document of the world bank...1 document of the world bank report no: icr0000589 implementation...

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Document of The World Bank

Report No: ICR0000589

IMPLEMENTATION COMPLETION AND RESULTS REPORT (IDA-34050 IDA-3405A)

ON AN

ADAPTABLE PROGRAM CREDIT

IN THE AMOUNT OF US$ 67 MILLION EQUIVALENT

TO THE

REPUBLIC OF GHANA

FOR AN

AGRICULTURAL SERVICES SUBSECTOR INVESTMENT PROJECT

November 30, 2007

Agriculture and Rural Development Sustainable Development Department Country Department 1, Ghana Africa Region

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CURRENCY EQUIVALENTS

(Exchange Rate Effective November, 2007) Currency Unit = Ghana Cedi

USD 1.00 = 0.9575 Cedi

FISCAL YEAR January 1 – December 31

ABBREVIATIONS AND ACRONYMS

AAGDS Accelerated Agricultural Growth and Development Strategy AfDB African Development Bank AFFSD Agriculture, Forestry and Fisheries Sector Directorate AgSSIP Agricultural Services Sub sector Investment Program ARPC Agricultural Research Policy Committee APL Adaptable Program Lending CAADP Comprehensive Africa Agricultural Development Program CARGS Competitive Agricultural Research Grant Scheme CIDA Canadian International Development Agency CSIR Council for Scientific and Industrial Research DANIDA Danish International Development Agency DAES Directorate of Agricultural Extension Services DCA Development Credit Agreement DFID Department for International Development DPL Development Policy Lending EDF Extension Development Fund EU European Union ECOWAS Economic Committee of West African States FABS Food and Agricultural Budgetary Support FAO Food and Agriculture Organization FASDEP Food and Agriculture Sector Development Policy FBO Farmer-Based Organization FBODF Farmer Based Organization Development Fund FMRs Financial Management Reports GCC Ghana Co-operative Council GLSS Ghana Leaving Standards Survey GOG Government of Ghana GTZ Gesellschaft fuer Technische Zusammenarbeit GPRS Ghana Poverty Reduction Strategy GDP Gross Domestic Product HEII Horticulture Exports Industry Initiative ICR Implementation Completion and Results Report IDA International Development Association IFAD International Fund for Agricultural Development IPM Integrated Pest Management ISM Implementation Support Mission M&E Monitoring and Evaluation

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MOFA Ministry of Food and Agriculture MTEF Medium Term Expenditure Framework NEPAD New Partnership for Africa’s Development NGO Non-Governmental Organization PCU Project Coordinating Unit PDO Project Development Objectives PPMED Policy Planning, Monitoring and Evaluation Directorate RELC Research and Extension Liaison Committee SDR Special Drawing Rights WAAPP West Africa Agricultural Productivity Program WIAD Women in Agriculture Development Directorate

Vice President: Obiageli Katryn Ezekwesili

Country Director: Ishac Diwan Sector Manager: Karen Mcconnell Brooks

Project Team Leader: Gayatri Acharya ICR Team Leader: El Hadj Adama Toure

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GHANA Agricultural Services Subsector Investment Project

CONTENTS

Data Sheet A. Basic Information………………………………………………………………………….5 B. Key Dates…………………………………………………………………………………..5 C. Ratings Summary…………………………………………………………………………..5 D. Sector and Theme Codes…………………………………………………………………..6 E. Bank Staff………………………………………………………………………………….7 F. Results Framework Analysis……………………………………………………………….7 G. Ratings of Project Performance in ISRs………………………………………………….12 H. Restructuring …………………………………………………………………………… 12 I. Disbursement Graph ……………………………………………………………………. 13 ...............................................................................................................................................

1. Project Context, Development Objectives and Design............................................. 142. Key Factors Affecting Implementation and Outcomes ............................................ 193. Assessment of Outcomes .......................................................................................... 244. Assessment of Risk to Development Outcome......................................................... 295. Assessment of Bank and Borrower Performance ..................................................... 306. Lessons Learned ....................................................................................................... 347. Comments on Issues Raised by Borrower/Implementing Agencies/Partners .......... 35 Annex 1. Project Costs and Financing.......................................................................... 36Annex 2. Outputs by Component ................................................................................. 37Annex 3. Economic and Financial Analysis................................................................. 52Annex 4. Bank Lending and Implementation Support/Supervision Processes ............ 56Annex 5. Beneficiary Survey Results ........................................................................... 58Annex 5. Beneficiary Survey Results ........................................................................... 58Annex 6. Stakeholder Workshop Report and Results................................................... 60Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR..................... 61Annex 8. List of Supporting Documents ...................................................................... 67

MAP: IBRD30924

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A. Basic Information

Country: Ghana Project Name: Agricultural Services Subsector Investment Project

Project ID: P000968 L/C/TF Number(s): IDA-34050,IDA-3405AICR Date: 11/29/2007 ICR Type: Core ICR

Lending Instrument: APL Borrower: REPUBLIC OF GHANA

Original Total Commitment:

XDR 50.9M Disbursed Amount: XDR 50.9M

Environmental Category: B Implementing Agencies: Ministry of Food and Agriculture (MOFA) Council for Scientific and Industrial Research (CSIR) Cofinanciers and Other External Partners: European Union (EU) Canadian International Development Agency (CIDA) B. Key Dates

Process Date Process Original Date Revised / Actual Date(s)

Concept Review: 04/15/1999 Effectiveness: 11/26/2001 11/26/2001

Appraisal: 05/08/2000 Restructuring(s): 02/14/2003 10/22/2004

Approval: 08/01/2000 Mid-term Review: 06/15/2004 Closing: 10/31/2003 04/30/2007 C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Moderately Satisfactory Risk to Development Outcome: Moderate Bank Performance: Moderately Satisfactory Borrower Performance: Moderately Satisfactory

C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings

Quality at Entry: Moderately Government: Moderately

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Unsatisfactory Unsatisfactory

Quality of Supervision: Moderately Satisfactory Implementing Agency/Agencies: Moderately Satisfactory

Overall Bank Performance: Moderately Satisfactory Overall Borrower

Performance: Moderately Satisfactory

C.3 Quality at Entry and Implementation Performance Indicators

Implementation Performance Indicators QAG Assessments

(if any) Rating

Potential Problem Project at any time (Yes/No):

Yes Quality at Entry (QEA):

None

Problem Project at any time (Yes/No):

Yes Quality of Supervision (QSA):

None

DO rating before Closing/Inactive status:

Satisfactory

D. Sector and Theme Codes

Original Actual Sector Code (as % of total Bank financing) Agricultural extension and research 63 42 Central government administration 14 19 General agriculture, fishing and forestry sector 21 Other social services 10 8 Sub-national government administration 13 10

Theme Code (Primary/Secondary) Administrative and civil service reform Primary Primary Decentralization Primary Secondary Rural policies and institutions Secondary Secondary Rural services and infrastructure Secondary Secondary Technology diffusion Secondary Primary E. Bank Staff

Positions At ICR At Approval Vice President: Obiageli Katryn Ezekwesili Callisto E. Madavo Country Director: Ishac Diwan Peter C. Harrold Sector Manager: Karen Mcconnell Brooks Jean-Paul Chausse Project Team Leader: Gayatri Acharya Solomon Bekure ICR Team Leader: El Hadj Adama Toure ICR Primary Author: El Hadj Adama Toure

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Franz M. Schorosch F. Results Framework Analysis Project Development Objectives (from Project Appraisal Document) Improve rural income generation through increased agricultural productivity and diversification and enhanced farmer participation in production and marketing. Revised Project Development Objectives (as approved by original approving authority) PDO was not revised. (a) PDO Indicator(s)

Indicator Baseline Value

Original Target Values (from

approval documents)

Formally Revised Target Values

Actual Value Achieved at

Completion or Target Years

Indicator 1 : Overall farm productivity increase of 10% on average for major crops compared to 2000 levels

Value quantitative or Qualitative)

Mt/ha Cereal: maize 1.45, Rice 1.87, Millet 0.81, Sorghum 0.97 Starchy crops: Cassava 12.3, Cocoyam 6.6, Yam 12

None 10% increase in overall farm productive

5.3% increase in average yield. Mt/ha Cereal: maize 1.55, Rice 2.00, Millet 0.87, Sorghum 0.98Starchy crops: Cassava 12.45, Cocoyam 6.45, Yam 12.93

Date achieved 04/24/2000 08/02/2000 11/09/2004 04/30/2007 Comments (incl. % achievement)

PARTIALLY ACHIEVED. Data are for cereals, starchy crops and legumes, excluding industrial crops and fruits and vegetables. Labor productivity increased by 8%.

Indicator 2 : Increased value of agricultural production, particularly in horticulture by 40%.


Cereals : US$210 MillionStarchy crops : US$1020 Million Horticulture: US$28.1 Millions Horticulture: US$28.1 Mn

None 40% increase

Cereals : US$520 Million Starchy crops : US$2200 Million Horticulture: US$65.1Millions

Date achieved 04/24/2000 08/02/2000 11/09/2004 04/30/2007

Comments (incl. % achievement)

FULLY ACHIEVED. Cereals : 147% Starchy crops : 116% Horticulture: 132%

Indicator 3 : Improved capacity of farmer based organizations for production and marketing

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n/a none

At least 75% of FBO supported subprojects under the FBO Development Fund are operating satisfactorily.

85% of projects funded under the FBODF are operating satisfactorily.


FULLY ACHIEVED. 326 Farmer based Organizations (FBOs) received grants from the FBO Development Fund.

(b) Intermediate Outcome Indicator(s)

Indicator Baseline Value

Original Target Values (from

approval documents)

Formally Revised

Target Values

Actual Value Achieved at

Completion or Target Years

Indicator 1 : Participation of farmer representatives in priority setting of adaptive research through research extension linkage committees in 10 regions

Value (quantitative or Qualitative)

0 Farmers representatives and other research clientele are participating in priority setting of adaptative research.

none

Participation of farmer representative in priority setting of adaptative research through Research-Extension Linkages Committees (RELCS) in 10 regions

RELCs inaugurated in 10 regions.

Date achieved 05/31/2000 08/02/2000 11/09/2004 04/30/2007

Comments (incl. % achievement)

FULLY ACHIEVED. RELC were used for identification 13 research project funded under CARGs and implemented in 7 regions, 3 other regions has been catered for by GTZ-supported FARMER project.

Indicator 2 : The Competitive Agricultural Research Grant Scheme is initiated and operating effectively and 75% of ongoing project have satisfactory ratings


n/a 75% of ongoing subprojects have satisfactory rating

none

The CARGs is established with agreed on operational procedures. Around 80% of the 193

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research projects have been found satisfactory.


FULLY ACHIEVED. CSIR has generated 67 technologies from the implementation of 193 research subprojects.

Indicator 3 : At least 15 priority research projects completed with 75% satisfactory rating


N/A

60 priority research subprojects completed with 75% satisfactory rating.

15 priority research programs completed with 75% satisfactory rating from a scientific and clientele point of view

15 Commodity/factor Priority research programs were completed satisfactorily.


FULLY ACHIEVED

Indicator 4 : The Agricultural Extension Development Fund established in each of the 15 pilot Districts and 75% of on-going contracts have satisfactory ratings


N/A none

The ESDF established and operational in 15 pilot districts

Extension services contracted out to private sector -including NGOS- in 8 pilot districts


PARTIALLY ACHIEVED. Under the EDF, private sectors agencies were contracted to deliver extension services in 8 pilot districts covering 8130 farmers in 272 farm communities

Indicator 5 : Production of improved planting materials increased on average by 40% in horticultural crops and oil palm.


N/A

40% increase in production of improved planting materials.

not revised

4.5 million plantlets of MD2 pinapple variety, and 828,000 oil palm seedlings distributed to 152 FBOs.


PARTIALLY ACHIEVED. % increase not established as baseline was not available.

Indicator 6 : 10 District annual agricultural services and development plans produced and implemented

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0 district 110 districts 10 districts

10 districts have developed and implemented agricultural development plan on a pilot basis.


ACHIEVED.

Indicator 7 : Functional review of MOFA and decentralization of activities implemented by December 31, 2005.


N/A

Restructuring of MOFA implemented by December 31, 2002

Functional review of MOFA by December 31, 2005

Planning and execution of MOFA budget has been decentralized. The review was launched as part of the preparation of the agricultural sector DPL.


PARTIALLY ACHIEVED.

Indicator 8 : Revised Fisheries Bill enacted by Parliament


N/A

Revised Fisheries Bill enacted by Parliament by October 31, 2000.

Revised Fisheries Bill enacted by Parliament by October 31, 2002.

Fisheries Bill revised and enacted by Parliament in 2002


ACHIEVED.

Indicator 9 : Establishment of Board of Trustees (BOT) for managing the FBO Development Fund


N/A N/A N/A BOT established and operational.


FULLY ACHIEVED

Indicator 10 : Auditing services of cooperatives undertaken by Ghana Cooperative Council. Value (quantitative or Qualitative)

No audit services of cooperatives undertaken

Audit services undertaken in 8 pilot districts by

Audit services undertaken in 8 pilot districts

Audit services undertaken by GCC in 10 districts.

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June 30, 2002 by December 30, 2005


FULLY ACHIVED

Indicator 11 : Establishment of 3 viable and operating industry/farmer owned companies to operate export infrastructure.


0

3 companies established to operated the planned Tema Port, Kotoka Airport and Pakchouse facilities

1 company established to operate the Shed 9 Facility atTema Port

No company established.


NOT ACHIEVED. Works on Shed 9 completed and study for the management of the facility carried out. Management options under discussions at the time of the ICR.

Indicator 12 : Agricultural Education Policy reviewed.


N/A

Agricultural Education Policy reviewed by December 31, 2001

Agricultural Education Policy reviewed by December 31, 2003

Agricultural Education Policy reviewed and finalized.


FULLY ACHIVED.

Indicator 13 : Curricula of agricultural colleges and farm institutes revised and improved to cater to needs of private sector


N/A Curricula revised not revised

Currula of agricultural colleges and farm institutes have been revised


FULLY ACHIEVED. Currucula revised and made operational with the commencement of Diploma Program in Agricultural Colleges.

Indicator 14 : Infrastructure of agricultural colleges and farm institutes rehabilitated


0 no target no target

Rehabilitation of 4 Agricultural Colleges and 3 Farm Institutes completed

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FULLY ACHIEVED.

G. Ratings of Project Performance in ISRs

No. Date ISR Archived DO IP

Actual Disbursements (USD millions)

1 12/22/2000 Satisfactory Satisfactory 0.00 2 06/28/2001 Satisfactory Satisfactory 0.00 3 12/18/2001 Satisfactory Satisfactory 0.00 4 05/18/2002 Satisfactory Satisfactory 2.20 5 12/03/2002 Satisfactory Satisfactory 3.60 6 06/02/2003 Satisfactory Unsatisfactory 10.23 7 10/08/2003 Unsatisfactory Unsatisfactory 14.39 8 02/18/2004 Unsatisfactory Unsatisfactory 18.98 9 05/28/2004 Unsatisfactory Unsatisfactory 22.43

10 12/15/2004 Unsatisfactory Unsatisfactory 31.23

11 06/29/2005 Moderately Unsatisfactory Satisfactory 39.23

12 12/30/2005 Satisfactory Satisfactory 48.19 13 06/30/2006 Satisfactory Satisfactory 57.98 14 10/29/2006 Satisfactory Satisfactory 63.83 15 10/02/2007 Moderately Satisfactory Satisfactory 73.92

H. Restructuring (if any)

ISR Ratings at RestructuringRestructuring

Date(s)

Board Approved

PDO Change DO IP

Amount Disbursed at

Restructuring in USD millions

Reason for Restructuring & Key Changes Made

02/14/2003 S U 4.74

10/22/2004 N U U 27.66

Slow disbursement resulting from important delays implementating project activities.

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I. Disbursement Profile

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1. Project Context, Development Objectives and Design

1.1 Context at Appraisal

Since 1983, following a period of successive macroeconomic reforms, Ghanaian agriculture has recovered from almost total collapse to a position of contributing significantly to the country’s economic growth. The Government of Ghana (GoG) initiated a number of investment programs from the mid-1980s onward to rehabilitate basic agricultural services, culminating in the formulation of a medium-term agricultural development strategy in 1990, which aimed at achieving sectoral growth of 4 percent per annum. The agricultural sector responded well, reversing the negative and sluggish growth rates of the late 1980s and early 1990s into a credible 3-4 percent annual growth rates of the late 1990s.

Despite this success, GoG at the same time was of the opinion that this growth path was well below the country’s potential for expanding production of agricultural commodities, both tradable and non-tradable. Climatic conditions, fast growing domestic and regional markets and proximity to the European market were considered to offer good opportunities for sustained growth. Although agriculture was supporting economic growth – with the employment of 60 percent of the active population and contributing 39 percent of total GDP and 46 percent of export earnings in 1997- the GoG had identified a number of constraints that needed to be addressed to sustain momentum and possibly accelerate growth of the sector. These constraints included: (i) low factor productivity; (ii) a weak technology and transfer system; (iii) weak Farmer-Based Organizations; (iv) a land tenure system that hampered sustainable agricultural development; and (v) overexploitation of natural resources. The Agricultural Services Sub-sector Investment Project was conceptualized and designed to support GoG in addressing these issues.

