public disclosure authorized - world bankdocuments.worldbank.org/curated/en/243811468273052573/...iv...

Document of The World Bank

Report No: ICR0001001

IMPLEMENTATION COMPLETION AND RESULTS REPORT (IDA-39290 IDA-H0980)

ON AN

IDA CREDIT IN THE AMOUNT OF SDR 18 MILLION (USD 27 MILLION EQUIVALENT)

AND AN

IDA GRANT

IN THE AMOUNT OF SDR 8.7 MILLION (USD 13 MILLION EQUIVALENT)

TO THE

REPUBLIC OF KENYA

FOR A

KENYA AGRICULTURAL PRODUCTIVITY PROJECT

IN SUPPORT OF THE FIRST PHASE OF THE

KENYA AGRICULTURAL PRODUCTIVITY PROGRAM

September 28, 2009

Agricultural and Rural Development Unit Sustainable Development Department Country Department AFCE2 Africa Region

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CURRENCY EQUIVALENTS

(Exchange Rate in original PAD) Currency Unit = Kenya Shilling (KSh.)

US$1.00 = 76 KSh. US$0.67= SDR 1

FISCAL YEAR July 1 to June 30

ABBREVIATIONS AND ACRONYMS

APL Adaptable Program Loan APVC Agricultural Product Value Chain ARZ Agro Regional Zone ASARECA Association for Strengthening Agricultural Research in Eastern and

Central Africa ASCU Agriculture Sector Coordination Unit ATIRI Agricultural Technology and Information Response Initiative CBOs Community Based Organizations CIGs Common Interest Groups CIMMYT Centro Internacional de Mejoramiento del Maizy del Trizo CIP Community Integrated Plan CRACs Centre Research Advisory Committees DIP District Integrated Plan DSUs District Service Units EDPs Enterprise Development Plans ERSWEC Economic Recovery Strategy for Wealth and Employment Creation FM Financial Management FMR Financial Monitoring Report GEF Global Environment Fund GoK Government of Kenya ICC Inter-Ministerial Coordination Committee ICR Implementation Completion Results Report ICT Information and Communication Technology IDA International Development Association

IMF International Monetary Fund ISR Implementation Status Results Report KAPAP Kenya Agricultural Productivity Agribusiness Project KAPP KAPP I

Kenya Agricultural Productivity Program Kenya Agricultural Productivity Project – Phase I

KARI Kenya Agricultural Research Institute

KENFAP Kenya National Federation of Agricultural Producers KEPHIS Kenya Plant Health Inspectorate Service

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KS KAPP Secretariat KSC KAPP Steering Committee KSh Kenyan Shilling M&E Monitoring and Evaluation MIS Management Information System MoA Ministry of Agriculture MoCD&M Ministry of Co-operative Development and Marketing MoFD Ministry of Fisheries Development MoLFD Ministry of Livestock and Fisheries Development MoU Memorandum of Understanding MTR Mid-term Review NAEP National Agricultural Extension Policy NARC National Agricultural Research Centre NARP I&II National Agricultural Research Project Phase 1&II NARS National Agriculture Research Systems NARS-IF NARS Implementation Framework NASEP National Agricultural Sector Extension Policy NASEP-IF National Agriculture Sector Extension Policy –

Implementation Framework NETF National Extension Task Force NFF National Farmers Forum NGOs Non-Governmental Organizations NPV Net Present Value NRTF National Research Task Force PAD Project Appraisal Document PCN Project Concept Note PDO Project Development Objective

PIP Project Implementation Plan PM&E Planning, Monitoring and Evaluation

R&E Research and Extension RF Results Framework SPs Service Providers TTL Task Team Leader

Vice President: Obiageli Katryn Ezekwesili

Country Director: Johannes Zutt

Sector Manager: Karen Mcconnell Brooks

Task Team Leader: Andrew Mwihia Karanja

ICR Team Leader: Mohammed Taqi Sharif

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Republic of Kenya Kenya Agricultural Productivity Project

Contents

Data Sheet ........................................................................................................................................ v A. Basic Information ................................................................................................................... v B. Key Dates ................................................................................................................................ v C. Ratings Summary .................................................................................................................... v D. Sector and Theme Codes ....................................................................................................... vi E. Bank Staff .............................................................................................................................. vi F. Results Framework Analysis .................................................................................................. vi G. Ratings of Project Performance in ISRs ................................................................................ ix H. Restructuring (if any) ............................................................................................................. ix I. Disbursement Profile ................................................................................................................ x

1. Project Context, Development Objectives and Design ................................................................ 1 1.1 Context at Appraisal .............................................................................................................. 1 1.2 Original Project Development Objectives (PDO) and Key Indicators .................................. 1 1.3 Revised PDO and Key Indicators .......................................................................................... 2 1.4 Main Beneficiaries ................................................................................................................. 2 1.5 Original Components ............................................................................................................. 2 1.6 Revised Components ............................................................................................................. 3 1.7 Other significant changes ...................................................................................................... 3

2. Key Factors Affecting Implementation and Outcomes ................................................................ 4 2.1 Project Preparation, Design and Quality at Entry .................................................................. 4 2.2 Implementation ...................................................................................................................... 5 2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization ....................... 6 2.4 Safeguard and Fiduciary Compliance .................................................................................... 7 2.5 Post-completion Operation/Next Phase ................................................................................. 8

3. Assessment of Outcomes ............................................................................................................. 8 3.1 Relevance of Objectives, Design and Implementation .......................................................... 8 3.2 Achievement of Project Development Objectives ................................................................. 9 3.3 Efficiency ............................................................................................................................ 11 3.4 Justification of Overall Rating ............................................................................................. 12 3.5 Overarching Themes, Other Outcomes and Impacts ........................................................... 13 3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops .................... 14

4. Assessment of Bank and Borrower Performance ...................................................................... 15 4.1 Bank Performance ............................................................................................................... 15 4.2 Borrower Performance ........................................................................................................ 16

5. Lessons Learned ......................................................................................................................... 17 6. Comments on Issues Raised by Borrower/Implementing Agencies/Partners ............................ 19 Annex 1. Project Costs and Financing ........................................................................................... 20 Annex 2. Outputs by Component ................................................................................................... 21 Annex 3. Economic and Financial Analysis .................................................................................. 36 Annex 4. Bank Lending and Implementation ................................................................................ 44 Annex 5. Beneficiary Survey Results ............................................................................................ 46 Annex 6. Stakeholder Workshop Report and Results .................................................................... 50 Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR ...................................... 51 Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders ........................................ 57 Annex 9. List of Supporting Documents ....................................................................................... 58 MAP ............................................................................................................................................... 59

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Data Sheet

A. Basic Information

Country: Kenya Project Name: Kenya Agricultural Productivity Project

Project ID: P082396 L/C/TF Number(s): IDA-39290,IDA-H0980

ICR Date: 09/28/2009 ICR Type: Core ICR

Lending Instrument: APL Borrower: GOVERNMENT OF KENYA

Original Total Commitment:

XDR 26.7M Disbursed Amount: XDR 26.7M

Revised Amount: XDR 26.7M

Environmental Category: C

Implementing Agencies: Ministry of Agriculture Ministry of Livestock Development Kenya Agricultural Research Institute

Cofinanciers and Other External Partners: Not applicable B. Key Dates

Process Date Process Original Date Revised / Actual

Date(s)

Concept Review: 10/17/2003 Effectiveness: 10/21/2004 10/21/2004

Appraisal: 03/01/2004 Restructuring(s): N/A

Approval: 06/17/2004 Mid-term Review: 06/19/2006 11/06/2006

Closing: 12/31/2007 12/31/2008 C. Ratings Summary C.1 Performance Rating by ICR

Outcomes: Moderately Satisfactory

Risk to Development Outcome: Moderate

Bank Performance: Moderately Satisfactory

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

Bank Ratings Borrower Ratings Quality at Entry: Moderately Satisfactory Government: Satisfactory

Quality of Supervision: Satisfactory Implementing Agency/Agencies:

Moderately Satisfactory

Overall Bank Performance:

Moderately Satisfactory Overall Borrower Performance:

Moderately Satisfactory

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C.3 Quality at Entry and Implementation Performance Indicators Implementation

Performance Indicators

QAG Assessments (if any)

Rating

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

Yes (due to country flag, disbursement and financial management issues)

Quality at Entry (QEA):

None

Problem Project at any time (Yes/No):

No Quality of Supervision (QSA):

None

DO rating before Closing/Inactive status:

Satisfactory

D. Sector and Theme Codes

Original Actual

Sector Code (as % of total Bank financing)

Agricultural extension and research 100 100

Theme Code (as % of total Bank financing)

Rural services and infrastructure 100 100 E. Bank Staff

Positions At ICR At Approval

Vice President: Obiageli Katryn Ezekwesili Callisto E. Madavo

Country Director: Johannes Zutt Makhtar Diop

Sector Manager: Karen Mcconnell Brooks Karen Mcconnell Brooks

Task Team Leader: Andrew Mwihia Karanja Moctar Toure

ICR Primary Author : Mohammed Taqi Sharif

ICR – Other authors Jane Njuguna and Julien Vallet F. Results Framework Analysis Project Development Objectives (from Project Appraisal Document) The project development objective is to support generation, dissemination, and adoption of agricultural technology through: (i) reforms in extension to increase pluralism, responsiveness to clients, and participation by private providers; (ii) an evolutionary change in the existing system of agricultural research to improve accountability and impact; and (iii) increased empowerment of producer organizations to influence the planning, design, implementation, funding and monitoring and evaluation of research, extension, training and capacity building activities. Revised Project Development Objectives (as approved by original approving authority) Not applicable

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(a) PDO Indicator(s)

Indicator Baseline Value

Original Target Values (from

approval documents)

Formally Revised

Target Values

Actual Value Achieved at

Completion or Target Years

Indicator 1 : Increased uptake of agricultural technologies and practices in 20 pilot districts Value quantitative or Qualitative)

Baseline undertaken in July 2006

Midterm- 30% End of Project -40%

Maize – 62% Fertilizer use -60%

Date achieved 07/20/2006 12/31/2008 Comments (incl. % achievement)

Indicator 2 : Pluralistic extension approaches and client empowerment support activities tested in 20 pilot districts by 31 Dec, 2008

Value quantitative or Qualitative)

Baseline data collected and analyzed in 2006

100%

75% (approaches tested in 15 districts but all ARZs covered.


