3,161.00 3,368.00 4,326.00 8,126.00 4,022.00 2,424.00 December 3,126.00 3,128.00 4,755.00 9,082.00 3,947.00 2,317.00 Yearly Average 3,053.00 2,882.50 3,443.33 6,074.33 4,800.08 2,799.83 Source: Bangladesh Department of Agricultural Marketing.

Appendix 6 47

Table A6.3: Monthly Wholesale Price of Onion (taka per quintal)

Year Months 2003 2004 2005 2006 2007 2008 January 683.00 1,960.00 1,239.00 1,651.00 1,248.00 1,469.00 February 691.00 1,760.00 1,241.00 1,034.00 1,412.00 1,181.00 March 1,083.00 1,453.00 1,282.00 997.00 1,729.00 1,358.00 April 963.00 1,374.00 958.00 1,399.00 1,204.00 1,440.00 May 1,194.00 1,608.00 1,161.00 1,875.00 1,312.00 1,908.00 June 1,384.00 1,617.00 1,214.00 1,728.00 1,491.00 1,900.00 July 1,725.00 1,682.00 1,458.00 1,789.00 2,068.00 2,224.00 August 1,818.00 1,794.00 1,667.00 1,867.00 2,577.00 2,533.00 September 1,805.00 1,907.00 2,306.00 1,952.00 3,321.00 2,499.00 October 2,240.00 2,207.00 2,864.00 1,738.00 4,586.00 2,411.00 November 2,496.00 1,852.00 3,967.00 1,468.00 5,063.00 2,720.00 December 2,019.00 1,482.00 2,678.00 1,160.00 2,974.00 2,480.00 Yearly Average 1,508.42 1,724.67 1,836.25 1,554.83 2,415.42 2,010.25 Source: Bangladesh Department of Agricultural Marketing.

5. Because of this, small-scale farmers have opportunities to enhance their economic position with proper support. Profitability varies with the nature of the crops, the yield, and the supply chain strategy under a free market mechanism. Assuming a high income elasticity of demand for HVCs in Bangladesh, the prospects for farmers to enhance income from these crops are good.

6. The project’s marketing support component was formulated within this practical context. A marketing model for effective and efficient marketing was developed that defined the functions of farmers’ marketing groups (FMGs) to be set up under the project, as well as eligibility criteria, formation guidelines, and training modules. The model aimed to develop alternate marketing channels through direct involvement of HVC producers.

7. The goal was to increase the income of the small- and medium-scale farm producers of HVCs by (i) improving the quality and standard of the HVCs, (ii) reducing intermediate selling costs for primary growers (by avoiding the charges of middlemen), and (iii) marketing the produce in response to the price situation to optimize revenues by using storage and ancillary transport facilities under the project. The increased income was intended to materialize through better post-harvest handling, sorting, grading, and value addition than was generally undertaken in the ordinary marketing of farm produce in Bangladesh. The key elements of the component were (i) the building up of marketing institutions and organizations, including FMGs, (ii) training of FMG members, (iii) development of market information services, and (iv) construction of market infrastructure at different locations in the project area as examples of better marketing and favorable to small and marginal farmers.

8. Three levels of market infrastructure were provided (i) at the subdistrict level to support the primary growers of HVCs, (ii) at the district level to support wholesalers of HVCs having linkage with primary growers, and (iii) at central level in Dhaka, for HVC marketing with linkage to primary growers. Seven of sixteen wholesale markets were selected to be provided with

48 Appendix 6 generators, cooling facilities, and cold storages. Four horticulture training and demonstration centers (HTDCs) at Rangpur, Pabna, Natore, and Chapai Nawabganj were created with multi- chamber cold storage and pack houses to be used by FMG members and traders on a priority basis.

9. Seventy-six markets were constructed at different locations in the project area to offer modern marketing facilities for HVCs to project beneficiaries through the FMGs. This included 60 growers’ markets in 60 subdistricts and 15 wholesale markets, one for each of the 15 projects districts in the Rajshahi Division. One wholesale market envisaged for Kurigram District could not be built due to an interdepartmental land ownership dispute.

10. The central market that was constructed in Dhaka was to help provide the FMGs a ready channel and fair prices for their products to consumers in Dhaka. (The market was added to the project under a scope revision agreed during the midterm review). To promote participation and the interests of women members of the FMGs and female entrepreneurs, women’s corners were created in each market for female members of the FMGs. Office bearers and executive members of FMGs were given 3 daylong training sessions on post-harvest management, agribusiness development, and marketing of HVCs to pass on to FMG members.

11. The project developed several methods for providing regular, dependable market information to farmers to allow them to bargain for fair prices of their produce including (i) development of a website with links to other relevant websites for the department of agricultural marketing (DAM) component of the project, (ii) providing Internet facilities to 16 DAM offices, (iii) DAM published a weekly HVCs price bulletin for the 16 project districts, (iv) posting daily HVC prices by the DAM headquarter in Dhaka on websites, (v) circulating daily and weekly prices of HVCs to various project partners including NGOs, and (vi) organizing on-the-job training organized through the project implementation unit of the DAM.

12. A total of 490 FMGs were formed under the project, involving group leaders from the SFGs. About 3,600 FMG members were trained in market operations skills and 1,180 MMC members were oriented on HVC marketing and management. A manual for effective market operation to ensure access to project beneficiaries was developed. It is being on a limited scale for various reasons.

13. The local government engineering department constructed the farmers’ central market at Gabtali in Dhaka and handed it over to the DAM in June, 2010. Of 33 spaces on the first floor, 29 have been allocated to FMG members and relevant business groups or individuals. Two of the three women’s corners have been allocated to women groups. All other facilities, along with three cooling chambers, have been rented out. Of six reefer vans and one open truck, two vans have been rented out and the remaining transports are reported to in the process of being leased.

14. The 1,180 MMC members trained were given instruction in market operation, maintenance, storing, cooling, transport, networking, and other associated activities for market development. The DAM has been responsible for operation, supervision, and the maintenance of infrastructure and facilities through the FMGs as per MOA approved market management manual.

15. Market infrastructure development was the responsibility of the local government engineering department. The markets have been constructed according to guidelines set by the project and have paved yards, market sheds, internal roads, drainage, foot paths, packing

Appendix 6 49 space, auction yards, loading and unloading space, toilets, training rooms, and ladies’ corners. Temporary cooling facilities were established in some markets.

16. Respondents (project farmers) to the survey conducted by PCR mission had a mixed reaction to the site selection for the markets.2 Respondents approved of the locations of more than 50% of the wholesale and growers markets.3 Use of women’s corner is reported to be mostly negative.

17. Many of the markets are either operating only partially or not operating at all. Table A6.4 shows the current states.

Table A6.4: Status of the Markets Built Under the Project

Markets Operational Status Handed Fully Partly Not Category Constructed Over Operating Operating Operating a Growers’ markets 60 59b 29 13 17 Wholesale markets 15 15 5 5 5 Central market 1 1 … 1c … Total 76 75 34 19 22 … = data not available. a The ministry of agriculture is attempting to make non-operating markets operational. b One growers market at Mundumala, Rajshahi has yet to be handed over to the department of marketing due to an interdepartmental land ownership dispute. c Of 33 spaces on the first floor, 29 have been allocated to farmers’ marketing group members and businesses. Of three women’s corners, two have been allocated. All other facilities and three cooling chambers have been rented out. Source: Department of Agricultural Marketing,

18. Table A6.5 shows the results of a survey on the satisfaction level of project farmers with the markets’ infrastructure and service facilities. A majority of the respondents were highly or moderately satisfied with most aspects of the markets and were least satisfied with the market sites of market, the special corner facilities, and storing and cooling provisions.

2 Based on project completion review mission survey, 2011. 3 Government of Bangladesh. Implementation, monitoring, and evaluation division, 2010. Impact Evaluation of Northwest Crop Diversification Project. Dhaka.

50 Appendix 6

Table A6.5: Farmer Satisfaction with Project Market Infrastructure

Highly Moderately Less Item Satisfied Satisfied Satisfied Marketplace at large (area, local, and growers’ comfort) 50.3 16.1 32.3 Special corner (commodity-wise) facilities 37.5 31.3 29.9 Electrical provisions 49.0 35.4 14.8 Security provisions 62.0 32.8 3.9 Storing provisions 47.9 18.8 32.8 Sanitation provisions 51.6 35.2 12.8 Water supply provision 69.0 18.0 11.2 Cooling provision 37.2 25.8 36.5 Women’s facilities 58.9 28.1 12.2 Transportation (in and out) 42.4 41.7 13.8 Market operation, maintenance, and 44.0 31.5 23.4 management (UP, UZP) Composition of management committee 45.1 36.2 16.4 Cooperation from local government 41.7 36.2 20.1 Growers’/users’ contribution to O&M of market 45.8 28.6 22.9 Daily market transactions 54.7 37.0 6.8 O&M = operations and maintenance, UP = union parishad (the lowest tier of administrative unit council), and UZP = upazila parishad (subdistrict council). Source: ADB Project Completion Review Mission Socioeconomic Survey, 2011.

19. Concluding observations. The report has following observations:

(i) The marketing approach developed and implemented by the project to enable farmers themselves to sell HVCs through the channels of growers’ and wholesale markets was an innovative concept in Bangladesh. This activity has unveiled a number of deficiencies with the DAM and in the marketing of agricultural commodities in the country in general. These require early redress.

(ii) The project has shown the need for the government to review and take steps to reorganize the DAM and to improve agricultural marketing system at large, in view of the limited success of this component. An expert committee appointed by the government has recommended a few steps to reorganize the DAM in the meantime and an interministerial committee has been formed as a result to implement the recommendations.

(iii) This achievement can be viewed as an indirect positive impact of the project’s marketing component. The experts’ scope of work includes establishment of a farmer–market linkage and supply chain, maintenance of price information flow, crop quality control, and technological advancement in the entire marketing system, all of which will directly impact the markets provided under the project positively.

Appendix 6 51

(iv) The design and planning of the markets suffered from a lack of non- structural (human and social) considerations. Providing infrastructure for marketing is not sufficient. The project should have known that market users would take longer time than was envisaged to achieve, given socio- cultural conditions. The process of formation and composition of FMGs ought to have been more objective-oriented, selective, and progressive. Local business-minded persons and leaders should have been invited to participate and advise on planning and implementation.

(v) A dispute over ownership of the land of a number of developed markets remains unresolved, preventing the handover of one market. The matter needs to be resolved per existing legal provisions by involving respective deputy commissioner to ensure the access of the project farmers to the markets.

(vi) The DAM has no departmental staff at the subdistrict level. This limits its ability to supervise and monitor the marketing aspects of HVCs at the village and subdistrict locations of the project markets. The project growers’ markets are considered to be far away by many project survey respondents. Their locations make them unattractive for many potential users. The few temporary cooling systems established are not used by project farmers because the farmers are not familiar with them and they are not compatible with their needs. This results from supply-driven nature of this aspect of the project planning.

(vii) Those who have recently started using the project’s grower-to-wholesale- to-central market chain report a lack of capital among the emerging farmer-entrepreneurs. Sources of working capital for such entrepreneurs need to be made available.

(viii) Historically, small-scale farmers in Bangladesh are neither businessmen nor traders. Instilling a new marketing culture into a subsistence agrarian community is a big challenge. Breaking the culture of traditional, free, and costless sales of their own products to buyers nearest to their farms is difficult. The marketing support provided by the project has been supply- driven.

(ix) The time should come when farmers will value the role of these markets and be eager to use the facilities. This change in the outlook and capacity of the project farmers will allow them to make the best use of the project facilities. The sociological and behavioral aspects of the marketing process are complex and change will take time. Therefore, an evaluation of the limited success of the project’s market component needs to take these factors into consideration and take a longer view, despite the original short-term expectations.

(x) The modern marketing benefiting farmers is a medium to long-term plan, requiring change of behavior of the farmer groups from subsistence agriculture to high value commercial crop agriculture. It is not expected that all the markets will be operable within the implementation period of the Project. So, the progress so far has been positive, but the details of

52 Appendix 6

legal, social, managerial and technical marketing issues have to be monitored, which is being taken up by MOA. As reported, problems have been identified and actions are underway by MOA to make all the markets operational at the expected level.