1.2 Original Project Development Objectives (PDO) and Key Indicators

The project development objective (PDO) of the Agricultural Services Sub-Sector Investment Project (AgSSIP) was to increase agricultural productivity and diversification at a rapid pace so that rural incomes will be raised, rural poverty reduced, food security improved and the basis for accelerated overall growth in the economy established on an environmentally sustainable basis.

The project was designed as an Adaptable Program Lending (APL) to be implemented in three 3-year phases coinciding with GoG’s three year rolling Medium Term Expenditure Framework (MTEF). The project was to support all public agricultural services programs managed by the Ministry of Food and Agriculture (MOFA) and the Council for Scientific and Industrial Research (CSIR). The first three-year phase ((2001-2003) was to focus on: (i) the introduction, on a pilot basis before its full-scale implementation, of a demand-driven, and open agricultural service delivery system; and (ii) the implementation of policy and institutional reforms to re-focus government services on their core functions and strengthen the technical, financial and managerial capacities of the sector ministries and district governments for executing these core functions effectively. The two subsequent phases of the AgSSIP were to expand these reforms and programs to a national level and support their consolidation.

The key indicators initially identified in the PAD for measuring progress toward the program’s and the project’s development objective included the following: (i) sector impact indicators –

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improved agricultural growth, increased rural household incomes, increased value of agricultural production and marketing, reduction in unit cost of production, reduced rate of land degradation, reduced over-exploitation of fisheries resources, and increased number of beneficiaries; (ii) institutional development indicators – decentralization of services, capacity building at all levels, cost-effectiveness of service provision, service cost recovery level, capacity building at all levels, empowerment of FBOs and satisfaction of clientele of agricultural services; (iii) a set of 33 project-specific input/output indicators clustered as follows – satisfactory operation of the competitive agricultural research grant scheme, and the agricultural extension and the farmer-based organizations (FBO) development funds; adoption rates and impact of research and extension recommendations; private sector participation in financing research and extension activities; productivity increases of selected commodities; increased planting material and improved breeding livestock produced; increase in female intake into agricultural colleges and extension personnel; reduction of post harvest losses; privatization of animal health services; dissemination of accurate agricultural statistics and market information; and (iv) 16 specific triggers to move from one phase to another.

1.3 Revised PDO (as approved by original approving authority) and Key Indicators, and reasons/justification

The original PDO was not revised. However, as part of the mid-term review, the key performance indicators were revised. For this purpose, Schedule 6 in the DCA was amended accordingly. Outcome indicators were reformulated into three and substantial modification were introduced concerning the Component or output Indicators , which were simplified and reduced in number - from 29 to 14- to make them more realistic and measurable. This was done in light of unsatisfactory project execution prior to the MTR and to reflect Bank and GoG agreement on priority actions to undertake and key policy and institutional reforms to retain. Revised project key performance indicators and measurements are detailed in Annex 2 (Table 6).

1.4 Main Beneficiaries,

The ultimate beneficiaries of the project were agricultural producers who are expected to adopt better production technologies: farmers, livestock producers and fishermen. At the same time, AgSSIP provided support for the development of farmer-based organizations (FBOs) to allow them to play a major role in shaping agricultural policy, providing services to farmers and in engaging in export activities. In addition, the project sought to strengthen the Ministry of Food and Agriculture in general and it’s Directorates both at the national and local level. Finally, the project provided institutional strengthening to Ghana’s agricultural research system (Council for Scientific and Industrial Research) and its agricultural education and training institutions (agricultural faculties of four universities).

1.5 Original Components

Component I. Reforming and Strengthening Agricultural Technology Generation and Diffusion (US$68.35 million; IDA $39.50 million). The objective of this component was to strengthen the national agricultural research and extension system, primarily by increasing the participation of users in priority setting, funding and delivery of these services. Specific activities of the agricultural research component

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included: (i) improving research governance and management and financial accountability; (ii) introducing sustainable and competitive research funding, including Competitive Research Grant Scheme (CARGS) 1 and voluntary contributions from research users; (iii) funding priority research programs, and (iv) strengthening/rationalizing the scientific information systems, human resources and research infrastructure. Specific activities of the agricultural extension component included: (i) supporting the decentralization of front-line extension activities to District Assemblies; (ii) empowering beneficiaries to participate in priority setting and decision making of extension and adaptive research programs; (iii) strengthening linkages with research; (iv) establishing and operating an Extension Services Development Fund2 to promote pluralism in the delivery of agricultural extension services; (v) mainstreaming gender, equity and environmental conservation issues in extension services; and (vi) supporting the national initiative on prevention and control of HIV/AIDS.

The agricultural research activities were to be implemented by The Council for Scientific and Industrial Research (CSIR), under the Ministry of Environment, Science and Technology (MEST), while MOFA had the primary responsibility in implementing extension services in collaboration with FBOs, NGOs and the private sector.

Component II. Institutional Reform and Strengthening of MOFA (US$24.90 million; IDA $17.65 million) The objective of this component was to assist Government to complete its decentralization program in the agricultural sector by supporting MOFA restructuring and providing the necessary support at the regional and district levels. Specific actions were to assess and realign MOFA’s structure, staff skill mix and internal processes with its new mandate. The central directorates of MOFA were to be strengthened and their staffing/skills developed to enable them to perform their core functions and to provide backstopping services and training to the regional development officers and subject matter specialists and to front-line extension agents at district level.

MOFA reform was to be led by its Policy Planning Monitoring and Evaluation Department in collaboration with the technical directorates of the ministries concerned, under the coordination and supervision of the Office of MOFA’s Chief Director. Implementation of the decentralization of agricultural services at the District level was to be done in collaboration with the Ministry of Local Government.

Component III. Development of Farmer-Based Organizations (US$ 9.03 million; IDA 6.35 million) The objective of the component was to provide support for the development of Farmer-based Organizations (FBOs) to allow them to play a major role in shaping agricultural policy and in providing services to farmers. Specific activities were: (i) development of policies and legal

1 As described in the project document, the CARGS aimed to support demand-driven research which is complementary to the priority research programs, and covers two type of research activity : (i) strategic research targeted at problem of national importance and (ii) downstream research and development, e.g. pilot project demonstrating potential for improved technologies or for development into commercial products 2 The establishment of an Extension Service development Fund aimed at contracting gradually extension services to private sector, and preparing District Assemblies to assume responsibility for the supervision and funding of extension services. It would also allow farmer to have a greater voice in determining extension programs.

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framework conducive for the development of FBOs and the operation of NGO; (ii) promotion and development of grass-root level FBOs; (iii) strengthening the capacity of agencies and entities responsible for assisting the promotion and development of FBOs; (iv) upgrading the Cooperative College and transforming it into a College of FBOs; and (v) establishment of an FBO Development Fund. The FBODF aimed to address constraints -such as inadequate access to inputs, extension services, credit, marketing, and lack of management capacity- that small and medium-scale farmers were facing in their daily operations.

The Department of Cooperatives, the Ghana Cooperative Council (GCC) and the Board of Trustees for the FBO Development Fund were in charge of the implementation of the component in collaboration with NGOs. These arrangements were defined in a tripartite memorandum of understanding between the Ministry of Finance, the Ministry of Employment and Social Welfare and GCC.

Component IV. Strengthening Agricultural Education and Training (US$4.67 million; IDA $ 2.80) The objective of the component was to strengthen the capacity of agricultural training colleges and farm institutes to produce the middle level human resources/skills critically needed for the sustained development of the agricultural sector. This objective was to be achieved through an in-depth review of Ghana’s agricultural education strategy and the revision of the curricula of the colleges and the institutes to cater to the skill needs of the private sector. As part of the program, the Human Resource Development Directorate was also to be strengthened.

MOFA’s Human Resources Development Department was responsible for implementing the agricultural education and training component, in collaboration with the Ministry of Education and the agricultural faculties of the four universities in Ghana.

There was no separate component for project’s coordination and monitoring and evaluation, which were mainstreamed into the government structure with MOFA as the lead government agency in implementing AgSSIP. A Program Coordination Unit was created within MOFA’s Policy Planning Monitoring and Evaluation Department (PPMED) to ensure technical and fiduciary coordination of all non-research components, while CSIR coordinated agricultural research activities.

1.6 Revised Components

There was no change in the number and headings of project components. However, activities under Component III Development of Farmers Based Organizations, and Component IV Agricultural Education and Training, were significantly enlarged after the mid-term review to include new activities clustered under the heading “New Initiatives”. As a result, credit proceeds were reallocated to increase expenditure categories for MOFA Grants to strengthen the Extension Development Fund and the FBO Development Fund, which were the main channels for supporting some of the new initiatives, in addition to the construction of the Shed 9 Fruit Terminal in Tema harbor (Civil Works and Goods, see Table 1 below and details in Annex1 (a) Table 2 and (b) Table 3).

These activities were carefully prepared and documented, and feasibility studies, including cost-benefit analyses, were carried out. At the same time, some of the originally stipulated actions under Component II Institutional Reform and Strengthening of MOFA were revised and simplified altogether subsequent to the agreement reached during the mid-term

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review. The institutional reform agenda was thus reduced from twelve measures as indicated in the original DCA, to three key actions: (i) the production and implementation of 10 district annual agricultural services and development plans; (ii) a functional review of MOFA and decentralization of its activities; and (iii) the enactment of a revised Fisheries Bill. Table 1: Allocation of Credit Proceeds over time (Special Drawing Rights, SDR)

Original Allocation

Reallocation at MTR Final allocation %

Civil works 6,700,000 9,300,000 9,700,000 45% Goods 10,300,000 9,600,000 11,000,000 7% Training 13,300,000 6,600,000 6,200,000 -53% Grants 4,900,000 11,700,000 11,200,000 129% Operating cost 11,400,000 9,400,000 11,300,000 -1% Refund of PPF 500,000 500,000 500,000 0% Unallocated 3,800,000 3,800,000 1,000,000 -74% TOTAL 50,900,000 50,900,000 50,900,000 14%

1.7 Other significant changes

As a consequence of the mid-term review carried out in June 2004, a New Initiatives subcomponent was introduced as part of Components I, III and IV. These initiatives were fully consistent with the overall project development objective and responded to GoG’s wish to expand the role of farmer-based organizations, and supporting private sector participation in agricultural and rural development. They reflected Ghana’s Poverty Reduction Strategy (GPRS) which was approved by Parliament in February 2003; it also targeted the sources of potential growth identified in the Bank/s 2004-7 CAS – namely, the development of non-traditional export crops, improved farmer access to infrastructure, technology, international markets and improved quality control.

These changes in emphasis led to the amendment of the Schedule 1 (Withdrawal of the Proceeds of the Credit) of the DCA, and as mentioned in paragraph #1.3, and to the revision of the project key performance indicators (Schedule 6 of the DCA), especially regarding Component Indicators. At the time of project restructuring3 carried out as part of the MTR, only of 37 percent of the credit proceeds had been disbursed.

To fully implement these changes, the project closing date was extended from 10/31/2003 to 10/31/2004, and thereafter two more times, to October 31, 2006 and again to April 30, 2007. Since the new initiatives were fully consistent with the overall project development objective and were part of existing components, there was no need for Board approval to the project restructuring that was agreed with GoG during MTR.

Activities introduced under the New Initiatives (USS12.35 million) were the following:

3 The project underwent a “minor” restructuring based on OPCS guidelines in effect at the time which note examples of minor project changes as “renaming of implementing entities, agreed revision of reporting schedules or formats, or changes in the specification of project outputs that do not have significant impact on the project objectives or scope”. In this case project outputs were changed but the PDO remained the same. The Key Performance Indicators were amended based on changes in project outputs and VPU clearance was received since the request included a 3 year extension from the original closing date, and because the reallocation was more than 5% from the original allocations.

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Horticulture Export Industry Initiative (HEII): The HEII was designed to address the challenges faced by the horticulture industry. The main objective of this component was to increase the income of the farmers, workers and small and medium enterprises (SMEs) involved in the horticulture export industry. This was to be done by supporting actions that would enable Ghanaian exporters and farmer-owned organizations to reposition themselves quickly to higher value growth segments of the market (logistics and post-harvest infrastructure, improved planting material, applied research and development programs, smallholders mango out grower development, quality management and food safety systems, support to industry and farmer owned organizations, program management and strategic support systems.

Development of Oil Palm Industry: The objective of this component was to support the Oil Palm Research Institute’s (OPRI) capacity for production of improved planting materials. This was part of the President’s Special Initiative (PSI) to develop the palm oil industry. To that aim, new seed store was to be constructed, some OPRI premises rehabilitated, and seedlings were to be produced and distributed to FBOs.

Community Fisheries Infrastructure Development: The objective of this component was to develop and promote small holder aquaculture as a source of fish protein, and to ensure safe landing of fish from capture fishers. This was to be achieved through the completion of two fish hatcheries, and the preparation of a feasibility study for improvement of six selected fish landing sites.

Rehabilitation of Irrigation Schemes: The objective of this component was to increase irrigated agricultural production. This was to be achieved through the rehabilitation of 9 irrigation schemes, covering 1,864 hectares of rice (70 percent) and vegetables (30 percent). In all 2,326 small holder families (18,600 persons) were expected to benefit from the project.

2. Key Factors Affecting Implementation and Outcomes 2.1 Project Preparation, Design and Quality at Entry

The intended policy and institutional reforms to re-focus government services on their core functions and to strengthen the technical, financial and management capacities of the sector ministries and district governments for executing these core functions effectively were not defined in sufficient detail. Little formal sector work was available to support the necessary comprehensive policy dialogue. While there was probably general agreement between GoG and the Bank on the desirability and sense of direction for the envisaged policy and institutional reforms, no clear roadmap was drawn up, which led to misunderstanding and disagreements during project implementation. Also, beneficiaries were not sufficiently involved in project design.

No implementation manuals were available at the beginning of the project. This led to misunderstanding between GOG and the Bank on the eligibility of certain expenditures, and resulted in procurement and disbursement delays.

It is worth noting that donor collaboration during project preparation and appraisal was good, and several donors participated in mission work. The original USD 123.73 million financing plan ((c) Table 4 in Annex1) was sought as an attempt to initiate a program-based approach for the agricultural sector, in particular for the implementation of the AAGDS and subsequently the FASDEP. Even though some donors did not follow through on commitments at approval

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stage, significant support through parallel financing has come during project implementation and GoG provided substantial counterpart funding as committed during project preparation.

The Canadian International Development Agency (CIDA) contributed to the Program through the Food and Agriculture Budget Support (FABS, CAD 49.25 million disbursed as of December 31, 2006). CIDA also supported the FBO component and contributed to the rehabilitation of some irrigation schemes, but reporting of CIDA funds were separated from reporting on AgSSIP funds. EU technical assistance came in 2005, for the elaboration and the implementation of a Sector Monitoring and Evaluation System. Over time, donor cooperation improved even further, notably under the mechanism of systematic joint Implementation Support Missions (ISM), which empowered the government in organizing, leading, and coordinating supervision missions with major donor partners taking part in it.

2.2 Implementation

After appraisal and presentation of AgSSIP to the Board on August 1st, 2000, the country entered into an intense phase of parliamentary and presidential election campaigns. During this time, there was considerable political uncertainty and government’s activities slowed down. The party which had been in power for a long time, lost and was replaced by the opposition party. The new government, once in office, reviewed all existing projects to make sure they fitted their own strategies and priorities. The new government was not committed to the original AgSSIP as designed and, as a consequence, the signing of the loan was delayed by about one year. The new government signed the DCA on the understanding that once signed, it would be easier to make modifications rather than to insist on an immediate redesign of AgSSIP. Also, the expected close donor coordination and financial support for the wider AgSSIP program, was slow in materializing. Nevertheless the practice of inviting other donors to participate in joint implementation support missions in the end paid off, and subsequently led to close collaboration in the revision of the Food and Agricultural Sector Development Policy, and likely the financing of the underlying sector wide program.

Government’s level of commitment improved after the project was finally modified to include activities it had called for from the start. This redesign of the components to include the new initiatives took over one year, as a consulting firm had to be selected to carry out feasibility studies and to undertake environmental assessments for these new activities.

In many ways, project design was oriented towards using country systems and responding to the possibility of channeling funds eventually (in phase II and III) through the budget. Project implementation, unlike many other projects of this vintage, was designed to be part of the government structure and the Director of the Policy, Planning, Monitoring and Evaluation Department (PPMED) of MoFA was at the same time project coordinator and that there was no separate project management unit. This was meant to reflect the fact that the project supported the implementation of the sector policy and indeed, the Ministry saw it as the main vehicle to implement the policy. Unfortunately, GoG’s initial capacity to manage the project as a mainstreamed program was over-estimated during project preparation causing delays during implementation.. Furthermore the decentralization policy was slow in being implemented and therefore MOFA as such had little incentive and was constrained in its ability to decentralize functions or budget beyond gradually increasing the level of budget to district directorates. Over time, and with specific training of key personnel, overall management of the AgSSIP improved and became satisfactory towards the end of the project period, suggesting that the

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approach of mainstreaming was in fact correct but should have been accompanied with more technical assistance

The project was considered as a problem project for nearly two years starting in October 2003, which coincides with the original closing date. The Bank and GoG teams identified and recognized major issues that hindered project implementation during the mid-term review, and addressed them through restructuring. This review was jointly prepared and considerable specialized human and substantial financial resources were mobilized both by Government and the Bank. This allowed the Bank and GoG to successfully identify implementation issues, and to agree on necessary adjustments to some of the initial policy and institutional reforms, and to the inclusion of the New Initiatives. The mid-term review was the turning point in the project life, as project implementation accelerated and became satisfactory. The Government also responded by focusing attention on implementation delays, careful monitoring of procurement processes, including demanding a faster turn around time within the Ministry and by the Bank on no objection requests.