(b) Intermediate Outcome Indicator(s)

Indicator Baseline Value

Original Target Values (from

approval documents)

Formally Revised Target

Values

Actual Value Achieved at

Completion or Target Years

Indicator 1 : Project coordination structures established at national and district level Value (quantitative or Qualitative)

Secretariat and Steering Committee in place during effectiveness

Fully functional DSUs

Fully functional ICC, KSC, KS and DSUs


Indicator 2 : National extension policy and implementation framework reviewed and approved by the cabinet

Value (quantitative or Qualitative)

The old policy (NALEP) in place and being implemented

New NASEP approved by Cabinet

NASEP document approved by Cabinet.

Date achieved 10/21/2004 06/30/2008 08/2009 Comments (incl. %

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achievement) Indicator 3 : At least four extension approaches tested and evaluated


Baseline information collected in 2006

Mid term- 4 extension approaches tested in 10 districts End of Project- 4 approaches tested in 20 districts and evaluated

Six extension approaches tested in 20 districts and four adopted for wider use.


Indicator 4 : NARS Rationalization action plan developed by Dec., 2006 and approved by cabinet, and implementation started in 2007


No NARS policy existing

Mid term- NARS action plan developed end of project- NARS action plan and rationalization started

NARS document completed; awaiting further review and endorsement.


Indicator 5 : 2/3 of KARI research activities rated satisfactory by internal and external reviewers


Inventory of KARI's (and other NARS) developed technologies and institutional capabilities done in 2005

Mid term- 66% evaluated end of project-100% evaluated and 66% rated satisfactory

External evaluation –rating was 60% satisfactory. Internal Evaluation rating was 71% satisfactory.


Based on a 60% satisfactory rating against a target of 66%, the achievement rate was 91%.

Indicator 6 : No. of client fora functioning at district and divisional level


Inventory undertaken in 2005

2005- 10 mid-term-20 end of project-20

20 Client fora (district level) and 80 divisional level fora functioning by close of project.

Date achieved 10/21/2004 12/31/2008

Comments (incl. % achievement)

100%

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Indicator 7 : Collaborative activities occupy 50% of project financing to non-KARI research institutes (competitive grants)

10/21/2004 12/31/2008

50% of grants awarded to non-KARI research institutes

Comments (incl, % achievement

100%

Indicator 8: Progressive devolution of KARI resource allocation and accountability for adaptive research programs to centers and center research advisory committees (CRACs)

10/21/2004

50% of centers using CRACs for allocation of 40% of research program budget by 12/31/2008

Achieved

Comments (incl. % achievement)

100%

G. Ratings of Project Performance in ISRs

No. Date ISR Archived

DO IP Actual Disbursements

(USD millions) 1 12/15/2004 Satisfactory Satisfactory 2.64 2 06/15/2005 Moderately Satisfactory Moderately Satisfactory 3.09 3 12/19/2005 Moderately Satisfactory Moderately Satisfactory 5.70 4 06/19/2006 Moderately Satisfactory Moderately Satisfactory 11.39 5 12/27/2006 Moderately Satisfactory Moderately Satisfactory 23.80 6 06/29/2007 Moderately Satisfactory Moderately Satisfactory 23.83 7 11/28/2007 Moderately Satisfactory Moderately Satisfactory 29.56 8 05/16/2008 Moderately Satisfactory Moderately Satisfactory 38.53 9 12/15/2008 Satisfactory Satisfactory 40.50

H. Restructuring (if any) Not Applicable

x

I. Disbursement Profile

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1. Project Context, Development Objectives and Design 1.1 Context at Appraisal 1. In the course of the 1980s and 1990s, Kenya’s economic performance fell well below potential. GDP growth declined from an average of 7 percent per year in the 1970s to just over 2 percent in the 1990s. Deteriorating growth performance in the economy as a whole was mirrored in the agriculture sector, where growth fell from 3.5 percent in the 1980s to 1 percent in the 1990s. These trends were partly explained by exogenous factors, including falling world prices for agricultural products, and climatic shocks. However, internal factors were also important. Most important among these were policy distortions in agricultural input and output markets, inadequate legal and regulatory policies, particularly for small enterprises, and poor infrastructure that raised marketing costs, and inadequate public support services that hindered the spread of new farm technologies. This resulted in increased poverty and food insecurity, decline in competitiveness, and limited investment in the agricultural sector. 2. In order to address the above issues, the Government launched a Strategy for Revitalizing Agriculture (SRA) in tandem with its new overall development strategy, the ERSWEC (the Economic Recovery Strategy for Wealth and Employment Creation, 2003-2007). The aim of the SRA was “to provide a policy and institutional environment that is conducive to increasing agricultural productivity, promoting investments, and encouraging private sector involvement in agricultural enterprises and agribusiness.” In 2004, the Government of Kenya (GoK) sought technical assistance and financing from the development partners to advance the SRA objectives. 3. To this end, the World Bank assisted GoK in the preparation of the Kenya Agricultural Productivity Program (KAPP), which was designed as a 12-year, three-phase Adaptable Program Loan (APL). 1 The Kenya Agricultural Productivity Project (KAPP Phase I – “KAPP I”) was the first phase of this program. KAPP I was originally designed as a three-year project (2004-2007). It was expected to contribute to a significant subset of SRA goals. It focused on improving technology generation, and their transfer and uptake through strengthening institutions for research, extension and farmer empowerment. More specifically, KAPP I was prepared to: (i) facilitate empowerment of farmers to access and apply profitable and sustainable technologies; (ii) lay the groundwork for a pluralistic agricultural extension and learning system; (iii) integrate and rationalize the national agricultural research system (NARS); and, (iv) to support analytical work to inform policy and institutional reform. KAPP I was aligned with the 2004 Country Assistance Strategy goal of reversing Kenya’s decline in economic growth and equity. It was also expected to contribute to higher level goals in the ERS/PRSP: economic growth, equity, and better governance, and to support the Government’s efforts to decentralize service delivery.

1.2 Original Project Development Objectives (PDO) and Key Indicators 4. The PDO was to support the overall system of generation, dissemination, and adoption of agricultural technology through: (i) reforms in extension to increase pluralism, responsiveness to clients, and participation by private providers; (ii) an evolutionary change in the existing system of agricultural research to improve accountability and impact; and (iii) increased empowerment of producer organizations to influence the planning, design, implementation, funding and monitoring and evaluation of research, extension, training, and capacity building activities.

1 The Bank was well placed to respond. In preparing KAPP I, it built upon previous efforts to support technology systems in Kenya, for example under NARP II (National Agricultural Research Project II).

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5. Key Performance Indicators (KPIs): These were: (i) the NARS action plan is adopted in year two and initiated by year three of Project implementation; (ii) collaborative activities constitute 50 percent of Research Grant financing to non-KARI research institutes; (iii) an inventory of KARI technologies and institutional capabilities is carried out and a database developed by the end of year one, and updated annually thereafter; (iv) progressive devolution of KARI resource allocation occurs, along with accountability for adaptive research programs, to centers and center research advisory committees; (v) six extension approaches are tested and proven cost effective; (vi) twenty client fora are created and functioning at district and divisional level; and, (vii) forty producer organizations invest in technology multiplication. 1.3 Revised PDO and Key Indicators 6. The PDO and the KPIs remained unchanged (Annex 2, Appendix 1). The KPIs were refined and made more operational to serve as Outcome Indicators in Bank Implementation Status Results Report (ISRs). These are reflected in the accompanying ICR Data Sheet.

1.4 Main Beneficiaries 7. Primary Beneficiaries: The primary beneficiaries of KAPP I were the farmers participating in farmer Common Interest Groups (CIGs) in 80 divisions of 20 pilot districts (only four divisions per pilot district were selected). 1,350 CIGs (with estimated membership of about 100,000 farmers) were expected to benefit from group facilitation in priority setting, support in development of enterprise development plans, contacts with newly facilitated service providers, and where they qualified, from matching grants to fund business plans. In addition, other key beneficiaries included: (i) the staff of the Ministries of Agriculture, Livestock Development, Fisheries Development and KARI at the national and local levels (including at District Service Units - DSUs - set up in the 20 pilot districts and at KARI centers in the field); and, (ii) private and public service providers (SPs), producer organizations (commodity organizations, farmers fora, cooperatives) and NGOs involved in project activities. 1.5 Original Components 8. KAPP I had four components: (i) Facilitation of Policy and Institutional Reforms; (ii) Support to Extension System Reform; (iii) Support to Research System Reform; and, (iv) Support to Farmer/Client Empowerment.

9. Component 1. Facilitation of Policy and Institutional Reforms (US$7.90 million, including US$6.93 million IDA credit and US$0.97 GoK contribution): The component’s objective was to support the establishment of the institutional framework to improve coordination structures within government and establish consultative fora that would create more integrated systems of research, extension and farmer empowerment. Support for this component was divided under two sub-components: (a) KAPP I Coordinating Bodies, which included (i) the SRA proposed Inter-ministerial Coordination Committee (ICC), with responsibility for policy and oversight of the KAPP Steering Committee’s (KSC’s) work; (ii) KSC, with responsibility for oversight of the project’s operations, and the work of the KAPP Secretariat ( KS - coordination unit); (iii) KS, which was responsible for day-to-day management and coordination of project activities; and (iv) DSUs, which had responsibility for coordinating project activities at the district/local level, including the setting up of local farmers’ fora; and (b) Support to the National Reform Process, which envisaged the establishment of three consultative mechanisms – National Extension Task Force (NETF), National Research Task Force (NRTF), and National Farmers Forum (NFF).

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10. Component 2: Support to Extension System Reform (US$3.46 million, including US$3.42 million IDA grant and US$0.04 million GoK contribution): The objective of this component was to facilitate a consultative process that would build on the National Agricultural Extension Policy (NAEP) framework and help establish a new extension policy and its implementation framework by 2007. Support was provided through two sub-components: (a) Facilitation of Consultations for Extension Reform, which financed, inter alia, the participatory and consultative deliberations of the NETF for the formulation of the new Extension policy and implementation framework, and preparation of an Inventory and Database of Extension Organizations (SPs); and (b) Learning Pilots and Capacity Building, which supported innovative extension approaches and targeted interventions through grants to farmers for extension service provision, and provided training to stakeholders.

11. Component 3: Support to Research System Reform (US$53.71 million, including US$20.08 million IDA credit, US$4.28 million IDA grant, and US$29.35 million GoK contribution): The research component supported: (a) Facilitation of a consultative process for the establishment of a national agricultural research system (NARS), which financed, inter alia: (i) the formulation of the NARS Policy and Implementation Framework Paper; (ii) development of a Comprehensive Technology Inventory, and institutional assessment of the research system and establishment of a database; (iii) piloting of collaborative research programs in priority, cross-cutting thematic areas, on a competitive basis; and, (iv) capacity building of scientific community (other than KARI) in priority areas; and, (b) Support to the Kenya Agricultural Research Institute (KARI), under which financing was provided for activities in four main areas: (i) Institutional Strengthening; (ii) Research Programs identified in KARI’s Medium Term Plan; (iii) Information Dissemination; and (iv) Research and Development Funding (for income-generating initiatives that provide foundation for the institution’s long-term financial viability and sustainability, including assistance for the Agricultural Research Investment Service.