20. Recommendations and follow-up actions. This report has the following recommendations:

(i) High-level monitoring and actions from MOA need to be pursued and continued to make all the markets fully operational.

(ii) Field-level DAM staff has to be more active in advising and guiding FMGs in partnership with non-government organizations involved. Considering the capacity limitations of the DAM, the DAE may have to be given additional responsibility in operating the markets.

(iii) Sources of working capital and credit support for innovative and growing enterprises involving HVCs need to be identified and made available to interested agribusiness entrepreneurs.

Appendix 7 53

ACTIVITIES UNDER PILOT AGRIBUSINESS CREDIT LINE

A. Background

1. The northwest crop diversification project was designed to contribute to increased production of high value crops (HVCs) in the northwest region and to increase agribusiness and entrepreneurship development, including value addition enterprises for post-harvest storage, processing, and transport. Expanding agribusiness activities such as cold storage, feed mills, and plants to process vegetables, spices, and fruit was expected to allow farmers to grow larger volumes of HVCs by choosing broader range of crops. But it was also envisaged that limited access to credit might be an obstacle to establishing and operating such enterprises. Because of this, the project planned to support more agribusiness activities and entrepreneurship development in the northwest region.

2. A pilot agribusiness credit line component was included in the project to test the feasibility and viability of some representative enterprises. The implementation and institutional arrangements for agribusiness lending were also included. The aim was to enable private individual entrepreneurs interested in small- and medium-sized ventures by supporting them with access to credit and other support services. Another intention was to involve NCDP beneficiaries produce so that they can learn lessons out of these activities. Agribusiness enterprises dealing with packaging and cold storage of potatoes and vegetables, feed milling, seed processing, specialized refrigerated transport, and small-scale processing of agricultural commodities were targeted as recipients of support from the pilot agribusiness credit fund. Rajshahi Krishi Unnayan Bank (RAKUB), a wholesale bank, was responsible for this pilot component.

3. A credit line of $1 million was earmarked to be on-lent through RAKUB, which was the bank specializing in agriculture in the region. The focus was on establishing downstream agribusiness as a support for large-scale HVC production under the NCDP. The businesses targeted for credit included cold storage, feed mills, packing and packaging enterprises, seed processing and storage, and specialized transport for HVCs, all making use of available indigenous technology.

4. As an initial step, the project arranged awareness raising and a campaign to attract private agribusiness entrepreneurs from the project area to come forward. The project experts tried to support the interested entrepreneurs with advice, suggestions, and guidance.

5. Bangladesh Bank was responsible for relending the agribusiness credit fund to RAKUB on the basis of loan applications. The NCDP sanctioned $1 million to RAKUB. As per project documents, the credit under this pilot credit line had to be run following the normal rules and norms of RAKUB. The full responsibility of the credit lied with RAKUB. Under continuous pressure from the project to do so, RAKUB sanctioned Tk70.88 million in loans until 2009 and by December 2010 RAKUB had disbursed Tk60.38 million to 14 selected agribusiness enterprises.

B. Current Status

6. From its start in 2004, the agribusiness credit line operated under constraints. RAKUB failed to take required actions timely. RAKUB’s procedural requirements for the credit line were complex. Due to continued follow-up and support from the project, RAKUB accepted credit proposals from 14 agribusiness enterprises under the program. The total credit sanctioned to

54 Appendix 7 these entrepreneurs was Tk70.88 million, of which, Tk60.38 million was disbursed. This disbursed amount included project loans of Tk53.08 million and cash credits of Tk7.30 million. The operation of most of the enterprises was not smooth because of their lack of experience and insufficient support from RAKUB.

7. Currently, 12 out of 14 enterprises are in operation, but most of these are underperforming. RAKUB marked six entrepreneur’s loan as bad loans, meaning the borrowers have not repaid the installments or have repaid but not on schedule, four as unclassified, one as written-off classified, and three as fully repaid. Total recovery has been only Tk26.85 million till 30 April 2011. Table A7.1 shows the list of credits and the current status of the agribusiness entrepreneurs.

8. A dearth of working capital is reported to be the key factor affecting operation of the enterprises. Procurement of raw materials and meeting operating and marketing costs required cash that the entrepreneurs could not afford. Most of the entrepreneurs could not go for production. As a result, they have huge amounts of overdue debt.

9. RAKUB told the project completion report mission that it could not extend working capital to the entrepreneurs because they did not have adequate collateral. As a result, none of the 14 industries was fully operational. All enterprises were commissioned but could not operate at full capacity due to shortage of working capital.1

10. The project credit line provided 60% of the enterprise capital and the remaining 40% was supposed to be provided by RAKUB. This meant that RAKUB had to follow all its mandated formalities and assessment procedures while valuing the mortgaged securities of the clients. This worked as formal barrier to advancing working capital. The RAKUB assessments were below market prices, according to most of the enterprises’ owners.2

C. Concluding Remarks

11. The original design of the pilot agribusiness program was reasonable. RAKUB was the right kind of bank to administer the pilot agribusiness program. The loan amount was suitable for small- and medium-sized enterprises. This report considers the main reasons for the component’s lack of success to be inadequate initiative and drive from RAKUB and a lack of appropriate entrepreneurs in the area. RAKUB is quite experienced in financing agribusiness and familiar with this sector in the northwest region. The 14 borrower enterprises, on the other hand, were not all been experienced enough to provide leadership in their agribusiness fields. Negotiating with RAKUB for working capital and over assessment criteria required such leadership qualities. The outputs of the component were not satisfactory and its performance is rated partly successful.

D. Recommendations

12. RAKUB needs to recover the loans, including interest, from those who have dues outstanding. To do this, RAKUB has to salvage these clients by reviewing each case on its merits and potential prospects. It should sanction needs-based working capital for the needy enterprises as per working capital requirement either from its own sources.

1 Eusuf and Associates. 2010. Impact Evaluation of Northwest Crop Diversification Project. Dhaka 2 Rural Development Academy. Bogra. 2008. Second Benefit Monitoring and Evaluation Survey Report. Bangladesh

Appendix 7 55

13. The prospects for HVCs promotion and development in the region are enormous. Mass production of HVCs will require the growth of small- and medium agro-industries for value addition and diversification of products and commodities. This will benefit farmers through higher incomes and a better standard of living. Allowing these attainable objectives to be compromised due to inadequate support for agribusinesses will jeopardize the whole endeavor. This report therefore recommends the development of pro-farmer entrepreneurship policies, an enabling environment for attracting private investment, and reinforcement of regulations to grow agribusiness in the region.

Table A7: Status of Agribusiness Entrepreneurs under Project Pilot Credit Line as of 30 April 2011 7 Appendix (taka million)

Amount

Outstanding Enterprise Amount Amount Amount including Loan Approved Disbursed Recovered interest Status Remarks New Ruchi Chips, Nilphamari 0.50 0.50 0.23 0.58 BL Working capital not approved, in operation. Arora Agri-Business, Dinajpur 2.83 0.00 0.00 4.10 UC Repayment schedule not settled, in operation. Humanitarian Agency for Development 9.00 1.70 1.40 0.97 BL Working capital not Services, Thakurgaon approved, not in operation. Meena Food Processing, Jaipurhat 0.90 0.90 0.97 0.86 UC Irregular repayment, in operation. Gold Moon Auto Feed Mill, Naogaon 4.50 4.50 0.00 7.08 BL In operation. Rafa Automatic Aromatic Rice Mill, Naogaon 9.00 9.00 0.51 13.34 BL Ownership of the enterprise under transfer, in operation. North Bengal Seed Industries, Dinajpur 4.90 4.93 2.94 2.26 UC Not in operation. Rajoni Bran Mill, Natore 0.75 0.75 0.35 0.67 BL In operation. Joshoda Traders, Natore 0.60 0.60 0.71 0.00 FR In operation. Habib Mini Specialized Cold Storage, Dinajpur 7.90 7.75 0.00 11.06 BL In operation. Nasib Agro Feed Industries, Rangpur 6.50 6.25 7.29 0.00 FR In operation. Sristi Beez & Agro Enterprises, Nilphamari 4.50 4.50 0.00 4.68 UC In operation. Annopurna Agro Service, Nilphamari 8.00 8.00 0.00 6.26 WCL In operation. Rangpur Himagar, Rangpur 11.00 11.00 12.45 0.00 FR In operation. Total 70.88 60.38 26.85 51.86 CL = classified loan, BL = bad loan, FR = fully repaid, UC = unclassified credit, and WCL = written-off classified.

PROJECT IMPLEMENTATION SCHEDULE

Key Component Activities Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 1. Farmers Training and Extension a. Assess upgrading requirements

b. Formulate training programs

c. Upgrade facilities

d. Train DAE and NGO trainers

e. Undertake institutional training

f. Undertake village-based training

g. Undertake follow-up training

h. Revise and update training program

2. Farmer Mobilization and Credit a. Promotion of program by NGOs and DAE

b. Farmer mobilization and credit provision

c. Training supervision and guidance

d. Provision and of credit packages

e. Marketing support

Appendix Appendix 3. Adaptive Research a. Assess horticulture station upgrading needs

b. Collate horticulture data bank 8

Appendix Appendix

Key Component Activities Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 c. Identify research needs

d. Undertake contract research

4. Marketing Support a. Formulation of market information strategy b. Formulation of DAM training program

c. Implementation of training program

d. Preparation of broadcast modules

e. Implementation of market information program f. Identification of markets for upgrading

g. Detailed design of markets

h. Market construction

i. Market management survey

j. Experiment with management methods

5. Pilot Agribusiness Credit Line a. Promote credit line

b. Assess proposals

c. Provide and supervise credit

d. Assess impact

Key Component Activities Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 6. Project Management Support a. Staffing of PMU

b. Equipping of PMU

c. Staffing of PIUs

d. Equipping of PIUs

e. Preparation of implementation plans

f. Finalization of interagency agreements

g. Project management activities

h. Undertake PBME

i. Participate in midterm review

DAE = department of agricultural extension, DAM = department of agricultural marketing, = horticulture training and demonstration center, NGO = non-government organization, PIU = project implementation unit, PMU = project management unit, and PBME = project benefit monitoring and evaluation. Note: Year starts on 1 August and ends on 31 July.

Appraisal Estimate Actual

Appendix Appendix

60 Appendix 9

COMPLIANCE STATUS OF THE LOAN COVENANTS

Reference Covenants Schedule Status

Project Executing Agencies Loan The project Executing Agency (EA) for the non- During project Complied with. Agreement credit components of the Project shall be implementation Schedule Department of Agricultural Extension (DAE), 6, para 1 The Project EA for crop production credit under Part B (ii) of the project and agribusiness credit under Part E of the project shall be Bangladesh Bank (BB). LA, As project EAs, each of DAE and BB shall be During project Complied with. Schedule 6 responsible for the overall supervision and implementation Para 2 execution of their respective components. Project Management Unit LA, DAE shall have overall supervision of project During project Complied with. Schedule 6 implementation. Such supervision shall be implementation Para. 3 exercised through a Project Management Unit (PMU) set up within the DAE headquarters in Dhaka. The PMU shall be responsible for: a) planning, budgeting, supervising and monitoring project implementation; b) managing, supervising and monitoring the implementation of the DAE-NGO Agreements; c) in cooperation with BB, monitoring the flow of credit to participating NGOs, qualified small farmers and qualified agribusiness enterprises; d) procurement and engagement of consultants under the project; e) accounting of all loan funds, commitments, disbursements and reimbursements, and f) liaison with the Bank. LA, The Borrower shall provide the PMU with the During project Complied with. Schedule 6 support necessary for it to properly supervise implementation Para 4 and manage the project. The PMU shall be headed by a full-time Project Director of sufficient experience and seniority. It shall have the following five units: (i) budget, planning and coordination; (ii) interagency coordination; (iii) procurement; (iv) accounting; and (v) monitoring and evaluation. The Borrower shall ensure that the each unit has a sufficient number of competent staff with adequate seniority and experience. Implementing Agencies LA, DAE shall be assisted by Department of During project Complied with. Schedule 6 Agriculture Marketing (DAM), as implementing implementation para. 5 agency (IA) for the implementation of part D (i) and D (iv) of the project and Local Government Engineering Department (LGED) as implementing agency (IA) for parts D (ii) and D (iii) of the project.

