implementation completion and results report (icr) documentresource constraints, limited access to...

Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No: ICR00004260

IMPLEMENTATION COMPLETION AND RESULTS REPORT

IBRD - 7769

ON A

LOAN

IN THE AMOUNT OF US$15.0 MILLION

TO THE

Jamaica Ministry of Finance and Public Service

FOR THE

RURAL ECONOMIC DEVELOPMENT INITIATIVE ( P105122 )

January 31, 2018

Agriculture Global Practice

Latin America And Caribbean Region

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

CURRENCY EQUIVALENTS

(Exchange Rate Effective Nov 02, 2017)

Currency Unit = Jamaican Dollar

J$126.83 = US$1

FISCAL YEAR

January 1 – December 31

Regional Vice President: Jorge Familiar Calderon

Country Director: Tahseen Sayed Khan

Senior Global Practice Director: Juergen Voegele

Practice Manager: Preeti S. Ahuja

Task Team Leader(s): Garry Charlier

ICR Main Contributor: Surajit Goswami

ABBREVIATIONS AND ACRONYMS

CEM Country Economic Memorandum CPS Country Partnership Strategy CPSPLR Country Partnership Strategy Performance & Learning Review CTE Community Tourism Enterprise DA Designated Account DO Development Objective EFF Extended Fund Facility EMF Environmental Management Framework FY Fiscal Year GDP Gross Domestic Product GOJ Government of Jamaica IBRD International Bank for Reconstruction and Development ICR / ICRR Implementation Completion & Results Report IFRs Interim Unaudited Financial Reports IMF International Monetary Fund IP Implementation Performance ISR Implementation Status & Results Report JSIF Jamaica Social Investment Fund M&E Monitoring and Evaluation MIS Management Information System NCDP National Community Development Project NGO Non-Governmental Organization NPV Net Present Value PAD Project Appraisal Document PDO Project Development Objective PIU Project Implementation Unit PMT Project Management Team RADA Rural Agricultural Development Authority REDI Rural Economic Development Initiative REEC Rural Economic Evaluation Committee SBA Stand-By Agreement SMART Specific, Measurable, Achievable, Relevant & Timely TPDCo Tourism Product Development Company USD United States Dollar WBG World Bank Group

TABLE OF CONTENTS

DATA SHEET .......................................................................................................................... 1

I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES ....................................................... 5

A. CONTEXT AT APPRAISAL .........................................................................................................5

B. SIGNIFICANT CHANGES DURING IMPLEMENTATION (IF APPLICABLE) .......................................8

II. OUTCOME ...................................................................................................................... 9

A. RELEVANCE OF PDOs ..............................................................................................................9

B. ACHIEVEMENT OF PDOs (EFFICACY) ...................................................................................... 10

C. EFFICIENCY ........................................................................................................................... 13

D. JUSTIFICATION OF OVERALL OUTCOME RATING .................................................................... 14

E. OTHER OUTCOMES AND IMPACTS (IF ANY) ............................................................................ 14

III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME ................................ 15

A. KEY FACTORS DURING PREPARATION ................................................................................... 15

B. KEY FACTORS DURING IMPLEMENTATION ............................................................................. 16

IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME .. 17

A. QUALITY OF MONITORING AND EVALUATION (M&E) ............................................................ 17

B. ENVIRONMENTAL, SOCIAL, AND FIDUCIARY COMPLIANCE ..................................................... 18

C. BANK PERFORMANCE ........................................................................................................... 20

D. RISK TO DEVELOPMENT OUTCOME ....................................................................................... 21

V. LESSONS AND RECOMMENDATIONS ............................................................................. 21

ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS ........................................................... 23

ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION ......................... 35

ANNEX 3. PROJECT COST BY COMPONENT ........................................................................... 38

ANNEX 4. EFFICIENCY ANALYSIS ........................................................................................... 39

ANNEX 5. BORROWER, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS ... 47

ANNEX 6. SUPPORTING DOCUMENTS (IF ANY) ..................................................................... 50

PHOTO SELECTION

MAP

The World Bank Rural Economic Development Initiative ( P105122 )

Page 1 of 56

DATA SHEET

BASIC INFORMATION

Product Information

Project ID Project Name

P105122 RURAL ECONOMIC DEVELOPMENT INITIATIVE ( P105122 )

Country Financing Instrument

Jamaica Specific Investment Loan

Original EA Category Revised EA Category

Partial Assessment (B) Partial Assessment (B)

Organizations

Borrower Implementing Agency

Jamaica Ministry of Finance and Public Service JSIF

Project Development Objective (PDO) Original PDO

The Project Development Objective (PDO) of the proposed REDI project is to improve market access for micro and small-scale rural agricultural producers and tourism product and service providers.


Page 2 of 56

FINANCING

Original Amount (US$) Revised Amount (US$) Actual Disbursed (US$)

World Bank Financing IBRD-77690

15,000,000 14,732,355 14,732,355

Total 15,000,000 14,732,355 14,732,355

Non-World Bank Financing

Borrower 500,000 500,000 900,528

Local Communities 2,000,000 2,000,000 963,347

Total 2,500,000 2,500,000 1,863,875

Total Project Cost 17,500,000 17,232,355 16,596,230

KEY DATES

Approval Effectiveness MTR Review Original Closing Actual Closing

03-Sep-2009 25-Jan-2010 15-Jun-2013 31-Jul-2016 31-Jul-2017

RESTRUCTURING AND/OR ADDITIONAL FINANCING

Date(s) Amount Disbursed (US$M) Key Revisions

14-Sep-2015 9.30 Change in Results Framework Change in Components and Cost Reallocation between Disbursement Categories

22-Jul-2016 11.56 Change in Results Framework Change in Components and Cost Change in Loan Closing Date(s) Reallocation between Disbursement Categories Change in Implementation Schedule

KEY RATINGS

Outcome Bank Performance M&E Quality

Satisfactory Satisfactory Substantial


Page 3 of 56

RATINGS OF PROJECT PERFORMANCE IN ISRs

No. Date ISR Archived DO Rating IP Rating Actual

Disbursements (US$M)

01 26-Oct-2009 Satisfactory Satisfactory 0

02 11-Mar-2010 Satisfactory Satisfactory .04

03 06-Feb-2011 Satisfactory Satisfactory 1.04

04 06-Sep-2011 Satisfactory Satisfactory 1.94

05 25-Apr-2012 Satisfactory Satisfactory 2.11

06 12-Nov-2012 Satisfactory Satisfactory 3.84

07 29-May-2013 Moderately Satisfactory Moderately Satisfactory 4.43

08 17-Dec-2013 Moderately

Unsatisfactory Moderately Unsatisfactory 6.01

09 06-Jul-2014 Moderately

Unsatisfactory Moderately Satisfactory 6.39

10 29-Dec-2014 Moderately

Unsatisfactory Moderately Satisfactory 7.15

11 24-Jun-2015 Moderately Satisfactory Moderately Satisfactory 9.33

12 09-Dec-2015 Moderately Satisfactory Moderately Satisfactory 9.58

13 13-Jun-2016 Satisfactory Satisfactory 11.60

14 28-Dec-2016 Satisfactory Satisfactory 13.91

15 25-Jun-2017 Satisfactory Satisfactory 15.00

16 27-Jul-2017 Satisfactory Satisfactory 14.73

SECTORS AND THEMES

Sectors

Major Sector/Sector (%)

Agriculture, Fishing and Forestry 50

Public Administration - Agriculture, Fishing & Forestry 9

Other Agriculture, Fishing and Forestry 41


Page 4 of 56

Industry, Trade and Services 50

Public Administration - Industry, Trade and Services 9

Other Industry, Trade and Services 41

Themes

Major Theme/ Theme (Level 2)/ Theme (Level 3) (%) Private Sector Development 100

Jobs 100

Urban and Rural Development 100

Rural Development 100

Rural Markets 50

Rural Non-farm Income Generation 50

ADM STAFF

Role At Approval At ICR

Regional Vice President: Pamela Cox Jorge Familiar Calderon

Country Director: Yvonne M. Tsikata Tahseen Sayed Khan

Senior Global Practice Director: Laura Tuck Juergen Voegele

Practice Manager: Ethel Sennhauser Preeti S. Ahuja

Task Team Leader(s): Ellen Hamilton Garry Charlier

ICR Contributing Author: Surajit Goswami


Page 5 of 56

I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES

A. CONTEXT AT APPRAISAL

Context 1. At appraisal, although poverty rates in Jamaica had declined overall over the past two decades, rural poverty had remained stubbornly high. The national incidence of poverty had fallen from 30.4 percent in 1989 to 9.9 percent in 2007. This compared with a more modest decline in poverty in rural areas from 22 percent to 15.3 percent. If Jamaica was to achieve “Developed World” status, as indicated in the Government’s Vision 2030 plan1, then development of rural areas needed to at least keep pace with development in urban areas. The aim of the proposed investment was to stimulate rural economic growth and in the process, increase the country’s overall competitiveness. The agriculture and tourism sectors held the most significant potential for rural growth and development both because of their importance to the economy overall and their potential reach into rural areas. The agricultural sector, while only accounting for 4.8 percent of GDP, represented an important source of income for the rural population, and accounted for 18.4 percent of total employment. Service sectors, of which tourism is a significant component, accounted for about 75 percent of GDP.

2. As indicated in the PAD, the Project was consistent with needs identified in Jamaica’s Poverty Assessment and the goals set out in the Country Assistance Strategy (April 2005, Report No. 31830-JM), and the Bank’s aim of reducing poverty, improving income equality and overall quality of life in rural areas by increasing rural incomes. The Project was also consistent with the World Bank Group’s Jamaica’s Country Partnership Strategy for FY10-13 (August 2012, Report No. 70275-JM) that was aligned with the Government's Medium Term Socio-Economic Policy Framework (MTF)2.

3. The Bank was well positioned to assist the GOJ in rural growth. Both in Latin America and globally, the Bank had supported projects to enhance rural growth, especially targeting the small farmer and tourism sectors such as the Colombia Productive Partnerships Support Project I and II, Bolivia Rural Alliances Project, Peru Sierra Rural Development Project, Ecuador Poverty Reduction and Local Rural Development, Vietnam Agriculture Competitiveness Project, and the Ethiopia Tourism Development Project. Building on the successful experiences of past projects, the GOJ had requested that the Bank support a project which would support rural economic development.

Theory of Change (Results Chain) 4. In Agriculture, the PAD had identified that Jamaica’s large-scale agricultural sector, based on the export of sugar and bananas, was becoming increasingly less important, i.e. mature and stagnant, if not declining. On the other hand, the small-scale agricultural sector exhibited significant potential for growth, particularly in the domestic market displacing high cost imports and could be made more competitive through technology transfer and infrastructure improvements. In particular, small farmers tended to be at a comparative disadvantage in accessing higher value markets for crop, livestock and fishery products because of a lack of market information, inefficient

1 The Project supported the prosperous economy and sustainable environmental development goals of Jamaica’s Vision 2030 plan, part of which states the need for a “Competitive Diversified Value-Added Agricultural Production” and “Strong Marketing Systems for Domestic and Export Markets,” and includes the need for long term rural development and rural environmental sustainability. 2 The Country Partnership Strategy for FY10-13 results areas were modified after the Project was approved and differs from what was indicated in the PAD. Of the three results areas in the FY10-13 CPS, the Project according to the CPS supported mainly the third results area: Promoting Sustained Growth.


Page 6 of 56

production practices and outdated technologies, lack of production of value added products, lack of economies of scale for storage and packing, and high logistics costs.

5. In Tourism, the PAD had found that a large portion of the investment and the market had been taken up by the large-scale, all-inclusive properties. Small rural tourism enterprises, on the other hand, faced several challenges, including: the capacity to respond to changing market dynamics, access to affordable capital and financing, human resource constraints, limited access to business development services and limited organizational capacity.

6. The PAD had also found that groups of people with common economic interests (i.e., farmers, fishermen, agro-processors, tour guides, craft makers etc.), could form a legally recognized organization, a rural enterprise. These rural enterprises of agricultural producers and tourism product and service providers could then be linked to markets through a project: (i) providing financial and technical support to small scale agricultural and rural tourism enterprises; (ii) assisting in the development of critical market-oriented small-scale infrastructure, marketing and management; (iv) increasing access to technical innovation and business support services; (v) enhancing financial management of rural enterprises; and (vi) providing technical and environmental skills development including disaster mitigation and recovery training.

7. The Project’s Theory of Change is presented in Figure 1 (see next page).

Project Development Objectives (PDOs) 8. In both the Loan Agreement and the PAD, the objective of the Project is to improve market access for micro and small-scale rural agricultural producers and tourism product and service providers 3.

Key Expected Outcomes and Outcome Indicators

9. Improved market access for the rural enterprises could come from them having access to new markets but could also come from increased sales to existing markets. Outcome indicator 3 (“Percentage of participating rural enterprises or producer groups that have accessed new markets”) measured the first aspect of improved market access whereas Outcome indicator 1 (“Number of participating rural enterprises that realize an increase in sales”) measured the second aspect of improved market access. To capture the sustainability aspect, the Project wanted to know how the situation was for the rural enterprises after one year. Outcome indicator 2 (“Number of participating rural enterprises functioning as legally registered entities one year after they started operations”) measured survival/sustainability of those enterprises.

Components

10. The project consisted of three components: ▪ Component 1: Rural Subprojects in Agriculture and Rural Tourism (Total US$ 14.18 million; IBRD US$11.78

million). This component was to finance two types of rural subprojects. Type A subprojects, where the grant amount was limited to US$50,000 (excluding technical assistance (TA) and capacity building elements), were to support revenue generating activities in agriculture and tourism. Type B subprojects, where the grant amount was limited to US$200,000, supported provision of critical infrastructure, marketing and management in the agriculture and tourism sectors. The PAD estimated there would be about 75 Type A and about 40 Type B sub-projects.

3 The PAD, adds in its footnote 4, “Market access” improvements refer to all steps along the value chain from production to market. The ICR uses the PDO in the Loan Agreement.