12. Component 4: Support to Farmer/Client Empowerment (US$5.32 million, including US$5.31 million IDA grant and US$0.01 million GoK contribution): The component’s objective was to build the capacity of farmer organizations to foster farmers’ capacity to mobilize resources and plan enterprise development through improved access to information on technology and services, scale-up application of technology innovations, and give farmers greater influence over the provision of extension and research services. Support was provided through two sub-components: (a) Institutions for Farmer Organization and Empowerment: (i) farmers/CIGs were supported to build their own consultative institutions at national and district/local levels to articulate their demands and interact with the NETF and NRTF; (ii) the NFF was supported to build communication links between national farmers’ organizations and farmers’ institutions; and (b) Targeted interventions for Client Empowerment: grants were provided for interventions focusing on the transition of informal groups into networks and producer/commodity organizations and strengthening of apex farmers’ organizations at national level.

1.6 Revised Components

13. The original components were not revised.

1.7 Other significant changes

14. Mid Term Review and Extension of Closing Date: The MTR (November 2006) concluded that whilst most of the planned activities had been rolled out, implementation progress was about one year behind schedule due to problems experienced during the initial months of project implementation, slow

4

flow of funds2 and inadequate counterpart funds from GoK. The MTR mission was also of the view that whilst two of the three triggers3 were likely to be met by the original Closing Date (December 31, 2007), a one year extension would be needed to meet the PDO. Accordingly, at GoK’s request, the project’s Closing Date was extended to December 31, 2008 (Bank’s letter dated January 31, 2007).

15. Reallocation of funds: Based on actual expenditures under various components, emerging priorities, and new opportunities, project management sought a reallocation of the IDA credit and IDA grant funds in April 2008, following the MTR.4 This reallocation was requested to address issues relating to: Avian flu, international accreditation of KARI laboratories, pilot capacity building of cooperatives in key KAPP I districts, some expenditures required for strategic commodities such as coffee and cotton, operational costs of core research activities, training/capacity building of CIGs and service providers, and operating costs for the DSUs. The allocations were increased for the following categories, with amounts in SDRs: Cat. 1 (Civil Works, 765,859); Cat. 2A (Goods & Equipment, 2,067); Cat. 3A (Consultancy Services, 2,143,955); Cat. 4A (Training, 492,815); Cat. 5 (Research Grants, 472,801); and Cat. 7B (Operating Costs under Part C.2, 3,561,771). The allocations were reduced for the following categories (amounts in SDRs): Cat. 2B (Goods & Equipment, Part C.2, 1,131,124), Consultancy Services under Part C.2, 1,127,412); Cat. 4B (Training, Part C.2, 186,351); Cat. 6A (Farmer Grants, 809,856); Cat. 6B (Farmer Grants, Part C.2, 220,583); Cat. 7A (Operating Costs, 525,769); Cat. 8 (Refund of Project Preparation Advance, 538,173), and Cat. 9 (Unallocated, 2,900,000). Based on a formal justification from GoK, Bank management agreed to a reallocation of the IDA credit and IDA grant funds on June 6, 2008.

2. Key Factors Affecting Implementation and Outcomes

2.1 Project Preparation, Design and Quality at Entry 16. GoK showed strong commitment to key principles underlying KAPP’s approach to technology system reform in its Letter of Sectoral Policy 5 . GoK recognized that a sustainable institutional mechanism, to be funded by KAPP I (and KAPP APL over the longer term), was needed for establishing a cost-effective system that generates and disseminates technologies and practices for the demand-driven needs of farmers. Background work undertaken by GoK agencies facilitated the Bank’s preparation of KAPP I in terms of its design and content. This included: detailed project description of the KARI component, KARI’s Third Medium Term Plan, Monitoring and Evaluation Report, and a draft Project Implementation Manual. 17. The project design incorporated several lessons from NARP II and other Bank operations. The NARP II 6 ICR showed significant progress in generating new and useful technologies, but demonstrated some continuing challenges including: difficulties coordinating among bodies within the research system, weak public sector technology dissemination, and inadequate engagement with, and

2 The move from an SOE-based to FMR system of disbursement and de-linking of project financial management (FM) responsibility from KARI to a stand-alone FM system, managed by the KAPP Secretariat, helped to ease the flow of funds. 3 The third trigger related to completion of two cycles of project monitoring and evaluation, with at least 85% of district intervention impacts evaluated. 4 The overall disbursement rate stood at 62% at MTR (Aide Memoire, November 6-17, 2006). 5 KAPP I PAD, Annex 11. 6 National Agricultural Research Project – Phase II (NARP II) represented the second project under which the Bank had provided substantial financing for KARI’s core research activities and for building up its capacity as the leading agricultural research institution in Kenya. Financing under KAPP I reflected the Bank’s long term commitment to Kenya’s agriculture sector.

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responsiveness to, farmers. KAPP I aimed to consolidate the gains of NARP II while addressing these challenges. It also drew on Bank experience in Uganda under the National Agricultural Advisory Services project to underline the need for mobilizing private service providers alongside the public sector, and adequate institutional space and incentives to collaborate, between researchers, agricultural service providers and farmers. Numerous design elements and implementation approaches, reflecting lessons from Bank experience, were included in the project. Among these were: (i) incorporation of NARP II’s competitive grants under a new KAPP I research grant facility; (ii) the requirement that ATIRI 7 collaborate in local farmers’ fora to ensure the responsiveness of research proposals to farmers’ demands; (iii) the requirement that all new research proposals include a dissemination strategy; and (iv) following the experience of the Arid Lands Resource Management Project in Kenya, steps to mainstream the activities of KAPP I’s newly created DSUs by linking them to existing district bodies. 18. The implementation bottlenecks experienced during the initial months arose from the short project preparation period, and an ambitious set of activities for a three year project. From Concept Review (October 17, 2003)8 to negotiations (March 2004) took about five months. The project appraisal documents showed no evidence of wide stakeholder consultations/workshops held to inform project design, particularly on farmer empowerment issues. Likewise, sufficient attention was not paid to the M&E aspects, including design of the RF and linkages between outputs to outcomes. A number of activities, generally undertaken during the preparation phase (e.g. baseline survey, studies to address knowledge gaps, preparation of implementation manuals), to carry out comprehensive technology inventories and institutional assessments in agricultural research, extension-training, and farmer organizations, were expected to be addressed during implementation. Together with the other tasks planned under the project (e.g. policy reforms in research and extension, testing of extension approaches and farmer empowerment), this was a demanding set of activities for which the initial implementation period of three years was quite short. Further, the previous project (NARP II) supported only KARI activities. There was little experience in managing a multi-sectoral project with community involvement, which required setting up of local level implementation structures. Setting up of DSUs took more time than anticipated due to the need to sensitize beneficiaries and service providers, and created a number of financial management related problems. In response to reviewers’ concerns on these issues at the PCN and QER/appraisal stages, the Bank task team reduced implementation complexity by dropping the proposed GEF land management component, but retained the initial three year implementation period. 19. The PDO, components and subcomponents were generally well conceived. As noted above, in response to peer reviewer comments at the design stage, the PDO was appropriately modified to focus on the more limited objective of reforming agricultural technology systems and extension service delivery.

2.2 Implementation 20. Overall, the project achieved progress in many activities. The support provided under KAPP I was instrumental in achieving a number of reforms in the sector (e.g. NASEP, draft NARS policy, national livestock and dairy policy, empowering farmers and their organizations to strengthen demand for services) and contributed to strengthening Kenya’s agricultural extension and research system, albeit with delays in project implementation in the initial months as mentioned above. Furthermore, the project supported reforms in the coffee subsector, assisted in establishing the Agricultural Sector Coordination Unit (ASCU), and supported the development and implementation of an Avian influenza action plan. The main factors that facilitated project implementation, or negatively affected it, are set out below.

7 Agricultural Technology and Information Response Initiative (ATIRI) is a KARI initiative, which was started under NARP II. 8 Minutes of Project Concept Note Review, dated November 17, 2003.

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Positive Factors in Project Implementation: GoK established multi-sectoral and broad based oversight committees (ICC, KSC) with public and

private sector representation, which provided adequate guidance to the NETF and NRTF for undertaking the reform work (the KSC met for 17 times);

The NETF and NRTF collaborated closely with members of the farmers’ fora set up at the national and local levels, which facilitated ownership of the reforms proposed in extension and research;

The DSUs played a proactive role in the establishment of farmers’ fora and facilitating the empowerment of farmers at the local level, and in bringing about public-private partnerships through the pilot sub-projects;

In supporting the SRA, KAPP I was also instrumental in setting the stage for a sector-wide approach, both within the government and amongst the relevant development partners, for the subsequent phases of the APL;

The establishment of an independent KS (coordination unit), de-linked from KARI, responsible for project financial management and procurement for non-KARI components, significantly addressed the problem of slow disbursements faced in the first year or so; and,

The fact that the Bank TTL was based in the Kenya Country Office and was able to interact with, and provide technical advice to, key GoK policy makers and project staff, helped the KAPP I project team to address bottlenecks and achieve most project objectives (reference aide memoires).

Factors that Negatively Affected Project Implementation The run-up to the national elections in December 2007, and the post-election civil unrest disrupted

project implementation for a number of months. Weak financial management by KARI, which was initially responsible for fiduciary matters, led to

delays in the flow of funds to KARI research centers and particularly the DSUs. This resulted in disbursement lags, particularly during the first year.

It took project management much longer than originally envisaged to move from a Statement of Expenditure (SOE) based to Financial Monitoring Report (FMR) based disbursement system, which commenced from July 1, 2006.9

Delays in provision of counterpart funds, reporting and audits, and weak oversight of financial management matters adversely affected project implementation.

Lack of oversight of established controls and procedures and disregard for funding agreement covenants resulted in a weak financial management environment.

Lack of an independent oversight function led to insufficient internal audit of KAPP I activities, which relied heavily on KARI internal audit staff.

The initial lack of simplified reporting arrangements led to accountability delays of advances to DSUs, and relied on intermediaries (e.g. NGOs) for fund transfers to CIGs for the approved sub-projects.

2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization 21. An M&E framework was designed at appraisal, together with the KPIs. Although the KPIs were well linked to the PDO, the project management recognized early on that the implementation of extension, collaborative research, and farmer empowerment activities at the local level required refining the RF to make it relevant/compliant with the realities on the ground. As a result, the project team put in substantial

9 The borrower’s comment is that the switch-over from the SOE to FMR system that led to initial accountability delays was due to the sector-wide and multi-institutional nature of the project, which required enhanced financial management capacity for disbursement, reporting and audits, and controls and procedures.