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Reference Covenants Schedule Status

Project Implementation Units LA, The Borrower shall ensure that Project No later than Complied with. Schedule 6 Implementation Units (PIUs) are set up within 30 days after para. 6 each of BB, DAE, DAM, LGED, Rajshahi Krishi the effective Unnayan Bank (RAKUB) and each of the date. participating NGOs. The PIUs shall be responsible for the individual day-to-day implementation of the various project components. The PIUs under DAE, DAM, LGED, RAKUB and each of the participating NGOs shall report to the PMU on progress under their respective components. The PIU under BB shall inform PMU of the amounts disbursed to RAKUB and the participating NGOs as crop production credit and agribusiness credit. The Borrower shall ensure that the PIUs have the requisite number of staff, and the necessary operational and logistical support. Project Supervision Unit LA, To ensure proper project supervision and No later than Complied with. Schedule 6 coordination at the field level, the Borrower 30 days after para. 7 shall ensure that regional project supervision the effective units (PSUs) are set up at Rajshahi and date. Rangpur under the Additional Director, DAE. These units shall be responsible, on behalf of PMU for overseeing and coordinating project implementation in the field, and shall work under the guidance of the PMU. Project Coordination and Steering Committee LA, A project coordination and steering committee Within 30 days Complied with. Schedule 6 (PCSC) shall be established by the Borrower. after the para. 8 The PCSC shall be responsible for overall effective date coordination among involved agencies. It shall be chaired by the Secretary of the Ministry of Agriculture. Its members shall be representatives from DAE, DAM, LGED, BB the Economic Relations Division of the Ministry of Finance, Planning Commission, and the Implementation, Monitoring and Evaluation Division of the Ministry of Planning, and a representative of the Divisional Commissioner of Rajshahi division. The PCSC shall meet at least twice a year, or more often as required, to discuss the progress of project implementation, resolve issues of interagency coordination and provide overall guidance for project implementation. LA, To ensure coordination in the upgrading Within 30 days Complied with but was Schedule 6 renovation and construction of the markets. The after the late. para. 9 Borrower shall ensure that Market Committees effective date (MCs) are established in each sub-region

62 Appendix 9

Reference Covenants Schedule Status

covered by a regional PSU. The MCs shall be chaired by the regional PSU and shall have representatives from DAM, LGED local authorities in the districts covered by the PSU and representatives of market vendors. Terms of operation of the MCs shall be prepared by the PMU. DAE-NGO Coordination Committee LA, A DAE-NGO coordination committee shall be Within 6 Complied with. Schedule 6 established to ensure the smooth operation of months after para. 10 part B of the project. This committee shall be the effective chaired by the head of the PMU and shall have date representatives from the DAE-PIU each of the participating NGOs and RAKUB. The terms of operation for this committee shall be prepared by the PMU in cooperation with the participating NGOs. Training and Extension (a) Formulation of Training Courses LA, The Food Crops Division of the DAE, under the During project Complied with some Schedule 6 supervision of the PMU, shall be responsible for implementation modification. PMU with para. 11 formulating training programs to promote assistance from expert production of HVC such as : (i) courses aimed consultants organized at training new and existing staff of DAE and all the institutional participating NGOs; (ii) courses intended to trainings under the train field staff to provide village-based training; guidance and (iii) courses aimed at DAE's and the supervision Director, participating NGO's staff who will be providing Food Crops Division, follow-on extension support; (iv) courses aimed DAE. The training to train small farmers in the project area in high programs utilized the value crop (HVC) production and marketing and expert trainers from (v) courses on specialized HVCs such as tree the food crops division. fruits and specialized vegetables for larger farmers with adequate resources to attempt a higher level of risk. (b) The Training Facilities LA, The project shall use existing facilities in the During project Complied with some Schedule 6 field, which facilities shall be upgraded to implementation modification para. 12 accommodate an increased number of farmer considering practical trainees. These facilities shall include: (i) four needs and ground horticulture training and demonstration centers realities. (s) under DAE at Rangpur, Pabna, Natore and Chapai Nawabganj; (ii) two agriculture training centers under participating NGOs; (iii) two horticulture training centers under Bangladesh Agriculture Development Corporation (BADC) at Rajshahi and Bogra; and (iv) a rural development academy which provides agriculture training at Bogra. Agreement shall be reached between the DAE and the operators of the training facilities identified under (ii), (iii) and (iv) in this paragraph. All training facilities

Appendix 9 63

Reference Covenants Schedule Status

shall be supported under the project and needs for upgrading, equipment and operational requirements shall be assembled based on curriculum design and number of institutional trainees intended for each facility. LA, The Borrower shall commence a review of Promptly after Partly complied with. Schedule 6 various financing arrangements that will ensure effective date DAE provided HTDCs para. 13 that the s become substantially self-financing. Tk100,000 as seed During the Mid-term review of the project, the money for improved borrower shall consult and agree with ADB on operation. HTDCs are the most appropriate arrangement that will required to return the ensure that the s become substantially self- money with 10% profit financing. The Borrower shall ensure that the per annum. The fund agreed arrangement is promptly implemented is revolving in nature. after the mid-term review. Due to initiatives of DAE, the s have increased their outputs (improved planting materials of HVCs and income against production costs. Revenue income increased against the production costs during 2003-04 to 2007-08. The Mission requested MOA and DAE to initiate further reforms in the ongoing systems to increase further efficiency of the s in extending services to the farmers including NCDP beneficiaries. (c) The Training Programs LA, Training programs shall be designed to cover During project Complied with. Schedule 6 all small-scale farmers interested in HVC implementation para. 14 production. Small scale farmer training shall be oriented to less risky field crops like tubers, hybrid maize, sunflowers, legumes, spices, vegetables and fruit crops. Village based training courses shall also be designed for those small-scale farmers who are unable or unwilling to participate in s-based training programs. (d) Follow-Up Activities LA, Follow-up field training for participating small During project Complied with. The Schedule 6 farmers shall be provided during crop implementation engaged partner para. 15 production and marketing. Such training shall NGOs formed a total be organized by the DAE in coordination with of 490 Farmers the Participating. NGOs and shall utilize the Marketing Groups resources of DAE field staff, supplemented by (FMG). PMU

64 Appendix 9

Reference Covenants Schedule Status

Participating NGO staff trained in horticulture. organized training on Wherever possible, participating NGOs shall be marketing for 339 encouraged to form marketing groups to help FMG members. defray marketing costs and assist in negotiating Follow-up activities by with bulk purchasers. the DAM, DAE & partner NGOs are ongoing. II. Farmer Mobilization and Credit for Crop Production

LA, The DAE and Participating NGOs shall be During project Complied with. Schedule 6 jointly responsible for promoting the project implementation para. 16 among small-scale farmers identifying and selecting potential participants for part B (i) and (ii) of the project and for follow up extension. The HVCs to be grown shall be chosen by the farmers with guidance (based on market prospects) from the participating NGOs and DAE. They shall be responsible for forming the farmers into groups for training and providing and supervising crop production credit packages to them. The borrower shall ensure that there is sufficient coordination and consultation between DAE and the participating NGOs in the identification and mobilization of small-scale farmers. The borrower shall also ensure that small farmers participating under part B (i) and B (ii) of the project (a) have land holdings in sub-districts that are identified as having good potential for HVC and which have access to primary markets; (b) indicate a willingness to participate in group activities; and (c) have not already received support for HVC from some other sources. Crop Production Credit LA, For purposes of crop production credit, the During project Complied with. Schedule 6 Borrower shall make available to BB, through implementation Para, 17 the financing agreement for crop production credit, funds in an amount equivalent to SDR 13,521,000. The Borrower shall ensure that such funds are re-lent by BB to RAKUB, under the subsidiary loan agreement (SLA) for crop production credit for purposes of on-lending to participating NGOs. The SLA for crop production credit shall provide for interest at a rate per annum equivalent to 14.5% below the BB rate. Further, it shall provide for repayment arrangements as may be agreed between BB and RAKUB, provided that RAKUB shall not hold for longer than 30 days any repayments made to it by the participating NGOs. Disbursements from BB to RAKUB and from RAKUB to the participating NGOs, will be made

Appendix 9 65

Reference Covenants Schedule Status

semi-annually on the basis of a work plan agreed between the PMU and each Participating NGO and copied to BB. The effective lending rates from RAKUB to the participating NGOs shall be equivalent to the rates at which the Palli Karma-Sahayak Foundation lends to large NGOs. Make such funds available as crop production credit packages to qualified small-scale farmers who wish to obtain crop production credit. Such credit packages shall be on terms and conditions acceptable to ADB. LA, The crop production credit packages shall be During project Complied with. Schedule 6 based on proposals submitted to the implementation Para. 18 participating NGOs by qualified small-scale farmers. The maximum size for any crop production credit package shall be Tk20,000 The Borrower shall ensure that DAE and the participating NGOs agree on broad guidelines regarding repayment terms, interest and loan charges, and that the participating NGOs strictly comply with such guidelines. LA, The Borrower shall ensure that BB shall Within one year Complied with. Crop Schedule 6 establish in its books a revolving fund for crop from the production credit Para. 19 production credit, which fund shall continue to effective date revolving fund exist for at least ten years after Project established and crop completion. The revolving fund shall be funded production credit in out of the repayments made by RAKUB under operation. Utilization of the financing agreement for crop production the fund commenced credit. under a separate agreement signed between RAKUB and NGOs, under the guidance of BB. III. Marketing Support (a) Market Information LA, The Borrower shall ensure that the daily Complied with. Schedule 6 broadcasts of crop volumes and prices at major Initiative to increase Para. 20 market centers throughout the country are budget for DAM to continued and that the annual budget of DAM is continue operation is increased to finance the continued operation of under way. DAM the communication equipment to be provided officials were trained under the project. on use of communication equipment like Computer & Internet under the Project.

66 Appendix 9

Reference Covenants Schedule Status

(b) Market Infrastructure LA, The preliminary identification of primary and During project Complied with. A total Schedule 6 growers market for upgrading and construction implementation of 76 (Central – 1, Para. 21 shall be undertaken by DAM on the basis of Complied with. A total market surveys and studies. Candidate markets of 76 markets (central shall be proposed to the market committees - 1, Wholesale – 15, and recommendations of the committees shall and Growers' – 60) be discussed with the relevant local constructed and administration (districts in the case of grower's handed over handed markets and sub-district in the case of primary over to DAM. One markets). Market construction and upgrading constructed growers shall then be arranged directly between the market is yet to be PMU and LGED. LGED shall be responsible for handed over due for the design and physical construction of the interdepartmental land market facilities. ownership dispute. LA, A region-wide market management study in During Project Complied with. A Schedule 6 respect of market operation and maintenance implementation printed guideline on Para. 22 shall be undertaken under the direction of DAE. market operation and On the basis of the study and maintenance approved recommendations, and on the basis of by the Ministry of consultation with local authorities and Agriculture distributed representative private sector stakeholder, to all stakeholders. various management options shall be Works are under way developed, implemented and monitored. In to revise the guideline developing these operational models particular to make it more user- emphasis shall be placed on good governance friendly. and on developing viable and sustainable public-private partnerships in market management. LA, Starting with markets upgraded under the During project Partly complied with. Schedule 6 Project, the Borrower shall ensure that implementation The guideline on Para. 23 improved market management and financing market operation and procedures are adopted for market maintenance covers maintenance. They shall incorporate principles the aspects of financial of good governance, transparency, and management and accountability. The Borrower shall also ensure maintenance of the that a substantial portion of the fees collected market. from the use of the market facilities are utilized for market maintenance, operation and repair.