Factors generally subject to implementing agency control:

Until mid-term review, project implementation and disbursement delays were very significant. While the project at appraisal was supposed to be a three-year time slice of a 9 year APL and to be closed by October 31, 2003, it has been extended 3 times and the final closing date was April 30, 2007. Disbursements were very slow initially and way behind the original disbursement schedule. As of September 2004 (shortly after the mid-term review and after the initial closing date), only 37 per cent of the Credit had been disbursed. The reasons for these implementation and disbursement delays were a combination of factors: changes in government and review of the original project, unrealistic implementation schedule, weak financial management system and inefficient procurement and disbursement. The fact that many of the expenditures were spread over a great number of cost centers all over the country was an additional complicating factor, initially. However this is part of the GoG decentralization policy and as such, AgSSIP should be commended for using and enhancing the implementation of the government decentralization framework. Hence, although the project might have been able to avoid some of the initial delays by adopting a ring-fenced implementation structure, the use and subsequent enhancement of government systems by the project is felt to have off-set some of the initial implementation delays.

Project costs for the overall AgSSIP program and the Bank financed AgSSIP project varied considerably between appraisal estimates and actual expenditures. Concerning the Bank financed AgSSIP, at the time of the mid-term review, the mission found that MOFA had committed most of the funds for civil works and goods already and that CSIR had overcommitted funds for civil works by US$4 million and goods by US$1.6 million, and under-committed funds for consultancy/training and operating costs.

After the mid-term review and the inclusion of new initiatives, project costs per component changed significantly and a major reallocation of Credit funds was carried out. The two main changes were: a) the allocation of SDR 10.3 million for training and consultants’ services was reduced to SDR 4.8 million, and b) the allocation of grants for MOFA was increased from SDR 3.9 million to SDR 11.1 million). The new initiatives were funded to the tune of US$ 12.3 million. These were mostly charged against the Component III on Development of Farmer-based Organizations, following project restructuring at the time of the medium term review.

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2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization At the sector level, MOFA received towards the end of the project, technical assistance from the European Union to establish a monitoring and evaluation framework. Reporting guidelines for quarterly and annual reports were established and discussed with national and selected district and regional staff. A significant effort during 2006 has been made to implement this M&E framework. This resulted in obtaining more information from the field and allowed better documenting of sector performance. As a consequence, MOFA's M&E system today is much better than in the past and provides a basis for the follow on operation to be sector budget support. The EU Technical Assistance found that field level monitoring and evaluation training carried out under AgSSIP was beneficial in that extension officers in charge of data collection were competent even if they were not fully conversant with or aware of national policies.

At the end of the project, and in line with earlier agreements, PPMED also carried out a general beneficiary assessment as well as an evaluation and impact study of the farmer- based organizations development. Key findings from these studies (see summary in Annex 5) revealed significant impact on livelihood of the FBOs and their members, and identified factors that militated against optimization of the project outcomes, particularly of subprojects funded under the FBODF. Beneficiaries also welcomed institutional innovations introduced for agricultural services that ensured increasing stakeholders’ participation in research and extension priority settings. In addition, although most of the new initiatives related investments were completed only towards the end of the project, thereby making it difficult to fully assess their overall profitability, initial results are very encouraging as demonstrated by the evaluation of irrigation investments. A full economic analysis of these activities and an evaluation of the extension development fund are underway as part of the preparation of the agricultural sector Development Policy Lending (DPL), meant as a follow up operation for AGSSIP I. It is also clear that a number of supporting interventions by other donors, such as in irrigation and horticulture, will rely on the completion of these investment activities for the implementation of their programs.

The project monitoring and evaluation system as designed in the appraisal document was very ambitious and all encompassing. Around fifty performance indicators and triggers for AgSSIP II were established. At appraisal, it was foreseen that in addition to the information collected for performance monitoring at the local, regional and national level, beneficiary assessments and impact evaluations would be carried out from time to time. These latter two activities were supposed to be done through twinning arrangements with local Universities and other partner institutions, since MOFA did not have adequate capacity in terms of staffing and analytical skills.

As it turned out, the original project’s M&E system was too complex and demanding to be implemented successfully. Baseline surveys were not carried out and many of the key performance indicators were not sufficiently specified, and no methodology was agreed upon on how to measure some of the variables. Taking the opportunity of the mid-term review, project performance indicators (sector indicators, end-of program indicators, outcome/impact indicators and component indicators) were reduced in number and revised to make them more easily measurable. Moreover baseline data have been collected and targets have been agreed upon. At that time it was also agreed to conduct a beneficiary assessment prior to project closing with the aim to obtain additional data to judge project performance. The Project

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Coordination Unit was then able to document appropriately progress towards achievement of project outcomes, and results have been documented in implementation support missions’ aide memoirs and Project Status Reports.

2.4 Safeguard and Fiduciary Compliance Two safeguard policies were triggered for the project: environmental assessment (OP 4.01) and pest management (OP 4.09). Overall the project has complied with these policies. To facilitate the development, implementation and adoption of IPM packages for sustainable crop production, and as part of AgSSIP support to the Directorate of Plant Protection under Component 2, the following guides were developed, printed and disseminated: Crop Protection Policy Guidelines, Handbook of Crop Protection recommendations in Ghana - Volume 4 - selected fruits; Good Agricultural Practices and Crop Protection Recommendations Volume 5 - selected vegetables; IPM Extension Guide 1-4 (650 copies distributed); Pesticides Dealers Handbook ; Pesticides Applicators Handbook; Post-registration field surveillance and monitoring manual for pesticides inspectors (400 copies available). The guides are in use by extension staff, RELC's researchers and other stakeholders.

In 2006, the MOFA work plan was subjected to environmental screening where a number of activities were identified for further environmental assessments. Criteria to guide the screening process have been developed and staff has been trained. Pest management is controlled by the National Pesticide Control and Management Act. To further improve an otherwise satisfactory application of policies in these areas, a number of opportunities were identified including: (i) a closer collaboration between MOFA and the Environmental Protection Agency; and (ii) updating the manual of procedures of the CARGs and FBODF to also apply environmental screening to individual research and FBOs subprojects.

Concerning fiduciary compliance, audit reports were delivered on time and were not qualified. Financial management reports were also submitted on a regular basis and generally on time.

Procurement initially faced a number of constraints notably that are typically associated with the use of country systems, including: inadequate capacity at the MOFA’s directorates and CSIR to prepare detailed technical specifications for goods and works, and/or sound terms of reference for consultants.

Under the CSIR managed research activities, during the first three years of the project, costs were grossly underestimated leading to category overruns. The Bank’s request during the mid-term review to reduce the scope of contracts under execution (instead of effecting reallocation from the unallocated category) and later restoring these same contracts to their original scope created problems for the civil works component for the research institutes and led to serious cost overruns and delayed contract execution.

However, these constraints were satisfactorily addressed by training and assigning two procurement specialists to the coordination unit, and towards the end of the project, procurement was handled satisfactorily, evidencing the project contribution to capacity building in this area. 2.5 Post-completion Operation/Next Phase

Based on achievements in policy and institutional objectives, including the successful completion of a revised Food and Agriculture Sector Development Policy (FASDEP II), a revised monitoring and evaluation framework, and improved financial management capacity

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within the Ministry, the next phase is expected to continue to support the implementation of the sector policy. This support is expected to help sustain investments made to date and support public agricultural investments where needed; stimulate private agricultural sector performance across the board and continue to increase donor coordination and collaboration in the agricultural sector.

Experience under AgSSIP I has shown that the follow-up operation should continue to support FASDEP II, which is the Government’s platform for sector development. Lessons from AgSSIP first phase, the CIDA/DFID-supported Food and Agriculture Budgetary Support (FABS) assessment, and the Public Expenditure and Institutional Review (PEIR) of MOFA have fed into the revision of FASDEP and broad based consultations have been held. The policy supports continuing focus on FBOs and private sector development and on productivity increases, particularly for staple crops.

Such an approach is necessary to develop the country’s potential in commercial agriculture and to address continuing concerns of food security and rural poverty. In agreement with the Government of Ghana, the current Country Assistance Strategy anticipated continued Bank’s support to Ghana’s agricultural sector through a Development Policy Lending instrument (DPL). The use of such instrument would require (i) a strategic sector policy framework, (ii) sound institutional and financial management arrangements, and (iii) a sector-wide M&E framework with specific indicators and targets. During the course of AgSSIP I implementation, these elements have indeed been strengthened and donor coordination has improved considerably. The time seems ripe therefore for a sector-wide budget support, . This would help fostering unfinished reform agenda and developing coordinated donor support to agricultural sector development.

3. Assessment of Outcomes 3.1 Relevance of Objectives, Design and Implementation

The development objective was highly appropriate in the context of Ghana. Recent analytical works have demonstrated how powerful engine of growth the agricultural sector may be – both in sustaining the overall economy as well as in reducing vulnerability and poverty in general. The recent Country Economic Memorandum (CEM, 2007) notes that national rural poverty has decreased from 50 percent in 1998/99 to 39 percent in 2004/06, and the depth of poverty among rural households (84 percent of total poverty at the beginning of AgSSIP) has also fallen over the same period from 0.24 to 0.18 to 0.14. The performance of the agricultural sector has been an important determinant of aggregate macroeconomic performance with the growth in the agricultural sector mirroring aggregate trends in most years. Macro-economic simulations recently undertaken by the West and Central Africa Council for Agricultural Research and Development (CORAF/WECARD), jointly with the International Food Policy Research Institute (IFPRI, 2006) highlight the potential of stronger agricultural growth based on improved yields and improvements in marketing.

The agricultural sector posed significant constraints and opportunities at the time AgSSIP was being prepared. Agriculture was dominated by resource-poor smallholders who employ low levels of technology. Farmer-based organizations (FBOs) were weak and existing land tenure arrangements hamper sustainable agricultural development, and natural resources are being over-exploited. Yet, with the institutional and policy reforms and stepped up investments by the public, and especially the private sector, as supported under AgSSIP, the rural economy

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had the potential to becoming the engine of growth for the whole economy. The CEM also notes that (i) over 2001 - 2005 agriculture contributed 38 percent to Ghana's aggregate growth and that 55 percent of this agricultural GDP growth was from crops (i.e. not from cocoa or livestock or forestry or fishing). The sub-sectors supported by AgSSIP have therefore contributed significantly to growth over this period. The CEM analysis further suggests that 60 percent of this agriculture sector growth is from increase in total factor productivity.

Because of strong linkages between small-scale agricultural and non-agricultural sectors of the rural economy, it is agricultural growth, based on technologically-driven factor productivity increases that can be expected to provide the effective engine for employment creation in the farm and non-farm sector. Also, non-traditional agricultural exports are in its infancy and given Ghana’s natural endowments, fast growing domestic and regional markets and proximity to the European market offer good opportunities for sustained growth. Horticulture, oil seeds, and tree crops are some areas where the approaches to improve technologies, policies and institutional arrangements are starting to pay off. GOG shared this assessment and considered AgSSIP as one of the major instruments for implementing its Accelerated Agricultural Growth and Development Strategy (AAGDS), which supports Ghana’s Vision 2020. The World Bank Group in its CAS equally considered the AgSSIP as the main instrument of Bank support to the agricultural sector.

The choice of an adaptable program lending (APL) was justified. However, the first-phase implementation period of three years was too short to allow full implementation of all the envisioned changes. The operation was very complex and combined too many investment activities, institutional objectives and policy changes. More sector work to provide the analytical underpinning would have been useful. Also, clear implementation procedures and milestone should have been spelled out in a comprehensive implementation manual before project effectiveness. 3.2 Achievement of Project Development Objectives

Out of a total of 19 performance indicators (including two end of program first phase indicators or triggers, three outcomes indicators to measure project development objectives, and 14 output indicators to measure component performance), 12 were fully achieved, 6 were partially achieved and only 1 were not met (see Table 6 in Annex 2 for more details).

The following outcome indicators were agreed upon to measure project development objectives: (a) Overall farm productivity increase by 10 percent for all crops compared to 2000 levels; (b) Increased value of agriculture production, particularly in horticulture by 40 percent; and (c) Improved capacity of farmer based organizations in production and marketing.

The indicator on farm productivity is partially met. Over the period 2001 – 2006 sector production (including crops, livestock, forestry and fishing) increased in real terms by 30 percent. The cocoa sector led the trend, with growth over the period of 69 percent. The crops and livestock sub-sector growth increased by 5.5 percent per annum on average real terms. Compared to the demographic growth (2.7 percent per year), production per capita (agricultural labour productivity) increased by 8 percent. Increase in production resulted from 5.3 percent improvement in average yield (land productivity), and 26.3 percent expansion and diversification of cropped areas, particularly for groundnut, cowpea, plantain, yam, and maize. At the same time, performance in production output contributed to food security improvement and additional income to the farmers. While Ghana has recorded good performance both in

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Processingequipement

Crop & animalproduction

Storage andWorkshopFacilityRehabilitationof office

Training

labour and land productivity, achievements are below the initial target of 10 percent, which was overly optimistic compared to the NEPAD/CAADP target of 6 percent. The second indicator regarding the increase in value of agriculture production is fully achieved. Value of horticultural exports at current prices recorded a 171 percent increase at USD 76 million in 2006, compared to the baseline established in 2000. Agricultural exports (including timber) are the primary source of foreign exchange accounting for over half of export receipts in 2006, and value of cereals production increased by 147 percent from US$210 million in 2000 to US$520 million in 2006 (see annex 2 for details). The third outcome indicator (Improved capacity of farmer based organizations in production and marketing) is fully achieved. Results achieved under the FBO component included setting up of the FBO Development Fund (FBODF), training of about 1,300 FBO executives in group development and business management at the Cooperative College, strengthening of the Ghana Cooperative Council, building capacity for agencies in charge of promoting FBO, and creating a web-based directory of FBOs and NGOs.. The FBODF assessment study report concluded that the Fund has been satisfactorily established in 2002 and has become operational progressively in 20 pilot districts (two districts per region), with governance structure composed of Regional Steering Committees whose mandate has been expanded to other non-pilot districts, a Board of Trustees assisted by the FBO Secretariat. 326 FBOs benefited from the FBODF, Figure 1: FBO's projects per activities

beyond the initial target of 300 FBOs. As many as 100 of the FBOs supported were made of women only, while the rest were a mix of women and men. An independent evaluation conducted by CIDA and the FBO Secretariat in 2006 indicated an 85 percent satisfactory rating for FBO projects funded under the FBODF. Results of the FBODF ‘s support included the following : over 70 percent of FBO assessed in the sample indicated improved access to services such as credit; about 70 percent of FBOs were utilizing their equipment effectively, and recorded a 50 to 100 percent increase in their processing

activities.

Furthermore, the agricultural sector experienced sustained growth rate over the project’s life, averaging 5 percent between 2001 and 2006 (compared to 2.1 percent in 2000), and well in excess of the population growth rate estimated at 2.7 percent per year. The agricultural sector contributes more than 35 percent to the country’s GDP.

While these performance cannot be all attributed to the Project’s intervention (for example the crisis in Cote d’Ivoire, other development projects supporting sector objectives also contributed to these developments), it is clear that the capacity of farmer based organizations in production and marketing is increasing steadily, although from a very low base. Priority Research Programs and subprojects funded under CARGS have generated 67 new technologies, including crops varieties tailored to users needs thanks to the farmers’ participation in selecting research priorities. In addition AgSSIP contributed to revamping the Horticulture Exports

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Industry. In particular, the Horticultural Export Industry Initiative (HEII) took the approach of developing public private partnerships and enabling small holders to access improved planting materials and respond to market needs (see Box 1below on pineapple industry and Annex 2 for details, including the public-private partnership for mango export from Tamale). Box 1: The Pineapple Story: Conversion to MD2 Pineapple exports from Ghana are an interesting success story in horticultural exports. Market volumes exploded from practically zero in the late 1980s to about 70,000 tons (fresh cut and juices combined) in 2004, capturing a 10 percent market share of the European fresh produce import market. Sea freight has been a major factor, increasing from 15,000 tons in 1997 to 70,000 tons in 2004 (even though only one shipping company is available to transport freight from Ghana). The pineapple export industry has a large base of small farmers contributing up to 50 percent of the total export volume. However, Ghana experienced a dramatic reduction in market share and export earnings from horticulture with the introduction of the MD2 pineapple cultivar by Del Monte. In 2005 horticultural exports declined by 27 percent primarily due to a decline in pineapple exports by 35 percent. The industry is now switching to the MD2 and trying to meet standards for food safety. HEII is in the process of converting 1,150 acres of small scale Smooth Cayenne farms to MD2 by August 2008 to benefit 1,560 small scale farmers. Forty groups of farmers (400 farmers) have been supplied with 1.76 million plantlets from two tissue laboratories to establish forty nurseries. The farmers have received training on how to multiply the plantlets, which, when harvested, will be used partly by the farmers and partly for further distribution to other farmer groups. In this manner, once the conversion is complete, smallholders who contribute over 40 percent of exported pineapple should be able to export 23,000Mt of MD2 by November 2009.