Page 7 of 56

Figure 1: Theory of Change: Jamaica Rural Economic Development Initiative Project Critical Assumptions Inputs/Activities Outputs4/Intermediate Results Outcome (PDO) LT Outcomes The Project supported the rural enterprises of agricultural produce and tourism product and service providers with5:

4 There were some “process” outcomes, on timeliness, procurement, financial management, and MIS, that the project delivered (indicated as intermediate outcomes for Component 3). There were also a number intermediate outcomes the project was expected to demonstrate at the level of organizing the project (indicated as intermediate outcomes for Component 2). The listing and monitoring of these items were far from being comprehensive because the focus was on the beneficiaries which led directly to the PDO. 5 Two types of subprojects were implemented:

• Type A: Small-scale revenue generating activities by rural enterprises in agriculture and rural tourism.

• Type B: Provision of critical small-scale infrastructure, marketing and management.

As the rural enterprises became more successful along the lines indicated above, the PAD also expected to show intermediate results in the number of direct jobs created in rural communities receiving project assistance and positive effect on the youth and women, two vulnerable groups addressed specifically under the project.

Number of participating entities that improved their operations

to meet industry standards

Number of rural enterprises with new or improved products and

services

Number of clients who adopted an improved agricultural

technology promoted by the project

Number of rural enterprises integrating environmental good

practices, business continuity plan in their operations, and/or

developed corporate social plans

Improve market access for micro and small-scale rural agricultural producers and tourism product and service providers.

Stimulate rural economic growth through small-scale agricultural sector, particularly in the domestic market, displacing high cost imports and made more competitive.

Stimulate rural economic growth through small rural tourism enterprises overcoming challenges of responding to changing market dynamics, access to affordable capital and financing, human resource constraints, limited access to business development services and limited organizational capacity.

Financial and technical support

Critical market-oriented small-scale infrastructure,

marketing and management

Increased access to technical innovation and business support services

Enhanced financial management of rural

enterprises

Technical and environmental skills

development including disaster mitigation and

recovery training

People with common economic interests (i.e.

farmers, fishermen, agro-processors, tour guides, craft makers,

etc.), forming a legally-recognized

organization, a rural enterprise.

JSIF builds up its internal capacity to

promote rural enterprise

development, including the extensive use of

private sector expertise in delivering

TA.


Page 8 of 56

▪ Component 2: National Technical Assistance and Capacity Building (Total US$ 1.25 million; IBRD US$ 0.69

million). The main objective of this component was to strengthen relevant national organizations to enhance their capacity to continue assisting the rural enterprises and other project partners and ensure the sustainability of the rural enterprises. Hence, the component was to finance technical assistance (TA) and capacity building for key organizations and agencies delivering support services in agriculture and rural tourism locally.

▪ Component 3: Project Management (Total Cost US$ 2.03 million; IBRD US$ 2.26 million). This component was to finance project management, technical expertise (tourism and agricultural specialists, monitoring and evaluation) staff training, the annual audit, vehicles, office equipment and other operating costs. This component was to also ensure that effective fiduciary arrangements were in place during implementation.

B. SIGNIFICANT CHANGES DURING IMPLEMENTATION (IF APPLICABLE)

Revised PDOs and Outcome Targets 11. The original project objectives remained unchanged throughout project implementation. The September 2015 Restructuring of the project, based on the Mid-Term Review in late 2013, adjusted the outcome target of one of the PDO indicators downwards from 56 to 44, when the PDO indicator replaced “(number of rural enterprises) functioning as registered business entities one year after final disbursement” with “(number of rural enterprises) functioning as legally registered entities one year after they started operations”6.

Revised PDO Indicators 12. The September 2015 Restructuring also replaced the PDO indicator “Percent of critical infrastructure subprojects that achieve their expected results for improvement in the value chain” by a more relevant PDO indicator “Percentage of participating rural enterprises or producer groups that have accessed new markets”. In addition, it relegated the PDO indicator “Number of direct jobs created in rural communities receiving project assistance”, that had already achieved the target, to an intermediate indicator.

Revised Components 13. Components were not revised during project implementation.

Other Changes

14. The Closing Date was revised from 31-July-2016 to 31-July-2017, and a small reallocation of proceeds - under US$500,000 - between Components, was also made.

Rationale for Changes and Their Implication on the Original Theory of Change 15. One of the actions agreed upon between the Bank and the Government during the Mid-Term Review (June 2013) was to update the Results Framework. The follow-up Technical Visits worked with the Project Management Team to revise both the indicators and the targets to better provide evidence on how the intervention would bring about significant benefits for the participating rural enterprises. Changes in the Results Framework strengthened results capture by providing clearer definitions, better reflecting project objectives and activities, and converging with similar projects in the region.

6 Legal registration is more stringent (which reduced the target) but permits various privileges, the most important of which is obtaining contracts.


Page 9 of 56

16. The Closing Date extension was due to a slow start. The implication for the Original Theory of Change was that the learning curve at the implementation agency when dealing with a new approach covering two distinct sectors was steep and the pace of implementation was slower than what one would have anticipated for repeat projects or projects similar to the ones the implementation agency had handled before.

II. OUTCOME

A. RELEVANCE OF PDOs

Assessment of Relevance of PDOs and Rating 17. The relevance of the project development objective is rated high. Following appraisal, the external environment affected Jamaica adversely and poverty rose sharply to 17.8 percent, eroding previous progress. Disparities in the well-being of households and communities across the country increased, particularly between rural and urban areas. Consequently, the Project gained in relevance and remained consistent through closing with the World Bank Group’s Jamaica’s Country Partnership Strategy for FY14-17 (April 2014, Report No. 85158-JM) whose goal is to support Jamaican efforts to help build the conditions for sustained and inclusive growth. The CPS program has three strategic thematic areas: (i) public sector modernization; (ii) enabling environment for private sector growth; and, (iii) social and climate resilience. The Project is highly relevant in terms of Strategic Thematic Area 2, Enabling environment for private sector growth, because the CPS specifically emphasizes support for improved business conditions (that encompasses market access – the PDO), and access to credit in particular for MSMEs (Outcome 3) (World Bank, 2014, 29)7. Lastly, project objectives have also resonated prominently in the GoJ’s agenda across two administrations from the two leading parties8.

18. The Country Economic Memorandum (CEM) (and subsequently the CPS) highlights the fact that Jamaica’s disappointing economic performance is traceable to low productivity. A combination of: (i) weaknesses in human capital and entrepreneurship; (ii) an inadequate business environment, (iii) weak public sector management and discretionary tax policies; and, (iv) poor and inefficient infrastructure, are the main causes of the country’s low productivity. They have resulted in low competitiveness and an enclave-based development model (especially in tourism and mining) with little spillover to the rest of the economy. By addressing item (i), (ii), and (iv) in specific locations, the project was to address both low productivity and non-enclave based development while leveraging the enclaves (and wherever the economy was growing satisfactorily).

19. The objectives went beyond a straight continuation of the NCDP (National Community Development Project) which would have been more of a pure social infrastructure project. The Project built on NCDP’s success in improving social capital across Jamaica with a more market driven approach that was expected to have a greater impact on rural jobs/income generation9. The progress over time was in Jamaica’s addressing inclusive growth using solutions such as greenhouses, drip irrigation, and organizing the value chain facilitating rural enterprises getting improved access to the market, which is the more competitive part of the economy.

7 As indicated in the Context, the Project was also consistent with the Country Partnership Strategy for FY10-13 which was developed concurrently with the Project and was finalized only in August 2012 (Report No. 70275-JM). According to the FY10-13 CPS, the Project plays an important role in the third results area: Promoting Sustained Growth. 8 Based on World Bank dialogues with the Government. 9 The Loan Agreement PDO of NCDP (p. 14) was “to provide basic services and temporary employment opportunities to low-income communities in Jamaica, and promote greater social and community development in Jamaica, especially among the poor “. It differed from the PDO of this project considerably in terms of leveraging rural enterprises and the essential role of the private sector in this project, both in terms of supply and demand of products and services.


Page 10 of 56

B. ACHIEVEMENT OF PDOs (EFFICACY)

Assessment of Achievement of Each Objective/Outcome 20. Achievement of the objective (improve market access for micro and small-scale rural agricultural producers and tourism product and service providers) is rated Substantial. This rating is based, as shown below, on the Project objective and intended outcomes being achieved and attributable to project activities. In addition, the PDO indicators, which were changed after the mid-term review, became more robust, valid measures of objectives and outcomes, and measuring more accurately “improving market access”. In terms of all the indicators, the Project exceeded the objective and intended outcomes.

21. The Project directly and indirectly benefitted an estimated 19,80810 (90 percent of the target 22,000) micro and small-scale rural producers and tourism product and service providers. Among them, 22 percent (147 percent of target) were youth (defined as aged below 30 years), and 51 percent women (170 percent of target). An additional estimated 33,800 (169 percent of target [20,000]) rural residents benefitted/are expected to benefit indirectly from the training and capacity building provided to staff of the Rural Agricultural Development Authority (RADA) and Tourism Product Development Company (TPDCo).

22. The project had good structure through its processes and technical solutions, particularly under Component 1. The structured processes permitted the project to keep the PDO firmly in focus while providing considerable leeway for local conditions. Key features of the process followed the design in the PAD, namely, promotion of the project and call for proposals; screening, review of applications, and prioritization; and sub-project preparation. A key aspect of sub-project preparation was that the direct beneficiaries created rural enterprises11 to receive project benefits, and the PDO was delivered by linking the rural enterprises of agricultural producers, and tourism product and service providers to markets. To link the rural enterprises to markets, the project, among many activities, provided financial and technical support to small scale agricultural and rural tourism enterprises; assisted in the development of critical market-oriented small-scale infrastructure, marketing and management; and increased access to technical innovation, such as greenhouses, and drip irrigation. Specifically, the Project did the above through two types of projects, both in two sectors, Agriculture and Tourism. Type A required less than USD 50,000 per investment and Type B required investments of up to USD 200,000. Their causal link to the PDO is explained below but it is important to appreciate that a counterfactual would have to include not only what is discussed below but also the structured processes (that preceded the technical solutions) including identification of the specific market opportunity and feasibility of a rural organization.

23. Type A, for example for agricultural subprojects linked groups of small producers (rural enterprises) to markets such as the hospitality sector, supermarkets, agro-processors, and other buyers. These subprojects helped producers and processors to better respond to market demand through on-farm investments and innovations, (e.g. greenhouses, breeding stock improvement, introduction of new crops and varieties, counter-seasonal production methods, small group marketing infrastructure such as storage sheds/other) broadly aligned to the PAD design. Project design entailed the use of certain technical solutions and the project followed this framework closely in practice. The counterfactual, at this stage, was that the small producers without support from the project would not

10 The PAD did not elaborate how it arrived at its target value of 22,000 which in paragraph 23 (page 5) was described as “rural residents” and in Annex 4 as those who “benefitted directly or indirectly”. The project kept track of direct participants/direct beneficiaries for the sub-projects but not the “rural residents/indirect beneficiaries”. The ICR used a value of four for every direct beneficiary/participant in sub-projects to estimate the above number. It could reflect members of the household benefitting but could also include others outside the household who benefitted from the economic activity. 11 “Rural enterprises” refers to groups of people with common economic interests (i.e., farmers, fishermen, agro-processors, tour guides, craft makers etc.), who have formed a legally recognized organization to carry out business activities.


Page 11 of 56

have made the key changes in their operations which in turn would have left them unable to meet the demands from the various entities, such as the hospitality sector, due to sub-standard performance in multiple dimensions. Instead, according to PDO Indicator 3, 86 percent of participating rural enterprises or producer groups accessed new markets (108 percent of target).

24. Type B subprojects included critical small-scale infrastructure that helped increase the efficiency and competitiveness of agricultural value chains. For example, some of these investments enhanced product sanitary conditions/standards, thereby extending the shelf life of fish and meat products, and promoted the development of higher value-added products. They included investments in cold storage, vegetable warehouses, packing facilities, processing equipment/other. Examples in the tourism sector included the construction of public bathrooms, collection and out-of-view disposal of solid waste, construction of simple craft markets, equipment for satellite-based internet access, landscaping, trail development, signage, and rehabilitation of or safety enhancements to public attractions (e.g., hiking trails, waterfalls and mineral baths). According to Intermediate Results Indicators (8 and 6), the number of enterprises with new or improved products and services was 64 (160 percent of target), and the number of participating entities that improved their operations to meet industry standards was 68 (155 percent of target). The new or improved products and services, as well as improved operations to meet industry standards, led to increased sales. The counterfactual is, lacking the level of organization to address value chain weaknesses such as product shelf life, rural enterprises would not experience sales growth. Instead, according to the PDO Indicator 1, the number of participating rural enterprises that realized an increase in sales was 61 (153 percent of target). See table below).