IV. Adaptive Research LA, The Borrower shall ensure that the DAE shall During project Complied with. Schedule 6 assess the upgrading requirements of the implementation Para. 24 horticultural research centers in the project area and, if upgrading is necessary, shall ensure that such upgrading is implemented under the project LA, The Borrower shall ensure that an electronic During project Complied with. On-line Schedule 6 horticultural data bank is established at the implementation connection between Para. 25 Bangladesh Agriculture Research Institute DAE, DAM and BARI (BARI) in Gazipur with on-line connection with maintained via the DAE headquarters in Dhaka. websites and Internet.

Appendix 9 67

Reference Covenants Schedule Status

LA, To improve access to better technologies and During project Complied with. A total Schedule 6 ensure the supply of high quality planting implementation of 26 adaptive Para. 26 materials for a wide variety of HVC, the project research items were shall contract out adaptive research to various contracted to BARI. research agencies including BARI, and BARI completed 22 universities, private sector research centers research schemes and and NGOs throughout the project area that produced useful meet the qualifications and criteria agreed results. between the Borrower and ADB. LA, Adaptive research contracts shall be based on During project Complied with. BARI Schedule 6 proposals received from the extension workers. implementation completed 22 adaptive Para. 27 Appropriate mechanisms for research research items, which extension collaboration and participatory on- were selected on field farm trials shall be established in the contracts problems. to be awarded. Project Review LA, Annual monitoring reviews will be jointly carried During project Complied with. Schedule 6 out by the borrower and the Bank. Initially these implementation Para. 33 reviews shall determine whether all the proposed participatory and interagency processes are in place and effective, whether work on the training programs and the upgrading of training facilities is progressing as planned, whether DAE staff are being trained, whether markets are being effectively selected, designed and upgraded, whether the adaptive research program is underway and whether the pilot agribusiness credit line is being effectively used. A comprehensive mid-term review shall be undertaken at the end of the third year of project implementation. The purpose of the review shall be to critically evaluate the progress of the project the viability of the implementation procedures, the efficiency of the flow of funds to participating NGOs, qualified small-scale farmers and qualified agribusiness enterprises, their ability to utilize the funds effectively, the performance of the training programs and the performance of the pilot agribusiness credit line. During the midterm review a decision shall be taken, subject to mutual agreement by all parties concerned, including the Borrower, the Bank and BB, as to whether or not to involve other financing agencies and NGOs in the implementation of crop production credit and agribusiness credit. The agribusiness credit shall be reviewed by the Borrower and the Bank after 50 percent of the funds there for have been utilized.

68 Appendix 9

Reference Covenants Schedule Status

Policy Dialogue LA, The Borrower shall keep the Bank informed of During project Complied with. Schedule 6 agriculture related policy issues. The Borrower implementation Para. 34 shall continue policy dialogue with the Bank on problems and constraints encountered relating agriculture and agriculture-related policy and desirable changes to overcome or mitigate such problems and constraints. The Borrower shall also keep the Bank informed of policy discussions concerning the same matters undertaken with other international and bilateral agencies as the Bank may reasonably request, and shall provide the Bank with the opportunity to comment on any resulting policy proposals. LA, The Borrower shall undertake a comprehensive 30 June 2001 Complied with. Schedule 6 assessment of the existing Bangladesh Para. 35 Agriculture Development Corporation (BADC) retail seed outlets and of the fertilizer distribution system and shall provide to the Bank by 30 June 2001, the results of the assessment and a timetable for further action. The Borrower shall also reassess and reformulate the procedures for seed imports, testing and approval by 31 December 2001. LA, Except as the Borrower, the Bank, BB, RAKUB During project No such situation Schedule 6 and the participating NGOs may otherwise implementation arose. Para. 36 agree, the Borrower shall make no plan for nor otherwise implement debt amnesty or other forgiveness of loan repayment obligations under crop production credit or agribusiness credit. LA, The Borrower shall ensure that the project During project Complied with. Schedule 6 gender strategy shall be complied with and implementation Para. 37 implemented in the course of project implementation. Para 28 For purposes of the agriculture credit, the During project Complied with Schedule 6 Borrower shall make available to BB, through implementation the financing agreement for agribusiness credit, the equivalent of SDR770,000. The Borrower shall ensure that such amount is relent by BB to RAKUB, under the subsidiary loan agreement for agribusiness credit, for purposes of on- lending to qualified agribusiness enterprises as an agribusiness credit package with terms and conditions acceptable to the Bank. The subsidiary loan agreement for agribusiness credit shall provide for interest at the BB rate and a repayment schedule in accordance with existing BB practices for similar transactions. Qualified agribusiness enterprises may be identified through advertisements placed in newspapers in Dhaka and the project area explaining the nature of the fund, the type of

Appendix 9 69

Reference Covenants Schedule Status

enterprises to be provided credit, the counterpart financing requirements, and the need for pre-investment technical and financial feasibility studies. Para 29 The maximum size of an agribusiness credit During project Partly complied with. Schedule 6 package shall be no more than the equivalent implementation Full utilization of the of $150,000. Any agribusiness credit package available amount could in an amount that is in excess of the equivalent not be ensured by of $100,000 shall require the prior approval of RAKUB due to its the Bank. Interest rates shall be the same as procedural complexity the prevailing market rates for similar RAKUB and lack of timely loans, and repayment periods shall be decided initiatives. between the RAKUB and the qualified agribusiness enterprise, based on the projected cash flows of the qualified agribusiness enterprises to be financed. Mortgages and similar collateral shall be required to secure the loans. Para 30 The Borrower shall ensure that BB shall within Complied with but late. Schedule 6 one year from the effective date establish in its books a revolving fund for agribusiness credit, which fund shall continue to exist for at least ten years after project completion. The revolving fund shall be funded out of the repayments made by RAKUB under the subsidiary loan agreement for agribusiness credit. To ensure the sustainability of this revolving fund, the Borrower shall ensure that RAKUB is required to promptly repay to BB the repayments made to RAKUB by the qualified enterprises. Schedule The service of approximately 124-person Complied with as per 5, para.1 months of international consultants shall be need of the project. utilized in the carrying out of the Project, particularly with regard to: crop production; agricultural information; extension training; integrated pest management; post-harvest and marketing; data collection and dissemination; market information and management; research; seed verification; monitoring and evaluation; and project management. The services of approximately 458 person months of competent domestic consultants shall also be utilized for the purpose of civil engineering training and extension, course formulation, market improvement and management, adaptive research and project management support.

70 Appendix 10

ECONOMIC ANALYSIS AND NET AVERAGE FARM INCOME UNDER MAJOR CROPPING 10 Appendix PATTERNS INVOLVING HIGH VALUE CROPS

A. Background and Assumptions

1. The Northwest Crop Diversification Project (NCDP) activities started in August 2001 and were completed in June 2009. This economic analysis was a post-factum exercise and considered the performances of the six project components, based on aide-memoires, back-to- office reports, benefit monitoring and evaluation reports, and consultants’ progress reports, quarterly progress reports, and a small-scale socioeconomic survey by the project completion review mission. The analysis represented the evaluation results applicable to entire project area.

2. The primary output of the project is enhanced production of high value crops (HVCs) of different types, varieties, and value. Their value has diverse gestation gaps— short duration HVCs (some seasonal vegetables, spices, fruits, pulses, and cereals), medium duration crops (some fruits, spices and vegetables), and long duration (some fruits). Since some crops take 3 to 5 years to bear fruits, the benefits of the project in economic terms have been calculated taking into consideration the above cropping system dynamics and based on the costs and returns of the farmers’ practical experiences with their small parcels of land planted in different crops.

3. The NCDP command area underwent as many as 263 cropping patterns.1 A single typical model of a cropping pattern on a hectare basis was therefore not possible to construct, considering this large variety of patterns, the many crops involved (including 33 project- recommended HVCs), and their distribution over so many small and medium parcels of land. The sample frame for the socioeconomic survey was constructed according to a standard statistical sampling method (ROWSOFT Sample Calculator). The costs and benefits were taken directly from the respondent project farmers’ own estimated production costs and returns. The total costs benefits were established for the sample area via a questionnaire survey and then projected for the entire project area following the percentage coverage by each HVC. The total area under HVCs was estimated to be 153,300 hectares (ha), a net result of the NCDP’s credit operations and other support.2

4. To derive net incremental benefits, the net benefits accrued by the NCDP farmers were compared with those of the control area farmers—farmers from the areas outside the NCDP area who had experienced minimal or no spillover effects of NCDP interventions. The economic internal rate of return (EIRR) was estimated based on cash flows derived from the difference between project costs and net incremental benefits, as such. The total benefited area (153,300 ha) were disaggregated crop-wise according to the percentage distribution of respondents’ coverage by each crop, as collected from the project completion review mission survey in 2011.

1 Rural Development Academy. 2008. Second Annual Benefit Monitoring and Evaluation Survey Report of NCDP. Bogra, Bangladesh. 2 The source is the RAKUB, the wholesale bank responsible for managing credit for beneficiaries. The bank registered an area coverage estimate for each HVC for the credit operation based on reports from its nongovernment organization partners in the project.

Appendix 10 71

B. Methodology

5. The economic cost includes the investment cost incurred from three sources: the Asian Development Bank (ADB), the Government of Bangladesh, and the beneficiaries. The project is assumed to have an economic life of 30 years from July 2002. The analysis converted financial prices into economic prices by using conversion factors. All costs and benefits have been expressed in taka.

6. To derive economic costs from financial costs, the discounted flow of financial costs were multiplied by a standard conversion factor of 0.9, as usual. Unskilled labor in agriculture was weighted by a factor of 0.75 to arrive at an economic cost. Hired and the farmers’ own labor were proportioned at 60:40, as was normally reported by the project farmers.

7. The total area under each HVC for the project area and the control area was derived proportionately from the sample data and is presented in Table A9.1. The per hectare financial and economic costs and benefits for the selected HVCs are in Table A9.2 and A9.3, respectively. The HVC-wise net incremental benefits (the difference between project area and control area) are in Table A9.4. Local conversion factors were used to derive economic costs (Table A9.7) and the output prices are presented in Table A9.6.

C. Results

8. Table A9.8 shows the economic costs and benefits streams during the project life, with the resulting EIRR, net present value, and benefit–cost ratio at a 12% discount rate. The calculated EIRR at project completion report preparation stood at 55%, which was substantially higher than the appraisal estimate (30.7%).

9. There were several major reasons for this positive difference:

(i) At project appraisal, only 40,000 ha were envisaged to be covered by HVCs. This target was revised to 85,000 ha after midterm review considering the conditions on the ground. The appraisal estimate was conservative and based on limitations existing in 2002, including (i) slow adoption of new HVC technologies by the risk- averse farmers, (ii) slow release of land for HVCs due to scarcity of land in general, and (iii) reluctance of farmers to increase coverage of HVCs. The HVC incremental coverage achieved was 153,330 ha by the end of the Project;

(ii) Current trends suggest that the HVC area will continue to expand but, for the sake of simplicity, the full development stage is assumed to be the 10th year, with HVC area at 153,330 ha. The return was quite attractive and indicated a steady growth of HVCs area and production; and

(iii) Other direct and indirect benefits were not considered in the benefit calculation in this PCR. These include (i) appreciation of the value of the land where HVCs are cultivated, (ii) nutritional and hygienic improvements for women and children, (iii) income distributional benefits of technology generation and dissemination, and (iv) the benefits of the research–extension–farmer linkage supported by the project. These have immense socioeconomic impacts for the country as a whole.