Likewise, steps have been taken to mainstream gender into agricultural policy making and in the delivery of extension services. Specific project’s contribution in mainstreaming women in agricultural development included increase of women enrollment in agricultural education and training, and support to women-led activities through the FBO Development Fund as indicated earlier. Support to the extension services through AgSSIP have also contributed to raising HIV/AIDS awareness in rural areas.

Most importantly, AgSSIP has laid the institutional ground for demand-driven agricultural services by initiating participatory priority settings and funding mechanisms such as CARGS, RELCs, FBO and Extension Services development funds. These mechanisms will need further strengthening under the agricultural sector DPL under preparation, as already foreseen in FASDEP II. 3.3 Efficiency

The actual sector average growth rate is much higher than the very modest minimum incremental growth rates (from 0.14 percent to 0.15 percent p.a.) calculated in the break-even analysis in the project appraisal document required to justify the cost stream of AgSSIP. 3.4 Justification of Overall Outcome Rating

Rating: Achievement of the overall project objective is rated as moderately satisfactory.

The approach for rating project’s overall outcome follows OPCS ICR guidelines (August, 2006, Appendix B), which indicate weighting separate outcome ratings for period before and after restructuring in a rating scale ranging

from 6 as Highly Satisfactory to 1 as Highly Unsatisfactory, in proportion to the share of actual credit disbursements. The Project is rated unsatisfactory against the original outcome indicators (2), and satisfactory against the revised outcome indicators (5). This results in a weighted average value of 3.89 or 4 when rounded off, or moderately satisfactory.

The project has fully or partially met all outcome indicators as stated in the revised DCA (amendment of the project key performance indicators), contributing to Ghana’s agricultural

Period Pre-MTR Post-MTR Outcome Rating Unsatisfactory Satisfactory Weight (Share in disbursement) 37% 63%

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sector performance and rural poverty reduction, as described in the economic analysis in Annex 3. 3.5 Overarching Themes, Other Outcomes and Impacts

(a) Poverty Impacts, Gender Aspects, and Social Development

Data from the 2006 Ghana Living Standards Survey (GLSS V), suggest that the share of the population in poverty decreased from 39.5 percent to 28.5 percent between 1999 and 2005. Disaggregated data show that poverty among food crop farmers has fallen from 59 percent to 45 percent in the same period, and from 39 percent and 24 percent for export crop farmers, putting Ghana on the right path to achieving MDG1...

Furthermore, agricultural research and extension programs have been widened in scope and concerns to mainstream gender dimension and to deal with HIV/AIDS related issues. The majority of beneficiaries under the farmer-based organizations component were women. Finally, it is worth noting that AgSSIP has steadily increased women enrollment in agricultural education and training programs. According to the FBODF assessment report (April 2007), of the 1,266 FBO executives trained at the Cooperative College, 48 percent were women and the youth (age range 18 to 39) constituted 42 percent. Out of the 326 FBO projects supported, 100 were solely for women with the remaining consisting of mixed groups. Also, it is worth noting that over 70 percent of FBO projects are into processing, which tended to be women-led activity. (b) Institutional Change/Strengthening

Both for the national research system and the agricultural extension system, AgSSIP has had a significant impact. The competitive research grant scheme and the subcontracting of extension delivery to private service providers, although very limited in scope and funding, are starting to influence the way managers of researcher and public extension think about their work. Most importantly, researchers as well as public field extension agents start to feel competitive pressure and realize that they have to deliver if they do not want to become irrelevant and even lose their jobs in the longer term. The decentralization of MOFA – even in its present limited form - has already significantly impacted the workings of district directorates, as field staff in the Districts are starting to realize that they now have to work with District Assemblies. MOFA is the most deconcentrated Ministry of the Government, with most staff located in districts. Also, the financial management restructuring at MOFA is progressing steadily, and planning and budgeting processes have become embedded in the Medium Term Expenditure Framework and now concentrates on defining and achieving clear objectives rather than describing activities.

AgSSIP has also promoted farmer-based organizations, by being a catalyst for business development by groups of farmers that want to succeed in the market place. With continued technical and financial support to primary FBOs, it can be expected that they will associate and create larger organizations that will enable them to take on larger challenges and provide them with greater bargaining power in the economic and political arena. Finally, through the “New Initiatives”, especially the Horticultural Export Industry Initiative, AgSSIP has proven that Ghana can become a major exporter of agricultural produce and that it can successfully and quickly step up production of competitive agricultural commodities if it so chooses by linking small holder farmers to agro-industries and the world market.

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Ghana is also spearheading the NEPAD/CAADP’s agenda for agricultural technology generation and dissemination, alongside Senegal and Mali to host the first phase of the West Africa Agricultural Productivity Program (WAAPP) which will be grounded on institutional developments under AgSSIP, including building on the achievements of the IFAD supported Roots and Tuber project. (c) Other Unintended Outcomes and Impacts (positive or negative)

Donors active in the agricultural sector participated in all phases of the AgSSIP (preparation, pre-appraisal, appraisal and during project implementation, including MTR). Joint field implementation support missions were the norm. As a result, CIDA and EU contributed to the program through parallel mechanisms – budget support and technical assistance on M&E respectively- and the horticultural sector has become more attractive to invest in (USAID-supported TIPCEE and the Millennium Challenge Account as well as private investors). In addition, institutional settings for more demand-driven agricultural services created under AGSSIP, are being used for implementing other programs. As an example, GTZ-supported FARMER Project is expanding the RELC experience in other regions which have not benefited initially from the project.

Furthermore, AgSSIP has provided the base for Ghana’s participation in the regional agricultural research agenda under the NEPAD’s Comprehensive Africa Agricultural Development Program (CAADP), which is supported by the Bank through the Regional West Africa Agricultural Productivity Project (WAAPP) approved by the Board in March 2007.

3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops

Both the general beneficiary assessment and the evaluation and impact assessment of the Farmer-Based Organizations Development Fund (FBODF) were positive, as indicated in section#3.2. They allowed an independent assessment of the response of various stakeholders, to identify strength and weaknesses of the different components, and to formulate recommendations for improvements (see summary of the reports in Annex 5).

The beneficiary assessment outlined for consideration in designing the second phase of AgSSIP the following: adoption of alternative approaches to reforms in MOFA; strengthening program management structures and systems; strengthening extension and research linkages; inclusion of Agro-processing in project activities; enhanced support to FBOs and strengthening of the FBO Development Fund; improving infrastructure and equipment base for agricultural development.

Key recommendations from the FBODF evaluation study include the need for continuous capacity building to address operational challenges, enhancing leadership and members’ commitment and encouraging the FBOs and District Unions to develop business plans to guide their operations. Others are the need to ensure that only FBOs that are solidly on the ground are supported, the provision of integrated support to the FBOs, blacklisting non-performing service providers and revisiting the unfavorable government trade policy on agricultural development

4. Assessment of Risk to Development Outcome Rating: Moderate.

Risks to development outcome and sustainability of project achievements are evaluated against the following criteria: institutional, economic and financial, environmental and social:

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• Institutional risk to development outcome is low: Given the support provided in FASDEP II, it is likely that the institutional framework that has been established under AgSSIP for developing the agricultural research and extension services system will prevail within the next years. CARGS, the Extension Services and the FBO development funds are now internalized as the right approach to enhance stakeholders’ participation in defining priorities. In addition, the current decentralization policy will further strengthen empowerment of local actors, notably at district levels, in scaling up the agricultural services delivery system.

• Economic and Financial risk to development outcome is moderate: the current annual agricultural growth is well above the incremental agricultural GDP growth rate of 0.14 percent to 0.15 percent per annum that has been determined as minimal to justify undertaking the program. Current level of Government contribution to the AgSSIP I, combined with a move towards more budgetary support –including the proposed agricultural sector DPL- in addition to resources from the WAAPP for supporting the agricultural research system over the next five years, would normally ensure a financial sustainability of the funding. However, cost for effective stakeholder involvement in setting priority research through RELCs, as well as for expanding the outsourcing of extension services to NGOs and private operators should be worked out.

• Environmental risk to development outcome is substantial: Ghana agricultural growth is first and foremost natural resources based. Expansion of cropped areas may threaten the sustainability of the agricultural and ecological systems. Agricultural sector performance should be sustained through increased agricultural productivity. The revised sector policy places an emphasis on the improvement of agricultural productivity and the development of a sustainable land management strategy for agricultural lands.

• Social risk to development outcome is low: AgSSIP has contributed to revamping the dynamics of farmer groups at the local level, and has played an instrumental role in mainstreaming gender in agricultural development, particularly with regards to extension services and agricultural education and training. In addition, under the WIAD leadership, HIV/IADS has been brought forward in the extension services agenda. It is likely that these achievements, built under clear governance and rules ad procedure to ensure equity, transparency and participatory control of public funds, would likely be sustained over the next coming years, following the country general trends towards more decentralization.

On the basis of these assessments, the overall risk to development outcome is rated as moderate.

5. Assessment of Bank and Borrower Performance 5.1 Bank Performance

(a) Bank Performance in Ensuring Quality at Entry

Quality at entry is rated as moderately unsatisfactory.

The AgSSIP featured prominently in the government’s development strategy and the Bank’s CAS. Government of Ghana prepared a Vision 2020 document which called for alleviating

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poverty through strong and broad-based economic growth, especially of the agricultural sector. Accordingly, the Ministry of Food and Agriculture (MOFA) prepared an accelerated agricultural growth and development strategy (AAGDS). The AgSSIP was one of the major instruments for implementing this strategy.

In preparing this operation, the Bank mobilized considerable financial and human resources. A PPF was put in place and the Bank fielded a large 5 week pre-appraisal mission of thirteen Bank and FAO staff and consultants that covered a wide area of technical expertise. However, the AgSSIP had too many components and sub-components to be prepared in sufficient detail (e.g. a project implementation manual was only prepared during implementation) and the policy dialogue did not focus on a limited number of critical issues that needed to be addressed realistically within the first phase of the project.

At appraisal, the capacity of MOFA and CSIR to manage such a complex project, especially concerning financial management and procurement was overestimated. Only four years after appraisal did an implementation support mission point out that the project lacked an appropriate computerized administrative, accounting and financial management system. Following the MTR recommendations, MOFA and CSIR appointed two financial controllers and two procurement specialists, one of each focusing on the project financial management and procurement related issues respectively. This helped improve MOFA and CSIR performance on project fiduciary aspects, but it showed clearly that using country systems requires some prerequisites in terms of capacity building. Also, use of computerized systems for accounting and financial management has been hampered overall because the roll out of the Ministry of Finance supported financial management software (BPEMS) has been so slow.

The moderately unsatisfactory rating reflects significant shortcomings in project preparation, notably regarding the policy and institutional aspects and a lack of adequate assessment of the implementing agencies’ capacity to carry out properly project activities. (b) Quality of Supervision

Rating: moderately satisfactory

The Bank’s initial reaction to project start-up delays was slow and inadequate. There was insufficient recognition and admission that the new Government was not committed to the original design of AgSSIP and that this would not change without reformulating the project so as to incorporate the Government’s concerns and priorities. The first several Project status reports (PSRs) painted a picture as if the project startup was simply delayed. During this period, dated legal covenants were not systematically addressed and enforced. Only the Project Status Report of July 2003 gave for the first time an unsatisfactory project performance rating for implementation progress. This was close to the original closing date of October 2003. By that time, consideration should have been given to partial cancellation or profoundly restructuring of the project.

While the supervision missions listed several critical risks, such as: inadequacy of counterpart funds; government not committed to private sector participation; and political will lacking to pass certain pieces of legislation, these risks were not closely followed and some were very little commented upon in successive Project Status Reports.

However, project supervision improved considerably over time and the Bank’s mid-term review mission in June/July 2004 did an in-depth work in resuscitating the project through: (i) simplifying and clarifying actions under the various original project components, and (ii)

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incorporating the new initiatives that client was calling for. Furthermore, to reinforce the Bank’s support to accelerate project implementation, Bank enhanced staffing in the field with two decentralized staff members, in addition to the team already in place, to work with the Government’s project team. Finally, the posting of the third and last TTL to the field in 2005 allowed for closer and swifter follow-up on project implementation issues and a better dialogue on policy and institutional issues with GOG and donor partners. The strengthening of the task team through the appointment of a new TTL, the transfer of task-management to the field and considerably stepped-up utilization of supervision funds ((b) Table 13 in Annex 4) resulted in better supervision of recommendations and close monitoring of action plans that came up out of the MTR

The rating of Quality of Supervision derives from the assessment of Bank performance before and after the medium term review (MTR) against the following criteria in table below, and reflects an unsatisfactory rating before mid-term review, and a satisfactory rating thereafter.

Criteria Before MTR After MTR

Focus on Development Impact MS S

Supervision of Fiduciary and Safeguards aspects S S

Adequacy of Supervision Inputs and Processes U S

Candor and Quality of Performance Reporting U S

Role in Ensuring Adequate Transition Arrangements N.A S

(c) Justification of Rating for Overall Bank Performance

Rating: moderately satisfactory.

The rating reflects an moderately unsatisfactory performance of the Bank in ensuring quality at entry, a moderately satisfactory performance in supervision particularly around and after the mid-term review, and a moderately satisfactory rating of the overall project outcome rating.

5.2 Borrower Performance

(a) Government Performance

Rating: moderately unsatisfactory.

The Government at the time of project preparation did everything necessary to prepare the various components of AgSSIP. However, it underestimated the difficulties to undertake such a complex program within the time frame agreed upon.

Significant shortcomings in Government’s performance include no enactment or approval of a number of laws and policies/strategies that have been prepared during project implementation, such as the revised Cooperative Bill, the Quarantine and Seeds Bills, the Agricultural and Education Policy, and the Irrigation Policy and Strategy. While most of these delays have been attributed to excessive time taken at political executive levels, the revision of FASDEP provides a new collaborative environment with a renewed Government’s commitment to accelerate the reform agenda. As a follow up operation to the AgSSIP I, the DPL would a suitable instrument to implement the reforms in collaboration with other donors.

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The new Government should have been more assertive vis-à-vis the Bank and insisted on an immediate redesign of the project, including a formal review of the institutional and policy reforms agreed to by the previous administration. In the absence of this initial redesign, until the time of the mid-term review, the Government did not demonstrate strong commitment in taking action towards implementing the initially agreed upon institutional reform measures.

However, it is noted that important changes took place once the New Initiatives were included, including Government’s effort in budgeting and releasing appropriate counterpart funding up to the initial amount agreed on during preparation. (b) Implementing Agency or Agencies Performance

Rating: moderately satisfactory.

The Policy, Planning, Monitoring and Evaluation Department (PPMED) of MOFA was initially ill prepared and not equipped to handle the administrative management of AgSSIP, especially the financial management and procurement aspects. Its management structure also faced difficulties in coordinating several technical implementing agencies and in ensuring coherence of the overall program. Project management was supposed to be mainstreamed but turned out as an unclear hybrid between discrete project type Project Coordination Unit (PCU) and mainstream management. PPMED did not ensure consistency between budget allocations to technical Departments and their work programs under AgSSIP. The role of director PPMED and the AgSSIP coordinator was further separated, but no clear responsibility has been defined for the two positions in the management of AgSSIP.

The AgSSIP Coordination Office was initially cautious in releasing funds. The directorates had also not been responsive in submitting timely returns of accounts for the funds advanced to them. The AgSSIP advisory and technical steering committees did not meet regularly and could not provide guidance to program implementation as designed.

Until the mid-term review, (i) the project was plagued by a lack of communication both internal and external, and was poorly understood even by the main stakeholders like MOFA’s Directorates; and (ii) program implementation suffered from a lack of leadership, as the AgSSIP Coordinator had other duties that prevented him from working full time on the program. Also, certain Departments of MOFA were less than enthusiastic about devolving functions to the private sector (case of private sector participation in clinical veterinary services, which was later dropped).

However, after the mid-term review and with renewed government commitment and measures to strengthen PPMEDs management capacity, performance improved considerably. Financial management and procurement capacity building was provided, monitoring and evaluation was emphasized and PPMED’s role as coordinator and facilitator of project activities was emphasized. As a result, key directorates of the Ministry – such as the crops division – developed clearly defined roles in project implementation with clear reporting mechanisms to allow PPMED to monitor progress under the project. The statistics directorate also improved coordination with PPMED so that data collection and analysis started to become more complementary. (c) Justification of Rating for Overall Borrower Performance

On the basis of the assessment of government and the implementing agencies performances, which basically was unsatisfactory prior to the MTR, and then improved tremendously towards

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the project closure, and given the overall outcome rating, the overall Borrower performance is rated as moderately satisfactory.