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effort to improve its design. Due to delays associated with getting the consultants on board, the baseline survey was not completed until July 2006. The availability of baseline data by project effectiveness would have enabled the project management to better gauge progress against the targets under KAPP I, and to assess outcomes over the 12-year APL. 22. The RF was modified in August 2006 by the project team. The changes proposed were not significant, and were largely made to clarify and improve measurability. GoK was advised during the MTR to formally seek amendments to the legal documents. There is, however, no evidence in the project files that this occurred. In the November 2006 MTR Aide Memoire, the mission recommended that the revised RF and KPIs be formally approved by the Borrower and the Bank. On account of inaction, the Borrower does not get credit for the work done as, in the absence of a formal amendment to the RF, the progress can only be assessed against the RF and KPIs in the PAD and the legal agreement.

2.4 Safeguard and Fiduciary Compliance

Safeguards 23. KAPP I had an environmental rating of category C and a social rating of S3. No Safeguard Policies were expected to be triggered (PAD, page 17). As a result, KAPP I activities were judged to likely have minimal to no adverse social and environmental impacts. The project was, however, expected to prepare an environmental and social audit, which was prepared by the time the project closed. Financial Management 24. KAPP I implementation was adversely affected by a weak financial management system that persisted throughout the project period. In the absence of a well designed system and operations manual at effectiveness, the project’s Financial Management system was ineffective in implementing recommendations prescribed by supervision missions, and rated unsatisfactory in aide memoires. As observed in June 15, 2005 ISR, disbursements had been low due to slow start of the main project components. The project’s financial accounting and reporting system was hosted by KARI on the understanding that KAPP I will develop its own system during the first phase of project implementation. KARI did not envisage the implications of the sector-wide and multi-institutional nature of the project, and the diversity of partnerships and collaborators who had their own accounting systems. Initially the project had adopted the SOE based system. This system resulted in constraints in flow of funds to implementing entities. To address this issue, the Bank (December 2005) recommended that project management switch to the FMR system, to expedite the flow of funds to DSUs. In addition, the Bank suggested a number of measures10 to improve the timeliness, efficiency and effectiveness of the financial management system in disbursing the funds. 25. Based on remedial actions taken by project management, the rate of disbursements improved during the remaining project period. This notwithstanding, financial management problems persisted. These included: late submission of FMRs (although this improved over time); discrepancies and inconsistencies in FMRs; lack of supporting documentation; and, delays in submission of audit reports, which noted lack of schedules to support expenditures and weaknesses in accounting and internal control. A review found that a substantial amount of funds, intended for community level activities, had not reached the beneficiaries as of December 31, 2008. The Bank requested a special audit to look into this matter. Based on an initial report (May 2009), the Auditor General requested the KAPP I team to provide

10 These included: a plan for a stand-alone accounting system including hiring of a consulting firm to do capacity building for KARI and the project secretariat; streamlining of disbursements to district units and research centers; and strengthening of oversight and internal audit functions by the project steering committee. The lessons learned have been incorporated in the second phase of the APL.

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additional documents to clear expenditures amounting to about US$2.2 million. MoA has provided the additional information required, and expects to receive another report from the Auditor General soon.

Procurement 26. The PAD anticipated that KARI would retain ultimate responsibility for procurement during phase I. KARI was, however, expected to build procurement capacity within the KS and other implementing institutions with the view of gradually devolving responsibility by the end of the first phase (PAD, page 10). The MTR noted satisfactory progress in procurement at the national level, but suggested a greater focus on building procurement capacity at the district/community level (MTR Aide Memoire, November 6-17, 2006). As envisaged, responsibility for procurement was gradually transferred to the KS and DSUs. The ISR ratings for procurement remained satisfactory throughout the implementation period.

2.5 Post-completion Operation/Next Phase

27. GoK continued to adequately support the normal operations of KARI and KS after the closure of KAPP I, and provided support for the preparation of Kenya Agricultural Productivity and Agribusiness Project (KAPAP, Phase II of the APL), which was approved by the Bank’s Board on June 11, 2009. It will focus on deepening the reforms initiated under KAPP I, and building the necessary policy and related frameworks for a sector-wide approach, which will be consolidated in the third and final phase of the program. KAPAP will support GoK’s efforts in: improving research and extension systems and their linkages to sector priorities through the implementation of the Agricultural Sector Development Strategy, NASEP, and NARS policies, including improved planning, coordination, funding and implementation of public agricultural programs aimed at sector transformation, growth and reduced risk; empowerment of farmer organizations and other stakeholders to influence planning, design, funding, implementation, and M&E of agricultural research, extension services, training and capacity building activities; development of agribusiness along commodity chains aimed at improved value addition and marketing; and, integration and mainstreaming of gender and other cross-cutting issues (HIV/AIDS, youth, environment) throughout the project area and along the value chains. 3. Assessment of Outcomes

3.1 Relevance of Objectives, Design and Implementation 28. The project’s objectives are consistent with the Government’s SRA to improve agricultural productivity in Kenya. In addition, the ERSWEC identifies agriculture as one of the prime movers of the recovery program and reduction of poverty. The overall objective was to improve the agricultural system by supporting generation, dissemination, and adoption of agricultural technology. 29. The project’s design remains valid today, even though it was over-ambitious at appraisal, especially regarding the time needed to set up the necessary structures, which contributed to start-up delays. The implementation of activities at the District level was not properly envisaged, which led to delays in implementing the project’s activities in the 20 target Districts. Setting up mechanisms and consultative structures for coordination of existing institutions led to a more integrated system of research, extension and farmer empowerment. Establishing a more demand-driven agricultural system meant farmers had a voice in policy and decision-making for the advisory services required. 30. Project implementation was not well envisaged at the appraisal stage, as observed earlier. The flow of funds to the District level had not been established at project start up, delaying disbursements. Hence, the existing government structures were strengthened to play an important role in facilitating

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implementation of specific KAPP I activities at all levels. At the national level, the ICC was established and guided the implementation of KAPP I objectives. As a result, the Government coordination of activities in the agriculture sector was improved and allowed for quick resolution to issues. At the district level, the KS was linked to DSUs, whose main role was to coordinate the implementation of targeted pilot interventions for the extension and farmer empowerment components. The results of these efforts contributed to the policy reform process and capacity building activities in the selected 20 districts. 3.2 Achievement of Project Development Objectives Achievement of Project Development Objective (PDO) is rated Moderately Satisfactory 31. PDO Outcome #1: Increased uptake of technologies and practices in 20 pilot districts. This outcome was achieved. KAPP I had an overall positive impact on the adoption of improved seeds, fertilizer use, animal feed preservations, value-addition, and uptake of improved cattle breeds, soil, and water and environment conservation technologies. In this context, adoption implies the uptake and use of improved agricultural technologies such as improved/hybrid seeds, fertilizer, and zero tillage, by farmers in a ‘with project’ scenario. The Technology Adoption Survey (July 2009) assessed the impact of KAPP I by using Double Difference Method, which compares target (treatment) and control (comparison) groups.11 The study’s results showed that the adoption of hybrid maize seeds had an impact adoption rate of 6.6 percentage points. By the project’s end, the target groups adopted the hybrid maize at 62.3percent against a target of 67 percent from a 32 percent baseline indicated in the PAD’s RF. The Rural Household Baseline Survey (2007) established the baseline for adoption of hybrid maize seed at 59.0 percent and the current results show an increase. The Northern Arid Zone (26.7 percent) and the Western Transitional Zone (34.1 percent) adopted the technology at higher rates than other regions. Eastern lowlands also recorded an increase (21.9 percent). Table 3.1 shows the adoption of hybrid maize seeds across the agro-regional zones (ARZs).

Table 3.1: Adoption of Hybrid Maize Seeds

Agro-regional zone

Before Project (KAPP I Baseline

Survey)%

After Project (Technology Adoption

Survey)% Double

Difference Target Control Target Control Central Highlands 86.0 86.0 89.8 89.6 0.2 Coast Lowland 29.0 26.0 35.4 26.7 5.7 Eastern Lowlands 7.0 25.0 30.8 26.9 21.9 High Potential Maize Zone 93.0 95.0 94.4 95.8 0.6 Western Highlands 87.0 89.0 91.7 91.8 1.9 Western Lowlands 19.0 22.0 19.7 26.0 -3.3 Western Transitional Zone 26.0 53.0 69.3 62.2 34.1 Northern Arid Zone 0.0 0.0 26.7 0.0 26.7 Overall 59.0 61.0 62.3 57.7 6.6

Technology Adoption Survey, July 2009

11 See Chapter 2: Study Methodology. Technology Adoption Survey, July 2009, pg. 12 – 20.

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32. Adoption of improved fruit trees increased from 5.3 percent to 7.1 percent for target farmers. Fertilizer use on maize increased from 18.0 percent to 21.0 percent for target farmers indicating a 4.3 percentage point increase. Adoption of animal feed preservation technologies increased for target farmers from 56.7 percent to 62.2 percent, while the control farmers had a modest increase from 43.5 percent to 44.7 percent. Adoption of value addition technology, both for farm produce and livestock products were estimated at 8.6 and 6.7 percentage points, respectively. Soil, water and environmental conservation technologies were adopted in the Central Highlands and the Western Highlands with impact estimates of 6.4 and 14.6 percent, respectively. Table 3.2 summarizes the above mentioned results. Table 3. 2: Summary of Adoption of Various Technologies

Technology Adopted

Before Project (KAPP I Baseline Survey)%

After Project (Technology Adoption Survey)%

Double Difference Target Control Target Control

Growing improved fruits 5.3 3.9 7.1 4.0 1.7 Use of fertilizer on maize 18.0 18.1 21.0 16.0 4.3 Animal feed preservation 56.7 43.5 62.2 44.7 4.3 Ownership of grade cows 5.0 7.0 19.3 9.9 11.4 Mulching/cover crop as a conservation technology 7.5 9.9 13.1 12.4 3.1 PDO Outcome #2: Integrated research and extension policy and institutional framework. 33. Research Policy: The PDO outcome for the research policy was partially achieved. Under the

umbrella of the SRA, the NARS policy was drafted and submitted to the technical committee of the ICC for review and endorsement by the three agriculture line ministries. The NARS Implementation Framework (NARS-IF) was developed by the NRTF that comprised 20 members from public and private institutions, as well as universities. A plan of action, with defined timelines to reform the policies on inter-institutional collaborative research programs through research grants and assessment of NARS institutions was prepared. However, the NARS policy has not yet been endorsed. 34. Extension Policy: The PDO outcome for the extension policy was achieved. To provide an institutional framework for the extension services, KAPP I supported a detailed review and revision of the National Extension Policy (NAEP) and its related Implementation Framework that required Government’s approval. The participatory approach adopted under the project informed the policy formulation/revision of NAEP, and resulted in the National Agriculture Sector Extension Policy (NASEP) document. NASEP was finalized in January 2007, endorsed by the agriculture sector related ministries, and approved by the Cabinet (August 2009). Following extensive consultations with other stakeholders, the companion document, NASEP-Implementation Framework, was finalized and put in place as a working document and regularly updated as data gathered from the extension pilots is analyzed and reported. 35. PDO Outcome #3: Pilot activities in 20 districts testing pluralistic extension approaches and supporting client empowerment. This outcome was achieved and it is assessed under the three indicators below.