72 Appendix 10

Table A10.1: High Value Crop Area Coverage and Control Area 10 Appendix

Area Area Total Area Crop Cultivated Percentage Cultivated Percentage under the

(hectare) of Area under NCDP of Area Project (Control Area) (Control Area) (hectare) (hectare) Aromatic rice 0.1 0.29 0.1 0.0 15 Banana 0.3 0.88 3.0 2.1 3,290 Bottle gourd 0.0 0.00 0.6 0.4 652 Brinjal 1.8 5.31 9.3 6.6 10,049 Cauliflower 0.2 0.59 1.3 0.9 1,412 Chilli 0.5 1.47 1.6 1.1 1,699 Country bean 1.0 2.95 5.5 3.9 6,006 French bean 0.3 0.33 1.2 0.9 1,310 Garden pea 0.1 0.29 0.2 0.1 218 Garlic 2.7 7.96 8.9 6.3 9,633 Jujube 0.0 0.00 1.8 1.3 1,955 Lady's finger 1.0 2.95 2.7 1.9 2,905 Litchi 1.4 4.13 0.2 0.1 217 Maize 3.4 10.00 24.9 17.6 27,029 Mango 2.0 5.90 18.0 12.7 19,496 Mug-86 0.0 0.00 0.2 0.1 217 Oil seed 0.0 0.00 0.1 0.1 146 Onion 2.5 7.37 13.5 9.5 14,628 Potato 15.1 44.54 41.9 29.7 45,458 Pulse 0.4 1.18 1.2 0.8 1,284 Sweet gourd 0.0 0.00 2.3 1.6 2,448 Tomato 0.9 2.65 1.7 1.2 1,807 Turmeric 0.2 0.59 1.2 0.8 1,297 Total 33.9 99.90 141.00 99.9 153,300 Source: Project Completion Review Survey, 2011 and Rajshahi Krishi Unnayan Bank (RAKUB)

Table A10.2: Net Return (Financial and Economic) from High Value Crops

Gross Gross Revenue Revenue Gross Cost Gross Cost Economic Financial Financial Economic Gross Cost Labor Cost (Financial) (Economic) Return Return HVC (Tk) (Tk) (Tk) (Tk) (Tk) (Tk) (Tk/ha) (Tk/ha) Aromatic rice 20,250 18,225 5,360 2,460 4,376 4,271 104,138 118,463 Banana 1,080,412 972,371 604,237 168,270 536,929 505,953 153,984 179,427 Bottle gourd 164,400 147,960 77,540 11,050 73,120 67,300 134,434 152,133 Brinjal 3,067,163 2,760,447 761,307 150,670 701,039 651,276 227,969 255,742 Cauliflower 299,644 269,680 165,065 32,950 151,885 141,145 98,873 113,661 Chili 684,760 616,284 135,485 46,890 116,729 111,386 322,825 363,191 Country bean 1,733,550 1,560,195 600,901 109,500 557,101 516,173 188,792 212,739 French bean 500,000 450,000 139,255 34,000 125,655 117,680 275,556 310,402 Garden pea 23,040 20,736 7,610 4,050 5,990 5,938 73,623 84,826 Garlic 2,986,600 2,687,940 1,119,617 178,165 1,048,351 967,568 193,976 218,42 Jujube 1,263,500 1,137,150 347,473 81,100 315,033 294,478 468,151 526,926 Lady's finger 702,420 632,178 236,619 44,440 218,843 202,958 160,456 180,776 Litchi 84,000 75,600 41,800 8,600 38,360 35,685 199,575 228,200 Maize 2,487,708 2,238,937 1,388,812 251,310 1,288,288 1,193,386 42,013 48,196 Mango 19,313,000 17,381,700 2,973,950 504,100 2,772,310 2,563,133 825,547 921,487 Mung-86 22,000 19,800 5,827 2,400 4,867 4,704 75,479 85,665 Oil seed 14,000 12,600 8,390 600 8,150 7,416 38,687 43,657 Onion 3,662,496 3,296,246 1,769,045 252,755 1,667,943 1,535,271 130,753 148,096 Potato 11,165,350 10,048,815 4,827,467 779,670 4,515,599 140,476 158,879 158,879 Pulse 96,000 86,400 44,760 12,900 39,600 37,382 41,471 47,716 Sweet gourd 275.000 247,500 169,350 35,900 154,990 144,338 45,769 53,243 Tomato 780,000 702,000 180,285 29,900 168,325 155,529 328,408 367,593 10 Appendix Turmeric 122,400 110,160 54,307 16,370 47,759 45,193 54,411 62,513 Tk = taka, and Tk/ha = taka per hectare. Source: Project Completion Review Mission Survey, 2011

74 Appendix 10

Appendix 10 Appendix Table A10.3: Net Return (Financial and Economic) from High Value Crops in Control Area

Gross Gross Gross Revenue Revenue Cost Gross Cost Return Return HVCs (Financial) (Economic) Gross Cost Labor Cost (Financial) Economic Economic Financial (taka) (taka) (taka) (taka) (taka) (taka) (Tk/ha) (Tk/ha) Aromatic rice 18,250 16,425 4,460 2,460 3,476 3,461 96,750 110,254 Banana 12,500 11,250 6,007 1,500 5,407 5,069 20,742 23,802 Bottle gourd 147,960 133,164 69,786 9,945 58,496 59,227 123,228 149,107 Brinjal 559,350 503,415 217,491 27,800 206,371 189,487 170,151 191,317 Cauliflower 44,000 39,600 30,206 6,600 27,566 25,700 69,498 82,170 Chili 124,800 112,320 53,970 17,400 47,010 44,658 147,734 169,847 Country bean 169,000 152,100 76,742 14,500 70,942 65,805 89,055 101,195 French bean 100,000 90,000 41,400 9,800 37,480 35,055 205,019 233,284 Garden pea 6,840 6,156 2,445 1,350 1,905 1,897 63,571 73,657 Garlic 864,000 777,600 307,115 50,310 286,991 265,084 187,941 211,591 Jujube 1,137,150 1,023,435 312,726 72,930 252,027 255,177 426,810 491,775 Lady's finger 199,700 179,730 103,013 15,440 96,837 89,238 90,583 102,966 Litchi 525,000 472,500 236,525 53,850 214,985 200,756 19,826 221,123 Maize 288,005 259,205 162,061 36,240 147,565 137,701 35,527 41,064 Mango 2,170,000 1,953,000 357,800 58,900 334,240 308,768 822,116 917,880 Mung-86 19,800 17,820 5,244 2,160 4,376 3,942 69,389 77,118 Oilseed 12,600 11,340 7,551 540 7,335 6,602 35,362 39,291 Onion 612,050 550,845 312,221 62,790 287,105 266,871 115,437 132,091 Potato 4,047,357 3,642,621 1,995,990 294,670 1,878,122 1,730,090 127,070 144,126 Pulse 28,000 25,200 15,250 6,050 12,830 12,364 31,931 37,736 Sweet gourd 247,500 222,750 152,415 32,210 123,991 125,542 43,127 54,795 Tomato 390,000 351,000 94,360 24,130 84,708 79,495 318,668 358,324 HVCs = high value crops, and Tk/ha = taka per hectare. Note: Per hectare net incremental benefits of bottle gourd, sweet gourd, mung bean, jujube, and oil seed (mustard) crops for the control area were collected from farmers outside the project area because no information was available from the sample survey. These costs and returns were based on local farmers’ estimates during the field survey.

Appendix 10 75

Table A10.4: Net Incremental Benefits by High Value Crops

Project Control Group Net Incremental Benefits HVCs (Non-Project) (Tk/ha) NRE NRF NRE NRF (Tk/ha) (Tk/ha) (Tk/ha) (Tk/ha) Financial Economic Aromatic rice 104,138 118,463 96,750 110,254 8,209 7,388 Banana 153,984 179,427 20,742 23,802 155,625 133,242 Bottle gourd 134,434 152,133 123,228 136,920 15,213 11,206 Brinjal 227,969 255,742 170,151 191,317 64,425 57,818 Cauliflower 98,873 113,661 69,498 82,170 31,491 29,375 Chili 322,825 363,191 147,734 169,847 193,344 175,091 Country bean 188,792 212,739 89,055 101,195 111,544 99,737 French bean 275,556 310,402 205,019 233,284 77,119 70,537 Garden pea 73,623 84,826 63,571 73,657 11,169 10,052 Garlic 193,976 218,542 187,941 211,591 6,951 6,034 Jujube 468151 526,926 426,810 474,234 52,693 41,341 Lady's finger 160,456 180,776 90,583 102,966 77,810 69,873 Litchi 199,575 228,200 193,826 221,123 7,077 5,749 Maize 42,013 48,196 35,527 41,064 7,131 6,485 Mango 825,547 921,487 822,116 917,880 3,607 3,431 Mug-86 75,479 85,665 69,389 77,099 8,567 6,090 Oil seed 38,687 43,657 35,362 39,291 4,366 3,325 Onion 130,753 148,096 115,437 132091 16,004 15,316 Potato 140,476 158,879 127,070 144,126 14,753 13,406 Pulse 41,471 47,716 31,931 37,736 9,979 9,540 Sweet gourd 45,769 53,243 43127 47,919 5,324 2,642 Tomato 328,408 367,593 318,668 358,324 9,269 9,740 Turmeric 54,411 62,513 29,819 35,080 27,433 24,592 Total 4,325,364 4,882,072 3,513,354 3,962,969 919,103 812,011 for all crops Tk/ha = taka per hectare, NRE = net return economic, and NRF = net return financial. 10 Appendix

76 Appendix 10

Appendix 10 Appendix

Table A10.5: Total Net Incremental Benefits (Financial and Economic)

Area Total Area NIB/HVC/ha NIB/Crop/ha Total NIB Total NIB HVCs Cultivated Percentage under Project Financial Economic Financial Economic (ha) of Area (ha) (taka) (taka) (taka million) (taka million) Aromatic rice 0.1 0.0 15 8,209 7,388 0 0 Banana 3.0 2.1 3,290 155,625 133,242 512 438 Bottle gourd 0.6 0.4 652 15,213 11,213 10 7 Brinjal 9.3 6.6 10,049 64,425 57,818 647 581 Cauliflower 1.3 0.9 1,412 31,491 29,375 44 41 Country bean 5.5 3.9 6,006 111,544 99,737 670 599 Chili 1.6 1.1 1,699 193,344 175,091 328 297 French bean 1.2 0.9 1,310 77,119 70,537 101 92 Garden pea 0.2 0.1 218 11,169 10,052 2 2 Garlic 8.9 6.3 9,633 6,951 6,034 67 58 Jujube 1.8 1.3 1,955 52,693 41,341 103 81 Lady’s finger 2.7 1.9 2,905 77,810 69,873 226 203 Litchi 0.2 0.1 217 7,077 5,749 2 1 Maize 24.9 17.6 27,029 7,131 6,485 193 175 Mango 18.0 12.7 19,496 3,607 3,431 70 67 Mung-86 0.2 0.1 217 8,567 6,090 2 1 Oil seed 0.1 0.1 146 4,366 3,325 1 0 Onion 13.5 9.5 14,628 16,004 15,216 234 224 Potato 41.9 29.7 45,458 14,753 13,406 671 609 Pulse 1.2 0.8 1,284 9,979 9,540 13 12 Sweet gourd 2.3 1.6 2,448 5,324 2,642 13 6 Tomato 1.7 1.2 1,807 9,269 9,740 17 18 Turmeric 1.2 0.8 1,297 27,433 24,592 36 32 Total 141.0 99.9 153,300 3,962 3,548 HVCs = high value crops, ha = hectare, and NIB = net incremental benefits.

Appendix 10 77

Table A10.6: Output Price of High Value Crops

Price High Value Crops (taka per kilogram) Aromatic rice 35 Banana 11 Bottle gourd 10 Brinjal 12 Cauliflower 8 Chili 25 Country bean 20 French bean 20 Garden pea 18 Garlic 26 Jujube 35 Lady's finger 9 Litchi 15 Maize 10 Mango 35 Mung-86 55 Oilseed 35 Onion 20 Potato 10 Pulse 50 Sweet gourd 12 Tomato 11 Turmeric 15 Note: Farmers reported according to the local practice of bulk sales. This was converted to a kilogram estimate.