6. Lessons Learned Among the major lessons to be drawn from the implementation and outcome of this operation are the following:

Combining in one operation: (i) investment lending for a very large number of activities; (ii) a broad institutional reform agenda concerning several centralized and decentralized organizations; and (iii) policy reforms require thorough preparation and borrower’s ownership. Institutional and policy reforms should not be folded into investment operations, unless strongly called for by the client. In such case, project preparation and reforms to be undertaken should be backed with strong economic and sector works, and timing both for preparation and implementation of agreed reforms measures should be worked out before project approval..

Project management Unit vs mainstreamed project management: The initial decision that project implementation should the mainstreamed within MOFA, under the responsibility of PPMED, although appropriate, was problematic. It overestimated the capacity of PPMED to deal with the fiduciary standards associated with Bank operations. Mainstreaming requires explicit attention to capacity issues and organizational aspects within the ministries, in order to ensure a successful shift-over from project mode to program mode. Therefore, capacity building for and technical assistance to implementing agencies should be conceived as a process that needs to be adequately supported through the project rather than as a one time decision.

Project timeframe: For complex APLs with heavy emphasis on institutional reforms, a multitude of executing agencies and where expenditures are spread geographically all over the country, the first phase should not be less than 5 years. Basic project management issues such as accounting, financial management, procurement and interagency coordination and flow of funds between the national level and the field need to be addressed especially carefully as they are likely to dictate the pace of project execution.

Accelerating mid-term reviews when governments have changed: For a major sub-sector loan with several distinct policy orientations and institutional reform objectives, the election cycle must be taken into account in establishing the time line for the different steps in loan processing (Board presentation and effectiveness) and the expected time for implementation. Also, once a newly elected Government asks for important changes in a recently approved project, an advanced mid-term review should be considered.

Clearly separate sector performances from project M&E system: In a major sub-sector agricultural loan, more attention from the beginning needs to be given to the state of agricultural statistics and the state of sector-wide monitoring and evaluation systems. There is a need to clearly distinguish between broad sectoral performances indicators, and to focus on more limited indicators that allow tracking of effectiveness of project interventions. The tendency to ask for ever more elaborate monitoring and evaluation systems should be resisted, as they risk becoming too expensive to be sustainable.

Donor coordination and parallel financing: Although ultimately donor coordination is the borrowers responsibility, in this kind of operation where success is to a certain extent predicated on better donor coordination, specific mechanisms for collaboration, including

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process mechanisms, procedures, and leadership arrangements should be explicitly and formally discussed and agreed upon by donor representatives in the field as well as their headquarters at the outset of the project. In addition, securing availability of other sources of funds during project preparation is critical for ensuring the coherence and integrity of the overall financing plan. Otherwise the program cost and design should be adjusted accordingly before IDA approval.

7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners (a) Borrower/implementing agencies

The Part A of the Borrower’s comments on the draft ICR related to editing corrections has been taken care of in the final version of the ICR, and is not included in the Annex 7. (b) Cofinanciers and Other partners and stakeholders

No comments received.

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Annex 2. Outputs by Component (a) Table 2: Project Cost by Component (in USD Million equivalent)

Components Appraisal Estimate

Total (USD millions)

Appraisal Estimate IDA (USD millions)

Actual/Latest Estimate IDA (USD millions)

Percentage of Appraisal

IDA(*) Technology generation and diffusion 68.35 39.50 42.7 108% Reform and strengthening of MOFA and District Assemblies 24.90 17.65 14.9 84%

Development of Farmer-Based Organizations 9.93 6.35 14.7 231%

Strengthening Agricultural Education And Training 4.67 2.80 6.5 232%

PPF 0.70 0.70 0.00 Total Baseline Cost 107.65 67 78.8 118%

Physical Contingencies 4.77

Price Contingencies 11.31

Total Project Costs 123.73 67 78.8 118% (b) Table 3: Project expenditures under components (IDA credit, in USD Million)

MOFA (USD millions*)

CSIR (USD millions*)

TOTAL (USD millions*)

Allocation at Appraisal (IDA)

$Million Technology Generation Diffusion 23.2 19.5 42.7 39.5

Institutional Reforms 14.9 ─ 14.9 17.65

Dev. of Farmer Based Organization 14.7 ─ 14.7 6.35

Agricultural Education & Training 6.5 ─ 6.5 2.8

Refund of PPF ─ ─ ─ 0.7

Total 59.3 19.5 78.8 67.0 (*) Difference between allocation at appraisal and actual derives from variation of exchange rate USD/SDR at project appraisal and closing.

(c) Table 4 : Project Financing

Source of Funds Type of Cofinancing

Appraisal Estimate

(USD millions)

Actual/Latest Estimate

(USD millions)

Percentage of Appraisal

Government of Ghana Counterpart funding 14.10 $10.11 72%

African Development Bank 5.00 0.00

Canadian International Development Agency (CIDA**) Parallel financing 10.30 0.00

Danish International Development Agency (DANIDA) 0.66 0.00

British Department for International Development (DFID) 3.50 0.00 European Union (EU,**) 21.00 0.00 International Development Association (IDA) Credit 67.00 78.8 118% International Fund for Agriculture Development 2.17 0.00 (**) CIDA contributed to the Program through the Food and Agriculture Budget Support (FABS, CAD 49.25 million disbursed as of December 31, 2006), and EU provided technical assistance to PPMED for sector M&E.

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Annex 2. Outputs by Component Component 1: Technology Generation and Diffusion.

Achievements under this component are rated moderately satisfactory.

For the subcomponent Agricultural Research Development, key performance indicators were as follows: (a) The competitive agricultural research grant scheme (CARGS) is initiated and operating effectively, and 75% of ongoing projects have satisfactory rating, (b) Participation of farmer representatives in priority setting of adaptive research through Research-Extension Linkages Committees (RELCs) in 10 regions, and (c) At least 15 priority research projects completed with 75% satisfactory rating from a clientele point of view.

All three performance indicators have been met. The CSIR agricultural research system generated 67 technologies out of a total of 193 research project during the period 2001-20064. Under the CARGS initiated with AgSSIP, CSIR has developed an agreed upon manual of procedures. Out of the 28 CARGS projects contracted out to scientists since 2003 fifteen were completed and scored satisfactory rating during project review meetings by research clientele. Three have generated technologies suitable for dissemination to farmers while the results of the rest are yet to be validated. 2nd round of CARGS employed RELCs to identify research priorities. Table 5: Institutions and type of technologies generated

Research Centers New crop varieties

New or improved farming systems

New production practice

New or improved Equipment

Total technologies

CSIR-Animal Research Institute 11 11

CSIR-Crop Research Institute 8 4 12

CSIR-Food Research Institute 2 2

CSIR-Forestry Research Institute 1 1 2

CSIR-Institute of Industrial Research 1 1

CSIR-Oil Palm Research Institute 3 3 6 12

CSIR-Savannah Agricultural Research Institute 8 1 2 11

CSIR-Soil Research Institute 2 2

CSIR-Water Research Institute 1 5 6

Kwame Nkrumah University of Science and technology, Kumasi 4 4

University for Development Studies, Tamale 2 2

University of Ghana, Legon 1 2 2

Total 20 5 39 3 67

4 Details of technologies generated and their distribution by Research Center are summarized in a booklet published by CSIR and titled “Agricultural Technologies 2001-2006: The Ghana National Agricultural Research System”.

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Research Extension Linkages Committees (RELCS) have been established early 2003 in all regions. The CARGS second round of call for proposals used RELCs for identification of farmers’ problem, which led to the approval of 13 research projects from 7 regions implemented with CARGS funds. The remaining regions are being catered for by GTZ-supported FARMER Project.

Concerning the third performance indicator, 15 research projects (11 from the 1rst round and 5 from the 2nd round) were completed. More than 75% are rated satisfactory. Also, the management information system (MIS) is producing timely information for research program management and evaluation. A database has been created using INFORM software to capture and provide easy access to information on all on-going research projects and technologies generated. Finally, participation of research clientele on the boards has been increased.

The subcomponent is rated moderately satisfactory, because of some remaining longer-term sustainability and effectiveness issues. So far, the project has had limited success in mobilizing co-financing from the private sector and other stakeholders. Most adaptive research programs do not enjoy 15 percent support from other stakeholders. Only 4 projects are being co–funded directly by non-research organizations. Also, as presently conducted, the RELC process is costly. It has had limited influence on the research agenda, due to limited participation of end users, and inadequate allocation of operating budgets for meeting RELCs expenditures and the perception in the research system that demand-driven research is to be limited only to funding made available under CARGS. Also, rehabilitations of labs under CSIR suffered from weaknesses in procurement that further delayed achievement of the project outcomes.

The subcomponent Agricultural Extension and Technology Diffusion is rated as moderately satisfactory. It has largely fulfilled the two performance indicators that were established, namely: (a) setting up of an extension development fund in each of the 15 pilot districts and 75% of on-going contracts having satisfactory ratings, and (b) production of improved planting material increased on average by 40% in horticultural crops and oil palm. In addition, significant activities have been undertaken to mainstream gender in extension services programs, and capacity has been built within the Ministry of Agricultural to that aim, under the leadership of the newly created Directorate for Women in Agricultural Development (WIAD).

Concerning the first indicator, the extension development fund is established and operating effectively and 75% of ongoing contracts have satisfactory rating in their operations in 8 pilot districts covering 272 farm communities and 8,130 farmers. Concerning the second indicator, 3,300,000 plantlets of MD2 (new pineapple variety) sourced from 2 local tissue culture labs and distributed to 75 small holder farmer groups (900 farmers) which have established nurseries. It is expected at the end of the multiplication process in December 2009, a production of 23,000 Mt of fruits. Oil Palm Research Institute (OPRI) seedlings production capacity has been increased fivefold from 1 million to 5 million units. OPRI has supplied 870,000 seedlings to the nurseries, as AgSSIP contribution to the Presidential Special Initiative (PSI).

Moreover, Agricultural services have been decentralized to the districts and district assembly (DA) members and farmers have been participating in extension program planning and implementation supervision through DA committees. For monitoring of extension activities, a new structure has been put in place at the district level. In addition, a national policy on

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extension was formulated, published and distributed to all stakeholders. Furthermore, the Women in Agricultural Development Directorate (WIAD) of MOFA took a leading role in mainstreaming gender in extension activities. Extension agents were trained in incorporating HIV/AIDS prevention in extension messages, and workplace HIV/AIDS committees were established in all districts and regions. Also, the extension services collaborated closely with the research system in carrying out RELC activities.

However, the movement towards a more pluralistic extension delivery system needs to be accelerated and developed at affordable costs. To that end, public sector extension needs to be resuscitated and made more professional as the great majority of farming communities, especially smallholders, will continue to depend on it for advisory services in the foreseeable future. Also, the ongoing decentralization process will affect agricultural extension delivery in a major way. Once completed, agricultural extension at the local level will have become the full responsibility of District Assemblies, including the management of extension personnel. This will need a careful redefinition of the roles and responsibilities for planning, funding, training and certification of extension agents of extension between the national, regional and district level. Appropriate adjustments to this new situation still need to be made and will be crucial for the future functioning of Ghana’s agricultural knowledge and information system (AKIS).

On the basis of the above assessment, the overall achievement under the agricultural extension subcomponent is rated as moderately satisfactory.

Component 2: Institutional Reform and Strengthening of MOFA

Achievements under this component are rated as unsatisfactory.

The three performance indicators for this component agreed upon during the mid-term review were as follows: (a) 10 district annual agricultural services and development plans produced and implemented, (b) functional review of MOFA and decentralization of activities implemented by December 31, 2005, and (c) Revised Fisheries Bill enacted by Parliament by October 31, 2002.

Ten district specific agricultural development plans along with M&E plans were developed on a pilot basis. Although all district level agricultural directorates prepare plans to feed into the expenditure framework for the Ministry, MOFA was not able to implement them beyond the 10 selected districts in part due to the slow decentralization process. Government, together with EU, GTZ and CIDA, is reviewing how to go about developing these district specific agricultural development plans so that the costs are sustainable and fully compliant with district level planning. Therefore this indicator is considered partially achieved.

Concerning the second indicators, a comprehensive organizational and structural management review of MOFA has not been undertaken. Nevertheless, following the GOG decentralization policy, there have been substantial changes at the district level with regards to ways under which activities are planned, budgeted and implemented with increased stakeholder participation. The institutional review is being carried out as part of the preparation of the follow up operation. Also, most of the activities for institutional capacity building for MOFA’s directorates have been executed as planned. Especially the training of staff to perform their core functions (policy formulation, planning and coordination, monitoring and evaluation) has been undertaken. Decentralization has already significantly impacted the workings of district directorates and MOFA is the most deconcentrated Ministry of the Government. The GOG has

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only just initiated a composite budget at the district level and this will allow MOFA to devolve functions and budgets further than it has already done. This indicator is also assessed as partially achieved.

The third indicator was met, as the Government has enacted the Fishery Bill. In addition the Government has drafted and/or enacted a number of other Bills and initiated some policy reforms. These include the enactment of the revised fisheries bill, the preparation of the Cooperative and NGO bills, the preparation of quarantine and seed bills, and the development of a sector M&E framework. The irrigation draft policy is under consideration at the Cabinet, and the Fisheries Act has been operationalized through the creation of a new Ministry of Fisheries and the formation of a Fisheries Commission. However, little progress has been made in the Livestock sub-sector reforms and for the co-financing by stakeholders of adaptive research for commercial crops and livestock. More importantly, a number of laws and policies/strategies that have been prepared a long time ago, such as the revised Cooperative Bill, the Quarantine and Seeds Bills, Agricultural and Education Policy have not been adopted. Most of these delays can be attributed to excessive time taken at the political executive level in presenting legislative measures to the Cabinet and Parliament.

In spite of important achievements reached at project closing with regards to the revised performance indicators, the component is rated unsatisfactory because of the delays and change in Government commitment in implementing some important policy reforms that were part of the original project design.

Component 3: Development of Farmer-Based Organizations Achievements under this component are rated satisfactory.

The three performance indicators for this component were as follows: (a) establishment of Board of Trustees (BOT) for managing the FBO Development Fund with MOFA to serve as secretariat of the Board; (b) auditing services of cooperatives undertaken by Ghana Cooperative Council (GCC) in two pilot regions and plan to expand into the remaining 8 regions prepared by December 30, 2005; and (c) establishment of 3 viable and operating industry/farmer owned companies to operate export infrastructure. The component also hosted new activities at the mid-term review and clustered under the New Initiatives, and benefited consequently from a substantial reallocation of the credit proceeds.

Concerning the first indicator, the BOT was established with a FBO secretariat embedded in MOFA’s Directorate of Extension. The Board is fully operational and has held on an average four meetings annually. The FBO component is working well. About 1,300 FBO executives have received training in Group Dynamics and Development, Business Management, Financial Management and Savings and Credit Management.

In addition all activities under the establishment of an FBO Development Fund (FBODF) subcomponent have been satisfactorily completed, and targets met or exceeded as documented in the FBODF Evaluation and Impact Assessment Study report (see summary in Annex 8). FBODF governance structure is appropriately established across the 10 regions. 326 FBOs were supported for several training and economic activities -mostly for value addition- and these enterprises have helped farmers to raise their incomes.

As for education and training of FBO leaders, most planned activities have been accomplished, though expectation in respect of the Cooperative College is only partially fulfilled. About 1,300 FBO executives have received training in Group Dynamics and Development, Business

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Management, Financial Management and Savings and Credit Management. In addition all activities under the establishment of an FBO Development Fund (FBODF) subcomponent have been satisfactorily completed, and targets met or exceeded. FBODF governance structure is appropriately established across the 10 regions. 326 FBOs were supported for several training and economic activities (mostly for value addition) and these enterprises have helped farmers to raise their incomes. A survey carried out by CIDA and the FBO Secretariat, found that, of the enterprises established under FBODF grant 85% are operating satisfactorily. A comprehensive evaluation and beneficiary assessment has been carried out and key findings are summarized in Annex 5.

Other activities related to building capacity for agencies promoting FBOs, have been fully implemented. This sub component provided for the strengthening of the NGO unit in the Ministry of Youth and Employment, strengthening the department of cooperatives, and establishment of NGO database and publishing a directory. The NGO directory is also available on the FBO website. Two thirds of the district cooperative officers and some staff of NGO unit were provided training using 5 training manuals prepared by the Department of Cooperatives with AgSSIP support.

Concerning the Ghana Cooperative Council, it has taken over audit in 10 pilot districts, and has prepared a plan for extending its audit function to the remaining districts of the country. This plan has been submitted to the MOFA.

Finally, the third indicator was not fully met. Agreement was reached between the Bank and GOG during the ISM of October 2005 to concentrate available resources of this component on the construction of 1 facility (the Shed 9) instead of three as initially planned (including Kotoka Airport Perishable Freight Handling and Field Packing houses). A study for the management of the facility was carried out which provided recommendations regarding options for O&M of the Shed 9.