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36. Number of Enterprise Development Plans (EDPs) prepared and implemented: The project was instrumental in development of two cycles of EDPs in the 20 districts and 80 divisions. The first cycle had a total of 1,115 EDPs with a total of 112,728 farmers directly benefitting. The second cycle, which was still under implementation when the project closed, had 1256 EDPs with 100,209 farmers (Aide Memoire October, 2008). These EDPs included fish farming, vegetables, intensive dairy and snow peas. The EDPs successfully introduced new activities that were productive in terms of yields. At the project’s inception, the baseline was zero against a target of 1,350 EDPs, representing 93 percent achievement. 37. Number of Common Interest Groups (CIGs) participating in value-addition (up-scaling related technologies): A total of 176 proposals for scaling up of technologies were developed, evaluated and funded, against a target of 240 proposals. This translated to approximately 73 percent achievement. In addition, 92 CIGs were provided with grants to scale-up technology innovations. Of this number, 25 were livestock-based, 57 were crop-based and 9 were under miscellaneous categories such as input supply. Before the project, there was low uptake of improved technologies and no farmer groups accessed funds from the district funds. In order to add value to production and marketing initiatives, most of these CIGs were linked to agricultural services and related institutions.

38. Number and types of service delivery agents actively operating in pilot districts: The project supported 1,192 service providers (SPs), both public (609) and private (583). These service providers supported the implementation of the EDPs in the 20 districts. Before KAPP I, there were few private SPs compared to public SPs. The SPs were mainly retired individuals and staff retrenched from public service, who were trained and designated to work with CIGs. The services were provided for, inter alia, improved production technologies, value addition, post harvest methods, and marketing. Farmers’ participation in planning extension activities empowered them to guide the process and contribute to decision-making and extension policies that led to improved delivery of advisory services.

3.3 Efficiency 39. As in the appraisal stage, a cost/benefit analysis and an efficiency analysis were performed. The economic and financial analysis has focused on four representative research enterprises, namely maize, potato, mango and dairy cattle because of their importance in national and household food security and nutrition. Maize is widely regarded as the “sleeping giant” of Kenyan agriculture, accounting for the single largest share of cultivated land in Kenya, potato is the dominant food security after maize, mango is a significant fruit eaten in many rural and urban families and dairy cattle to represent livestock because of the crucial role of milk as a source of animal proteins and cash flow for many families. The details of the analysis and the corresponding assumptions are given in Annex 3. 40. Financial and economic analysis: As at appraisal, financial and economic internal rates of return were computed for an assumed project life cycle of 20 years, ignoring the indirect, non-measurable benefits of KAPP I. The analysis used farm models, which were fed with average price, input and output data from the rural household baseline survey and the Technology Adoption Survey. From the representative farm-model, the net benefits for 1 hectare (or 1 farm in the case of milk production systems) were valued at the total physical area adopting technology or at the total amount of improved cattle breeds. As in the PAD, the potential area adopting technology after 20 years is expected to be 1,200,000ha for maize, 56,000ha for potato and 16,000ha for mango. Dairy herd adopting technology was assumed to be 1,400,000 cows. The annual incremental areas adopting technologies were calculated based on the rates of adoption obtained in the Technology Adoption Survey. As far as the economic analysis is concerned, specific efforts were made to compute conversion factors and derive economic prices for tradable inputs and outputs.

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41. The resulting economic (ERR) and financial rates (FRR) of return for KAPP I, together with the corresponding net present values (NPV), are presented in the table below. In spite of efforts to retrieve data, results for mangoes and dairy cattle were not available due to farm data scarcity. The ICR financial and economic rates of return for maize and potato are lower than at appraisal due to the below optimal agricultural productivity in most parts of the country during KAPP I. The sensitivity analysis suggests that a contributing factor for the moderate efficiency of KAPP I is the low yields in maize and potato in 2008: a 25 percent increase in maize yields in 2008 would have increased the FRR and ERR up to 41 percent and 59 percent, respectively. Low returns can be explained by several factors such as: (i) droughts and the over reliance on rain-fed cultivation against the background of unreliable and unevenly distributed rains; (ii) scarcity of irrigated agriculture; and (iii) the 2008 post-election social unrests that were transmitted to the rural areas and affected the agricultural production.

National level: summary of Economic and Financial Analysis Enterprise Baseline (PAD) 2009 (ICR)

IRR, 20 years

Maize FRR 48% 15% ERR 38% 25%

Potato FRR 35% 18% ERR 33% 37%

Mango FRR 30% N/A ERR 20% N/A

Dairy cattle FRR 40% N/A ERR 28% N/A

NPV @12%, 20 years, USD'000

Maize Financial 1,254 24,124 Economic 22,100 143,425

Potato Financial 327 8,285 Economic 9,500 49,383

Mango Financial 799 N/A Economic 11,700 N/A

Dairy cattle Financial 3,204 N/A Economic 47,100 N/A

42. Public expenditure benefits: The review of Kenya’s agriculture public expenditure in 2008 demonstrates progressive increases in sector spending, more especially towards development activities that averaged 45 percent of total budget to agriculture in recent years. Besides, the Technology Adoption Survey established an emerging demand-driven agricultural extension system, with 51.7 percent of households who actively sought advice and 49.6 percent receiving the services. By supporting the private sector participation, KAPP has the potential to reduce the burden of service provision on the public sector. 43. Positive externalities: It was assumed in the PAD that KAPP I would have the potential to improve governance at the district level and below. The ICR observed that: (i) KAPP I supported reforms for the progressive devolution of resource allocation and accountability for adaptive research programs to decentralized centers (district level). At district level, the KS was linked to DSUs, acting as local secretariats. The DSUs built capacities of SPs to meet acceptable standards and to conform to the principles outlined in the reform policies (component 3); and, (ii) other positive economic and social externalities arose from component 4 activities, like the substantial number of client fora established at the divisional and district level (Annex 2).

3.4 Justification of Overall Rating Rating: Moderately Satisfactory

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44. The PAD listed three PDO indicators. As stated above, two of the PDO indicators were achieved, whilst under the third indictor, a draft NARS Policy and Implementation Framework was prepared, but had not been endorsed by the technical ministries by the time the project closed. KAPP I succeeded in supporting reforms in extension, and creating participation and empowerment of farmers and community groups at local levels. However, the project’s design was ambitious and did not take into account the amount of time it would take to set up implementation structures and build the capacity of local level staff to implement the project. 45. The CIG grants, which were initiated on a pilot basis, showed positive results. The economic analysis shows the FRR and ERR of the enterprises examined to be above the 12 percent threshold (Annex 3). However, the sensitivity analysis showed that the sustainability of the project could be challenged by changes in prices and yields.

46. The “MS” rating reflects: (i) the relevance of the project’s design and investments made; (ii) the positive impact on the local farmers/CIGs in the target districts, derived through the adoption of improved technologies; and, (iii) enhanced capacity and effective structures are in place to provide continuity in integrating and undertaking research and extension activities. 3.5 Overarching Themes, Other Outcomes and Impacts

a. Poverty Impacts, Gender aspects, and Social Development 47. The Project benefited the rural poor and vulnerable, through farmer empowerment and development of farmer-driven agricultural systems.12 The project provided targeted support for scaled-up application of technology innovations through establishment of farmers’ networks as they transformed into producer organizations as well as building capacity of farmers’ apex associations and commodity organizations. Furthermore, some of the participating farmer groups were given an opportunity to venture into value addition activities thereby capturing higher shares of market value of their produce. Indeed, in some few areas the EDP funds provided a critical base on which cottage industries can be built upon. In other areas, completely new enterprises such as aquaculture were introduced to communities (e.g. Nakuru district) which hitherto are not known to show any interest in such enterprises.

48. The results showed women participated in groups as equal partners with men. Female-headed households in 9 out of 20 districts comprised 13.1 percent according to the Technology Adoption Survey (July 2009). The Report of the Internal Evaluation of the Kenya Agricultural Productivity Project (KAPP – Phase I) District Service Units Interventions Survey (March/April 2008) recorded 18,590 female membership in CIGs in 7 districts where breakdown of membership by gender was provided. Nonetheless, results from the Evaluation of Extension Pilots (2008) indicated that amongst the various categories, female-managed households had the highest proportion (31 percent) of participation in decision making in extension, followed by male-headed households (28 percent) and female-headed households (22 percent). In addition, the project’s support of revenue generating activities gave women control and financial independence they had never experienced before. Due to project’s support for farmer empowerment activities through the CIGs, the beneficiaries participated in the decision-making process and in accountability for enterprise funds at the divisional and district levels.

12 “Farmer empowerment is the process of strengthening farmers’ capacity to access and control resources to achieve their desired outcomes for improved rural livelihoods” - MTR Aide Memoire, November 2006.

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Institutional Change/Strengthening In general, several important changes emerged due to project-supported activities, as follows: KAPP I made significant contributions toward capacity building, ICT and infrastructure

development for KARI. Human resource development capacity was enhanced through support of both long-term training of PhDs, MScs, as well as other short-term training.

Construction of offices and laboratories at Thika and rehabilitation of staff houses and retreat facilities at NARC Muguga improved working and living conditions for KARI personnel. In addition, purchase of vehicles, tractors, office equipment (350 computers, 304 printers, 65 photocopiers) enhanced the working environment for KARI personnel. KARI increased the number of title deeds from five to twenty five, obtained nine Letters of Allotment and is in the process of translating them into title deeds.

The project supported the establishment of implementation structures at the central and local levels (e.g. ICC, KSC, KS, DSUs).

The project initiated a partnership agreement with Kenya National Federation of Agricultural Producers (KENFAP) for capacity building for the CIGs as well as creation and empowerment of farmer organizations established under KAPP I.