Component 1 Type A

Component 1 Type B

Component 2 Grand Total

Enterprise 23 51 74

- Agriculture 22 41 63

- Tourism 1 10 11

Technical Assistance 5 16 12 33

- Agriculture 2 8 7 17

- Mixed 3 6 1 10

- Tourism 2 4 6

Grand Total 28 67 12 107

25. While the sub-project investments were diverse, the US$163,000 investment in the Jamaica Bauxite Institute (JBI)/Noranda Joint Community Council Green House Cluster (Watt Town in the St. Ann parish) may bring out some of the key aspects of the efficacy factors indicated above. This was a Type B subproject which during REDI promotion attracted interest from JBI and Noranda (the mining company) because, through the project, they found a way to address some of the old mining pits. Without the project, the old mine pits would have remained. During the call for proposals, 20 farmers in Watt Town expressed their commitment to the investment. Without the project, they were producing diverse crops with open field and rainfed farming independent of each other. Screening, and review of applications of sub-projects gave some priority to the sub-project because it included 11 women, and 1 youth (and female leadership). Sub-project preparation led the direct beneficiaries (the 20 farmers) to create a rural enterprise with potential for increased income. The increased income came from increased yield of vegetable crops (e.g., sweet peppers, tomatoes) with 2-3 crops per year (this is reflected in the PDO Indicators: “number of participating rural enterprises that realize an increase in turnover (sales)” and “percentage of participating rural enterprises or producer groups that have accessed new markets”, as well as the Intermediate Results Indicator “number of participating entities that have improved their operations to meet industry standards”). The sub-project design involved investment in 20 greenhouses, bathroom facility, chemical storage shed, and packing shed. Apart from the above


Page 12 of 56

investments, JSIF, with Noranda’s help, provided key business support and ongoing liaison to buyers (market access), who in turn benefited from lower costs stemming from replacing imports from the United States. JBI utilized the sub-project to reclaim and restore land, using the reconfigured old mine pits for rainwater harvesting and storage, and then providing steady water supply to the farm enterprise with solar pumps for irrigation, a climate resilient technology. Because of the steady water supply, productivity potentially improved by 400 percent vis-à-vis open field farming (not all of it gets captured because that depends on demand for the product and market access). In addition, important environmental aspects resulted from drip irrigation. The steady water supply induced optimal use of fertilizers, 50 percent less use of pesticides (compared to open field) and increased resilience to weather conditions (droughts). Lastly, the use of local lumber reduced greenhouse infrastructure costs. In terms of sustainability, other than the market access, farmers own their own greenhouse and are also members of a cooperative to maximize efficiencies through joint sales and input purchases while contributing 30 percent of income to the cooperative.

26. As indicated in the example above, there were a number of project outcomes not captured by the PDO. First, perhaps because JSIF, the implementing agency, became the only public entity in the region to receive an ISO 14001 certification for environmental management systems in 2009 (prior to project approval), the project was particularly successful in the rural enterprises adopting excellent environmental practices. According to Intermediate Indicator 10, the number of rural enterprises integrating environmental good practices and or business continuity plans in their operations was 58 (145 percent of target). Another outcome achieved under the project include formalization of rural enterprises. According to PDO Indicator 2, the number of participating rural enterprises functioning as legally registered entities12 one year after they started operations was 53 (120 percent of target). Third, according to Intermediate Results Indicator 7, the number of direct jobs created in rural communities receiving project assistance was 1357 (4.5 times the target). Lastly, REDI, through its selection mechanism and capacity-building activities that targeted vulnerable groups (such as women and youth), effectively addressed gender equity.

27. To complement the above discussion, other specific project outputs can be highlighted:

• the construction of 183 greenhouses (thereby Increasing the number of greenhouses by 50 percent in the country and the area under protected agriculture by 40 percent);

• the installation of drip irrigation in 14 communities (>600 acres);

• three ginger shade houses; and

• the construction and equipping of seven agro-processing incubators in partnership with RADA across Jamaica.

28. Overall, 4,325 farmers in total including 1,694 women, adopted improved agricultural practices and/or technology (greenhouse, drip irrigation, water-harvesting, tissue culture seeds, solar energy for pumping water/processing, etc.).

29. Under Component 2, the TA and capacity building interventions were designed to improve the capabilities of key national institutions responsible for assisting rural enterprises. This component supported a total of 12 technical assistance or capacity building sub-projects that were non-revenue generating. Highlights include:

• Training of a wide range of government technical staff (including 120 extension and plant quarantine officers) in relevant subject areas such as bringing them up to global standards on food safety;

• Studies to inform agricultural and tourism sectors (e.g., pork value chain, in vitro potato production, tourism demand study); and

• Developing the building blocks to integrate CTEs into Jamaica’s “traditional” tourism sector, such as the National Community Tourism Policy & Strategy, a community toolkit, a community tourism portal and new Jamaica Community Experiences brand and logo.

12 Legal registration usually leads to other benefits for the country, such as, higher domestic revenue mobilization.


Page 13 of 56

Justification of Overall Efficacy Rating 30. As described above for the single PDO, the Project objective and intended outcomes were achieved and are attributable to Project activities.

C. EFFICIENCY

Assessment of Efficiency and Rating 31. Based on the findings presented below, the ICR rates project efficiency as substantial. The ICR replicated the PAD methodology to calculate efficiency. The analysis is based on twelve enterprise sub-projects that were selected as being representative of the various enterprises supported under Component 1 (in almost all parishes). In addition, the sample includes diverse types of agricultural enterprises, such as vegetable production through greenhouse technology and drip irrigation, open field drip irrigation, and pig rearing, as well as sub-projects to support community-based tourism enterprises, such as projects promoting adventure trails, mountain hiking, and cultural experiences.

32. The analysis focuses on incremental net benefits at market and social prices based on data collected from each of the subprojects under the scenarios "with project" and "without project". Key indicators of economic and financial performance include Net Present Value (NPV) over a 10-year period, and Internal Rate of Return (IRR, same period). The analysis uses a discount rate of 10%, which is representative of the opportunity cost of capital for Jamaica13.

33. The IRRs of the sub-projects had considerable variation with two failed projects, but 58 percent (7 out of 12) showed an IRR higher than the discount rate of 10 percent used in the PAD.

34. If a discount rate of 5 percent is used, as it has been recently indicated as acceptable within the Bank in this prevailing low interest environment, then 75 percent (9 out of 12) sub-projects had a positive NPV.

Table 5: Economic NPV and IRR for REDI project under two scenarios, and compared to appraisal

EIRR ENPV (JMD) ENPV (USD) EIRR (appraisal)

Full project economic costs 13.85% 204 million 1.59 million 14%

Comp 1 economic costs only 18.22% 376 million 2.9 million 39%

35. The overall economic rate of return for the REDI project is 13.85 percent compared to the PAD estimate of 14 percent, with an economic NPV of 204 million JMD (1.59 million USD). If only the costs of Component 1 are included in the analysis, then the NPV rises to 376 million JMD (2.90 million USD), and the IRR to 18.22 percent14.

13 Central Bank of Jamaica (www.boj.org.jm). This also matches the discount rate that was used at appraisal stage (PAD, 2009) 14 Any shortcoming, including initial delays when fortunately, not much was expensed, has been captured by the EIRR because all costs and benefits are lined up by the year.

0 2 4 6 8

D (IRR below 0)

C (IRR 0-4)

B (IRR 5-9)

A (IRR 10 plus)

http://www.boj.org.jm/


Page 14 of 56

36. In terms of administrative efficiency, the project was quite efficient. It delivered 67 Type B subprojects (with a target of 40), which were much more complex technically and given that the rural enterprises required individual incentives for sharing their income (refer to the paragraph on JBI/Noranda Joint Community Council (Watt Town) above). This was also the desired path after the implementation team found that Type A subprojects were not delivering the results as well as Type B subprojects. So, a tradeoff was made that led to a smaller number of Type A subprojects delivered (28 instead of 75) accompanied by a 67.5 percent increase in the delivery of the more complex and complicated Type B subprojects that most importantly, had good efficacy.

D. JUSTIFICATION OF OVERALL OUTCOME RATING

37. The overall outcome rating for the project is Satisfactory because it is rated high on relevance and substantial on efficacy and efficiency.

E. OTHER OUTCOMES AND IMPACTS (IF ANY)

Gender 38. REDI, through capacity-building with activities that targeted vulnerable groups (such as women and youth), addressed gender equity. The Project supported the inclusion of women in the processes of economic decision making. In doing so, the participation of women’s productive organizations and training programs focused on developing women’s subprojects proposals and preparing business plans. Moreover, the participation rate of women was monitored separately. Thirty-nine percent (1,694 out of 4,325) of those who adopted an improved agricultural technology promoted by REDI were women. Most importantly, the project exceeded its target set for the inclusion of women: 51 percent of rural enterprise participants were women (170 percent of target).

Institutional Strengthening 39. Most of the institutional strengthening attributable to this project was in enhancing JSIF’s role within the private sector, including the rural enterprises. Before this project was implemented, JSIF, incorporated in 1996 as a component of the GOJ’s National Poverty Eradication Program, had already integrated infrastructure development, human and social capacity building and environmental stewardship. They had developed this capacity from implementing numerous projects financed by various multilateral and bilateral institutions. In addition, the diagnostic work and institutional strengthening measures undertaken pre-project, had made JSIF the only public entity in the Caribbean to receive an ISO 14001 certification for environmental management systems (January 2009).

40. The private sector-related institutional strengthening at JSIF came from changing the focus to business activities at two levels. At the higher level, it was to develop the requisite system to select business entities ensuring good governance and transparency. This system included the development of new structures. JSIF established the Rural Economic Evaluation Committees (REEC), one for agriculture and one for tourism, which although chaired by JSIF had three (out of five) private sector representatives on each committee drawn from the private micro-finance sector, commercial banks and private businesses. This system also included new processes that started with the development of business-oriented operational manuals, with all details on eligibility, priority and selection criteria, for its sub-projects. In both these aspects - new structures and processes - JSIF’s capacity had to be extended to cover business projects. Lastly, unlike a venture capital firm, JSIF also had to develop the capacity to hold periodic activities, including workshops, with stakeholders and explain, inter alia, why a large number of subprojects were not selected for financing.

41. At the level of the rural enterprises, JSIF’s institutional strengthening involved developing the capacity to enquire about the markets for the rural enterprises. For some groups, such as the farmers, this meant finding items that were being imported and making the farmers competitive through technology transfer and infrastructure improvements.


Page 15 of 56

For others, particularly in Tourism, the focus was on entities that would provide alternatives to large-scale, all-inclusive properties. JSIF improved its ability to support small rural tourism enterprises in meeting the challenges of changing market dynamics. Overall, JSIF was also strengthened in addressing their clients’ human resource constraints, limited access to business development services and limited organizational capacity.

Mobilizing Private Sector Financing 42. This was limited to contributions in cash/kind from the communities which amounted to USD 2.0 million (not accounting for their sweat equity).

Poverty Reduction and Shared Prosperity

43. The Project was particularly successful in the agricultural sector that represents an important source of income for the rural areas where poverty remains stubbornly high. In addition, JSIF gave priority to the poverty status of communities when ranking eligible proposals15.

Other Unintended Outcomes and Impacts 44. None.

III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME

A. KEY FACTORS DURING PREPARATION

Realistic objectives 45. The preparation team set a clear objective that was appropriate for a project of this nature. Strategically, the entrenched issue of rural poverty, addressed by the Project, remains relevant to multiple GoJ administrations and spans multiple WBG Country Partnership Strategies. Within that context, the choice of the two sectors was appropriate: Agriculture, based more on the resources/activities in rural areas and small-investment Tourism, based on possibilities indicated from development in other countries. Within this context, the preparation team could have easily gone astray and chosen a wider objective, such as rural income, which would have been too ambitious. It realistically set the objective, particularly in the context of a public sector implementing agency, to “improving market access” for its targeted beneficiaries.

Appropriate selection of stakeholders 46. The Project had three categories of stakeholders: communities and beneficiaries, private sector, and government institutions. During preparation, the team undertook needs assessment reports and sectoral studies which provided: (i) characterization of rural communities; (ii) mapping of local public and social organizations (to be supported under the Project) that were expected to deliver the benefits to small scale producers and organizations, and (iii) suggestions on how to engage local producers. Consultations involved representatives of parishes, Non-Governmental Organizations (NGOs), farmers, women, private actors related to relevant agricultural and tourism initiatives and public and social sub-national entities that provide services in these sectors. The Project design then developed mechanisms, including the use of the REECs to attract the private sector inputs16 and strengthening the national

15 Other criteria for prioritization of proposals included market potential, financial feasibility, financial capacity of applicants, jobs created, environmental impacts, legal status of applicant and organizational capacity to implement and monitor project 16 See the section on Institutional Strengthening for more on private sector stakeholders’ role.


Page 16 of 56

public-sector organizations to enhance their capacity through Component 2. This was essential in developing stakeholders’ ownership in project success.

Environmental aspects 47. Strategically, it is increasingly important for hotels and supermarkets to have the produce they buy meet high environmental standards. To replace the imports, local produce was expected to have standards equal to or better than the imports. In addition, the project, in the case of agricultural subprojects, had to preclude potential negative environmental impacts, including water pollution from groundwater contamination from seepage of animal waste, and feedlot, pesticide and fertilizer runoff. Similarly, in tourism sub-projects, the project had to preclude potential negative environmental impacts from trail disturbance, natural resource loss from tampering with flora/ fauna, and improper sewage and solid waste disposal. JSIF already had in place environmental guidelines and an Environmental Management Framework (EMF) to mitigate the negative environmental impacts of different types of subprojects. With the use of project preparation funds, a consulting firm proposed revisions to the existing EMF to accommodate new types of agricultural and rural tourism subprojects. In addition, environmental mitigation plans were prepared to spell out activities to address any potential environmental shortcomings, which were adopted by JSIF just before the project was approved. This proved to be a particularly important strength of the project.

B. KEY FACTORS DURING IMPLEMENTATION Factors subject to government and/or implementing entities control

• Active engagement at the community level and experience in the targeted sectors of JSIF staff. This included, but was not limited to, Subproject Information Meetings with a grant agreement signed by the parties, to remind all actors of their commitments under the business plan (contributions, procurement methods, flow of funds) as specified in the Operations Manual;

• Steep learning curve for JSIF in a new type of operation (business/private sector oriented) entailing cumbersome procedures up until 2014 (and an understaffed PIU). This situation was improved by: (a) faster turnaround times for the approval of sub-project applications; (b) choice of sub-projects that were relevant and innovative yet practical; and (c) supply of equipment and/or completion of infrastructure construction on time; and

• JSIF’s environmental strengths, which included inter alia, strong processes and high standards.

Factors subject to World Bank control

• Rationalization of various indicators following the Mid-term Review (also see M&E sub-section within Bank Performance);

• Increase in funds available for Project Management to strengthen the PIU of the implementation agency to hire a Community Tourism Specialist, a Monitoring & Evaluation Specialist, an international Consultant to assist with the preparation of Business Plans, and a Site Supervisor; and

• Extension of the closing date.