10 Appendix Table A10.7: Conversion Factors used in Economic Analysis

Inputs/Outputs/ Conversion

Others Factor All local inputs except labor 0.90 Local unskilled labor 0.75 77

All outputs 0.90 Local cost (taka) 0.90

78 Appendix 10

Appendix 10 Appendix Table A10.8: Base Case Economic Analysis

Total Economic Cost: Tk4,094 million

Parameters Project Years 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15–30 Economic costs 19 61 273 694 982 768 609 688 Economic benefits 0 0 0 177 355 532 887 1,951 2,661 3,548 3,548 3,548 3,548 3,548 53,222 Conversion factor -19 -61 -273 -517 -627 -235 278 1,263 2,661 3,548 3,548 3,548 3,548 3,548 53,222 Net Present Value = Tk14,868 million (@12%) Economic Internal Rate of Return = 55% Economic Benefit Cost Ratio = 7.8 : 1.0 (@12%)

Appendix 10 79

D. Net Average Farm Income under Major HVC Cropping Practices

10. For financial analysis, the net incremental benefits per hectare were calculated using crop-wise net returns of the with- and without-project scenarios. The annual average farm income was calculated by considering the five most prevalent cropping patterns involving HVCs in three farm categories (0.5 ha, 1.0 ha, and 2.0 ha). The net incremental benefits from the more frequently practiced pattern involving mango, maize, pulse, and potato for a 0.5 ha farm was Tk29,347. The net incomes from other patterns are presented in Table A9.9. Analysis revealed that greater the area planted with HVCs the higher were the returns, but cultivating HVCs of higher values depended on the agro-ecological suitability of the particular HVCs to a particular farmers’ land.

11. The income impact was encouraging due to the higher production and income derived from HVCs for every NCDP farmer during the 9 years. The small-scale socioeconomic survey conducted in 2011 confirmed that the incomes of farmers using the five prevalent cropping patterns had greatly increased. The prevalent cropping practices of the marginal small- and medium-sized farms of 0.5–2.0 ha were: (i) entire area planted with banana, potato and turmeric in different proportions, with and without project; (ii) all land planted with banana, potatoes, and zero-tillage garlic in different proportions, with and without project; (iii) all area planted with mango, maize, pulse (mung), and potato in different proportions, with and without project; (iv) all land planted with mango, litchi, pulse, and maize in different proportions, with and without project; and (v) all area planted with mango, jujube, tomato, onion, and zero-tillage garlic in different proportions, with and without project.

12. The income increases for an NCDP farmer of 0.5 ha over that of non-NCDP farmer was 21%–56%. The income was proportionally higher for larger holding sizes. Details on income increases with NCDP supports and services are in Table A9.9.

80 Appendix 10

Table A10.9: Increase in Net Income from High Value Crops

Farm Size HVCs Cropping Patterns Marginal Small Medium 0.5 ha 1.0 ha 2.0 ha All area planted with banana, potato, and turmeric (P-1)a Change in net farm income with project 64,397 128,793 257,586 (new HVC technologies) Change in net farm income without project 47,602 95,204 190,409 Incremental net farm income in taka 16,794 33,589 67,177 Incremental net farm income in US dollar 233 467 933 All area planted in potato, banana, and garlic (P-2)b Change in net farm income with project 90,444 180,887 361,774 (new HVC technologies) Change in net farm income without project 68,371 136,741 273,482 Incremental net farm income in taka 22,073 44,146 88,292 Incremental net farm income in US dollar 307 613 1226 All area planted with mango, maize, pulse, and potato (P-3)c Change in net farm income with project 171,646 343,292 686,584 (new HVC technologies) Change in net farm income without project 142,299 284,597 569,194 Incremental net farm income in taka 29,347 58,695 117,390 Incremental Net farm Income in US dollar 408 815 1630 All area planted with mango, litchi, pulses, and maize (P-4)d Change in net farm income with project 138,380 276,759 553,518 (new HVC technologies) Change in net farm income without project 95,019 190,038 380,076 Incremental net farm income in taka 43,361 86,721 173,442 Incremental net farm income in US dollar 602 1204 2,409 All area planted with mango, jujube, tomato, onion, and garlic (P-5)e Change in net farm income with project 229,239 458,479 916,957 (new HVC technologies) Change in net farm income without project 146,854 293,709 587,417 Incremental net farm income in taka 82,385 164,770 329,540 Incremental net farm income in US dollar 1,144 2,288 4,577 ha = hectare, HVC = high value crop, P-1 = pattern one, P-2 = pattern two, P-3 = pattern three, P-4 = pattern four, and P-5 = pattern five. aWith project—30% land planted with banana, 20% with garlic, 50% with turmeric; Without project—10% planted with banana, 30% with garlic, and 60% with turmeric. bWith project—50% land planted with potato, 20% planted with banana, 30% planted with garlic; Without project— 70% planted with potato, 20% planted with banana, and 10% planted with garlic. cWith project—30% land planted with mango, 20% planted with pulses, 30% planted with potato, 20% planted with maize; Without project—20% planted with mango, 15% planted with pulses, 55% planted with potato, 10% planted with maize. dWith project—20% land planted with mango, 20% planted with pulses, 30% planted with litchi, 30% planted with maize; Without project—5% planted with mango, 25% planted with pulses, 50% planted with litchi, 20% planted with maize. e With project—20% land planted with mango, 20% planted with jujube (plum), 30% planted with tomato, 10% planted with onion, 20% planted with garlic; Without project—5% planted with mango, 15% planted with litchi, 50% planted with tomato, 10% planted with onion, 20% planted with garlic.

Appendix 11 81

WOMEN EMPOWERMENT AND GENDER QUALITY INITIATIVES

1. An gender development objective was built into in the design of the Northwest Crop Diversification Project (NCDP). The design provided for special attention to the empowerment of women. The project’s gender action plan (GAP) and implementation guidelines were developed at the outset of the project, gender-related activities were identified, and the implementation of these activities began immediately. The specific tools for achieving gender objectives were (i) a project policy giving priority to female heads of households in selecting beneficiaries and in providing access to resources such as training, extension services, and credit; and (ii) preparation and implementation of the GAP.

2. The NCDP adapted the definition of ownership to accommodate the prevailing ownership pattern in the project area and to be able to involve women in HVC activities. While ownership generally implies legal rights over the land and assets, the partnership of women in using the land and assets was defined under the project to be as good as ownership. Under a daylong project program, 326,020 beneficiaries received technical training, 51% of whom were women. The female members participated more intensively in most of the HVC-related activities under the project, as reflected in the socioeconomic survey undertaken by the project completion report mission in 2011. Table A11.1 indicates the extent of participation by women in various NCDP activities.

Table A11.1: Women Participation in High Value Crop Development Activities (n=384)

Participation by Women (% of beneficiaries) Activities High Medium Low Participation Participation Participation Group formation 86.2 9.1 3.6 Training 84.1 14.8 0.5 Demonstration activities 51.8 44.8 2.1 Bookkeeping and accounting 48.7 47.7 3.1 Group meetings 71.1 26.8 1.0 Integrated pest management 46.4 26.6 13.8 Decision making in selecting HVCs for 32.3 47.9 19.0 production in households Marketing of HVCs/ products 45.8 28.4 25.3 Skills training 61.7 32.3 4.9 n= number of observations. Source: Project Completion Review Mission Survey, 2011

3. Women members were made aware about their rights and supported in skills development and income generation through HVCs production and marketing. The benefits accrued by the female beneficiaries, as reflected in the survey conducted1 under the project, are presented in following Table A11.2.

1 Asian Development Bank, Bangladesh Resident Mission. 2009. Internal Study on Gender and Northwest Crop Diversification Project. Dhaka.

82 Appendix 11

Table A11.2: Benefits Accrued by Women Beneficiaries (n=415)

Responding Types of Benefits Yes (%) Got preliminary knowledge on HVCs 75 Got knowledge on HVC production technologies 83 Got training on HVCs 87 Got NCDP credit 87 Got fertilizer using technology 78 Got pesticide using technology 56 Got vaccines using technology 47 Knowledge on prevention of plant diseases 39 Social orientations on gender related issues 48 Received motivational tours 4 Participated in agricultural fairs 15 Learned new things and ideas 23 n= number of observations. Source: Internal Study on Gender and NCDP, ADB-BRM

4. Project training events improved the knowledge of women members. Table A11.3 provide details on this training. Participation by women in a few activities, including motivational tours, was low (2% to 9%) due to social constraints but the vast majority of women received vital training on HVCs.

Table A11.3: Skills and Awareness Training Received by Women under the Project (n=415)

Beneficiaries Agreeing Training Subjects to Have Received (%) Acid violence 7 HIV/AIDS 5 Birth registration 17 Dowry 18 Early marriage 16 Education 5 Health 10 Leadership 16 Marriage registration 4 Nutrition 9 Polygamy 17 Savings management 2 Skills training on HVCs production 88 Trafficking 4 Tree plantation 7 n= number of observations. Source: Internal Study on Gender and NCDP, ADB-BRM.

Appendix 11 83

5. Freedom to spend money is an important element of a woman’s independence within a family. The NCDP increased the income of women family members as well as of men. This resulted in the recognition by all family members of the contribution being made by women members to the family’s income. Women beneficiaries earned a degree of freedom through the project activities and its gender awareness programs to spend family money. Table A11.4 summarizes the survey responses of women in project areas regarding their freedom to spend money.

Table A11.4: Results of Survey on the Freedom to Spend Money of Women Beneficiaries of the Project (n=415)

Responded Responded Yes No Spending Category (%) (%) Healthcare 94 6 Household asset (furniture, TV, and Radio) 77 23 Food for children 88 12 School materials for children 87 13 Children's clothing 82 18 Land/leasing land 22 78 n= number of observations. Source: Internal Study on Gender and NCDP, ADB-BRM.

6. The survey showed that women members were aware of such providers of services as government organizations, private service providers, and NGOs. The women came into contact with these service providers through the project activities and thereby strengthened their connections with a network of services that could improve the socioeconomic welfare of their families. Table A11.5 summarizes the responses to survey questions regarding service providers.

Table A11.5. Awareness of Project Women regarding Service Providers (n=415)

Reporting Reporting Service Sources Yes No (%) (%) Healthcare centers 78 22 Banks 65 35 Government offices 54 46 DAE offices 76 24 Places where seed, fertilizer, pesticides are available 77 23 Department of Women's Affairs 34 66 Department of Youth 40 60 NGOs (ASA, ASK, BNWLA, BRAC, Grameen Bank, and TMSS) 77 23 n= number of observations. ASA = Association for Social Advancement, ASK = Ain-o-Salish Kendra, BNWLA = Bangladesh Women Lawyers Association, BRAC = Bangladesh Rural Advancement Committee, DAE = Department of Agricultural Extension, and TMSS = Thengamara Mohila Sabuj Shanga. Source: Internal Study on Gender and NCDP, ADB-BRM.

84 Appendix 11

7. The project advanced gender integration in the project area. Villagers informed the project completion review mission of a number of benefits to village culture in this regard: (i) female members of SFGs had had close contact with each other during decision making about HVCs; (ii) The financial savings of female members, deposited with NGOs, were felt to provide important protection for families against potential financial crises; (iii) The area under HVCs was increasing each year because women had taken up HVC cultivation as a profitable enterprise; (iv) Cooperation among the members on livelihood matters, even outside the project agenda, was strong; (v) women members of SFGs felt privileged in the society; and (vi) Women from the project villages could demonstrate their new skills and the practice of cultivating HVCs elsewhere.

8. The project has encouraged a strategic shift away from female dependency on their male partners toward a win–win formula of sharing in investment and profit with the common objective of ensuring family welfare.

9. Because cultivation of most of the HVC crops was physically manageable for women and the post-harvest activities could be comfortably carried out from home, family support for participation of female members in all HVCs activities was complete. However, examination of the management of all the income-generation activities showed that women dependent to a great extent on men for certain functions, such as product marketing and the management of income from the sale proceeds. Awareness on social development issues, management of increased income are to be nurtured further for sustaining the project impacts on the families and the community.

10. The project’s impact on the empowerment of women beneficiaries came primarily in the following areas:3

(i) Ownership of resources. Ownership by women beneficiaries of women-friendly assets grew. The increases were in cash savings (18.98%), land (4.89%), goats (4.89%), and jewelry (2.10%).