Other Unintended Outcomes and Impacts (Positive and Negative) 49. Farmers (beside CIG members) in the pilot districts and villages emulated the activities of KAPP I-supported farmer groups, leading to spill-over effects of improved practices. In addition, the SPs in pilot districts that improved their business, technical and management skills through project training and experience, increased demand for their services in the non-project areas.

3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops 50. The Technology Adoption Survey (July 2009) was conducted on 800 households in 9 out of 20 districts that were representative of all agro-regional zones. The survey assessed post-project impact of the concluded phase one of KAPP, with focus on uptake of agricultural technologies. The findings showed that the project had a positive impact on the adoption of agricultural technologies such as use of improved seeds, fertilizer use, animal feed preservation technologies, and improved cattle breeds. Also, an Evaluation of Extension Pilots (2008) was conducted on 2001 farming households and 236 extension providers. The survey assessed extension delivery systems and funding mechanisms and approaches in 15 of the 20 pilot districts. Most of the respondents (99 percent) already belonged to groups but they were not well organized to demand extension advisory services that would benefit their agricultural enterprises. The majority of respondents believed that successful mobilization and formation of CIGs and involvement of the members in activity priority-setting, the development and implementation of the EDPs on scaling up technology contributed to decision-making abilities that led to farmer empowerment. (See Annex 5 for detailed beneficiary survey results). Assessment of Risk to Development Outcome Rating: Moderate 51. Overall, risk to development outcomes is evaluated as moderate. Risks to development outcome and sustainability are assessed against institutional, economic/financial, environmental and social criteria. The risk is low in some instances such as: (i) the government’s commitment to institutional reforms in the delivery of extension services through NASEP, as well consultation with stakeholders in the development of NARS-IF; (ii) the high ownership of the project at national, district, divisional and locational levels, by government and beneficiaries through the CIGs, farmer/client fora and

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service providers fora; (iii) the moderate financial risks linked to sustainability of investments. The project promoted extensive delivery mechanisms and reforms that are expected to reduce cost of services and incorporate cost-sharing mechanisms as well as producer groups and commodity organizations playing a larger role; (iv) the high social significance of project activities (targeting grassroots communities). However, there are substantial risks related to the political instability in Kenya. Following the last general election’s unrest, some project activities were disrupted in areas where the clashes were intense.

52. The institutional risk to development outcome is low. At appraisal stage, three major risks were identified that could jeopardize achievement of the outcomes as follows: (i) government encounters difficulty in acting on commitment to public sector reform and devolution to private sector and civil society; (ii) delayed reforms due to lack of capacity to meet the strict timetables; (iii) exogenous weather shocks or other events that sidetrack sustained attention needed for reform. The project supported the stakeholders driven reform process of NASEP and NASEP-IF documents that were supported by stakeholders and the agriculture-sector related ministries. Both documents have been endorsed by the relevant ministries and approved by the Cabinet. The NARS and NARS-IF documents have been finalized and are awaiting endorsement by the relevant sector ministries. For the second risk, the project supported capacity building within KARI, non-KARI institutions as well as at the farmer-fora and service providers’ level. For the exogenous risks, these are factors beyond the control of the project or the government. As long as the country continues to rely on rain-fed agriculture, erratic rainfall will remain a risk unless most of the agricultural activities are supported through irrigation. 53. The economic and financial risk to development outcome is substantial. Unpredictable shocks remain a risk to farmers. The unpredictability of prices volatility and the impacts of the present global financial crisis on agricultural markets affect the prices of inputs and outputs. The economic analysis highlighted that Kenya's economy responded to the worldwide nervousness about the food prices with high domestic prices. The economic analysis shows that if input prices increase significantly, the project will no longer be economically viable. Exogenous weather shocks also have consequences on the economy as those affect food production, farm incomes and growth. 54. The environmental risk to development outcome is low. According to the assessment at appraisal, the environmental rating was C indicating minimal impact. The project concentrated on formation of farmers’ fora, farmer empowerment, institutional reforms, capacity building in KARI and adoption of technology. It is worth noting that the project had a positive impact on adoption of soil, water and environment conservation technologies such as mulching/cover crop, terracing, crop rotation, afforestation and minimum tillage by farmers in the target project areas. Terracing conservation method was the most popular (70 percent), followed by crop cover/mulching (12.8 percent) and afforestation (1.8 percent). 55. The social risk to development outcome is low. The project played a major role in ensuring that farmers (both men and women) accessed extension services by empowering the farmer/client fora to actively participate in decision-making regarding extension advisory services and policies. The project also supported adoption of appropriate technologies by farmers. There was no evidence that the project activities adversely impacted the indigenous population.

4. Assessment of Bank and Borrower Performance

4.1 Bank Performance (a) Bank Performance in Ensuring Quality at Entry Rating: Moderately Satisfactory

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56. The Bank team worked closely with the GoK project team to develop a project that was consistent with the government’s agricultural strategy. Sufficient resources were also provided for capacity building, particularly at the local levels. However, as indicated above, the Bank team over-estimated the financial management strength of KARI to implement a multi-sectoral, multi-agency project, and under-estimated the time it would take to build the capacity of KS and DSUs, to gradually take over fiduciary responsibility. In addition, the Bank did not pay sufficient attention to: (i) the time it would take to sensitize beneficiaries and service providers, and build their capacity to implement sub-projects; and, (ii) ensuring that the various operational manuals (covering project operations, financial management, farmer grants, and research grants) were available for use by project effectiveness, which affected implementation progress. (b) Quality of Supervision Rating: Satisfactory 57. Project supervision was carried out regularly during the implementation period, with generally adequate skills mix. (A Safeguards specialist was not included in the missions. But, this appears to have been on account of a C environment category for the project, and the relatively late rolling out of the investments’ in farmers’ subprojects). The project benefited from continuous supervision as the TTL was based in Nairobi. The supervision missions identified implementation bottlenecks and provided detailed action plans in aide memoires to address them. The Bank team emphasized to GoK the need to seek a formal amendment of the revised RF (prepared by GoK), to enable the Bank to later assess progress against the revised set of KPIs. However, despite the team’s efforts, GoK did not follow up with this recommendation. The Bank team also consistently emphasized fiduciary issues during the missions, and provided adequate guidance on remedial measures. (c) Justification of Rating for Overall Bank Performance Rating: Moderately Satisfactory 58. This rating is due to the Bank performance being rated Moderately Unsatisfactory on Quality at Entry and Satisfactory during Supervision. 4.2 Borrower Performance (a) Government Performance Rating: Satisfactory 59. From the preparation stage and throughout implementation, GoK maintained its strong commitment to the KAPP and KAPP I. It established the policy and implementation structures (ICC, KSC, KS, DSUs), funded KARI, provided adequate counterpart funding and resources to staff, to achieve project objectives. At the ICC and KSC levels, the senior ministry officials worked hard to maintain oversight of the project performance, particularly in terms of the project meeting the triggers (one of which was partially met) for the second phase of KAPP.

(b) Implementing Agencies Performance Rating: Moderately Satisfactory 60. Whilst agriculture line ministries had overall responsibility for project oversight, through the ICC, during the initial period, KARI was responsible for fiduciary matters. Subsequently, this latter responsibility was passed on to KS at the central level, and to the DSUs at the district/local level. Therefore, implementation performance of three entities is assessed – KS (working under KSC/ICC), KARI, and DSUs.

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61. KS: The performance of KS was satisfactory in facilitating the work of, inter alia, the ETF and RTF (which led to the formulation of NASEP and NARS policies), establishment of 20 DSUs, introduction of results-oriented, work programming procedures, establishment of farmers’ fora at national level, and support to avian influenza preparedness. Further, working collaboratively with the DSUs, KS was able to build a momentum that facilitated full disbursement of the credit and grant funds, despite the political violence and unrest in large parts of the country following the elections in December 2007; and working with KENFAP, it facilitated the participatory development of capacity building curriculum and training of CIGs/farmer groups. However, KS’ performance was not satisfactory in ensuring that the funds disbursed to DSUs, intermediaries and CIGs were being used effectively and efficiently for intended purposes.13 A subsequent audit has indicated that about KSh. 164.3 million (equivalent to about US$2.2 million) disbursed for project activities has yet to be fully accounted for, or relates to equipment procured, but not installed. 14 Although MoA has advised the Bank that the necessary supporting documents have been provided to clear the auditors’ queries, the Bank has yet to receive a formal report from the Auditor General’s office. Moreover, implementation progress could have been better if KS and KSC had strictly adhered to the actions and deadlines agreed upon with various Bank missions. 62. KARI: Whilst good progress was made in a number of areas, it exercised undue “control” over the project funds in the first 12-15 months. Instead of quickly moving to the Bank recommended FMR system for speedy disbursement, it continued to use the SOE-based disbursement method, resulting in slow and inadequate flow of funds, both for core research activities and for implementing activities at the district/local levels, which delayed implementation progress by at least a year. It was also unable to complete an inventory of available technologies and data system for the NARS, and progress on moving towards a sustainable funding mechanism for KARI was also limited. 63. DSUs: The DSUs’ performance was satisfactory in facilitating the capacity building of service providers, sensitization of farmers and stakeholders on the reform agenda, establishment of the farmers’ fora at the district/local levels, facilitating the M&E work in terms of the baseline and household surveys, and the piloting of innovative extension delivery approaches, intended to enhance the efficiency of service delivery. However, as indicated above, the DSUs’ performance was not satisfactory in following up the disbursement of funds to intermediaries and CIGs, to ensure that they were being spent efficiently, and in the timely accountability of funds received. These problems resulted largely from the fact that the accountants in the DSUs had been hired on a contract basis, and left when the project closed. (c) Justification of Rating for Overall Borrower Performance Rating: Moderately Satisfactory 64. Based on the Satisfactory rating under 5.2 (a) and Moderately Unsatisfactory rating under 5.2 (b), the overall Borrower performance is rated as Moderately Satisfactory.

5. Lessons Learned 65. The major lessons learned from the implementation and outcome of KAPP I, (incorporated in the design and implementation arrangements for Phase II--KAPAP) are summarized below.

13 The borrower’s comment is that due to limited capacities in the beneficiary communities to utilize M&E tools, there were delays in submission of reports to assist management to ascertain that the funds to DSUs, intermediaries and CIGs were being used effectively and efficiently for intended purposes. 14 Source: Special Audit Report of the Controller and Auditor General on the KAPP I, dated May 27, 2009.