Factors outside the control of government and/or implementing entities

• Macro-economic environment of low growth for Jamaica: the CPS was prepared in the context of serious economic and fiscal challenges. A Performance and Learning Review of the CPS in May 2017 indicated that Jamaica has successfully completed the 2013-17 IMF Extended Fund Facility (EFF) program and signed a successor Stand-By Agreement (SBA) supporting continued focus on fiscal consolidation, macroeconomic stability and growth promoting reforms.


Page 17 of 56

IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME

A. QUALITY OF MONITORING AND EVALUATION (M&E)

M&E Design 48. During preparation, an M&E system had been prepared which was incorporated into JSIF’s Management Information System (MIS) and formed the basis for systematically tracking project implementation progress. The design and arrangements were aligned with the institutional capacity of JSIF and the indicators were SMART (specific, measurable, achievable, relevant, and timely). M&E design was soundly based on the theory of change, particularly following post-MTR adjustments. From the beginning though, the evidence based learning was established at the level of sub-projects and involved not only the project objective and intermediate indicators but also process indicators, such as, time taken to approve sub-projects. Given it was a “greenfield” project and the nature of the indicators (e.g., nothing on income), the baselines were all zero. M&E design took into account the sectoral and group aspects of the sub-projects. For agriculture sub-projects, farm management data was captured through the use of an updated Farm Book. This manual recorded all the activities and observations related to the production being supported by the REDI project on the respective farms. If the farmer was part of a larger group, the Farm Book data was aggregated by the respective groups e.g. for the drip irrigation open field systems, group data was aggregated using the Drip Irrigation Monitoring Form. The farmers, where required, were trained in the recording of data on the observations related to his/her farm. General observations on the weather and possible disease vectors, specific chemical applications and production were also recorded in the book for the crop planted. Similarly for tourism sub-projects, data collection used a comprehensive data capture tool for the group.

M&E Implementation 49. The JSIF M&E unit took responsibility for implementing the project’s M&E framework. The project, by financing a full-time M&E Officer under Component 3, strengthened JSIF’s regular M&E staffing. This improved M&E capability within JSIF from limited routine monitoring of ongoing project activities and outputs to, inter alia, maintenance of the overall M&E framework including implementation procedures, tools, data flow charts and budget, coverage of process and outcome monitoring, validation of data random sampling recording and aggregating processes, as well as promoting and encouraging M&E and quality control. The subproject preparation studies provided baseline information on the proposed business, objectives and measurable monitoring indicators. The business plan functioned as the implementation plan with the beneficiaries involved in defining sub-project target indicators. Most importantly, the beneficiaries played an important role in assessing their achievement, reporting on the performance of their business ventures as part of Component 1 activities, an activity sustained after project closing. For example, a data collection liaison, appointed by the group, compiled the reports in consultation with the farmers, the group leadership and the REDI PMT. The group’s leadership monitored conformity with the individual farmer data collections standards and did basic quality control on the data supplied by the individual farmers.

50. Following the effort at the beneficiary level, REDI’s PMT, especially the Monitoring and Evaluation Specialist, maintained communication with the groups’ data collection liaison and other members of the leadership team. Data was then triangulated using knowledge internal and external to JSIF and also from sector partners, especially RADA. The Enterprise Development Officers prepared bi-monthly reports on the implementation of subprojects, indicating the milestones achieved (according to plan) and the difficulties encountered. The PMT issued reports, every six months or so on the overall status of the subprojects for review by JSIF management and the World Bank. These reports provided inputs for the JSIF and World Bank monitoring system (Implementation Status Reports). This facilitated the tracking of indicators included in the Results Framework and then reported in the ISRs.


Page 18 of 56

51. At the end of the subproject disbursement cycle, JSIF and grant recipients carried out a final evaluation of subproject design and implementation to document lessons learned for future subprojects. The End of Project Instrument and End of Project Focus Group Protocol were used to compile the data needed for the reports. Based on those, the weaknesses in M&E design in terms of indicators (see above) was corrected after the MTR. In addition, an external independent final review was conducted covering the full project scope to determine progress towards development goals, and impact, likelihood of sustainability of results, and recommendations for follow up activities.

M&E Utilization 52. The compiled sub-project reports were analyzed using MS-Excel as the primary tool for quantitative analysis (breakeven, Internal Rates of Return, Net Present Value, etc.). This permitted the M&E data to provide evidence of achievement of outcomes, as opposed to only providing evidence of application of inputs or achievement of outputs. It was also communicated to the various stakeholders beyond the communities including the World Bank and GoJ authorities. This in turn has created demand for a follow-on project where some of the shortcomings of the M&E system, particularly, in terms of faster feedback on the business model “hypothesis”, are expected to be addressed. The M&E system also led to various changes in JSIF’s original cumbersome processes, redirecting Component 1 allocations towards more successful business models, and extension of the closing date. Lastly, the sub-project M&E data provided the requisite feedback internally within the rural enterprises.

Justification of Overall Rating of Quality of M&E 53. Overall M&E quality is rated Substantial. The M&E system was well designed, implemented, and utilized, particularly at the sub-project level. There were some initial shortcomings in matching the M&E system’s design with that of the Theory of Change but these were addressed effectively following the MTR.

B. ENVIRONMENTAL, SOCIAL, AND FIDUCIARY COMPLIANCE

Social Compliance 54. The project did not trigger the Bank’s social safeguards policies: OP 4.10 (Indigenous People) and OP4.12 (Involuntary Resettlement). However, the project did record substantial direct and indirect social benefits. The participation rate of women and youth in the sub-projects exceeded set targets. Women adopted the improved agricultural technology promoted by REDI and led some sub-projects. Project beneficiaries have reported economic benefits that have contributed to their children’s education, and the feeling of ownership and pride through association with ‘modern’ technology. In some communities, there is evidence that cooperation between project beneficiaries and other community members has led to replication and expansion of new agricultural practices in these communities.

Environmental Compliance 55. Compliance with environmental safeguards progressed from satisfactory to highly satisfactory throughout implementation and remained highly satisfactory at closing. Environmental risks were managed appropriately, and the implementing agency’s capacity for environmental management was high due to their application of an ISO14001-certified management system. Country-wide improvements in pest management practice were introduced by training in Integrated Pest Management and food safety training, and through application of an innovative pesticide rinsate17 disposal technique to the region (charcoal pits). Good agricultural practice, water conservation, and climate resilience were furthered by widespread introduction of drip systems for small farming

17 Rinsate is a diluted mixture of a pesticide or pesticides with water, solvents, oils, commercial rinsing agents, or other substances, which may be produced during the washing of pesticide spray equipment.


Page 19 of 56

operations, as well as a cooperative effort with the Jamaica Bauxite Institute to reclaim mine pits for micro basin catchments with solar water pumps to fertigation18 tanks for greenhouse supply. Model pig-rearing facilities were also constructed incorporating bio-digesters for pollution prevention and methane collection. The protection of physical cultural resources has been promoted integrally through project-financed ecotourism projects involving historic and cultural artifacts and sites (Maroon Village), caverns and landscapes of exceptional conservation quality (Cockpit Country), and the first UNESCO World Heritage Site in Jamaica (Blue and John Crow Mountains).

Fiduciary Compliance Procurement

56. Procurement performance was consistently rated satisfactory throughout project implementation. The Bank carried out five Post Reviews. In addition to the prior review contracts, the Bank reviewed 71 out of 217 post review contracts and concluded that procurement was being conducted in compliance with the Loan Agreement, procurement guidelines, and agreed procurement plans. All contracts signed under the project were of small value, and many of them were for the procurement of similar items for different communities. However, this identity of contract objects, coupled with a fragmented procurement strategy, represented an increased workload for the implementing agency. The procurement strategy could have considered using framework agreements for such procurement items to promote economies of scale and standardization, to minimize the administrative burden.

Financial Management 57. Throughout implementation, JSIF had an established Financial Management (FM) system that satisfactorily covered the needs of the Project, including those for the community subprojects. However, as was indicated in the PAD, there were several issues that needed to be addressed to strengthen the FM system. These included, inter alia, the set-up of the accounting system’s chart of accounts; the methodology for allocating general administrative cost amongst all projects managed by JSIF; the treatment of foreign exchange movement; and having adequate oversight of the auditing and financial reporting process. In the beginning, the above challenges impacted JSIF’s ability to provide timely and accurate financial reports to the Bank. During implementation, Bank FM staff complied with the PAD requirement for undertaking two supervision missions a year during the first year of implementation and at least one supervision mission per year thereafter. In addition, training was provided by the Bank, on the preparation of IFRs, the financial management arrangements and financial reporting on the subprojects, audited financial statements, and the treatment of foreign exchange movements. Consequently, JSIF was able to provide timely reports as well as timely external audits.

58. Although the External Auditors issued qualified opinions (with exception) on JSIF’s project financial statements for the year ended March 31, 2017, the Bank noted that JSIF is now accounting for community contributions (the issue that had led to the qualified opinion) in an acceptable manner. The audited financial statements were thus deemed acceptable by the Bank. In addition, as an implementing entity of several internationally-funded projects, including other World Bank-financed projects, JSIF is expected to continue implementing various improvements which remained a work-in-progress at the end of the project. Because these other World Bank-financed projects are ongoing, JSIF is also expected to continue to review their overall financial management system, for areas which require further strengthening and enhancement.

18 Fertigation is the injection of fertilizers, and other water-soluble products, into an irrigation system.


Page 20 of 56

C. BANK PERFORMANCE

Quality at Entry

59. Bank Performance in ensuring Quality at Entry is rated Satisfactory. Bank performance was particularly strong in the following six areas: (a) strategic relevance and approach; (b) technical, financial, and economic aspects; (c) poverty, gender, and social development aspects; (d) environmental aspects; (d) implementation arrangements; (e) M&E arrangements; and (f) Bank inputs and processes.

60. Strategically, the Bank supported the design of the project to address the enabling environment for private sector growth (Strategic Thematic Area of the CPS) and for where growth needs to be addressed, in rural areas (see Context). The Bank’s support of technical, financial, and economic aspects was exceptionally good in the Agricultural sector, which is the main source of employment and income in the target area. In Agriculture, the Bank supported the identification of the markets that could be accessed with proven interventions, such as greenhouses. In the Tourism sector, the financial aspects were just as strong. However, the technical support relied more on freeing up constraints. The Bank expected that the project and the small rural tourism enterprises would find a way to develop viable products. However, this search for viable products needed to follow a process of quicker elimination demonstrated by the developing literature on start-ups19. The Bank addressed poverty, gender, and social development aspects well through project design. The design addressed poverty based mostly on where the sub-projects were located. It addressed gender and social development, first through capacity-building within the implementing agency and then with a gender/social development “biased20” sub-project selection process. On environmental aspects, the Bank had supported building capacity at JSIF during project preparation which was then well utilized. Broadly, the Bank’s approach for implementation arrangements relied on JSIF, one of the ablest entities in the public sector, in tandem with the communities for Component 1 and other institutions, such as RADA and TPDCo, for Component 2. For Component 1, the implementing agencies (JSIF, RADA, and TPDCo) and the communities then relied for sub-project implementation on the rural enterprises. In this set up, for Component 1, the Bank’s preparation effort dovetailed well with the strong M&E system at JSIF with the rural enterprises playing an important role in assessing their achievement, and reporting on the performance of their business ventures21. Finally, the Bank provided extensive inputs during the preparation process with experts in agricultural economics, agribusiness, environmental safeguards, financial management, and procurement (Annex 2).

Quality of Supervision 61. Bank Performance in Quality of Supervision is rated Satisfactory. Most importantly, Bank supervision was instrumental in supporting private sector-related institutional strengthening at JSIF. With the Bank’s support, JSIF was able to make various structural changes required to involve the private sector, both on the demand and supply sides. It also helped JSIF develop, among other things, business-oriented processes that included operational manuals, with all details on eligibility, priority and selection criteria, for its sub-projects. At the level of the rural enterprises, JSIF’s institutional strengthening involved developing the capacity to enquire about the markets for the rural enterprises. In technical terms as well, the Bank supervision team was effective. The Bank team had observed that sub-projects that received only limited TA tended to have a lower survival rate or limited improvement in market access. This led

19 See, for example, Ries, Eric The Startup Way: How Modern Companies Use Entrepreneurial Management to Transform Culture and Drive Long-Term Growth, Currency, New York, 2017. To be fair, this approach is rather new and was uncommon outside certain locations, such as Silicon Valley. 20 The sub-project selection process put explicit weights for women and youth. In addition, the project had to meet targets for percentage rural enterprise participants who were women and who were youth (<30 years old). 21 For other components, the Bank’s approach was more straightforward with JSIF playing the standard role of an implementing agency in M&E.


Page 21 of 56

to JSIF contracting the service of specialized technical assistance providers more systematically which in turn led sub-projects with clearer vision and sustainability plans, and stronger contractual arrangements with wholesalers. The Bank regularly fielded teams with expertise in agriculture, agriculture economics, environment, financial and operational aspects. This permitted proactive identification of opportunities and focus on development impact related to agricultural sub-projects. In addition, because of the Bank team’s focus on development impact, the project did make adjustments and allocated more project funds for rural agricultural enterprises, focusing on Type B projects when that proved to be more successful. Bank supervision was characterized by candor. For example, the MTR had downgraded both “Progress towards Development Objective” and “Implementation Progress” to Moderately Unsatisfactory when JSIF processes had been slow. It impinged on issues outside the control of the Bank, including staffing. This candor led to streamlining of the sub-project selection process following the downgrading of the project. Bank supervision efforts also addressed quality of performance reporting by looking at the PDO and intermediate indicators carefully and matching them with the Theory of Change. The Bank supervision team recommended an extension of the closing date, which permitted the implementing agency to recover from some of its past shortcomings and improve transition arrangements. For those sub-projects that received grants from REDI, the Bank and GoJ are relying mainly on the enterprises themselves to address their own sustainability. For JSIF and other government entities that participated in REDI, a follow-up project with GoJ is currently envisaged to further improve their ability in this new area of working with the private sector.

Justification of Overall Rating of Bank Performance 62. Overall Bank performance is rated Satisfactory, reflecting the Satisfactory rating for Bank performance both in ensuring Quality at Entry and for Quality of Supervision.