(ii) Participation of women in decision making. About 16.00% of the female group members reported that involvement of women in decision making regarding the production, post-harvest handling, sorting, cleaning, and selling of HVCs increased considerably and 80.25% reported their partial participation after joining project groups.

(iii) Extent of domestic violence. About 34.00% of women respondents reported a reduction in domestic violence against women while 35.59% reported no violence against women in their households had occurred after their joining the project’s groups.

(iv) Mobility of women. Visits by women to crop fields increased by 29%. Women were also able to move more often to participate in training and take part in other project activities.

(v) Status in the family. More than 57% of males with women family members participating in the project groups expressed ―positive views‖ about the involvement of their female family members and appreciated the contribution of these women to the family’s income.

3 End of Assignment Report, Team Leader and Agriculture. Management Specialist, NCDP Consultants Team, 2009

Appendix 12 85

SOCIOECONOMIC IMPACTS OF PROJECT INTERVENTIONS

A. Background

1. Assessing socioeconomic impacts is an indispensable part of the project cycle. The ultimate goal of the Northwest Crop Diversification Project (NCDP) was to improve the livelihoods of the project beneficiaries. The socioeconomic impacts of the completed project have been captured through a small-sample household survey undertaken during the project completion review mission. The responses from the project beneficiaries reflected the project’s impacts and provided an indication of whether the project investment generated the benefits envisaged at appraisal for the high value crop (HVC) farmers in general. The survey also threw light on lessons learned from successes or failures during implementation and afterwards.

2. The project areas were spread over the northwest region of Bangladesh and included 60 subdistricts of 16 districts of the Rajshahi Division. Small-scale farmers were the focus and beneficiaries of the project. The survey captured responses of project beneficiaries from each of the 16 districts and control groups based on representative sample.

B. Socioeconomic Profile of the Northwest Region

3. The region is divided into 16 districts and 127 subdistricts with an estimated population of 34 million, covering about 36,000 square kilometer of land. The area is largely flood free and most soil is suitable for HVC cultivation.

4. Agriculture is the main occupation of the majority of the households in the region. The proportion of total farm households in the small-scale land ownership category of 0.02–1.00 hectares (ha) is around 86%. The project division region suffers from the third highest incidence of poverty in the country. Its marginal and small farming communities deserved effective support services to avail of existing opportunities and to create new ones to improve their livelihoods.

C. Approach and Methodology

5. The survey used a simple but focused questionnaire suited to the socioeconomic context to collect information. It is in supplementary Appendix 2. The data collected included quantitative information on HVC cultivation practices, costs, benefits, and other aspects. The questionnaire included open-ended questions on social and economic well-being expressed in earning income, acquiring assets, accessing services, participating in institutional development, improving house, sanitation, and ensuring education. In addition, responses with respect to problems and prospects of the project were also registered through the questionnaire.

6. The questionnaire was administered on a purposively drawn sample of households of project beneficiaries. The same questionnaire was used for collecting information on HVCs from control groups of non-project farmers who had experienced no or minimum spillover impacts from the project.

7. To supplement and validate the collected information and data, focus group discussions were organized with the four partner non-government organizations (NGOs). Opinions were sought from partner NGOs to establish an informed basis for assessing project impacts. The geographical distribution of the sample households is given in Table A12.1.

86 Appendix 12

8. The socioeconomic survey was conducted on 384 randomly selected beneficiary households in the project area. The primary information gathered concerned:

(i) household global crop production statistics (area, crops, yield, and production);

(ii) household HVC production (area under each HVC, yields, production);

(iii) household financial crop budget for each HVC;

(iv) household credit worthiness situations (amount of credit received and repaid according to schedule or defaulted on);

(v) household level post-factum satisfaction with the Department of Agricultural Extension (DAE) and the Department of Agricultural Marketing (DAM) services, compared with what had been foreseen in the project design;

(vi) household total net income from HVCs with and without household labor; and

(vii) gender disaggregated data on household labor rendered, farmer group activities, credit received and repaid, marketing outputs, and other productive activities related to HVCs in particular.

9. A sampling frame for household survey was constructed using the simple ROWSOFT sample calculator to estimate the sample size for the household survey for the evaluation, using the following formula: c 2 x = Z( /100) r(100-r)

N x 2 n = /((N-1)E + x)

(N - n)x E = Sqrt[ /n(N-1)]

where N is the population size, r is the fraction of responses that we are interested in, and Z(c/100) is the critical value for the confidence level c. Margin of error is assumed to be 5%, confidence level is 95%, response distribution is assumed to be 50%, and population size is 260,000.

10. The resultant sample size thus arrives at 384 farm households that have been surveyed for primary investigations. These 384 households are distributed over 11 out of 16 NCDP districts (mostly greater districts), stratified by Bangladesh Bureau of Statistics land ownership categories. The control area respondents were fixed at 122 households, which is roughly one- third of the project sample households.

11. The geographical distribution of the respondent households is shown in Table A12.1.

Appendix 12 87

Table A12.1. Distribution of Sample Households in Project Completion Review Survey

Respondents (numbers) Group District Project Area Outside Project 1 Bogra 86 17 Joypurhat 10 11 Subtotal 96 28 2 Rajshahi 49 10 Naogaon 33 17 Chapai Nawabganj 12 5 Subtotal 94 32 3 Pabna 38 9 Natore 41 15 Sirajganj 24 8 Subtotal 103 32 4 Panchagarh 50 15 Dinajpur 21 9 Thakurgaon 20 6 Subtotal 91 30 Total 384 122 Overall Total 506

12. The land ownership scenario of the sampled households is in the Table A12.2.

Table A12.2: Land Ownership Categories by Sample Households, Project Completion Review Survey, 2011

Land Ownership Households Households Category (numbers) (percentage) Within Project Area <=0.5 ha 290 75.5 >0.5 ha to <=1.0 ha 72 18.8 >1.0 ha to <=3.0 ha 21 5.5 >3.0 ha 1 0.3 Total 384 100 Outside Project Area (Control Group) <=0.5 ha 79 65 >0.5 ha to <=1.0 ha 18 15 >1.0 ha to <=3.0 ha 25 20 >3.0 ha … … Total 122 100 Overall Total 506 < = less than, > = greater than, <= = less than or equal, and … = data not available.

88 Appendix 12

D. Presentation

13. The collected data were processed and analyzed to draw inferences on specific issues. In most cases, responses were presented as percentage of beneficiaries agreeing to participation in various project activities, satisfaction from project support or facilities, having received training, and socioeconomic impacts on standard of living indicators.

14. The responses of beneficiaries are tabulated below and show the patterns of their participation in NCDP activities, including training. Their satisfaction levels regarding HVC production, extension services, marketing support are also recorded. Responses with regard to the impacts of NCDP on a few standard of living indicators are also presented, as are their levels of satisfaction with NCDP market infrastructure and operational performance.

15. The participation rates in all initial group formation, training, and demonstration of technology of HVCs, group meetings, institution building, and other NCDP activities are shown in Table A12.3, segregated by sex.

Table A12.3: Participation of Beneficiaries by Sex in Project Activities (n=384)

Level of Participation by Beneficiaries (%) Areas High Moderate Low Participation Participation Participation Male Female Male Female Male Female In group formation activities 33.1 53.1 2.6 6.5 1.0 2.6 In training 29.7 54.4 6.8 8.1 0.3 0.3 In demonstration activities 17.4 34.4 16.9 27.9 1.8 0.3 In bookkeeping and accounting 19.0 29.7 15.6 32.0 2.1 1.0 In group meetings 27.6 43.5 8.3 18.5 0.5 0.5 In integrated pest management activities 15.6 30.7 9.6 16.9 5.7 8.1 In decision making about HVC production in households 10.9 21.4 18.5 29.4 7.0 12.0 In marketing of HVC products 16.4 29.4 9.9 18.5 10.4 14.8 In skills training 21.6 40.1 12.5 19.8 2.6 2.3 Others 2.3 0.5 0.0 n= number of observations. Source: ADB project review mission socioeconomic survey, 2011.

16. Training and extension were major activities under the NCDP. The project arranged institutional and village-based training programs. The DAE, in collaboration with partner NGOs, organized daylong training for 326,020 beneficiaries (159,750 male and 166,270 females). In some cases, farmers participated in training more than once in different subjects. In addition, season-long farmer field school training was provided to 30,275 farmers. This training was highly appreciated by the project farmers. The DAE also arranged gender training for 5,490 farmers and group leadership training for 18,750 members. In addition, 4,050 farmers participated in marketing related trainings. The project produced visual packages for training programs on HVCs.

Appendix 12 89

17. Table A12.4 shows the extent of participation by SFG members in various kinds of training.

Table A12.4: Participation by Members of Small Farmers’ Groups in Training Activities (n=384)

Training Category Participated Male Female (%) (%) (%) Farmers’ training on HVCs 62 30 32 Group leaders’ training 22 12 10 Gender training 17 8 9 Training on marketing 9 7 2 Farmers’ field day 20 11 9 n= number of observations.

18. The socioeconomic survey assessed the level of farmer satisfaction with several NCDP services provided by the NGOs, the DAE, and the DAM in various fields of HVC production, credit, transport, and marketing. Table A12.5 summarizes the results.

Table A12.5: Project Farmer Satisfaction with Support (n=384)

Highly Moderately Least NCDP Satisfied Satisfied Satisfied Supports and Services (%) (%) (%) Quality seed/planting material availability 74.5 13.5 11.5 Extension services 57.3 36.5 4.4 Farmers’ group formation 72.9 25.3 1.3 Women’s participation 59.4 38.0 1.6 Assistance initiative for processing, marketing, and transportation of products 48.7 31.3 18.5 Use of growers’ markets 41.7 23.2 34.4 Use of wholesale markets 66.7 19.3 12.8 Operation of marketing facilities 44.5 32.8 20.1 Maintenance of marketing facilities 35.4 43.2 19.5 Timeliness and adequacy of credit operations by NGOs 26.3 71.9 1.0 Price of high value crops in local markets 48.2 37.0 13.5 Harvesting and storing of high value crops 47.1 35.7 16.4 Product differentiation status in markets between high value crops with project and 37.0 35.4 26.3 without Project Supervision of DAE staff 28.4 48.2 22.7 Supervision of DAM staff 20.1 51.6 27.1 n= number of observations.

19. Project supports and services impacted positively on their own standard of living indicators. The survey indicated that female beneficiaries saw more positive impacts from the project than did male respondents. Table A12.6 summarizes perceptions of the project’s positive impacts on standard of living indicators.

90 Appendix 12

Table A12.6: Impact on Standard of Living Indicators by Sex (n=384)

Respondents (%) Indicators Male Female Total Better own heath care 27 51 78 Better children’s healthcare 27 51 78 Better children’s healthcare 22 44 66 Improved food 15 24 39 Better livestock development 12 19 31 Farm size extension 13 21 34 House repair/new construction 16 32 48 Furniture purchase 14 20 34 Increase in income 49 51 100 n= number of observations.

20. Market development was an important component of the project and aimed at increasing the income of the small and medium farm households by enabling them to obtain fair prices for their produce through the use of modern amenities of quality production, storage, and transport. However, the component only partly achieved its objective due to organizational deficiencies. The socioeconomic survey tried to assess the level of satisfaction of NCDP farmers with various market infrastructures provided under the project. The results are in Table A12.7.

Table A12.7. Levels of Satisfaction with the Project’s Market Infrastructure (n=384)

Beneficiaries’ Satisfaction Level (%) Highly Moderately Least Item Satisfied Satisfied Satisfied Marketplace at large 50.3 16.1 32.3 (area, location, and growers’ comfort) Special corner (commodity-wise) facilities 37.5 31.3 29.9 Electrical provisions 49.0 35.4 14.8 Security provisions 62.0 32.8 3.9 Storing provisions 47.9 18.8 32.8 Sanitation provisions 51.6 35.2 12.8 Water supply provision 69.0 18.0 11.2 Cooling provision 37.2 25.8 36.5 Women’s facilities 58.9 28.1 12.2 Transportation in and out 42.4 41.7 13.8 Market operation, maintenance, and 44.0 31.5 23.4 management (UP, UZP) Composition of management committee 45.1 36.2 16.4 Cooperation from local government 41.7 36.2 20.1 Growers’/users’ contribution to O&M of market 45.8 28.6 22.9 Daily market transactions 54.7 37.0 6.8 Project induced ancillary development of 11.2 26.6 48.7 services, if any n= number of observations. UP = union parishad (the lowest tier of administrative unit council), and UZP = upazila parishad (subdistrict council).