FBOs were supported under the original project, and the MTR also put greater emphasis on getting results. Furthermore many activities FBOs are engaged in are profit making (according to the assessment) so they may well continue to flourish. The follow up operation might also pay attention to the continuation FBODF as called for in the FASDEP II, which recognizes it as a good instrument to provide organizational and business skills to the farmers.

New Initiatives As agreed at the project mid-term review in 2004, a new cluster of activities titled ‘New Initiatives’ was included. These initiatives were related to: (i) Horticultural Export Industry Initiative (HEII); (ii) Development of Palm Oil Industry; (iii) Rehabilitation of Irrigation Schemes; and (iv) Community Fisheries Infrastructure Development. Implementation under this new component is uneven with almost all activities planned for HEII completed, or near to be so, while for fisheries, even the design studies have not been completed.

Ghana’s horticulture industry is private sector driven. More than 80 percent of the sector’s entrepreneurs own small to medium sized businesses. While horticulture growth has been driven by pineapples, it includes: pawpaw, soybeans, eggplants, banana, mangoes, capsicum, dried apricots, oranges, spinach, beans, tomatoes, berries, avocadoes and sweet potatoes. Sales to Europe of Asian vegetables have also increased the unit value of air freighted exports while fresh produce processing (fresh-cut fruits and juices) and fresh produce sales in local and regional markets have also picked up. Under the Agricultural Services Sub-sector

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Investment Program (AgSSIP), the Horticulture Exports Industry Initiative (HEII) supports the development of Ghana’s Horticulture Export Industry. The initiative took the approach of developing public private partnerships and enabling small holders to access improved technologies in order to facilitate market integration and develop Ghana’s competitive edge in export markets. Box 2: Developing other markets: Mango on the rise

Satisfactory progress has also been made under horticulture expansion activities : 4.5 million plantlets of the new MD2 pineapple variety for export was sourced from tissue culture laboratories and 100 smallholder farmer groups, totalling 1000 farmers were supported to establish nurseries to generate 19.8 million suckers by October 2008. It is expected that a production level of about 21,000 tons for export will be achieved at the end of the process in 2009.

Other activities performed under HEII included rehabilitation of a cold store in Team, diversification and pesticide residue trials, knowledge sharing and dissemination, setting up a web-based out growers mapping, and developing successful market linkages between small out-growers and an agribusiness company for the collection and marketing of mango fruits in Tamale (see Box 2). The project also supported Ghana Standards Board to procure and install equipment for a pesticide residue analysis laboratory

Upgrading the Cold chain: The project supported the rehabilitation of a cold storage facility at Tema Port (Shed 9). The facility is to support improvements in fruit quality and an increased market share, with the potential for the industry to reach a capacity of 300,000 tons by 2010. Upgraded Shed 9 into a modern Fruit Terminal fitted with cold storage installation and a double stacking system is expected to increase the holding capacity of the facility from about 1200mt to about 2200mt..The Shed is the exit point of the cold chain for fruits. Support for improved agricultural technology, access to rural finance and improved tenure security; development of public-private partnerships to build trust, improve food safety/quality, promote investments and coordinated support for addressing transport/infrastructure constraints are elements of a focused strategy to regain market share in horticulture.

Addressing Food Safety standards: A harmonized pesticide list, to guide pesticide usage in line with international standards, has been published by the Environmental Protection Agency. The Ghana Standards Board laboratory has been upgraded for ISO 17025 certification. Farmers are being trained in Good Agricultural Practices and, in collaboration with GTZ and TIPCEE, being trained to meet EurepGap (Euro-retailer Produce Working Group for Good Agricultural Practice) certification requirements which are expected to offer smallholders better access to the European market.

Public/private collaborative research has been facilitated by the Public/Private Research Committee and a Geographic Information System (GIS) Database Management System has been established to provide reliable and accessible data for production planning.

A certification scheme for accessing high quality planting materials of mango, citrus and pineapple coupled with knowledge of improved production techniques has been initiated. Mango and Banana plantations are developing and are expected to use these improvements in the value chain to export larger quantities. Large commercial interests have increased in the sector. Mango is, like pineapple, a potentially important export crop for smallholders. In collaboration with a successful private sector company – the Integrated Tamale Fruit Company (ITFC), HEII initiated a program for out-growers to access improved seedlings of mango. 2,000 out-growers were supplied with planting materials on a 50% grant basis and an Organic Mango Outgrower Association (OMOA) has been created.

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Implementation of the HEII has also promoted collaboration between development partners, public sector and the industry, and has served as a model for other programmes. The AfDB’s Export Marketing and Quality Awareness Programme (EMQAP); Millennium Challenge Account (MCA) Programme and USAID’s Trade and Investment Programme for Competitive Export Economy (TIPCEE) have drawn lessons from the HEII and the public-private partnership approach.

Under the New Initiatives, AgSSIP also supported the Oil Palm Research Institute (OPRI) as part of the Presidential Special Initiative (PSI) to develop the palm oil industry. To that end, a new seed store facility has been constructed and some OPRI premises have been rehabilitated. However, rehabilitation of labs delayed and was only completed towards the project closure, due to procurement shortcomings under CSIR. Under the project, the OPRI distributed 828,800 seedlings to 152 FBOs developed around 12 “PSI-Oil palm nurseries” in 8 districts, which resulted in an area of 5,180 ha being planted with improved materials. Overall, about 300 FBOs are currently operating in 56 districts that have planted 13,771 ha under the PSI.

Rehabilitation of 9 irrigation schemes was initially estimated to cost Cedis55 billion for 9 schemes selected in September 2005. The funding provided under AgSSIP could cover only 43% (4 schemes), while 57% of the cost were covered by CIDA (5 schemes). Works for 9 irrigation schemes were completed, and three schemes -namely Bontanga in the Northern Region, and Afife and Kpando in the Volta Region- have started cropping activities.

A Cost benefit analysis conducted in August 2007 for these three schemes revealed positive net returns for all production systems (rice, vegetables or combined) even though average yield is below initial targets. On average, recovery of irrigation service charges is low at 60% and may pose concerns regarding the sustainability of the rehabilitation. The new irrigation policy however emphasizes increased management of the sites by water user associations.

Progress under the Community Fisheries Infrastructure Development is insignificant. The proposed cost for the feasibility studies for six fish landing sites and the rehabilitation of two hatcheries exceeded by far the budget allocated for it, and therefore the studies could not be undertaken.

A number of interesting developments have taken place as a result of the lead taken by the Ministry in supporting non-traditional export commodities. The Millennium Challenge Corporation (MCC) has made agricultural development, and especially horticulture, a key element of its program. It has based its analysis of the potential of this industry in large part on the HEII experience, the fact that a key cold chain infrastructure has been completed (Shed 9) and private sector participation has improved. HEII has had a strong impact on the horticulture industry and has served as a model for other programmes. Plans developed for additional infrastructure such as the Kotoka Airport Perishable Freight Handling and Field Packing houses) have been made available to the Millennium Development Authory (MiDA) which plans to construct these structures. The AfDB’s Export Marketing and Quality Awareness Programme (EMQAP); Millennium Challenge Account (MCA) programme and USAID’s Trade and Investment Programme for Competitive Export Economy (TIPCEE) have drawn lessons from the HEII and the public-private partnership approach.

The oil palm industry has also taken off with IFC providing a US$12.5 million loan to Ghana Oil Palm Development Corporation to support (i) its planting of oil palm trees on its existing plantation in Kwae and new plantation at Okumaning, (ii) increasing oil store capacity and improving infrastructure, (iii) refinancing of a loan used to fund new plant (refinery, boilers,

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turbines) and (iv) working capital. This will be IFC’s first major investment in Ghana’s agribusiness sector.

Component 4: Strengthening Agricultural Education and Training

Achievements under this component are rated satisfactory.

The performance indicators for this component were as follows: (a) agricultural education policy reviewed by December 31, 2003; (b) curricula of agricultural colleges and farm institutes revised and improved to cater to needs of private sector; and (c) infrastructure of agricultural colleges and farm institutes rehabilitated.

The education policy review was completed and the policy was finalized before the deadline. Indicator two was also achieved. Curricula of agricultural colleges and farm institutes have been reviewed and MOFA was planning to make it operational with the commencement of the Diploma program in the Agricultural Colleges in year 2007. Concerning the third indicator, achievement is partial. Rehabilitation works were at various stages of completion at the time of the ICR mission.

Most noticeable under this component is the increase in female enrollment from 10% in 2004 to 27% in 2006. AgSSIP also provided resources for training and upgrading of the skills of 2,496 instructors, from which 1,815 were enrolled in short courses, 306 received diplomas, 241 graduated as BSc. and 134 with Masters Degrees. Also, the Cooperative College has also trained FBO executives. As mentioned earlier, about 1,300 farmers (male and female) were trained. Both the training content and teaching methods are appropriate for these adults who often are in a classroom situation for the first time in their lives. The setting allows these farmer leaders to network and to learn technical skills in addition to group dynamics and lobbying.

Project Coordination, Management and M&E

There was no separate component for these activities which were folded into Component I for CSIR and component II for MOFA.

Project Coordination and M&E Following the evaluation of M&E activities of MOFA carried out in 2002, the Ministry has established a monitoring framework for the sector and MOFA’s programs with the technical assistance of the EU. The draft framework has been discussed with selected district and regional staff. The draft performance matrix has been circulated to development partners for comment. Reporting guidelines for quarterly and annual reports have been established and the 2006 annual report will be compiled using the new template. A significant effort through 2006 has been made to implement the M&E framework and PPMED got technical assistance from EU starting June 2006 to that aim. This resulted in obtaining more information from the field and allowed better documenting of sector performance. However the tendency of using staff exclusively for M&E activities in the field could lead to high costs and disinterest of other technical staff in participating in the M&E system.

Financial Management Disbursement Status and Project Financing: The total amount of the credit no. IDA 34050-GH (SDR 50.9 million, equivalent to USD 78.8 million) was disbursed at project closing date. The

45

government released an amount equivalent to $10.11 million as counterpart funds, fulfilling 72% of its initial commitment of $14 Million at project preparation.

Audit: audits of the project were carried out on a regular basis and audit reports submitted on or before the deadline of June 30 of each year. The MOFA also submitted on a regular basis the project Financial and Management Reports (FMRs), which are usually consistent with Bank disbursement data.

Procurement The procurement function was managed at the central and directorate levels. Procurement during the life of the project faced a number of constraints notably: inadequate capacity at the directorates to prepare detailed technical specifications of their needs; submitted technical specifications sometimes turn out to be for obsolete items - this sometimes becomes known during the bidding process leading to extended bidding processes; difficulty in drafting of terms of reference for technical assistance and other consultancy assignments; inadequate capacity at the Procurement Section of the coordination unit at the beginning of the project - though this was later addressed by assigning two officers to the unit; weak capacity at the decentralized levels to manage procurement.

Under the CSIR component, costs were grossly underestimated leading to category overruns. The Bank’s directive to reduce the scope of contracts under execution (possibly instead of effecting reallocation) and later restoring these same contracts to their original scope further compounded the contract management crisis and led to serious cost overruns and delayed contract execution.

Overall, project management and coordination within MOFA, including for procurement, had improved considerably by project closure. This can be considered as an important achievement of AgSSIP in term of capacity for mainstreaming the project’s activities within the PPMD/MOFA, as it moves toward a SWAP. Effort should be pursued at the decentralized levels however, so as to carry out the procurement and financial management functions irrespective of the funding source.

In spite of these achievements mostly reached during the last two years of the project life, the overall achievement under the Project Management, Coordination and Monitoring is rated as moderately satisfactory, as initial arrangements for project coordination and limited capacity for handling procurement procedures negatively impacted project implementation.

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Table 6: Project key performance indicators (as stated in the amended DCA dated November 5th, 2004) PDO as stated in the Document of Credit agreement : the objective of the project which forms the first phase of the program, is to increase agricultural productivity and diversification at a rapid pace so that rural incomes will be raised, rural poverty reduced, food security improved and the basis for accelerated overall growth in the economy established on an environmentally sustainable basis.

Indicator Reference Performance Indicator (baseline/target) Status as of April 30, 2007 Annual GDP growth with reference to 2000 (target not indicated)

5.5% Ag. GDP average growth (period 2001-20006)

(a) None indicated. Rural poverty indices are used as proxy measurement :

(a) . Rural poverty: Poverty headcount felt from 59% to 45% among food crop households, and from 39 to 24% among export crop households. (source GLSS V, 2006)

A. Sector Indicators: Annual GDP growth Annual GDP growth with reference to 2000 (a) Annual increase in household income (b) Improvement in core welfare indicators

(b) Core welfare indicators and targets not defined. Selected rural welfare indicators are primary school net enrollment (80.2%) and access to electricity (19.7) as indicated in (GLSS IV, 1998/99).

(b) Primary school net enrollment is 79.9 %; access to electricity 27% as reported in GLSS V.

B. End Program Indicators 1. Approval of each work plan and budget linked to Medium term Expenditure Framework 2. Financing of subsequent program phases triggered by achievement of milestones, and gradual assumption by borrower of full responsibility for recurrent costs from the end of third project year

1. All Ministries, Departments and Agencies including the Ministry of Food and Agriculture should prepare their plans and budgets based on the Medium Term Expenditure Framework. 2. Phase to be initiated on achievement of Triggers as established in AgSSIP project document for Phase 2 commencement

1. Fully achieved. Implemented 2. Partially achieved. Most of the triggers stand fulfilled. In respect of a few milestones not likely to be fulfilled during phase 1 project the government has requested postponement of their attainment to the first year of the second phase. These will however be assessed for their relevance as the new program of support is developed. Government has generally increased its share of the recurrent costs Year % increase

2003 17.5 2004 4.41 2005 46.98 2006 25.71 Government is committed to move towards meeting full costs of recurrent expenditure.

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1. Overall farm productivity increase by 10% for all crops compared to 2000 levels.

Partially achieved. Increase in Aggregate production : 21.6% Expansion of cropped areas : 26.3% Contribution of Total Factor Productivity increase in production : 60% Increase in crop yield : 5.3% Increase in Agricultural Labour productivity : 8%

2. Increased value of agriculture production, particularly in horticulture by 40%

Fully achieved. - Value of cereals production increased by 147% from US$0.21 billion in 2000 to US$0.52 billion in 2006 - Value of starchy crops production increased by 116% from US$1.02 billion in 2000 to US$2.2 billion in 2006 - Value of cowpea and groundnuts production increased by 342% from US$0.07 billion in 2000 to US$0.31 billion in 2006. - Value of horticultural exports increased by 171% from $28 million in 2000 to $76 million in 2006

C. Outcome/Impact Indicators 1. Farm productivity 2. Increased value of agricultural production 3. Improved capacity of FBOs

3. Improved capacity of farmer based organizations in production and marketing.

Fully achieved. Under AgSSIP 326 FBOs were supported with grants under the FBODF. Of these, over 90% established value addition enterprises and several linked up with markets. Higher returns are acting as strong incentives for increasing production.

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Project Component Performance Indicator (baseline/target) Status as of April 30, 2007 (a) The competitive agricultural research grant scheme (CARGS) is initiated and operating effectively and 75% of ongoing projects have satisfactory rating

Fully achieved. CSIR has initiated GARGS with agreed on manual of procedures. Priority research programs numbering 15 have been funded to promote high quality collaborative research of national importance. Overall 67 technologies have been created from the implementation of 193 research projects.

(b) Participation of farmer representatives in priority setting of adaptive research through Research-Extension Linkages Committees (RELCs) in 10 regions.

Fully achieved. All regional RELCs were inaugurated in March 2003. RELCs were used for identification of farmers’ problems and 13 projects from 7 regions implemented with CARGS funds. Remaining regions being catered for by GTZ-supported FARMER Project.

1. Technology Generation and Diffusion

1.1 Agricultural Research

(c) At least 15 priority research projects completed with 75% satisfactory rating from and clientele point of view.

Fully achieved. 15 commodity/factor research programs (11 from the 1rst round and 4 from the 2nd round) were completed. More than 75% are rated satisfactory.

(a) Agricultural extension development fund established in each of the 15 pilot districts and 75% of on-going contracts have satisfactory ratings

Partially achieved. Extension development fund is established and operating effectively and 75% of ongoing contracts have satisfactory rating in their operations in 8 pilot districts covering 272 farm communities and 8,130 farmers.

1.2 Agricultural Extension

(b) Production of Improved planting material increased on average by 40% in horticultural crops and oil palm

Partially achieved. 4,500,000 plantlets of MD2 (new pineapple variety) sourced from 2 local tissue culture labs and distributed to 100 small holder farmer groups (1000 farmers) which have established nurseries. It is expected at the end of the multiplication process in December 2009 a production of 21,000 Mt of fruits. Oil Palm Research Institute (OPRI) seedlings production capacity has been increased fourfold from 1million to 5 million units. OPRI has supplied 828,000 seedlings distributed to 152 FBOs from 12 nurseries, as AgSSIP contribution to the Presidential Special Initiative.