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66. Sector-wide approach and other cross cutting agenda. Although Phase I of the Project had some elements that focused on promotion of sector-wide approach, it nevertheless became clear during its implementation that there is need to invest more on these sector-wide approaches for greater impact. The GoK, the Bank, and other development partners have, therefore, agreed to promote the sector-wide approach in the agricultural sector, as well as harmonization of programs, in line with the Kenya Joint Assistance Strategy. The formulation of the GoK’s Agricultural Sector Development Strategy, which is a sector-wide policy, has brought in the necessary impetus and platform on which to promote the sector-wide approaches in the sector in Phase II. Equally important is the need to strengthen focus on cross-cutting issues such as gender mainstreaming. 67. Mainstreaming implementation structures into the GoK system. Although attempts were made under KAPP I to mainstream implementation structures into the GoK system, some Project structures and systems were maintained. The rationale for maintaining stand alone Project structures and systems was based on low capacity within sector ministries. However, during KAPP I implementation, it became clear that the stand alone Project structures were not only expensive and unsustainable, but also tended to distort the incentives and other conditions for public civil servants. As the capacity of sector ministries has improved over time, the implementation of KAPAP will be mainstreamed within the GoK structures, and aligned for sector coordination. 68. Financial management and disbursement to local-level activities was a key challenge. Long delays affected Project implementation progress. While the financial management structures inherited from the project that preceded KAPP I were suitable for the research activities, major challenges were encountered when the project initiated disbursements to communities. The low capacity of communities to account for the funds played a significant role in clogging the financial flows. The financial management capacity of KS and the CIGs will be strengthened under KAPAP, to address the earlier weaknesses. The design of Phase I was over-ambitious, as the time needed to set up institutional arrangements especially at the local level was under-estimated, delaying implementation by almost a year, and necessitating a project extension by one year. In the design of Phase II, a more cautious approach has been taken especially regarding the new agribusiness component. The first 12-18 months will be used to set up the necessary institutional arrangements and consultations for this component. 69. The results from the learning pilots under KAPP I have shown that adoption of new technologies can increase if funds are provided directly to empowered farmer groups for the preferred extension approaches. Therefore, increased provision has been made for investments in farmer groups’ subprojects under KAPAP (KAPAP PAD).

70. For sustainable funding of the agricultural research priorities, KARI should not rely heavily on financing from development partners (particularly IDA), as it has done in the past 15-20 years. Milestones have been agreed under KAPAP, under which GoK is expected to progressively provide increased financing for KARI’s research program, with KARI generating higher funds internally to reduce dependency on development partners. In addition, in response to a regional initiative to enhance the efficiency of research (East African Agricultural Productivity Program), institutions like KARI are expected to become centers of excellence for specific crops/commodities, rather than all the leading, national agricultural research institutions conducting research in a supply-driven mode.

71. Although no explicit gender targeting was done in Phase I, it emerged that gender parity was almost achieved, judged by the participating men and women in groups supported by the Project. Nevertheless, it was apparent that women’s capacities to accumulate resources, retain income, and have a voice in decision-making bodies needed to be strengthened. Phase II has, therefore, taken a more pro-active approach to mainstream gender issues in the Project.

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6. Comments on Issues Raised by Borrower/Implementing Agencies/Partners (a) Borrower/Implementing agencies The Borrower’s comments, received on September 25, 2009, raised no substantive issues. (Annex 7). These comments have been reflected in the ICR, as deemed appropriate. (b) Cofinanciers Not applicable. (c) Other partners and stakeholders Comments of KENFAP were included in the Borrower’s comments, and have been reflected in the ICR (Annex 8).

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Annex 1. Project Costs and Financing (a) Project Cost by Component (in USD Million equivalent)

Components Appraisal Estimate

(USD millions)

Actual/Latest Estimate (USD

millions) per GoK

Percentage of Appraisal

FACILITATION OF POLICY AND INSTITUTIONAL REFORM

7.90 4.87 62%

SUPPORT FOR EXTENSION SYSTEM REFORM

3.46 4.66 135%

SUPPORT FOR RESEARCH SYSTEM REFORM

53.70 64.71 121%

SUPPORT FOR FARMER/CLIENT EMPOWERMENT

5.31 4.63 87%

Total Baseline Cost

Physical Contingencies

0.00

0.00

0.00

Price Contingencies

0.00

0.00

0.00 Total Project Costs 70.37 78.87 112%

Front-end fee PPF 0.00 0.00 .00 Front-end fee IBRD 0.00 0.00 .00

Total Financing Required 70.37 78.87 112%

(b) Financing

Source of Funds Type of

Cofinancing

Appraisal Estimate

(USD millions)

Actual/Latest Estimate

(USD millions)

Percentage of Appraisal

Borrower 30.37 36.83 121% International Development Association (IDA)

27.00 28.34 105%

IDA GRANT FOR POOREST COUNTRIES

13.00 13.70 105%

Total 70.37 78.87 112% Note: US dollar amounts for IDA exceeded appraisal amounts on account of depreciation of US dollar against the SDR during the project period.

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Annex 2. Outputs by Component Component 1: Facilitation of Policy and Institutional Reforms (US$7.90 million including US$6.93 million IDA credit and US$0.97 million Government contribution) Achievements under this component are rated moderately satisfactory 1. The goal of this component was to establish an institutional framework necessary for increasing agricultural productivity in Kenya. The output under this component was improved coordination and enhanced linkages between stakeholders in the agricultural sector. Two indicators/results were identified: (i) Percent completion in establishment of coordinating structures at national and district levels; (ii) Percent completion of establishment of a decentralized and embedded monitoring and evaluation system that feeds into planning and implementation processes. 2. Achievements under this component included the launch of a coordinating institutional framework for policy guidance and advice, which formed a link to the structures set up by the government to implement the SRA. In order to create a coordinated system resulting in improved outcomes and efficient resource allocation, an ICC composed of permanent secretaries of agriculture sector-related ministries (Agriculture, Livestock and Fisheries Development, Cooperatives, Water, Environment and Natural Resources, Local Government and Lands) and KAPP Steering Committee (KSC) held several meetings to provide coherence and direction to the reform process. The ICC guided the overall implementation of KAPP I at national level while KAPP Secretariat (KS) was responsible for management and coordination of the project activities through the office of the project coordinator assisted by various specialists. At District level, KS was linked to DSUs that coordinated implementation of targeted pilot interventions for the extension and farmer empowerment components. The results fed into policy reform process and capacity building activities in the 20 districts. The government maintained a fully functional project secretariat in accordance with the terms of the project agreement. In addition, the DSUs, the National Extension Task Force (NETF) and the National Research Task Force (NRTF) provided a solid foundation for improved and efficient coordination and enhanced cooperation between stakeholders at the grassroots level. Further, the above structures facilitated the formulation of various policies under KAPP I (including NASEP, NARS, national livestock and dairy policy), and supported establishment of ASCU and reforms in the coffee subsector. 3. The project established a decentralized planning, monitoring and evaluation (PM&E) system for use by all the stakeholders in the KAPP activities. The M&E operational procedures and tools were developed to successfully guide the implementation of the extension services, farmer empowerment and collaborative research sub-component by providing the framework on which to build the planning, budgeting, implementation and accountability attributes that are effectively the indicators of a functioning PM&E system. However, this activity was not finalized. Component 2: Support to Extension System Reform (US$3.46 million, including US$3.42 million IDA grant and US$0.04 million Government contribution) Achievements under this component are rated satisfactory 4. The component was designed to support extension system reform and inputs into the policy formulation by generating the adoption of a pluralistic, efficient, farmer-led extension system. Four key indicators/results identified under this component were: (i) Review and revision of the National Extension Policy completed; (ii) Enterprise Development Plans (EDPs) prepared and implemented; (iii)

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Number of pilot districts/divisions in which the extension approaches have been tested; and (iv) Number and types of service delivery agents actively operating in pilot districts. 5. Regarding the first indicator, in an effort to shape the reform agenda, KAPP I supported a consultative process for the formulation and development of a national extension policy and its implementation framework. An extension task force reviewed and revised the National Agricultural Extension Policy (NAEP) and drafted a new sector-wide, National Agricultural Sector Extension Policy (NASEP) and its Implementation Framework (NASEP-IF) through a series of multi-level and multi-stakeholder consultative forums. The formulation of the policy incorporated experiences from study tours in Uganda, India and Malaysia, and the lessons learned were included in the NASEP and NASEP-IF documents. The NASEP-IF is in place as a working document. These documents were adopted by the agriculture sector ministries and approved by the Cabinet. 6. For the second indicator, the commercial based EDPs, developed jointly by the members of Common Interest Groups (CIGs) and service providers, targeted farmers in the pilot districts. A total of 1,250 EDPs with a membership of 96,443 farmers were categorized into nine sets (see Table 2.1 below).

Table 2.1: Distribution of EDPs by memberships Enterprise category Number of EDPs

(CIGs) in the category Total Membership

Agro forestry 18 1,690 Agribusiness related CIGs 21 2,072 Crops 635 48,786 Environmental Conservation 34 1,817 Fish farming 41 2,265 Irrigation 6 527 Livestock based CIGs 393 31,989 Medicinal 38 2,768 Tree-woodlots 64 4,529 Total 1,250 96,443

Source: KAPP Project Completion Report, December 2008 7. The project supported the training of these CIGs on various skills and knowledge on crops and livestock production, which translated into farm interventions and increased the farmers return on investments. In Taita Taveta District, 21 CIGs generated KShs, 31,901,207. This increase could have been influenced by other factors, but preliminary evidence indicated the project intervention played a key role in facilitating the returns. The farmers benefited from development of new skills in agricultural production leading to increased levels of income. 8. Regarding the third indicator, the project achieved substantial results in terms of identifying the most appropriate, effective and efficient extension approaches. An Evaluation of Extension Pilots study (Sept., 2008) carried out in 15 out of 20 pilot districts indicated that the focal area approach was most widely used (50%). This approach embraced methods such as CIGs actively involving farmers. The second was the farmer field schools (42%) encompassing farmer to farmer extension, where farmers learn from other farmers. The Provinces favored different techniques with farmers in North Eastern province who are largely pastoralists favoring a multidisciplinary pastoralist approach. In the Coast province, farming systems approach to technology and development and transfer was popular. The study showed that farmers/clients chose approaches that worked best for them, and participatory approaches were likely to meet client group needs. Table 2.2 below details these findings.