D. RISK TO DEVELOPMENT OUTCOME

63. The risk to development outcome largely depends on the rural enterprises that have market access now but may suffer in the future. Some of the deterioration would be likely to transpire due to their own management issues but, as can already be seen in pig farming, it could also come from others (not financed under the project) making improvements. This resulted in deterioration of output prices for all producers, including the rural enterprises who participated in the project. They still have market access but, due to new entrants in the market, their margins are being squeezed. Some sector level policy in this regard may be needed22.

V. LESSONS AND RECOMMENDATIONS

64. Specialized “soft” support along with the provision of hardware to sub-projects improves sub-project sustainability. Specialized “soft” support, such as technical assistance, implementation support of sub-projects, facilitation of contractual arrangements within the value chain, was a critical determinant of the success of sub-projects, proving to be just as important as the provision of hardware. Sub-projects that received only limited soft support, particularly at the beginning of project implementation, tended to have a lower survival rate or limited improvement in market access. Later, JSIF contracted the service of specialized technical assistance providers more systematically leading to stronger sub-projects, with clearer vision and sustainability plans, and stronger contractual arrangements with wholesalers.

22 Though the issues are not exactly the same, see https://en.wikipedia.org/wiki/Fishing_industry_in_New_Zealand which

discusses regulations (following the overcapitalization of the commercial saltwater fishing industry) that included a moratorium on new marine farming applications, initially for two years.

https://en.wikipedia.org/wiki/Fishing_industry_in_New_Zealand

https://en.wikipedia.org/wiki/Marine_farming

https://en.wikipedia.org/wiki/Marine_farming


Page 22 of 56

65. Availability of specialized technical assistance is an important determinant of choice of sub-projects. The first few calls for proposals had led to a large number of value chains, requiring technical support in many different areas that were often not available23. Subsequently, a narrower focus during latter calls for proposals enhanced the credibility of the investments in front of the groups’ buyers improving the chances of market access of the sub-projects. In addition, specialization led to economies of scale and allowed for better learning across sub-projects. For example, while the initial greenhouses showed promising success by being easy to disassemble in case of hurricane, leading to higher survival rate than non-project greenhouses, the Project was able to move on to much cheaper and efficient greenhouses by providing the basic material and teaching beneficiaries to build and maintain the greenhouses themselves.

66. Checking depth of leadership can avoid unpleasant surprises. The ICR found leadership to be quite important in organizing a group for sub-project development and implementation. It also found that often leadership is concentrated in a single person, with few others knowing or understanding the business and being able to step in. This was the case when a leader died (MPCBS) or moved to the USA (Rapid Growth Cooperative). The group and the sub-project collapsed or performed well below what was envisaged. Based on this lesson, the ICR recommends that sub-project ex-ante evaluation should include an assessment of the depth of leadership within the group.

67. Accessing markets for rural enterprises is easier when it is clearly visible. Having a clear opportunity is very valuable to rural enterprises. This proved to be the case with accessing the hotels which imported much of the food for the foreign tourists. The incentives of all members in the supply chain all the way to the buyer could be aligned. However, when it came to replacing a local “supplier”, as was the case with some of the tourism ventures, alignment proved to be difficult because the intermediaries were in a more powerful position vis-à-vis the rural enterprises financed under the Project. The literature on start-ups could provide a useful structure to understand the various opportunities. In this literature, the development of the access to market is broken down in a number of steps24. Essentially, the first focus is on developing a more limited offering, sometimes termed as the minimum viable product, which makes the technical effort/technical assistance easier. Once such a beachhead has been achieved, the focus shifts to scaling up (and even later work at the systems level). This reflects a certain amount of uncertainty/doubt about the solutions that has to be tested and may be difficult to carry out within the framework25 of a World Bank-funded project.

68. When the Implementing Agency is strong in an area, such as Environmental Management, that reputation attracts others in the economy to approach them for win-win solutions, generating positive unintended results. As indicated above, because of JSIF’s ISO 14001 certification for environmental management systems prior to project approval, the project was particularly successful in the rural enterprises adopting excellent environmental practices. In addition, JSIF’s reputation in that area also led Jamaica Bauxite Institute to approach JSIF to creatively address holes created from mining. Water reservoirs were built in the mine pits for the catchment of rain and run-off water. JBI and the bauxite company in return, inter alia, installed solar-operated water pumps to pump the water to a higher location (1,000-gallon water tanks provided by the Project) so that it could flow by gravity to the greenhouses.

.

23 The Venture Capital/Private Equity industry experience supports this “expertise first, deals later” thinking. See, for example, Why some private equity firms do better than others by Joachim Heel and Connor Kehoe, The McKinsey Quarterly, 2005 Number 1.

24 See, for example, The Start-Up J Curve by Howard Love, Greenleaf Press, Texas 2016. 25 Such “hybrid” projects where some solutions are at the scale-up stage but others are in a minimum viable product stage may require separate implementing agencies or, at least, great organizational/managerial clarity.


Page 23 of 56

ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS

A. RESULTS INDICATORS A.1 PDO Indicators Objective/Outcome: To improve market access for micro and small-scale rural agricultural producers and tourism product and service providers.

Indicator Name Unit of Measure Baseline Original Target Formally Revised

Target

Actual Achieved at Completion

Number of participating rural enterprises that realize an increase in turnover (sales).

Number 0.00 44.00 44.00 61.00

07-Oct-2009 31-Jul-2016 31-Jul-2016 30-Jun-2017

Comments (achievements against targets): Exceeded: 139 percent of the end-of-project target. This number is likely to increase in the future as the recently completed RADA agro-processing centers become operational. The new or improved products and services, as well as improved operations to meet industry standards led to increased sales. The counterfactual is unaddressed value chain weaknesses, such as poor shelf life of fish etc., which makes market access and sales growth elusive for the target group.


Target


Number of participating rural enterprises functioning as legally registered entities one year after they started operations

Number 0.00 56.00 44.00 53.00

07-Oct-2009 31-Jul-2016 31-Jul-2016 30-Jun-2017


Page 24 of 56

Comments (achievements against targets): Exceeded: 120 percent of the end-of-project target. This indicator is meant to help measure the sustainability of the investments, by recording the number of investments that were still operational one year after they received funding. Only when a community organization is legally registered was it eligible to enter into contracts, a key aspect to gain access to markets (as a reliable supplier).


Target


Percentage of participating rural enterprises or producer groups that have accessed new markets

Percentage 0.00 78.00 80.00 86.00

07-Oct-2009 31-Jul-2016 31-Jul-2016 30-Jun-2017

Comments (achievements against targets): Fully Achieved: 108 percent of the end-of-project target. New markets include (but are not limited to) new market segments, expansion of existing market segments, additional hagglers, etc. The counterfactual for the small producers without support from the Project was lack of key changes in their operations which in turn left them unable to meet the demands from the various entities, such as the hospitality sector, who found them sub-standard in multiple dimensions.

A.2 Intermediate Results Indicators

Component: Component 1 - Rural Subprojects


Target


Number of participating entities that have improved their operations to meet industry standards

Number 0.00 75.00 44.00 68.00

07-Oct-2009 31-Jul-2016 31-Jul-2017 30-Jun-2017


Page 25 of 56

Comments (achievements against targets): Exceeded: 155 percent of the end-of-project target. The intermediate result arose from the Project, for example, facilitating discussion between buyers and sellers can, on a regular basis, production quality, reliability, volume, new products, and other challenges and opportunities. The counterfactual are operational improvements made by a supplier to meet the industry standards on their own which could also come from piggy-backing the Project (and are not counted in the results).


Target


Percent of rural enterprise participants who are youth (less than 30 years old)

Percentage 0.00 15.00 15.00 22.00

07-Oct-2009 31-Jul-2016 31-Jul-2017 30-Jun-2017

Comments (achievements against targets): Exceeded: 147 percent of the end-of-project target. The Project encouraged the inclusion of young people through capacity-building activities that targeted youth (and women). Monitoring separately the participation rate of youth also led to the results. (Rural populations in Jamaica, particularly youth, tended to be the most vulnerable to high unemployment rates and the PAD (page 72) had identified steadily increasing the rate of youth migration from rural to urban areas in search of employment.)


Target


Percent of rural enterprise participants who are women

Percentage 0.00 30.00 30.00 51.00

07-Oct-2009 31-Jul-2016 31-Jul-2017 30-Jun-2017

Comments (achievements against targets): Exceeded: 170 percent of the end-of-project target. In addition to focused capacity building, the Project supported the inclusion of women in the processes of decision making. Both the training programs and the participation of women’s productive organizations focused on developing subproject proposals and preparing business plans by women. Lastly, monitoring the participation rate of women separately also led to the superlative results.


Page 26 of 56


Target


Number of direct jobs created in rural communities receiving project assistance

Number 0.00 150.00 300.00 1357.00

07-Oct-2009 31-Jul-2016 31-Jul-2017 30-Jun-2017

Comments (achievements against targets): Largely Exceeded: 452 percent of the end-of-project target. Average number of jobs created by each investment proved to be much higher than expected. The Project ranked eligible proposals using pre-established weighted priority criteria that included, among other things, potential social impacts (jobs created, poverty status of community, and size of the group). The sub-criteria “size of the group” may have been one of the reasons that led to the much larger than expected job creation.


Target


Number of enterprises with new or improved products or services

Number 0.00 40.00 40.00 64.00

07-Oct-2009 31-Jul-2016 31-Jul-2017 30-Jun-2017

Comments (achievements against targets): Exceeded: 160 percent of the end-of-project target. As indicated in this ICR’s depiction of the ToC (as well as in the Results Framework of the PAD on page 26), this is one of the crucial intermediate results that led to improved market access. Component 2 is designed to increase the technical capacity of national institutions so that they may offer improved TA leading to improved products and services, the results of which have not been captured in the above results because it is forthcoming and could not be estimated convincingly.


Target


Number of rural enterprises integrating environmental good practices and/or

Number 0.00 50.00 40.00 58.00

07-Oct-2009 31-Jul-2016 31-Jul-2017 30-Jun-2017


Page 27 of 56

business continuity plans in their operations.

Comments (achievements against targets): Exceeded: 145 percent of the end-of-project target. Compliance with environmental safeguards progressed from satisfactory to highly satisfactory throughout implementation and remains highly satisfactory. Environmental risks were managed appropriately, and the implementing agency’s capacity for environmental management was high due to their application of an ISO14001-certified management system.


Target


Number of participating rural enterprises or producer groups that have developed corporate social plans

Number 0.00 50.00 40.00 45.00

07-Oct-2009 31-Jul-2016 31-Jul-2017 30-Jun-2017

Comments (achievements against targets): Exceeded: 113 percent of the end-of-project target. Based on potential social risks identified (through consultations with representatives of a range of social and community organizations and beneficiaries during project preparation), the sub-project prioritization gave weightage to promote social inclusion. The PMT then utilized in-house JSIF Social and Technical Officers to, among other things, monitor the indicator. (In parallel, the Project promoted effective engagement of Civil society through TA, as needed, to strengthen their internal organization, including financial management and their capacity to communicate demand and development proposals on agriculture and community based tourism.)


Target


Farmers adopting improved agricultural technology

Number 0.00 3500.00 3500.00 4325.00

07-Oct-2009 31-Jul-2016 31-Jul-2017 30-Jun-2017

Clients who adopted an Number 0.00 1100.00 1100.00 1694.00


Page 28 of 56

improved agr. technology promoted by project – female

07-Oct-2009 31-Jul-2016 31-Jul-2017 30-Jun-2017

Comments (achievements against targets): Both exceeded: 124 percent (and 154 percent) of the end-of-project target. Included technology, such as, greenhouse, drip irrigation, water-harvesting, tissue culture seeds, solar energy for pumping water/processing, etc.

Component: Component 2 - National Technical Assistance and Capacity Building


Target


Number of national entities' staff trained to improve their delivery of support to rural businesses

Number 0.00 50.00 50.00 78.00

07-Oct-2009 31-Jul-2016 31-Jul-2017 30-Jun-2017

Comments (achievements against targets): Exceeded: 156 percent of the end-of-project target. TA and capacity-building programs in the agricultural sector that was financed under Component 2 included RADA staff training so that they are able to provide ongoing TA after subproject completion. Training for TPDCo staff focused on rural tourism and niche market tourism development, including culture and nature-oriented tourism product development. (It is estimated, but not monitored, that an additional 20,000 rural residents will benefit indirectly from the training and capacity building provided to RADA and TPDCo staff.)


Target


Number of national and parish entities that realize enhanced capabilities to serve rural enterprises

Number 0.00 5.00 5.00 10.00

07-Oct-2009 31-Jul-2016 31-Jul-2017 30-Jun-2017


Page 29 of 56

(studies, policies, equipment,etc.)

Comments (achievements against targets): Largely Exceeded: 200 percent of the end-of-project target. Activities have generated more interest by national entities and a more diversified portfolio than anticipated, as a result of the strong communication strategy by JSIF. Enhancement of their capabilities, in turn, led to their ability to serve the rural institutions.

Component: Component 3 - Project Management


Target


Percentage of subprojects that are implemented in accordance with the time frame in the OM

Percentage 0.00 60.00 60.00 60.00

07-Oct-2009 31-Jul-2016 31-Jul-2017 30-Jun-2017

Comments (achievements against targets): Fully Achieved:100 percent of the end-of-project target. Some of the process related indicators, such as turnaround time for the approval of sub-project applications, were maintained within the PIU but is reported only as a summary through this indicator.


Target


Procurement and FM duties are executed in accordance with national and World Bank guidelines

Text No Yes Yes Yes

07-Oct-2009 31-Jul-2010 31-Jul-2017 30-Jun-2017

Comments (achievements against targets): Fully Achieved. Based on comments from Bank staff entrusted with the activities during implementation (see also ICR sections on these items).


Page 30 of 56


Target


JSIF project MIS is producing indicator reports within 6 months after the start of the project

Text No Yes Yes Yes

07-Oct-2009 31-Jul-2010 31-Jul-2017 30-Jun-2017

Comments (achievements against targets): Fully Achieved. Based on ISRs.