(a) 10 district annual agricultural services and development plans produced and implemented

Fully achieved. 10 district specific agricultural development plan, along with monitoring and evaluation plans were developed on a pilot basis

2. Institutional Reform and strengthening of MOFA

(b) Functional review of MOFA and decentralization of activities implemented by December 31, 2005.

Partially achieved. A comprehensive organizational and structural management review of MOFA has not been undertaken. Nevertheless, following decentralization there have been substantial changes at the district level with regards to ways under which activities are planned, budgeted and implemented with increased stakeholder participation. The institutional review is being carried out as part of the preparation of the follow up operation

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(c) Revised Fisheries Bill enacted by Parliament by October 31, 2002.

Fully achieved. Revised Fisheries Act 652 passed by parliament in 2002.

3. Development of Farmers Based Organizations

3.1 Farmer Based Organizations (FBOs)

(a) Establishment of Board of Trustees (BOT) for managing the FBO Development Fund with MOFA to serve as secretariat of the Board

Fully achieved BOT established with a FBO secretariat embedded in MOFA’s Directorate of Extension. Board fully operational and has held on an average four meetings annually.

(b) Auditing services of cooperatives undertaken by Ghana Cooperative Council (GCC) in two pilot regions and plan to expand into the remaining 8 regions prepared by December 30, 2005.

Fully achieved. GCC has taken over audit in 10 pilot districts, and has prepared a plan for extending its audit function to the remaining districts of country which has since been submitted to the MOFA. In addition, an assessment of a sample of 80 FBO projects conducted by independent body (CIDA) indicated 85% satisfactorily rating.

3.2 Industry Based Organizations (IBO) Establishment of 3 viable and operating industry/farmer owned companies to operate export infrastructure.

Not achieved. Agreement was reached between the Bank and GOG during the ISM of October 2005 to concentrate available resource of this component on the construction of 1 facility (the Shed 9) instead of three as initially planned (including Kotoka Airport Perishable Freight Handling and Field Pack houses). The facility has been completed, and a study for the management of the facility was carried out which provided recommendations regarding options for O&M of the Shed 9. Management of the facility is triggered in the DPL under preparation

(a) Agricultural Education Policy reviewed by December 31, 2003

Fully achieved. Education policy review completed and policy finalized.

(b) Curricula of agricultural colleges and farm institutes revised and improved to cater to needs of private sector

Fully achieved. Implemented. Curricula of agricultural colleges and farm institutes have been reviewed and MOFA was planning to make it operational with the commencement of the Diploma program in the Agricultural Colleges in year 2007.

4. Strengthening Agricultural Education and Training

(c ) Infrastructure of agricultural colleges and farm institutes rehabilitated

Fully achieved. Partially implemented. Rehabilitation works were at various stages of completion at the ICR mission.

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Table 7: Original Project Key performances indicators and revised indicators (for reference) A. Outcome / Impact Indicators

Current Indicators Revised Indicators • Increased rural household incomes • Overall farm productivity increase of 10% on average

for all crops compared to 2000 levels • Increased value of agricultural production. • Increased value of agricultural production, particularly

in horticulture by 40%.

• Reduced cost of production Dropped

• Improved irrigation water use efficiency. Dropped

• Reduced rate of land and forest degradation. Dropped

• Improved capacity of farmer based organizations in production and marketing

B. Output Indicators:

Current Indicators Revised Indicators

1.1 Agricultural Research a) The competitive agricultural research grant scheme

(CARGS) is operating effectively and 75% of ongoing projects have satisfactory rating.

1.1 Agricultural Research • The competitive agricultural research grant scheme

(CARGS) is initiated and operating effectively and 75% of ongoing projects have satisfactory ratings.

b) Farmers’ representatives and other research clientele are participating in priority setting of adaptive research

• Participation of farmer representatives in priority setting of adaptive research through research extension linkage committees in 10 regions

c) At least 60 priority research projects completed with 75% satisfactory rating from a scientific and clientele point of view

• At least 15 priority research projects completed with 75% satisfactory rating from a scientific and clientele point of view

d) Private sector and other stakeholders are co-financing at least 15 percent of adaptive research on commercial crops and livestock

Dropped

e) Strategic action plan for rationalizing the main research institutes of the NARS prepared

Dropped

f) No. of new varieties released and no. of new cultural or husbandry practices passed on to extension

Dropped

1.2 Agricultural Extension • The agricultural extension development fund is

established and operating effectively and 75% of ongoing contracts have satisfactory rating

1.2 Agricultural Extension • Agricultural extension development fund established

in each of the 15 pilot districts and 75% of ongoing contracts have satisfactory ratings

• Agricultural services have effectively been decentralized to the regions and districts and district assemblies and farmers’ representatives are participating in extension program design and management

Dropped although progress made to extent possible

• 20,000 farmers participating in on-farm adaptive trials

Dropped.

• 300,000 farmers reached of which at least 20% are female

Dropped

• 120,000 farmers adopting new technologies Dropped

• Female extension agents increased Dropped

• Production of improved planting materials increased by 40%

• Production of improved planting materials increased on average by 40% in horticulture crops and oil palm

• Reduction of post-harvest losses by 10% Dropped

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• Adoption of IPM will result in pesticide use reduction in relevant crops

Dropped

• Overall farm productivity of 20% achieved Dropped 2.1 Agricultural services delivery

• 110 district annual agricultural services and development plans produced and implemented

2.1 Agricultural services delivery

• 110 district annual agricultural services and development plans produced and implemented

• Restructuring of MOFA implemented by December 31, 2002

• Functional review of MOFA and decentralization of activities implemented by December 31, 2005

• Veterinary legislation revised and enacted Dropped • Privatization of animal health services expanded

and total privatization piloted in one district Dropped

• Revised Fisheries Bill enacted by Parliament by October 31, 2000

• Revised Fisheries Bill enacted by Parliament by October 31, 2002

• Private sector and civil society contracted to co-produce statistical analysis and program impact evaluation

Dropped

• Reliable agricultural statistical data collected analyzed and disseminated every year

Dropped


• Revised Cooperative Act and NGO Act submitted to Parliament by December 31, 2001


• Dropped

• Board of Trustees for managing the FBO Development Fund established

• Establishment of Board of Trustees (BOT) for managing the FBO Development Fund with MOFA/ DAES to serve as secretariat of the Board

• NGO to serve as secretariat of the Board contracted by competitive bidding

Dropped

• Projects undertaken by FBO’s under the Fund show a 75% satisfactory rating

Dropped

• Auditing services of cooperatives undertaken by GCC in two pilot regions and plan to expand into the remaining 8 regions prepared by June 30, 2002

• Auditing services of cooperatives undertaken by GCC in two pilot regions and plan to expand into the remaining 8 regions prepared by December 30, 2005

• The Ghana Cooperative Council (GCC) and other apex FBO movements strengthened

Dropped

3.2 Industry Based Organizations (IBO) • Establishment of 3 viable and operating

industry/farmer owned companies to operate export infrastructure

4.1 Agricultural education • Agricultural education policy reviewed by

December 31, 2001

4.1 Agricultural education • Agricultural education policy reviewed by December

31, 2003 • Curricula of agricultural colleges and farm institutes

revised and improved to cater to the needs of the private sector

• Curricula of agricultural colleges and farm institutes revised and improved to cater to the needs of the private sector

• Infrastructure of agricultural colleges and farm institutes rehabilitated

• Infrastructure of agricultural colleges and farm institutes rehabilitated

• Female intake into agricultural colleges increased by 30%

Dropped

• Skills of instructors improved Dropped

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Annex 3. Economic and Financial Analysis Sector Performance The economic justification for AgSSIP at appraisal was based on break-even analysis on the basis that the sector-wide nature of the project made it impossible to quantify rates of return. On this basis, AgSSIP was expected to break-even if incremental growth rates in agricultural GDP (AgGDP) were 0.14 – 0.15 percentage points higher than the without-project scenario (see table in Appendix). Assuming the pre-project growth rates of 3.9% per annum (p.a.) as the counterfactual, observed growth rates of 5.5% p.a. over 2001 – 2006 demonstrate that the break-even incremental growth rate has been exceeded (Table 8).

There is no analytical evidence as to what extent can this be attributable to project interventions, particularly given the re-focusing at mid-term review. However, a breakdown of the sector performance shows that those areas of Ghana’s agricultural economy supported by AgSSIP – primarily crops, which accounting for 68% of the agricultural value-added and excluding cocoa and fishing – also expanded at a significantly higher rate during project period and was a major driver of total agricultural growth. Agriculture remains a key driver of overall economic performance, and performance in the crops sector is a key factor (although the cocoa sector has become a major driver in recent years because of high global prices and Cote d’Ivoire Crisis). Table 8 : Sector Performance

Pre-project period Project period 1996 – 2000 2001 – 2005 2006

GDP growth 4.2% 5.2% 6.1% Agricultural GDP (AgGDP) growth 3.9% 5.5% 5.6% Growth in crops (other than cocoa) & livestock sector 3.4% 4.5% 5.8% Growth in cocoa sector 6.0% 14.8% 8.3%

Share of AgGDP in GDP 36% 36% 36%

Contribution of AgGDP to GDP growth 34% 38% 33% Contribution of crops & livestock sector to AgGDP growth 60% 55% 69% Contribution of cocoa sector to AgGDP 14% 28% 19%

Source: Ghana CEM (2007)

According to analysis reported in the recent CEM (2007), improvements in total factor productivity (TFP) accounts for 60% of agricultural growth in the project period.5 The contribution of labor participation and fixed capital accumulation has reduced compared to the pre-project period. Although high commodity prices for cocoa have played a part. TFP growth is attributed primarily to endogenous factors of increasing agricultural production (Table 9).

Aggregate production of key crops has been impressive, with the main cash crops (maize, rice, millet, sorghum, cassava, cocoyam, plantain, groundnut, cowpea and soybean and yam) increasing by 21.6% during the 2001 – 2006 period as compared to the year 2000, in excess of the target 10% increase. With demographic growth of 2.7% p.a., per capita

5 Results calculated using a Solow-Denison decomposition assuming Cobb-Douglas production function with 40% share of physical capital and a 4% rate of depreciation. See CEM (2007) for more details.

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production has increased by 5.4% during the period (equivalent to a per capita increase of 0.9% p.a.) thereby contributing to improved food security and increased incomes to farmers. Table 9: Productivity Analysis in the Agricultural Sector

Pre-project period Project period 1996 – 2000 2001 – 2005

Fixed capital accumulation 28.5 3.5 Labor participation 37.3 21.8 Education level 11.4 15.3 Total factor productivity 22.8 59.4 Total 100 100 Source: Ghana CEM (2007)

Land and Labor Productivity As reported elsewhere, area expansion was the primary driver of increased production, with yield improvement playing a smaller role. Over the period 2000 – 2006, the area planted to cassava increased by 20%, with growth also in yam (25%) plantain (23%) maize (14% and sorghum (11%). In aggregate, increase in agricultural production resulted from a 5.3% yield improvement and a 26.3% increase in cropped areas.. Comparing annual yields in 2000 and 2006 suggests some increases in land productivity, in particular for millet (23%), plantain (22%), soybean (20%), groundnut (12%) and maize (9%). Aggregate data that account for annual seasonal variations suggest more modest changes and have not met AgSSIP targets (Table 10). Table 10: Average Yields of Key Crops; 1997 – 2006

Average Yields (mt/ha) Pre-project period Project period

Yield growth during project period

1997 – 1999 2000 – 2003 2004 – 2006 2000 – 2006 2000 – 06 maize 1.48 1.48 1.55 1.51 9% cassava 11.84 12.40 12.45 12.42 4% sorghum 1.02 0.93 0.98 0.95 3% millet 0.87 0.79 0.87 0.82 23% yam 13.04 12.51 12.93 12.70 1% cocoyam 6.05 6.53 6.45 6.50 0% plantain 7.98 8.04 9.28 8.59 22% paddy 1.95 2.01 2.00 2.01 6%

Source: MoFA/SRID

Increased output albeit driven by expansion rather than yield growth, has fed through to increases in labor productivity. According to aggregate FAO data, the average value added per agricultural worker has increased from 229,000 Cedis in 2000 to 248,000 Cedis in 2003 (constant 1993 prices) – equivalent to a real increase of 8% over 4 years.

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Non-Traditional Agricultural Exports After restructuring, a greater emphasis was placed on non-traditional agricultural exports under the HEII initiative. At appraisal, economic rates of return were estimated (see Table 11). Data is not available to update this assessment. However, there is ample evidence that the economic impact of the HEII under the restructured AgSSIP is substantial.

According to Government statistics, the total number of non-traditional agricultural products being exports has increased from 77 in 2000 to 209 in 2004.6 Diversification appears to have contributed to increase exports overall with the aggregate value of (non-traditional) agro-exports having increased from an average of $81.2 million in the three years period ending 2000 to $159.8 million in 2004. Horticultural exports have increased from $28million in 2000 to $76million in 20067. Small-holders and medium-sized farmers make-up over 80% of Ghana’s horticultural industry. By assisting in the transition to MD2 varieties, AgSSIP has helped small-holders in particular to maintain market share and has reversed the price discounts suffered by exports of the less popular variety (Figure 2). Figure 2: Recent Trends in Pineapple Exports; 1996 – 2006

010,00020,00030,00040,00050,00060,00070,00080,000

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

Pro

duct

ion

MT

050100150200250300350400450

Pri

ce $

/ MTMT

$/MT

Source: GEPC Economic Versus Financial Impacts An important consideration in the economic (rather than a financial) assessment of AgSSIP is the true resource cost of economic performance. Cropland accounts for 64% of Ghana’s natural capital (even though only 18% of agricultural land is under cultivation) and expansive agriculture is associated with land degradation (from soil erosion and nutrient depletion). Previous estimates cost these effects at between 2.9% – 6.3% of agGDP8 and to the extent that AgSSIP activities have reduced the negative environmental impacts of farm practices (for instance, through improved agricultural technology generation and diffusion) the (improved) macroeconomic indicators will under-report the true economic impact of project interventions.

6 This substantial increase appears to be very recent: the number remained between 68 and 82 from 1997 – 2003 with the big increase only in 2004. 7 Data from CEPS. 2006 figures provisional. 8 See the Ghana Country Environmental Assessment, 2006.

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Poverty Impacts Drawing on data from two living standards surveys conducted in 1998/99 and 2004/05 shows the rapid poverty reduction commensurate with impressive growth figures reported above. The national poverty headcount has fallen from 39.5% to 28.5% over the period. Disaggregate poverty rates across economic activity shows that while agricultural households continue to lag behind (it has the highest rates of all occupations and poverty is increasingly a food-crop farmer phenomenon) poverty among (current) food crop farmers has fallen from 59% to 45% with respective figures for export crop farmers of 39% and 24%. Poverty reduction in the agricultural sector is helping ensure Ghana is on-track in achieving the MDG target of reducing poverty by half by 2015.

Table 11: Methodologies for Economic Appraisal of AgSSIP

Component Methodology Estimate Source Original AgSSIP Appraisal

Overall program and Components A - D

Break even analysis

Incremental AgGDP growth of 0.14 – 0.15

percentage points Individual Components A – D Break even

analysis Incremental AgGDP

growth of 0.006 – 0.086 percentage points

PAD

Research and Extension (indicative)(a)

Economic surplus

52% - 78% PAD, citing various studies

New Initiatives at Mid-Term Review MD2 conversion(b) IRR 136% - 255% Pilot packing stations(c) IRR 7% - 21% Mango IRR 33% Oil Palm plantation IRR 30% Irrigation rehabilitation(d) IRR 6% - 45% Kotoka export facility IRR 32% Tema port facility (Shed 9) IRR 71% Mechanization centers IRR 47% Fingerling Hatcheries IRR 122% Fish Landing Sites NPV $47 million

SOFRECO report

Notes: (a) Differ depending on crop. (b) IRRs depend on farm size. (c) IRRs differ for fruit and vegetables. (d) depending on particular scheme.