Appendix 12 91

E. Impacts

21. Income Improvement. The income increase of project farmers due to higher production of HVCs was evident during last nine years. The survey confirmed that the income of farmers increases greatly with the use of five different cropping models. The income increase was 21% for a 0.5 ha farm. The increases ranged from 21% to 56%, depending on the cropping patterns and farm sizes. The households based cropping patters were taken from the frequently practiced farmers of marginal, small and medium land sizes (between 0.5 ha to 2 ha only). The prevalent cropping practices are the following: (i) entire area planted with banana, potato and turmeric in different proportions, with and without project; (ii) all land planted with banana, potatoes, and zero-tillage garlic in different proportions, with and without project; (iii) all area planted with mango, maize, pulse (mung), and potato in different proportions, with and without project; (iv) all land planted with mango, litchi, pulse, and maize in different proportions, with and without project; and (v) all area planted with mango, jujube, tomato, onion, and zero-tillage garlic in different proportions, with and without project.

22. The increase in income of project farmers’ was 21%–56% over that of the non-project farmers in the control group. The income was proportionally higher for larger land holdings. The details of the income increases with NCDP support and services for five major cropping models is discussed in the economic analysis in Appendix 10.

23. Living standards improved substantially more for project farmers than for non-project control group farmers due to this increased income. The socioeconomic conditions and standing of project area women also improved. This is discussed in Appendix 11, which examines the project’s gender impact.

24. Employment generation. The project achieved its employment generation objective. The second benefit, monitoring and evaluation (BME) reported that 80,263 person-days of labor were created per year by project farm production of HVCs. This included hired labor and the farmers’ own additional work. On average, 153 labor per hectare was created by the project farmers. The HVCs generating the most additional employment were potato (43.63%), maize (18.45%), garlic (6.81%), country bean (4.25%), brinjal (4.03%), and mango (3.14%). Assuming a minimum wage rate of Tk100 per day, the total income for the labor selling households in the project area from these project benefits was Tk8 million per annum. Wage rates varied depending on location and seasonal demand.

25. The second BME study assessed the impact of the NCDP in terms of increasing the area under cultivation of 19 HVCs and the yield of HVCs per hectare. The comparison between the baseline in 2000 and 2007) is shown for 16 NCDP districts in Table A12.8.

92 Appendix 12

Table A12.8: Change in High Value Crop Area of Cultivation and Yield per Hectare in Project Area, 2000–2007

Area increased Yield increased over Baseline over Baseline High Value Crop (%) (%) Aromatic rice 33.0 46.0 Banana 22.0 341.0 Bitter gourd 75.1 84.8 Brinjal 45.0 97.0 Cauliflower 49.0 63.0 Country bean 81.1 45.0 Garlic 56.5 67.6 Ginger 28.8 22.0 Green chili 62.5 103.2 Guava 38.4 66.7 Jujube 183.0 785.3 Litchi 151.0 235.0 Mango 63.4 123.3 Mung bean 260.0 276.3 Onion 17.5 73.0 Pointed gourd 29.5 50.3 Sweet gourd 35.0 90.0 Tomato 38.2 94.0 Turmeric 54.7 41.6 Source: Second Benefit Monitoring and Evaluation Study, 2008

26. Increased land value. Focus group discussions with partner NGOs revealed that the value of land in the project area that had potential for HVC cultivation increased 25%–100%.

27. Increased ownership of land and other assets. These focus discussion and other consultations and meetings showed that the project beneficiaries had used additional income from HVC cultivation to acquire additional land and other assets—livestock or a better house, for example.

28. Increased cultural harmony. Besides income, employment, and production impacts, the NCDP generated an integration of community culture and interests among the NCDP farmers, male and female, through establishment of NCDP villages. A few interviews with the NCDP village members demonstrated that the farmers had become better at organizing themselves for collective decision making, credit utilization, improving a better standard of living, and engaging as skilled representatives to introduce HVCs to other areas. Their demonstration capability in motivating neighboring farmers and mobilizing them in cooperative efforts was a commendable breakthrough.

29. Other impacts. The other impacts of the project included (i) better access for beneficiaries to hygienic facilities (sanitary latrines, pure drinking water, better housing); (ii) better access to quality education for their children; (iii) the provision of greater in-depth knowledge to the NGOs in the services required to support HVC cultivation; and (iv) an improved working partnership among the DAE, NGOs, BARI, RAKUB in delivering services to the farmers (see also Appendix 11).

Supplementary Appendix 1 93

ASIAN DEVELOPMENT BANK

HOUSEHOLD SURVEY QUESTIONNAIRE PROJECT COMPLETION REVIEW NORTHWEST CROP DIVERSIFICATION PROJECT (To be used for both project and control area)

Block No.------(put No. as per footnote) HHID: 1. Name of Household………………………………………………… 2. Village ………………………………………………………………… 3. Upazila………………………………………………………………… 4. District………………………………………………………………….

Household global crop production statistics (area, crops, yield, production)

1. Give the following information on crop production of your household (Khana) during last three years

Name of crop1 Area (ha) Yield (kg) 2008 2009 2010 2008 2009 2010 Cereals 1. Aus 2. Aman 3. Boro 4. Wheat Non-Cereal Crops (oilseed, spices, fruits, vegetables, flowers Oilseeds

Spices

Fruits

1 1 - Potato, 2 - Tomato, 3 - NABI Tomato, 4 - Cabbage, 5 - Cauliflower, 6 - Lady's Finger, 7 - Brinjal, 8 - Bottle Gourd, 9 - Bitter Gourd, 10 - Sweet Gourd, 11 - Country Bean, 12 - French Bean, 13 - Carrot, 14 - Garden Pea, 15 - Pointed Gourd, 16 - Banana, 17 - Guava, 18 - Lemon, 19 - Papaya, 20 - Water Melon, 21 - Chilli, 22 - Garlic, 23 - Garlic without cultivation, 24 - Ginger, 25 - Onion, 26 - Turmeric, 7 - Aromatic Rice, 28 - Maize, 29 - Hybrid Sunflower, 30 - Mug, 31 - Ground Nut, 32 - Latiraj Kochu, 33 - Litchi, 34 - Mango, 35 - Jujube, 36 - Aus, 37 - Aman, 38 - Boro, 39 - Pulse, 40 - Wheat, 41 - Jute, 42 - Oilseed

94 Supplementary Appendix 1

Name of crop1 Area (ha) Yield (kg) 2008 2009 2010 2008 2009 2010 Vegetables

Flowers

2. Household financial crop budget for each HVC

Name of HVC:……………………….. Area cultivated under the crop during 2010: ………ha

Items of cost Unit price Sources Total (taka) Own Purchased (taka) Land preparation (power tiller/ha) Land preparation (man-days) Seed/seedlings (Kg./ha) Sapling (Nos. per ha.) Applying fertilizer (man-days) Sowing/Transplanting (man-day) Weeding (man-day) Intercultural operation (man-day) Applying insecticides/pesticides (man-days) Harvesting & carrying (man-days) Threshing and winnowing (man- days) Cowdung (kg/ha) Urea (kg/ha) TSP (kg/ha) MP (kg/ha) Gypsum (kg/ha) Zink sulphate (kg/ha) Boron (kg/ha) Insecticides/pesticides (Tk/ha) Irrigation Tk/ha) Land use value (Tk/ha) Marketing cost Interest on operating capital Total cost Main product (ton/ha) By-product (ton/ha) Gross Return Net Return

94 Supplementary Appendix 1 95

3. Incremental Benefits of HVC production

Gross Gross production Benefits Net Margin (taka) Crop Name production (taka) cost Qty Rate sold Total Rev (taka) (taka) (taka)

4. Credit situation for HVC production and marketing of the Households (For the period 2007 – 2010) HVC Name Amount of Amount of R/I HH position production Marketing Total Total repaid till Credit (Tk) Credit (Tk) amortizatio date (Tk) by with source with source n claimed borrower by lender (Tk)

5. Post-facto perception of satisfaction of HVC farmers (Crop-wise)

Crop Name:…………………………. Indicators of satisfaction Satisfaction Levels Remarks High Medium Low 1. Quality seed availability 2. Extension services 3. Farmers group formation 4. Women’s participation 5. Private initiative for processing, marketing and transportation of products 6. Use of growers’ markets 7. Use of Wholesalers markets 8. Operation of marketing facilities 9. Maintenance of marketing facilities 10. Timeliness and adequacy of credit operations by

96 Supplementary Appendix 1

NGOs/ RAKUB 11. Price situation of HVCs in local markets 12. Harvesting and storing of HVCs 13. Product differentiation status in markets between HVC with project and HVC without project 14. Supervision of DAE staff 15. Supervision of DAM staff

6. Gender participation in HVC activities

Areas of women’s Perceived participation Remarks if any participation levels 1. Participation in group formation activities 2. Participation in training 3. Participation in demonstration activities 4. Participation in book keeping and accounting activities 5. Participation in group meetings 6. Participation in IPM activities 7. Participation in decision making about HVC production in HH 8. Participation in marketing of HVC products 9. Participation in skill training

7. Opinion about Growers’/Wholesalers’ Market infrastructure

Opinion (put tick mark where Remarks/suggestion appropriate) for improvement Issues Fully Partly Not (cause of failure used/satisfac used/sati used/sati must be mentioned, tory sfactory sfactory if any) 1. Market place at large (area, location and growers’ comfort) 2. Special corner (commodity-wise) facilities 3. Electrical provisions

96 Supplementary Appendix 1 97

4. Security provisions 5. Storing provisions 6. Sanitation provisions 7. Water supply provision 8. Cooling provision 9. Women’s facilities 10. Transportation in & out 11. Market operation, maintenance and management (Union Parishad, Upazila Parishad) 12. Composition of Management Committee 13. Cooperation from local government 14. Growers’/users’ contribution to O&M of market 15. Daily market transactions 16. Project induced ancillary development of services, if any

8. Mode of marketing HVC products

Modes of marketing Growers’ response Remarks Yes No 1. By headload 2. By own van 3. By hired van 4. By local motor vehicle 5. By truck 6. By carts/animal load 7. By farmers’ own/ cooperative carriers

9. Growers’ own initiative, if any

Initiatives Response Remarks Yes No 1. HVC quality seed storing 2. HVC post harvest services (cleaning, sorting, packing, branding, transporting etc) development 3. Market networking 4. Advertising 5. Raising fund from members of groups for

98 Supplementary Appendix 1

product quality control

10. Perceived problems in sustaining HVC production

Problem types Response* Suggestion for 1 2 3 overcoming 1. Seeds/seedlings not available in good quality 2. Pests/insects 3. Climate change impacts 4. Floods 5. Droughts 6. Irrigation 7. Skilled labor 8. Gender conflicts 9. HVC low price at farm gate 10. Overproduction at local level 11. Competition with non- project farmers 12. Difficulties in differentiation between project and non-project HVCs 13. Location of project market 14. High toll paid for market space 15. Power failure 16. High cost of credit

11. Area you a member of the NCDP village? Yes/No

12. How long have you been a member? ….years

13. What are the benefits of your NCDP village culture? (take note of at least 5 major benefits) a. b. c. d. e.

14. Is the village functions still working? Yes/No

15. Are you benefited by Revolving Credit operations Yes/No

98 Supplementary Appendix 1 99

16. Training Benefits:

Title of Duration Benefits of Training received (in no. of days) training of training

17. Impacts of NCDP on standard of living indicators (put tick as appropriate)

Indicators HHs Reporting Yes HHs Reporting No Own heath care Childs heath care Improved food Livestock development Firm size extension House repair/ new construction Furniture purchase