Page 31 of 56

B. KEY OUTPUTS BY COMPONENT

Objective/Outcome 1 To improve market access for micro and small-scale rural agricultural producers and tourism product and service providers.

Outcome Indicators

1. Number of participating rural enterprises that realize an increase in turnover (sales) 2. Number of participating rural enterprises functioning as legally registered entities one year after they started operations 3. Percentage of participating rural enterprises or producer groups that have accessed new markets

Component 1: Rural Subprojects

1. Number of participating entities that have improved their operations to meet industry standards Actual Achieved at Completion: 68 (Exceeded: 155 percent of the end-of-project target) 2. Percent of rural enterprise participants who are youth (less than 30 years old) Actual Achieved at Completion: 22 (Exceeded: 147 percent of the end-of-project target) 3. Percent of rural enterprise participants who are women Actual Achieved at Completion: 51 (Exceeded: 170 percent of the end-of-project target) 4. Number of direct jobs created in rural communities receiving project assistance Actual Achieved at Completion: 1,357 (Largely Exceeded: 452 percent of the end-of-project target) 5. Number of enterprises with new or improved products or services Actual Achieved at Completion: 64 (Exceeded: 160 percent of the end-of-project target)


Page 32 of 56

6. Number of rural enterprises integrating environmental good practices and/or business continuity plan in their operations Actual Achieved at Completion: 58 (Exceeded: 145 percent of the end-of-project target) 7. Number of participating rural enterprises or producer groups that have developed corporate social plans Achieved at Completion: 45 (Exceeded: 113 percent of the end-of-project target) (13. last item in the system generated list in section A.2 above) Number of clients (of which women) who have adopted improved agricultural technology Achieved at Completion: 4,325 (of which 1,694 women). (Both Exceeded: 124 percent (and 154 percent for women) of the end-of-project target)

Component 2: National Technical Assistance and Capacity Building

8. Number of national entities' staff trained to improve their delivery of support to rural businesses Achieved at Completion: 78 (Exceeded: 156 percent of the end-of-project target) 9. Number of national and parish entities that realize enhanced capabilities to serve rural enterprises (studies, policies, equipment,etc.) Achieved at Completion: 10 (Largely Exceeded: 200 percent of the end-of-project target)

Component 3: Project Management

10. Percentage of subprojects that are implemented in accordance with the time frame in the OM Achieved at Completion: 60 (Fully Achieved: 100 percent of the end-of-project target) 11. Procurement and FM duties are executed in accordance with national and World Bank guidelines Achieved at Completion: Yes (Fully Achieved) 12. JSIF project MIS is producing indicator reports within 6 months after the start of the project Achieved at Completion: Yes (Fully Achieved)


Page 33 of 56

Key Outputs by Component

Component 1: Rural Subprojects in Agriculture and Rural Tourism (To finance Type A rural sub-projects [supporting revenue generating activities in agriculture and tourism] and Type B rural subprojects [supporting provision of critical infrastructure, marketing and management in the agriculture and tourism sectors]) 1. Provision of financial and technical support to small scale agricultural and rural tourism enterprises; 2. Assistance in the development of critical market-oriented small-scale infrastructure, marketing and management; 3. Increased access to technical innovation and business support services; 4. Enhanced financial management of rural enterprises; 5. Technical and environmental skills development including disaster mitigation and recovery training.

Component 2: National Technical Assistance and Capacity Building (Building up the capacity of national organizations, such as RADA and TPDCo, that can help to sustain and later initiate similar rural enterprises.)

For RADA, among other things, it included:

• Training in participation methodologies and updating of the community development handbooks (developed under NCDP);

• Training in agricultural marketing, identification of bottlenecks in the value chain, post-harvesting technologies, sustainable farming (including organic farming, etc.)

For TPDCo, among other things, it included:

• Development of a marketing platform (e.g., rural tourism association development, branding, and marketing) for rural tourism products;

• Training for TPDCo staff, focused on rural tourism and niche market tourism development, including culture and nature-oriented tourism product development;


Page 34 of 56

In addition, 10 national and/or parish entities realised enhanced capacities to serve rural enterprises (studies, policies, equipment, etc.)

Component 3: Project Management (including adequate fiduciary arrangements during implementation), technical expertise (tourism and agricultural specialists, and monitoring and evaluation officer), staff training within implementing agency, the annual audit, vehicles, office equipment and other operating costs.


Page 35 of 56

ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION

A. TASK TEAM MEMBERS

Name Role

Preparation

Ellen Hamilton Co-TTL, Sr. Urban Specialist (LCSUW)

Yurie Tanimichi Hoberg Co-TTL, Sr. Agricultural Economist (LCSAR)

Daniele Giovannucci Market & Agro-enterprise Specialist (Consultant)

Jim Phillips Tourism Specialist (Consultant)

Jessica Wurwarg JPA, Urban Planner (LCSUW)

Deep Ford Agricultural Economist (FAO-CP)

Yao Wottor Procurement Specialist (LCOPR)

Emmanuel Njomo Financial Management Specialist (LCSFM)

Pilar Gonzalez Sr. Counsel (LEGLA)

Viviana Maya Counsel (LEGLA)

Nancy Agwu Senior Finance Officer (LOADM)

Miguel-Santiago Oliveira Finance Officer (CTFRC)

Anjali Acharya Sr. Environmental Specialist (LCSEN)

Pilar Larreamendy Sr. Social Development Economist (LCSOS)

Ming Zhang Lead Urban Economist (LCSUW)

Jean Claude Balcet Agriculture Economist (Consultant)

Shaun Mann Tourism Specialist (Consultant)

Paul Siegel Agriculture Economist (Consultant)

Supervision/ICR

Garry Charlier Task Team Leader (TTL) (GFA04)

Pierre Olivier Colleye Sr. Agricultural Specialist and former & TTL (GFA13)

Nabil Chaherli Task Manager

Hannah Messerli Sr. Private Sector Development Specialist, Tourism


Page 36 of 56

Ellen Hamilton Senior Urban Specialist

Carmine Paolo De Salvo Junior Professional Associate

Luciano Wuerzius Senior Procurement Specialist (GGO04)

Shonell Jodian Robinson Financial Management Specialist (GGO22)

Kerry Crawford Financial Management Analyst

Anatol Gobjila Senior Agriculture Economist (GFA03)

Daniel P. Gerber Senior Agriculture Economist (GFA01)

Holger A. Kray Lead Agriculture Economist (GFA13)

Pilar Larreamendy Ricardo Social Safeguards Consultant

Jason Paiement Social Development Specialist

Luz Berania Diaz Rios Senior Agribusiness Specialist (GFA04)

Valerie Hickey Environmental Specialist

Michael J. Darr Environmental Safeguards Specialist Consultant

Komlan Kounetsron Operations Officer

Javier Jahnsen Project Management Consultant

Maria del Mar Polo Agricultural Specialist, (FAO-CP)

Roble Sabrie Agricultural Economist (FAO-CP)

Jean Risopoulos Investment Support Officer (Economist), FAO/CP

Surajit Goswami Senior Economist & ICR Consultant

Rachael Themora Levy Team Assistant (Temporary, GFA04))


Page 37 of 56

B. STAFF TIME AND COST

Stage of Project Cycle Staff Time and Cost

No. of staff weeks US$ (including travel and consultant costs)

Preparation

FY08 14.705 96,537.78

FY09 49.437 229,731.75

FY10 8.243 31,841.16

Total 72.39 358,110.69

Supervision/ICR

FY10 21.461 85,048.71

FY11 15.647 82,637.70

FY12 15.530 76,271.23

FY13 18.174 101,286.20

FY14 21.033 144,331.88

FY15 12.316 81,437.18

FY16 23.447 149,509.18

FY17 15.183 114,506.08

FY18 6.277 72,229.09

Total 149.07 907,257.25


Page 38 of 56

ANNEX 3. PROJECT COST BY COMPONENT

Components Amount at Approval

(US$M) Actual at Project

Closing (US$M) Percentage of Approval

(US$M)

1. Rural Subprojects in Agriculture and Rural Tourism

14.18 13.61 96.0

2. National Technical Assistance and Capacity Building

1.25 0.69 55.0

3. Project Management 2.03 2.26 111.0

Front-end Fee 0.04 0.04 100.0

Total 17.50 16.60 95.0


Page 39 of 56

ANNEX 4. EFFICIENCY ANALYSIS

Background

1. Under REDI’s Component 1 (Rural Subprojects in Agriculture and Rural Tourism), 74 productive sub-projects were financed, of which 63 were in Agriculture and 11 in Tourism. An additional 21 technical assistance projects were financed under this component, of which 10 in Agriculture, 2 in Tourism, and 9 mixed26. These TA projects were targeting groups also benefiting from investments27.

2. As highlighted in Table 1 below, overall investment in Component 1 represents 977.24 million JMD (7.58 million USD)28 of which 858.75 million JMD (6.69 million USD) was for Agriculture, and 118.50 million JMD (0.92 million USD) for community tourism. The budget for technical assistance under this component was 472.55 million JMD (3.68 million USD). The Jamaica Social Investment Fund database provides an estimate of 4952 direct beneficiaries (participants in sub-projects)29 from rural enterprise investments, and 5098 direct beneficiaries from technical assistance provided to these sub-projects (same direct beneficiaries and the small difference arises from a few sub-projects that did not require the TA). In terms of additional employment, 1,969 jobs were created, of which 1,511 were in Agriculture enterprises, and 265 in Community Tourism based enterprises.

3. Component 2 (National Technical Assistance and Capacity Building) was designed to improve the capabilities of key national institutions responsible for assisting rural enterprises. This component supported a total of 12 technical assistance or capacity building sub-projects that were non-revenue generating. Activities included conducting food safety training for key government staff, supporting alignment to the 2012 US Food Safety Modernization act, carrying out a value chain analysis of the pork industry in Jamaica; strengthen the capacity of the Pig Farmers Association, as well as the Greenhouse growers’ association. In Tourism, this component assisted the Ministry with the preparation of a community tourism policy and strategy, and sensitizing key stakeholders to the opportunities and challenges of Community Tourism Enterprises, as well as preparing a Tourism demand study.

4. Overall number of direct beneficiaries is derived by aggregating direct beneficiaries under component 1 and 2, and totaled 12,984. Assuming that benefits also accrue to other household members, estimated to be four, the overall number of direct and indirect beneficiaries of REDI project is estimated to about 52,000.

26 Database of active REDI sub-projects, July 24 and Independent End-of-Project Evaluation of REDI, August 2017 27 Technical expertise (addressed by mobilizing private-sector technical assistance), like investments, was one of the inputs/activities under the project (see the PAD as well as the Theory of Change in this ICR). 28 The exchange rate at the end of October 2017 was 128.31 JMD/USD (Bank of Jamaica website) 29 Assuming that benefits also accrue to other household members, estimated to be four, the overall number of direct and indirect beneficiaries of REDI project is estimated to be over 53,000.


Page 40 of 56

Table 1: Database of sub-projects (enterprise and technical assistance)30 Sub-projects Type # Direct

Beneficiaries Approved Amount

(million JMD) Additional

Employment

Component 1

Enterprise Agriculture 63 4,617 858.75 1,594

Community Tourism 11 335 118.5 182

Technical Assistance Agriculture 11 3,308 226.61 26

Community Tourism 2 1,572 17.81 8

Mixed 8 218 228.12 142

Sub-Total 95 4,952* 1,449. 8 1,952

Component 2

Technical Assistance Agriculture 7 8,027 143.54 14

Community Tourism 4 - 18.84 3

Mixed 1 - 6.32 -

Sub-Total 12 8,027 168.70 17

(*): Only enterprise sub-projects

Methodology

5. This section provides the cost-benefit analysis, based on a selection of twelve enterprise sub-projects, financed under REDI. These sub-projects were selected as being representative of the various enterprises supported under component 1 (in almost all parishes), and include diverse types of agricultural enterprises: vegetable production through greenhouse technology and drip irrigation, open field drip irrigation, pig rearing, processing of agriculture produce, such as cassava, meat products, vegetables, honey, and cocoa drying, as well as, sub-projects aimed to support community-based tourism enterprises, ranging from adventure trail, to mountain hiking, arts and crafts and cultural experience.

Table 2: Selected sub-projects for end of project financial and economic analysis

30 Source: JSIF database, 24 July 2017 and End-of-Project Evaluation of REDI, August 2017

Subproject Sector Legal entity Location (Parish)

1 SMCC St Mary Multipurpose Cooperative Cold Chain Agriculture Cooperative society Annotto Bay, St Mary

2 RGC Rapid Growth Cooperative pig rearing Agriculture Cooperative society Corn Piece, Hayes, Clarendon

3 FHPCS Flower Hill Producers Cooperative Society Cassava processing Agriculture Cooperative society Flower Hill, St James

4 MPCBS Manchester Plateau Community Council Benevolent Society: greenhouse vegetable Agriculture Benevolent Society Pear Tree, Manchester

5 STEA Southern Trewlany Environmental Agency - Nature Tourism and attractions Tourism NGO Albert Town, Trelawny

6 ACC Alpart Community Council - drip irrigation Agriculture Benevolent Society Nain, St Elizabeth

7 BSVC Bethel town, Sorrell Value Chain Improvement - Juice processing Agriculture Cooperative society Bethel Town, Westmoreland

8 HBFCS Hannover Bee Farmers' Cooperative Society: honey bottling facility Agriculture Cooperative society Lucea, Hannover

9 HSF Holy Spirit Foundation, St Elizabeth Meat Processors Agriculture Ltd liability company Maggoty, St Elizabeth

10 JCFA Jamaica Cocoa Farmers Association - cocoa solar drying and processing Agriculture Cooperative society Little Spring Garden, Portland

11 Noranda Noranda JBI Greenhouse cluster - vegetable production Agriculture Benevolent Society Nine Miles, St Ann Parish

12 TBWGBS Treasure Beach Women' Group Benevolent Society: Arts and craft Tourism Benevolent Society Treasure Beach, St Elizabeth


Page 41 of 56

Data generation and analysis

6. In 2015, JSIF contracted a management consultancy based in Jamaica, The Competitiveness Company (TCC), to prepare updated business plan for the twelve selected sub-projects. In early 2017, TCC carried out a return visit, to document actual out-turn, compared to planned figures from the 2015 updated business plan. The updated business plans, prepared by TCC and revised to contain actual out-turn for a period of two-three years, form the basis for the cost-benefit analysis of this ICR3132.