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Annex 4. Bank Lending and Implementation Support/Supervision Processes (a) Table 12:Task Team members

Names Title Unit Responsibility/ Specialty

Lending Solomon Bekure Senior Agricultural Economist AFTS2 Task Team Leader Cornelis de Haan Livestock Advisor Livestock Advisor Derek Byerlee Principal Economist, Research

Specialist RDV Principal Economist,

Research Specialist Eugene Terry Agricultural Advisor Agricultural Advisor Eustacius Betubiza Agricultural Economist AFTS2 Agricultural Economist Yves-Kofi Prudencio Agriculturalist AFTS2 Agriculturalist Ismael Ouedraogo Agricultural Economist AFTS2 Agricultural Economist Patience Mensah Agricultural Economist AFTS2 Agri-business Specialist/

Agricultural Economist Charles Annor-Frempong Senior Country Officer AFTS2 Extension Specialist Edward Felix Dwumfour Senior Natural Resources

Management Specialist AFTS2 Safeguards/ENV Specialist

Kofi Awanyo Procurement Specialist AFTPC Procurement Specialist Mbuba Mbungu Financial Analyst AFTPC Financial Analyst Frederick Yankey Financial Analyst AFTFM Financial Management Lucie Tran Operations Analyst AFTS2 Operations Analyst Daniel Moreau Lead Specialist, Agricultural

Services Lead Specialist,

Agricultural Services Gregoria Dawson-Amoah Team Assistant AFC10 Team Assistant Wendy Wiltshire Program Assistant AFTS2 Program Assistant Joan Grigsby Program Assistant AFTS2 Program Assistant Supervision/ICR Gayatri Acharya Senior Economist AFTAR Task Team Leader Solomon Bekure Senior Agricultural Economist AFTS2 Task Team Leader Noël Chabeuf Senior Livestock Specialist AFTS2 Task Team Leader El Hadj Adama Toure Senior Agriculture Economist AFTAR Economist/ICR Task Team

Leader Christophe Ravry Senior Agri-business Specialist/E

T Consultant AFTAR Agri-business Specialist

Patrick Labaste Lead Agricultural Economist AFTAR Economist Patience Mensah Senior Agricultural Economist AFTS4 Agricultural Economist Charles Annor-Frempong Senior Country Officer AFMLS Extension Specialist Edward Felix Dwumfour Senior Natural Resources

Management Specialist AFTEN Safeguards/ENV Specialist

Chris Jackson Economist AFTAR Economist Ismael Ouedraogo Senior Agricultural Economist AFTAR Agricultural Economist David J. Nielson Lead Agriculture Services

Specialist AFTAR Agricultural Specialist

Malick Daniel Antoine Junior Professional Associate AFTS4 Agri-business Rose Abena Ampadu Program Assistant AFCW1 Program Assistant Rohan G. Selvaratnam Senior Program Assistant ECSSD Program Assistant Joseph Antoine Ellong Language Program Assistant AFTCS Program Assistant Akosua Gada Team Assistant/E T Consultant AFCW1 Team Assistant Marie-Jeanne Ndiaye Program Assistant IEGSG Program Assistant Karen Hudes Senior Counsel LEGAF Lawyer Manush Hristov Senior Counsel LEGAF Lawyer

57

Modupe Adebowale Senior Financial Management Specialist

AFTFM Disbursement Officer

Frederick Yankey Senior Financial Management Special

AFTFM Financial Management

Samuel Bruce-Smith Consultant AFTFM Financial Management Jonathan Nyamukapa Senior Financial Management

Specialist AFTFM Financial Management

Robert Wallace Degraft-Hanson Financial Management Specialist AFTFM Financial Management Ferdinand Tsri Apronti Procurement Specialist AFTPC Procurement Anthony Mensa-Bonsu Procurement Specialist (E T

Consultant) AFTPC Procurement

Ms. Valerie Layrol Senior Operations Officer AFTSN Operations Liba Strengerowski-Feldblyum Operations Analyst AFTEN Disbursements Satish Kumar Consultant AFTEN Farmer-based

Organisations/Research Extension Linkage

Albert Van Ittersum Consultant Ebow Smith Consultant AFTFM Financial Management

Specialist Franz Schorosh Consultant Extension Services

(b) Table 13:Staff Time and Cost

Staff Time and Cost (Bank Budget Only) Stage of Project Cycle No. of staff weeks USD Thousands (including

travel and consultant costs) Lending

FY96 23.36 FY97 0.73 FY98 332.94 FY99 477.00 FY00 65 397.44 FY01 11 73.73 Total: 76 1305.20

Supervision/ICR FY01 23 57.59 FY02 34 101.37 FY03 30 96.11 FY04 39 177.23 FY05 70 246.74 FY06 40 225.13 FY07 57 240.38

Total: 293 1144.45

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Annex 5. Beneficiary Survey Results (Prepared by Bank staff based on Borrowers” Implementation Completion Report of January 2007). AgSSIP commissioned two studies: 1) a general beneficiary assessment and 2) a specific evaluation of the Farmer-Based Organizations Development Fund (FBODF), i.e. component III of the project.

1) Beneficiary Assessment The beneficiary assessment consisted of interviewing representatives of the different agencies involved in carrying out the project. It was designed as a qualitative survey and no statistical analysis was carried out. Overall, the assessment was positive.

Emerging Issues and Recommendations The critical issues that emerged from the assessment from beneficiaries’ point of view as well as consultants’ analysis were as follows:

• The critical role of extension support in agricultural development cannot be underestimated and thus require maximum assistance for enhancing service delivery.

• Linkages among research, extension and farmers need to be made effective with financial support and effective co-ordination mechanisms at all levels of the system that is from district to national level.

• With yield and productivity of the farmer increasing, there is the urgent need to address the issue of low prices and poor marketing of farm produce.

• The role of FBOs in value addition to farm produce is having some multiplier effect on the local economies and thus requires to be adequately supported by liaising with other national programmes and agencies including NGOs and private sector operators.

• Programme management has not been satisfactory from beneficiaries’ point of view and thus needs to be a priority issue to be addressed. Critical areas to be addressed are co-ordination of activities and feedback, systems for M&E and procurement of goods and services.

Considerations for the follow up operation

In view of the above the following are outlined for consideration in designing the second phase of AgSSIP:

• Adoption of alternative approaches to reforms in MOFA;

• Strengthening program management structures and systems;

• Strengthening extension and research linkages;

• Inclusion of Agro-processing;

• Enhanced support to FBOs and strengthening of the FBO Development Fund;

• Improving infrastructure and equipment base for agricultural development.

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2) Evaluation and impact study of the farmer-based organisations development fund. The evaluation reviewed the extent of achievement of objectives, outcomes and triggers as defined under the project framework, while the impact assessment reviewed impacts of the fund’s interventions on agricultural production and livelihoods of the beneficiary FBOs, the individual members and their communities.

Key Findings The findings revealed that significant progress had been made in the establishment and functioning of the fund as well as the operational performance of the projects of the beneficiary FBOs. The support to FBO projects had yielded significant impact on the livelihoods of the FBOs, their members and the communities in which they operated.

Challenges The key challenges identified include poor performance of some service providers, ineffective leadership, inadequate understanding and appreciation of the dynamics of FBOs’ functioning by some FBOs, inadequate working capital, as well as unfavorable trade policies of the government.

Recommendations Key recommendations from this study include the need for continuous capacity building to address operational challenges, enhancing leadership and members’ commitment and encouraging the FBOs and District Unions to develop business plans to guide their operations. Others are the need to ensure that only FBOs that are solidly on the ground are supported, the provision of integrated support to the FBOs, blacklisting non-performing service providers and revisiting the unfavorable government trade policy on agricultural development.

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Annex 6. Stakeholder Workshop Report and Results A stakeholder workshop has not been organized. However, a joint final implementation support and completion mission which involved World Bank Team, implementing agencies and, CIDA, EU and participating NGOs was carried out in February 2007. Joint working groups have been formed whose technical reports served to prepare a join mission aide memoir. The document and its annexes was use as the basis for elaborating the ICR.

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Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR (Prepared by Bank staff based on Borrowers” Implementation Completion Report of January 2007). 1. Summary of Borrower’s project completion report Project context, development objectives and design Context at appraisal

The Agricultural Sub-Sector Investment Program (AgSSIP) was the major instrument for implementing the strategy of the Government of Ghana (GOG) for accelerated agricultural growth and rural development (AAGDS) at the end of the 1990s. GOG intended to increase the pace of the sector’s growth from the annual average rate of 3-4% (1995-1999) to 5-6% in support of attaining the goals set in the Vision 2020 program of social and economic development.

AgSSIP was an attempt to move away from stand-alone project type to an integrated system that encompasses all public and private investments in the agricultural sector. Until now, GOG had been undertaking reform and investment programs in the agricultural sector on the basis of individual projects, many of which were spatially, temporally and/or donor restricted. This was rejected in favor of a program sector wide approach. Under the AgSSIP, Project Management has been mainstreamed within the Ministry of Food and Agriculture (MOFA) to eliminate the wastage, duplication and fragmentation of Government’s development efforts. Benefits and target population The AgSSIP was expected to benefit the general rural population, particularly women farmers, traders and food processors through:

• Supporting technological change and innovation in crop, livestock. fishery, forestry production and in agro-processing thereby improving returns to all production factors, including land and labor; and

• Strengthening producer organization such as cooperatives and farmer groups. Such

strengthening will lead to provision of better services to members of such groups and will lead to facilitating technology adoption, by improving access to inputs and facilitating marketing. This approach would also benefit rural women who make up over 60% of the farming population. Increased incomes accruing to such women will improve household food security and well being.

Project Description Project components were as follows:

(a) Reforming and strengthening the agricultural technology generation and diffusion systems

(b) Institutional reform – Restructuring and strengthening of Ministry of Food and Agriculture

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(c) Development of Farmer-Based Organizations (d) Strengthening Agricultural Education and Training

After a joint GOG/IDA mid term review of the program in June 2004 with the participation of the development partners active in the agricultural sector, funds were reallocated for the funding of new initiatives. The new activities of the restructured AgSSIP were:

• Development of Horticulture Export Industry; • Rehabilitation of Irrigation Schemes; • Development of Oil Palm Industry; • Community Fisheries Infrastructure Development; and • Agricultural Mechanization Services Centers.

Implementing Agencies were: Ministry of Food and Agriculture (MOFA), Council for Scientific and Industrial Research (CSIR) and the Department of Cooperatives. Implementation and Outcomes While overall progress has been made towards achieving the project development objectives, implementation results have been mixed. Outcomes by component have been as follows:

(a) Technology Generation and Diffusion. 67 technologies have been created from the implementation of 193 projects and a booklet titled: ‘Agricultural Technologies: 2001-2006 has been published. A competitive agricultural research grant scheme (CARGS) was established and it was made more demand driven through research-extension liaison committees (RELCS). The Directorate of Agricultural Extension Services (DAES) performed as expected. An extension policy document was published, and private extension providers delivered services in selected pilot areas. Gender issues were mainstreamed in extension work.

(b) Institutional Reforms. The various technical Departments of MOFA improved their planning procedures and implemented their programs more effectively. Also, MOFA’s capacity for decentralized planning and budgeting has been greatly enhanced.

(c) Development of Farmer-Based Organizations. Although financial and economic analysis was not carried out on this component, there was substantial evidence to show that benefits of this component outweighed the cost. Subprojects supported with matching grants exceeded the target by 7%. FBO benefited from value addition to their produce and that increased their incomes. To make the component sustainable, closer links with rural finance institutions will have to be developed.

(d) Strengthening Agricultural Education and Training. The objectives of this component were largely achieved. The agricultural education policy has been reviewed and is ready for implementation. Curricula of agricultural colleges and farm institutes have been reviewed and will become operational with the commencement of the Diploma program in the Agricultural Colleges in 2007.

(e) New Initiatives – Horticulture Export Industry Initiative (HEII). Despite remaining challenges, the major achievement of this component was to help the country in resuming pineapple exports which had been stalled by the need to complete the switch to the new MD2 pineapple variety and to adapt export

63

practices to higher quality expectations for both cold chain management and food safety/quality.

Bank and Borrower Performance. Bank. During implementation, the Bank fielded Joint Implementation Support Missions with other sector Development Partners and monitored progress. Recommendations and actions for redress were communicated through mission aide-memoirs and follow-up discussions. Government of Ghana was alerted on problems with project execution and remedies were facilitated in a timely manner in conformity with Bank’s procedures. The aide-memoirs were realistic in the assessment of the performance of the project in terms of achievement of development objectives and project implementation. The shortcomings of the Bank were mainly delays in the granting of no objection to disbursement requests for funds to implement various activities. Borrower. The Government facilitated implementation by making available counterpart funding. Government also prepared for, convened and took part in the implementation support missions. Also, the Government asked for and gave its concurrence to donors in November 2004 to restructure the AgSSIP when it was found that expected development outcomes would not be realized within the original time frame. Implementation of some key policy and institutional issues were however slow. Implementing Agencies. Management structures such as the AgSSIP Coordination Unit at MOFA faced difficulties. This Project Unit was designed to be mainstreamed but turned out as an unclear hybrid between discrete project type PCU and mainstream management. This arrangement needs to be resolved for smooth implementation of future support. GOG needs to take a decision on the management and application of projects within the context of overriding national policies of decentralization and privatization and also the current orientation towards the sector wide approach and the MDBS. Due to improved capacity in Monitoring and Evaluation through the appointment of Technical Specialists and the establishment of a computerized management information system (MIS) the AFFS of the CSIR was able to monitor and evaluate the performance of research projects which were being implemented. At the CSIR there were initially some problems with the submission of Financial Management Reports (FMRs) on time due to difficulties in the use of the SCALA Accounting Software. The situation improved over time. Also, the situation of non-timely submission of financial returns by some spending institutions was corrected as time went on. In MOFA a plan to restructure financial management is progressing steadily. This is to improve oversight over the use of public resources. However some change of mandates in financial management in relation to the budgeting process has posed difficulties in some instances in information gap to adequately advice disbursements.

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Procurement of all works, goods, consultancies and training all followed the procurement guidelines of the Bank. There were however initial delays in procurement due to the slow build-up of capacity in the implementing agencies. Concerning monitoring and evaluation, the project design assumed incorrectly that a sector M&E system was in place to support implementation of activities. The development of this system is ongoing as Phase I is coming to a close. It is hoped that the completed system will serve the needs of the envisaged future support to the sector in the form of an agricultural sector-wide approach. The report concludes with a detailed list of recommendations for future operations, covering all the different technical Departments of MOFA and agricultural research.

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2. Borrower’s comments on draft ICR

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Annex 8. List of Supporting Documents World Bank Implementation Completion Report, Republic of Ghana, Agricultural Sector Adjustment Credit (Credit 2345-GH). World Bank , Performance Audit Reports and Sectoral Overview, Ghana, June 22, 2001 WB Project Appraisal Document on a Proposed Adaptable Program Credit to the Republic of Ghana in support of the first phase for an Agricultural Services Subsector Investment Project, June 8, 2000 WB Development Credit Agreement – Agricultural Services Subsector Investment Project between Republic of Ghana and International Development Association, July 17, 2001 Country Assistance Strategy of the World Bank Group for Ghana, June 29, 2000 Country Assistance Strategy of the World Bank Group for Ghana, February 20, 2004 WB Guidelines for Preparing Implementation Completion Reports WB Adaptable Lending, New Investment Instruments, August 14, 1997 WB Ghana Country Assistance Review, A study in Development Effectiveness, Report No. 14547, Publication date: 6/1/95 WB Implementation Completion Report (IDA – 26980) on a Credit to the Republic of Zambia for an Agricultural Sector Investment Program, 6/30/2002 Republic of Ghana, MOFA, Operating Guidelines for the Farmer Based Organizations Development Fund and the Extension Development Fund Government of Ghana Agricultural Services Subsector Investment Project (AgSSIP), Implementation Completion Report, January 2007 Council for Scientific and Industrial Research (CSIR), Agriculture, Forestry and Fisheries Sector (AFFS) Brochure on Agricultural Technologies Ghana, Ministry of Food and Agriculture, Policy Planning, Monitoring and Evaluation Directorate, Report on Beneficiary Assessment of Agricultural Services Sub-sector Investment Program (AgSSIP), January 2007, presented by Nkum Associates, Accra. Republic of Ghana, Agricultural Services Sub-sector Investment Project (AgSSIP), Implementation Completion Report, January 2007.

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Christian Rural Aid Network (CRAN), Ghana, On the Implementation of the extension development fund (EDF). Towards the provision of agricultural extension services in pilot communities of the Hohoe District in the Volta Region of Ghana, AgSSIP, January 2007. Report on District Corporation Regulation, prepared by the Ministry of Local Government, Rural Development, and Environment; supported by the Ministry of Food and Agriculture; for the Cabinet and Parliament of the Republic of Ghana, 4th January 2007. Harold Coulombe and Quentin Wodon. Ghana CEM: Meeting the Challenge of Accelerated and Shared Growth. Poverty, Livelihoods, and access to basic services in Ghana. (Partial and Preliminary draft, June 2007). Republic of Ghana, Agricultural Services Sub-sector Investment Project (AgSSIP), Beneficiary Assessment, April 2007. Ghartey Associates Limited, Report on Evaluation and Impact Assessment Study of the Farmer-Based Organizations Development Fund. AgSSIP, April 2007. IFRPI, in collaboration with IITA, ECOWAS and CORAF/WECARD. Regional Startegic Alternatives for Agriculture-led Growth and Poverty reduction in West Africa. October 2006. Neil Thomas, Mariama Adama-Issah, Yaw Amoyaw-Osei. Food and Agricultural Budgetary Support, A Project Between CIDA and the Ministry of Food and Agriculture, Ghana. Result-Based Assessment. Final Report. Prepared for CIDA, December 2007.

This map was produced by theMap Design Unit of The World Bank.The boundaries, colors,denominationsand any other information shown onthis map do not imply, on the part ofThe World Bank Group, any judgmenton the legal status of any territory,orany endorsement or acceptance ofsuch boundaries.

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G H A N A

AGRICULTURAL SERVICESSUBSECTOR INVESTMENT PROJECT

AGRICULTURAL INSTITUTES:

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SUBJECT MATTER SPECIALIST CENTERS

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AGRO-ECOLOGICAL ZONES:

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IBRD 30924

JUN

E 2000