7. TCC business plan (BP) focused on the “with project” situation. They provided a ten-year forecast and derived the Financial Net Present Value (NPV) and Internal Rate of Return (IRR) under various scenarios. For the purpose of this analysis, the base scenario is used in each case, and a few corrections have been incorporated, including removing an assumed annual ten percent increase in revenue, as well as a seven percent increase in cost (to reflect inflation), and a NPV calculated using inflation as the discount rate. Labor costs were added wherever they were missing. A “without project” situation has been established, following interviews with farmer groups and business operators in ten out of the twelve sub-projects.

8. The analysis here focuses on incremental net benefits at market and social prices based on data collected from each of the subprojects under the scenarios "with project" and "without project". Key indicators of economic and financial performance include Net Present Value (NPV) over a 10-year period, Internal Rate of Return (same period), number of jobs created. The analysis uses a discount rate of 10 %, which is representative of the opportunity cost of capital for Jamaica33.

9. This analysis assumes that the selected subprojects are representative of the broader list of enterprise subprojects financed by REDI. For instance, the number of tourism sub-projects is kept at 2 out of twelve (16%), whereas these represent 15% of the universe of enterprise sub-projects (11/74). While the project started in 2010, the first sub-projects to be financed got underway in 2012, and the latest were finalized early 2016. These have not yet achieved their inherent productive potential at the time of data collection, and this may have affected the financial viability in some cases. In the case of goods or equipment, the residual value of the assets acquired in a project situation is considered as zero by year ten. Unskilled labor was valued based on the salaries reported for daily employment in rural areas34. All prices expressed in USD have been converted at current prices into Jamaican dollars.

Results Financial analysis

10. The main results achieved in terms of financial performance are highlighted in Table 3. Of the twelve projects, two have failed, while seven are operating at below capacity, and three are operating at or above capacity. Projects performing best were the honey-bottling project, followed by the Vegetables Marketing cooperative, and the Cocoa drying. Financial cost benefit analysis shows substantial variation between sub-projects. While aggregate, financial viability is sound at 20.43% IRR with a financial NPV of 1.3 million USD, several sub-projects have a negative Financial NPV (at 10% discount rate), with internal rates of return ranging from 2.92% to 125% (with two that failed with negative returns).

31 Consultancy service for the economic & financial analysis of JSIF/REDI subprojects, The Consultancy Company, July 2017 32 The ICR confirms that the selected sub-projects were more or less representative of the universe of enterprise sub-projects. 33 Central Bank of Jamaica (www.boj.org.jm). This also matches the discount rate that was used at appraisal stage (PAD, 2009) 34 For example, unskilled labor wage in rural areas was reported to be 2000 JMD/day.

http://www.boj.org.jm/


Page 42 of 56

Table 3. –Sub-projects Financial performance

11. The range of IRR is represented graphically. Out of 12 sub-projects, 7 have an IRR that is above 10%), with two having IRR between 5-10 and one having IRR between 0 and 5. With a five percent discount rate, 9 out 12 would have a positive NPV (75%).

12. Benefit – Cost ratio varies accordingly, from 0.15 (failed project) to 4.37 for the most profitable. The analysis provides switching values for both revenues and costs. Business plans profitability is highly sensitive to changes in revenues, so either production and/or prices. Many sub-projects still need to achieve expected productivity or production levels, in order to ensure profitability. Labor is another critical cost; a small increase leads to negative NPV in many business plans.

Operational

REDI investment (disbursed) B/C Capacity

('000 JMD) ('000 usd) JMD USD IRR ratio cost revenue status

1 SMCC 17,104 132.67 16,333,388 126,694 15.47% 1.88 88% -47% At or above

2 RGC 10,793 83.72 (2,117,490) (16,425) 6.85% 1.10 10% -9% Below

3 FHPCS 17,613 136.62 (4,629,717) (35,912) 2.92% 1.04 4% -4% Below

4 MPCBS 5,212 40.43 n.a n.a n.a n.a n.a n.a Failed

5 STEA 13,427 104.15 1,727,392 13,399 11.36% 1.62 62% -38% Below

6 ACC 5,729 44.44 (15,462,743) (119,941) n.a. 0.15 -85% 553% Failed

7 BSVC 23,115 179.30 7,787,425 60,405 14.78% 1.34 34% -25% Below

8 HBFCS 22,954 178.05 172,170,046 1,335,480 125.48% 4.37 337% -77% At or above

9 HSF 14,310 111.00 (3,056,385) (23,708) 6.36% 1.01 1% -1% Below

10 JCFA 21,350 165.61 9,164,435 71,086 15.99% 1.21 21% -17% At or above

11 Noranda 64,658 501.54 2,343,466 18,178 10.92% 1.53 53% -34% Below

12 TBWGBS 1,470 11.40 1,789,196 13,878 23.22% 1.22 22% -18% At or above

NPV Switching values


Page 43 of 56

Economic analysis

13. The economic benefits of the project were assessed exclusively based on the selected business plans. While technical assistance sub-projects in Component 1 and 2 are expected to yield benefits, the analysis does not quantify these. Technology transfer, capacity building, extension services and marketing support are considered as investments in public goods, which traditionally have high returns. For instance, a meta-analysis showed that the median rate of return was 58% for extension investments, 49% for research investments, and 36% for combined investments in research and extension35. By not quantifying these, the overall economic benefits of this project are probably under-estimated.

14. Regarding component 1 income-generating sub-projects, financial (or market) prices were converted to economic (or social) prices, based on certain conversion factors reflecting economic parameters36. A social discount rate of 10 percent was used, which is consistent with the rate used at appraisal stage.

15. The values of production, sales, and annualized costs in scenarios "with" and "without" project were determined considering constant prices for 2017 (prices collected during fieldwork). Net benefit streams for each sub-project were then aggregated, and scaled up by a factor reflecting the ratio between the total amount disbursed by REDI to the sampled subprojects over the total amount disbursed for income generating agriculture and community tourism sub-projects37. The failure rate within the sample of selected projects is approximately 16 percent (2 out of 12), which is in line with the failure rate of the overall component 1 enterprise sub-projects (estimated at 13 percent overall, 14 percent for agriculture)38.

16. Project economic costs correspond to WB financing, which include taxes, as per financing agreement. JSIF provided the annual disbursement breakdown (amounts disbursed in USD, per year). These disbursements were converted into economic costs by removing taxes (16.5 percent VAT), and adding beneficiaries and GoJ total disbursements, broken down by year according to WB annual share of disbursement. Project economic costs were expressed in JMD at the average exchange rate of each year39. Component 3 disbursements during the last year of the project were assumed to represent recurrent costs, which are kept constant.

17. Based on the above, the overall economic rate of return for the REDI project is 13.85 percent, with an economic NPV of 204 million JMD (1.59 million USD). If only the costs of component 1 are included in the analysis, then the NPV rises to 376 million JMD (2.9 million USD), and the IRR to 18.22 percent.

Table 5: Economic NPV and IRR for REDI project under two scenarios, and compared to appraisal

EIRR ENPV (JMD) ENPV (USD) EIRR (appraisal)

Full project economic costs 13.85% 204 million 1.59 million 14%

Comp 1 economic costs only 18.22% 376 million 2.9 million 39%

18. The analysis reveals positive economic returns for the REDI project’s investments under Component 1 (income generating enterprises). Investments in REDI project are justified, given that they

35 J. Alston et al., A meta-analysis of rates of return to agricultural Research and Development, IFPRI (2000) 36 Conversion factors: Standard Conversion Factor 0.95; Shadow wage rate unskilled labor: 0.85 (unemployment rate of 15%), Shadow wage rate for skilled labor 0.75 (25% withholding tax), conversion factor for goods and services: 0.835 (general consumer tax of 16.5%). 37 Scaling up factor of 4.10, the ratio of disbursement in selected sub-projects/disbursement in enterprise sub-projects Comp 1 38 Independent End-of-Project Evaluation of REDI, August 2017, p. 52-53 39 http://boj.org.jm/foreign_exchange/fx_rates_annual.php


Page 44 of 56

provide a higher return than the social discount rate used for the evaluation of public investments in Jamaica. These results are in line with economic and financial returns reported in similar projects implemented in the LAC region40, and are consistent with the ex-ante EFA performed at appraisal41. Further Observations

19. This section builds on findings from the TCC report, and their presentation on Oct 26. It also incorporates the findings of field visits that were undertaken to 10 sub-projects out of the 12.

a) Focusing support on new activities and supporting groups to come together to access project funds proved to be challenging. By and large, established cooperatives and societies were performing better than newly created groups/associations (SMCC, JCFA, Honey Cooperative vs. Rapid Growth pig, Sorrell juice, Manchester society);

b) The revenue distribution/sharing model should be clarified at proposal design stage to avoid poor participation and group collapse (ACC, other drip irrigation, earlier greenhouse design vs the Noranda approach, where each farmer owns and operates one);

c) Access to technical support, after the phase of works and equipment procurement and installation, could be an issue. Consequently, stronger partnership with RADA which was inculcated under component 2 could become crucial. Availability of the public extension staff, so that there can be some continuity once the private TA/capacity building phases out is vital to productivity increase;

d) Risk analysis at project review stage. Often leadership is concentrated in a single person, with few others knowing or understanding the business and being able to step in. If the leader dies (MPCBS) or moves to the USA (Rapid Growth Cooperative), the group collapses;

e) Many sub-projects struggle to operate at a higher volume, which is key to ensuring profitability. All sub-projects reported experiencing constraints in having access to working capital. This was not considered eligible when preparing Business Plans. This decision could be reviewed in a second phase (Bammy, SMCC, Holy spirit);

f) Due to delays in implementation, several years can pass between the preparation of a sub-project, its financing, and its implementation, including procurement of works, and goods. In several cases, works ended up consuming a larger share of the budget, thereby prejudicing other requirements (goods or services). Closer engagement is required between REDI/JSIF’s procurement staff and beneficiaries, to ensure best value for money and relevant specifications – (e.g. Holy Spirit, Hanover Bee);

g) Within the sub-projects, monitoring system needs to be strengthened so that deviations from business plans are picked up early and can be addressed swiftly (Sorell Juice). Critical importance of feedback to ensure productive use of resources and to enable timely interventions to support chances of successful & sustainable outcomes.

40http://documents.worldbank.org/curated/en/702681480494322907/pdf/110615-WP-LinkingFarmerstoMarketsthroughProductiveAlliances-

PUBLIC-ABSTRACT-SENT.pdf 41 The ex-ante EFA estimated the FIRR and EIRR at 12% and 14% respectively, factoring in all the projects costs (PAD, Annex 9).


Page 45 of 56

APPENDIX 4.1 – NET FINANCIAL BENEFIT STREAM

Net financial benefit stream (With-Without project) 10% discount rate

# CfP Subproject Y0 Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10

1 2

St Mary Multipurpose Cooperative Cold Chain Supply and

Post Harvest enhancement (24,831,500.00) (4,280,003.68) (12,338,205.00) (16,418,848.00) (5,830,504.06) 24,608,867.58 24,608,867.58 24,608,867.58 24,608,867.58 24,608,867.58 24,608,867.58

2 2

Rapid Growth Cooperative pig rearing and food traceability

project (11,093,129.20) (2,426,359.36) 576,533.90 (717,662.88) 2,473,834.91 3,065,072.91 3,115,072.91 3,175,072.91 3,175,072.91 3,175,072.91 3,175,072.91

3 2

Flower Hill Producers Cooperative Society: food safety and

market access enhancement (21,548,581.00) 5,188,058.33 2,148,506.67 5,109,526.35 776,661.85 1,880,698.43 1,880,698.43 1,880,698.43 1,880,698.43 1,880,698.43 1,880,698.43

4 1

Manchester Plateau Community Council Benevolent Society:

protected agriculture (greenhouse) technology project (22,280,000.00) 656,550.00 656,550.00 - - - - - - - -

5 1

Southern Trewlany Environmental Agency - Safety and

security improvement, marketing and capacity building (15,500,476.00) (2,891,798.00) (1,543,418.00) (751,671.50) 532,269.00 205,557.00 9,082,677.00 9,082,677.00 9,082,677.00 9,082,677.00 9,082,677.00

6 2 Alpart Community Council - Installation of drip irrigation (14,640,918.71) (2,369,852.38) (269,461.03) 11,990.00 - - - - - - -

1 2

Bethel town, Sorrell Value Chain Improvement and

Equipping, Marketing and Capacity Building (23,115,061.95) (2,467,526.91) (1,421,143.53) (493,803.70) 7,033,313.03 10,308,963.03 10,308,963.03 10,308,963.03 10,308,963.03 10,308,963.03 10,308,963.03

2 3

Hannover Bee Farmers' Cooperative Society Equipping,

Training and Bottling Facility (22,954,021.22) 27,289,364.00$ 29,269,231.44$ 31,101,342.25$ 33,025,058.60$ 34,449,535.77$ 36,570,433.05$ 38,797,375.20$ 41,135,664.45$ 43,590,868.16$ 46,168,832.06$

3 3 Holy Spirit Foundation, St Elizabeth Meat Processors (17,752,266.11) (2,486,369.89) 3,155,706.98 2,873,125.38 3,273,308.15 3,333,878.58 3,395,660.41 2,117,677.89 3,522,955.71 3,588,519.09 3,655,393.73

4 3

Jamaica Cocoa Farmers Association construction of cocoa

processing (21,350,442.58) (1,095,000.00) (1,095,000.00) (1,095,000.00) 7,606,662.36 8,217,074.62 8,858,007.49 9,530,987.00 10,237,615.49 10,979,575.40 11,758,633.31

5 2

Jamaica Conservation & Development Trust: Management &

Infrastrucutre of the Blue and John Crow Mountain Regions (20,750,265.00) (83,185.00) 198,228.00 4,006,473.00 5,007,757.50 5,007,757.50 5,007,757.50 5,007,757.50 5,007,757.50 5,007,757.50 5,007,757.50

6 3 Noranda JBI Greenhouse Cluster (64,658,936.22) 10,942,471 10,942,471 10,942,471 10,942,471 10,942,471 10,942,471 10,942,471 10,942,471 10,942,471 10,942,471

7 1

Treasure Beach Women' Group Benevolent Society:

Promotion and Training ($1,470,500.00) $254,855.00 $760,943.00 ($86,240.00) ($459,827.00) ($891,595.00) ($685,855.00) $2,178,313.00 $2,178,313.00 $2,178,313.00 $2,178,313.00

8

Rastafari Indigenous Village: Infrastructure upgrading,

Marketing and propmiton of cultural toursim ($19,496,666.00) ($5,696,505.00) ($3,930,997.35) $1,773,880.70 $19,145,403.99 $19,145,403.99 $19,145,403.99 $19,145,403.99 $19,145,403.99 $19,145,403.99 $19,145,403.99

TOTAL (301,442,763.99) 20,534,698.35 27,109,946.30 36,255,582.82 83,526,409.55 120,273,685.63 132,230,157.61 136,776,264.74 141,226,460.30 144,489,187.31 147,913,083.76

NPV 206,923,184

IRR 20.77%


Page 46 of 56

APPENDIX 4.2 – ECONOMIC NET BENEFIT STREAM

Economic net benefit stream 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026

CfP Subproject Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10 Y11 Y12 Y13 Y14 Y15 Y16 Y17

2

St Mary Multipurpose Cooperative Cold Chain Supply and Post

Harvest enhancement (4,280,004) (12,338,205) (16,418,848) (5,830,504) 23,111,899 23,111,899 23,111,899 23,111,899 23,111,899 23,111,899 - -

2

Rapid Growth Cooperative pig rearing and food traceability

project (2,185,118) 653,043 (473,472) 3,142,725 3,895,849 3,937,599 3,994,599 3,994,599 3,994,599 3,994,599 - - -

2

Flower Hill Producers Cooperative Society: food safety and

market access enhancement 5,188,058 2,148,507 5,136,857 885,786 2,971,471 2,971,471 2,971,471 2,971,471 2,971,471 2,971,471 - - -

1

Manchester Plateau Community Council Benevolent Society:

protected agriculture (greenhouse) technology project - - - - -

1

Southern Trewlany Environmental Agency - Cockpit Country

Adventure Team - Safety and security improvement, marketing

and capacity building (2,339,142) (1,089,530) (435,176) 704,889 307,788 8,524,373 8,524,373 8,524,373 8,524,373 8,524,373 - - - -

2 Alpart Community Council - Installation of drip irrigation (2,051,331) (53,884) 18,291

2

Bethel town, Sorrell Value Chain Improvement and Equipping,

Marketing and Capacity Building (2,164,005) (1,184,396) (272,401) 7,114,638 10,390,288 10,390,288 10,390,288 10,390,288 10,390,288 10,390,288 - -

3

Hannover Bee Farmers' Cooperative Society Equipping, Training

and Bottling Facility 29,156,627 30,814,251 32,554,756 34,382,286 36,301,193 38,316,046 40,431,641 42,653,016 44,985,459 47,434,525

3 Holy Spirit Foundation, St Elizabeth Meat Processors (2,669,616.88) 3,022,673.66 3,079,042.49 3,136,538.70 3,195,184.84 3,255,003.90 3,316,019.33 3,378,255.08 3,441,735.54 3,506,485.61

3

Jamaica Cocoa Farmers Association construction of cocoa

processing (930,750.00) (930,750.00) (930,750.00) 7,693,518.38 8,273,410.03 8,882,296.25 9,521,626.79 10,192,923.86 10,897,785.77 11,637,890.79

2

Jamaica Conservation & Development Trust: Management &

Infrastrucutre of the Blue and John Crow Mountain Regions (85,110) 198,228 4,245,638 5,246,359 5,246,359 5,246,359 5,246,359 5,246,359 5,246,359 5,246,359 -

3 Noranda JBI Greenhouse Cluster 11,185,221 11,185,221 11,185,221 11,185,221 11,185,221 11,185,221 11,185,221 11,185,221 11,185,221 11,185,221

1

Treasure Beach Women' Group Benevolent Society: Promotion

and Training 342,662 820,001 74,868 (347,786) (754,757) (479,402) 2,451,066 2,451,066 2,451,066 2,451,066 - - - -

Rastafari Indigenous Village: Infrastructure upgrading,

Marketing and propmiton of cultural toursim (4,489,164) (2,298,931) 3,079,903 20,549,266 20,549,266 20,549,266 20,549,266 20,549,266 20,549,266 20,549,266

SUM Incremental Economic benefits selected sub-projects - - (1,996,480) (248,669) (9,476,566) 17,358,012 39,861,413 90,335,097 134,654,797 137,326,404 140,070,049 142,949,152 134,995,013 118,784,511 67,244,360 14,626,957 3,506,486

Scaled up to represent all productive subprojects (Comp 1) - - (6,907,696) (860,378) (32,788,333) 60,057,650 137,918,027 312,553,856 465,897,278 475,140,872 484,633,716 494,595,235 467,074,404 410,987,069 232,661,332 50,608,365.78 12,132,223.56

Incremental project economic costs in JMD 60,971,676.89 87,661,193.19 184,515,708.48 173,755,505.23 225,797,734.70 312,127,897.14 413,691,393.51 144,776,554.35 24,016,791.22 24,016,791.22 24,016,791.22 24,016,791.22 24,016,791.22 24,016,791.22 24,016,791.22 24,016,791.22 24,016,791.22

Incremental net benefit stream in JMD (60,971,676.89) (87,661,193.19) (191,423,404.47) (174,615,883.73) (258,586,067.77) (252,070,247.52) (275,773,366.53) 167,777,301.25 441,880,487.27 451,124,080.46 460,616,925.03 470,578,443.82 443,057,612.74 386,970,278.07 208,644,540.39 26,591,574.57 (11,884,567.65)

Economic NPV @ 10% (JMD) 199,280,586.63

Economic IRR @ 10% (USD) 1,553,118.13 Exchange rate USD 128.31 JMD (as of 31 Oct 2017)

Economic IRR 13.61% Discount rate 10%

Scaling up factor 346%


Page 47 of 56

ANNEX 5. BORROWER, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS

The ICR reflected the objectives, achievements, challenges and the socio-economic value of the project. The presentation was succinct and efficient in its presentation of the status at end-of-project. As the GOJ, our view is that this project and the impact will be more demonstrable and instructive in another five (5) years. A greater reflection on the reasons behind the delays in the implementation of the project would have been useful. It is our view that the delays were the result of a combination of the following factors:

• Weak buy-in during the initial stages of the project by stakeholder agencies such as those responsible for Agriculture and Tourism. More focus could have been given at project design to framing a strategy to engage these agencies more effectively. However over time these agencies became more supportive of the project and contributed in a substantial way to its success.

• The complex design of the project and the need for the executing agency (JSIF) to adapt its approaches and procedures to respond effectively. JSIF built its expertise and coupled with a good understanding of the project, was able to effectively guide the initiative successfully.

• At the request of the GOJ, the willingness of the Bank to include in the Project a sub-project for aquaculture which necessitated intensive consultations and lengthy technical inputs and which resulted in a delay in implementation of several months.

• Prevailing fiscal constraints, which limited the ability of the project to implement at an efficient pace. Our specific comments are set out below: B. ACHIEVEMENT OF PDOs (EFFICACY) Assessment of Achievement of Each Objective/Outcome The value and demonstration effect of a REDI can be assessed through the components that dealt with the Community Tourism Enterprises and the Greenhouse Clusters. Both these -components reflect the effective advancement from policy and strategy and implementation during the life of a Project. The success of these required cogent and focused policy formulation, multi-agency support and coordination and community involvement. Importantly also, they are areas that can be scaled and replicated for greater and further impact. The REDI investments in critical small-scale on-farm infrastructure contributed to increased efficiency and competitiveness of agricultural value chains by integrating the most micro players within the Sectors. The project directed support to areas that are fundamental to the Agriculture and Tourism Sectors. Some of these investments enhanced the sanitary handling of produce, thereby extending the shelf life of fish, meat produce and promoted the development of higher value-added products. They included investments in cold storage, vegetable warehouses, packing facilities, processing equipment, etc. Examples in the tourism sector include the construction of cabins and camping facilities, rehabilitation of museums and craft shops and equipment supply to include fire and safety equipment, landscaping, trail development, signage, and rehabilitation of or safety enhancements to public attractions (e.g., hiking trails, waterfalls, and rivers).


Page 48 of 56

Other Unintended Outcomes and Impacts It is important to reflect on what we view as other unintended outcomes. The engagement of the Private Sector at the very localized level with these micro enterprises is a win, and in some notable instances this was achieved. As a result of REDI’s investment at Portland Gap in the Blue and John Crow Mountains, private sector interests including a regional resort chain that is locally owned, were inspired to invest both at Portland Gap and Blue Mountain Peak to further enhance the visitor experience. At the community level, private sector (i.e. individuals put up their own capital) for replication of investments in drip irrigation and greenhouse technologies. Both participating and neighboring farmers who witnessed the successes of the application of both technologies were inspired to invest in additional drip irrigation systems or construct additional greenhouses to increase production and income. Owing to the acquisition of greenhouse construction skills, six greenhouse vegetable crop farmers, 3 each from Schwallenburgh and Windalco Blue Mountain were able to offer services in greenhouse construction thereby creating another source of income for their families. The results of the REDI Project extend beyond the direct beneficiaries as a spirit of social responsibility has been built within the communities where project interventions were implemented through community involvement and development activities to include providing much needed support to other vulnerable groups within their communities as well as becoming tools in education at the primary and secondary level. Some of the Greenhouse clusters now form part of the demonstration modules for students. The Rural Economic Development Initiative has provided an innovative approach to development in Jamaica targeting two key growth sectors, agriculture and tourism. Human capital development has been fostered through its numerous capacity building initiatives and the adoption of innovative and climate smart technologies has been realized. It is worth noting that it has revolutionized vegetable crop production in the drought prone areas of St. Elizabeth resulting in a 60% increase in production contributing to the recorded 16% growth in agricultural output for the October to December 2016 quarter and the reduction of Jamaica's food import bill by US$6 million in 2016. Integrated in the agriculture interventions was the strengthening of the island’s food safety infrastructure and systems supporting the GOJ’s Food Safety Modernization Act Compliance Programme through among others Global Gap Certification, to increase exports to the US market. Additionally, REDI supported the expansion of the Agro-Park Development Programme to boost non-traditional exports through the provision of critical drip irrigation systems also contributing to the production of onions locally. The diversification of the local tourism product through the development of community tourism added a dynamic portfolio of community experiences which offer an adventurous, cultural and gastronomic flair reaching both local and international markets as represented on the National Community Tourism Portal www.moretojamaica.com. The leveraging of the nexus between agriculture and tourism has been realized for which opportunities for further strengthening exist. Informed by the Tourism Demand Study funded by REDI, farmers are supplying the high value tourism market as well as large supermarkets and wholesale clubs. Underpinning the globally competitive Jamaica Community Experiences brand developed in conjunction with the Jamaica Tourist Board, is the Community Tourism Policy & Strategy approved by Parliament in April 2015. The National Community Tourism Toolkit to guide further development in the sector produced in collaboration with the Tourism Product Development Company (TPDCo) was also developed by the Project.


Page 49 of 56

REDI has a unique combination of strategic investments in these two key growth sectors that are expected to contribute to economic growth at the national and community levels. These investments are poised for scalability and replicability and can be significant contributors to improving the competitiveness of both sectors aimed at the achievement of the medium to long-term national development goals


Page 50 of 56

ANNEX 6. SUPPORTING DOCUMENTS (IF ANY)

Project Concept Note (PCN) and Project Information Document (PID)

Project Appraisal Document (PAD)

Loan and Project Agreements

Operational Manual

Restructuring Papers (2015, 2016)

Implementation Support Mission Aide Memoires

Implementation Status and Results Reports (ISR)

Economic and Financial Analysis (EFA) Report

Financial Management Reports and Aide Memoires

Audit Reports

Jamaica Vision 2030 National Development Plan (NDP)

Jamaica Poverty Assessment

Country Assistance Strategy for Jamaica (2005)

Country Partnership Strategy (2014-2017)

Borrower’s REDI Completion Report (July 2017)

REDI Publications • Agriculture

o Pork Value Chain analysis and Pig Census Study for MICAF and the Jamaica Pig Industry.

o An Integrated Disaster Risk Reduction Training Package for the Agricultural and Community

Tourism Based Sectors

o Food Safety and Quality Assurance Compliance for Slaughter Facilities Manual.

o Assessment of the Current Technical and Infrastructural capacity of the Christiana Potato

Growers’ Association, Bodles Research Facility, Scientific Research Council, and UWI Bio-

technology Unit to undertake in-vitro production of plants.

o Standardized On-Farm Record Keeping from Pig Breeding to Finish Manual.

o Farm Record Book

• Tourism

o The National Community Tourism Policy & Strategy, April 2015

o National Community Tourism Toolkit

o National Community Tourism Portal: www.moretojamaica.com

o Jamaica Community Experiences brand and logo developed in conjunction with the Jamaica

Tourist Board and registered with the Jamaica Intellectual Properties Office.

o Tourism Demand Study

http://www.moretojamaica.com/


Page 51 of 56

PHOTOS SELECTION OF REDI INTERVENTIONS (Courtesy JSIF)


Page 52 of 56


Page 53 of 56


Page 54 of 56


Page 55 of 56


Page 56 of 56

implementation completion and results report (icr) documentresource constraints, limited access to...

Documents