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Table 2.2: Extension Approaches

Province Extension Approaches Focal

Area Approach

(%)

Farmer Field

Schools (%)

Farming Systems

approach to technology

dev & transfer (%)

Multi-disciplinary pastoralist approach

(%)

Seminars (%)

Training & Visits

(%)

Central 60.9 34.8 2.2 2.2 0.0 0.0 Coast 42.9 47.1 10.0 0.0 0.0 0.0 Eastern 57.5 40.0 2.5 0.0 0.0 0.0 North Eastern 38.9 38.9 5.6 16.7 0.0 0.0

Nyanza 51.0 40.8 6.1 0.0 0.0 2.0 Rift Valley 44.9 44.9 3.8 2.6 1.3 2.6 Western 55.0 42.5 2.5 0.0 0.0 0.0

Total 49.9 42.2 5.0 1.8 0.3 0.9 Source: KAPP: Evaluation of Extension Pilots, September 2008 9. Regarding the fourth indicator, the project supported a comprehensive inventory of all agricultural extension service providers and established a database that included detailed institutional profiles such as geographical coverage, governance structures, program planning, budgeting, implementation, monitoring and evaluation, as well as impact assessment processes, physical, human and financial resources. Out of the 986 Service Providers (SPs) in the 20 pilot districts, 482 were private providers while 504 were public providers, assisting in implementation of 1,115 EDPs with a total of 112,728 farmers benefitting in the first cycle. In the second cycle, the SPs assisted in the implementation of 1,256 EDPs with a total of 100,209 farmers benefitting (Aide Memoire, October 2008). The Eastern province had the highest proportion of private SPs (81%), followed by Nyanza (72%) and Central (64%) provinces; North Eastern province had the least (31%). This information was posted on the KAPP I website providing a platform for sharing information with stakeholders. The presence of diverse SPs from various organizations enhanced partnerships and teamwork in extension service provision. Component 3: Support to Research System Reform (US$53.71 million, including 20.08 million IDA Credit, 4.28 million IDA Grant, and 29.35 million Government contribution) Achievements under this component are rated moderately satisfactory 10. This component was designed to reform the agricultural sector so that it would encompass a plurality of actors by becoming more efficient and accountable. Two outputs were identified: (a) establishment of an institutional framework for National Agricultural Research System (NARS) coordination and financing; (b) Cost effective and high quality KARI research programs located within the NARS framework and based upon stakeholder defined priorities and outputs disseminated. The seven indicators identified under this component were: (i) NARS policy developed and adopted; (ii) Percent of competitive grants financing to non-KARI research institutes occupied by collaborative research; (iii) NARS (KARI and non-KARI) technology inventory and institutional capabilities carried out and database established; (iv) Percent of resources devolved for allocation and accountability for all research programs to centers (CRACs); (v) MIS for project planning, monitoring and evaluation established; (vi) Proportion

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of KARI research programs rated satisfactory by internal and external reviewers; and, (vii) Proportion of ATIRI proposals reviewed and approved at KARI centers and grassroot fora. 11. Under the first indicator, the project supported the development of the NARS policy aimed towards the establishment of an integrated and holistic national agricultural research system that is responsive to demand-driven and market-oriented technology generation. The NARS policy was drafted and submitted to the technical committee of the Inter-ministerial Coordination Committee (ICC) for review and it was recommended that further review and consultations are necessary. The NARS Implementation Framework (NARS-IF) was developed by the NRTF that comprised 20 members from public and private institutions, as well as universities. A plan of action, with defined timelines to reform the policies on inter-institutional collaborative research programs through research grants and assessment of NARS institutions, was also prepared. 12. Regarding the second indicator, the project supported collaborative research projects on priority thematic areas such as market development, agricultural production, and value-addition, using a consortia approach for funding competitive research grants. Of the six commissioned projects from the first cycle, 50% of the projects that were approved and funded were for non-KARI institutions. In the second cycle, 20 projects were approved for commissioning and 65% of the financing went to non-KARI institutions. The third call was time-barred and, therefore, no projects were funded. The processing of grants was based on the Agricultural Product Value Chain (APVC) rather than individual or institutional approach, which was envisaged at the design stage of the project. The capacity building strategy for non-KARI NARS was developed and reviewed by NRTF, and made available for implementation. To boost capacity building in the scientific community (both public and private NARS), training workshops in strategic planning, project management cycle, research proposal writing, and monitoring and evaluation were conducted. A total of 300 non-KARI personnel were trained. 13. For the third indicator, the project supported the development of a comprehensive technology inventory and institutional assessment of NARS, database, and the ISO Certification. Although these activities were initiated, they were not complete by the time the project closed. 14. Regarding the fourth indicator, an effort was made to devolve resource allocation to the KARI centers for adaptive research programs to enhance accountability. Further, participation of farmers and beneficiaries, among other stakeholders, was encouraged through involvement in the Centre Research Advisory Committee (CRAC) which facilitated the inclusion of relevant research outputs. The SRA policy on farmers and other partners’ involvement in agricultural productivity and agricultural product value chain (APVC) approach in research mandated the involvement of farmers in setting research agenda before implementation. Hence, through the project’s support, KARI adopted the APVC concept and aligned its research to the national policy of commercializing agriculture. Comprehensive formal guidelines for collaboration with the three agricultural sector line ministries and DSUs were developed to ensure farmers play a proactive role in the CRACs. The project enabled the Pre-CRAC and CRAC structures to be enhanced and strengthened, and the Research Coordination Committee (RCC) was re-launched to improve the quality of research planning, implementation and M&E. Guidelines for holding the Pre-CRAC and CRAC meetings were reviewed and circulated to all the centers for implementation. CRAC meeting participation was encouraged not only to include farmers but other stakeholders along the agricultural value chains, such as processors, traders, NGOs, Universities, and marketing institutions. The responsibility of approving projects and resources for implementation of adaptive research activities was devolved to the adaptive research centers, and progress is monitored by CRAC. The initial delay in funding led to a slow start of the non-KARI programs and adversely affected the implementation progress. The overall progress under this activity is rated satisfactory.

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15. Regarding the fifth indicator, the project supported the design of a Management Information System (MIS) for PM&E. An integrated MIS with feedback mechanisms would allow management to identify weaknesses in operations and make appropriate adjustments. Various elements of MIS, including databases, were developed. M&E framework and reporting formats were developed as well. The log-frame was institutionalized as the main planning tool. KARI appointed a scientist to coordinate the M&E activities as well as sensitizing the scientists on PM&E benefits. However, the MIS has not yet been rolled out. Therefore, this activity was not fully implemented. 16. Under the sixth indicator, and in keeping with the SRA, the objective was to develop, test, disseminate and catalyze adoption of appropriate agricultural technologies in collaboration with participating stakeholders. The external reviewers gave KARI research programs an average satisfactory rating of 60% (see table below), while the internal reviewers satisfactory rating was 71% (KAPP Support to KARI – End of Phase I – Self Internal Evaluation Report, April 2008). The following is the assessment of the External Evaluation Team on KARI research programs implemented.

Table 2.3: Summary of Assessment of Research Programs in KARI Programs Kakamega

% Kisii

% Kitale

% Average/program

% Food crops 63.2 52.5 62.0 59.2 Horticultural and oil crops 68.0 55.0 46.0 56.0 Socio Economics 50.0 65.0 64.0 59.6 Adaptive research 51.0 72.0 46.0 57.0 Animal Health - 40.0 - 13.0 Animal production 58.0 - 67.0 41.6 Biotechnology - - 90.0 30.0 KSU 60.0 - 50.0 55.0 ATIRI 66.0 85.0 60.0 70.0 Average per Centre 59.0 61.0 60.0 60.0 Source: External Evaluation Final Report, August 2008 17. The following research program activities were supported by the project in KARI:

Animal Health Program: This activity was in line with KARI’s policy of multidisciplinary approach to research and Integrated Agricultural Research for Development. Six (6) technologies were developed and packaged: Newcastle disease vaccine; an oil-based foot and mouth disease vaccine; an improved contagious caprine pleuropneumonia vaccine; pen-side latex agglutination kit for testing the latter vaccine; and East-Coast Fever immunization (using the Muguga cocktail). To improve livestock productivity through breeding, improved nutrition and management using conventional methods and biotechnology applications, the following activities were implemented: -

o Capacity building was achieved for four (4) scientists on embryo transfer and multiplication of livestock breeds for dairy goats and poultry in Naivasha as well as beef in Lanet.

o As part of value-added to livestock products, equipment for processing milk was acquired for Muguga South and Naivasha dairies.

o Strategies for marketing value-added products were in their formative stages of development.

Animal Production: Establishment of a database for dairy feeds, with 200 feeds, was initiated and completed and is currently being used by relevant stakeholders. Maps for 12 forage accessions

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(Napier grass, Rhodes grass, Foxtail, Kikuyu grass, Lucerne, Kenya white clover and Desmodium) were produced. A database on breeds has not yet been established.

Biotechnology: The role of this activity was to develop, evaluate, and disseminate appropriate agricultural technologies and knowledge systems for improved productivity. The capacity in the form of infrastructure and trained manpower was in place. There were three fully functional biotechnology laboratories at Kabete, Njoro and Katumani and a fourth under construction in Thika. Four diagnostic tests for livestock diseases were developed and tested against the target of two. Three tests for crop diseases (sweet potato feathery mottle virus, cassava mosaic and banana streak virus) were developed. Transgenic crop varieties and tissue culture protocols for cassava and sweet potatoes and bananas were developed. Marker-assisted selection for drought-tolerant maize varieties identified 45 lines, which were in the second season of on-station trials. Also, four diagnostic tests for livestock diseases were developed and tested. KARI made progress in establishing partnerships with organizations such as CIMMYT, Kenyatta University and A-harvest Foundation to develop appropriate biosafety and Intellectual Property (IP) for biotechnology development. A biosafety legal framework was developed for approval by the government. The DNA extraction protocol and procedures for certification of tissue culture materials were abandoned due to lack of funding.

Food Crops: Project activities experienced financial constraints caused by erratic flow of funds,

unreliable weather, and unexpected diseases and pests. Despite the financial constraints, an effort to develop improved crop varieties was successful. Selected food crop varieties (29 maize, 4 wheat, 3 sorghum, 2 pearl and finger millet and 21 cassavas) were registered with Kenya Plant Health Inspectorate Service (KEPHIS). In terms of developing and disseminating superior crop management technological packages, effective agronomical practices to increase maize yield, sorghum ratoon management and pest management options for control of Russian Wheat Aphid in wheat were established. Regarding germplasm conservation, 903 accessions of the major crops were characterized and sufficient seed samples made available for utilization. But, out of 20 seed handling and viability testing protocols, only five (5) have been developed. In addition, post-harvest handling practices were developed along with collaborators in KARI, and the promotional aspects of the technologies were addressed.

Horticulture and industrial crops (HIC) program: Activities under this program identified the

main research themes of importance as technology transfer, crop production and variety development. While horticulture activities in Kenya have become popular, pests and diseases remain a constraint limiting the development of horticultural crops. Hence, in collaboration with partners such as the agro-chemical companies, an integrated pest management program was developed. Other areas identified as challenges were post-harvest handling and value addition technologies. In an effort to develop better cultivars and resistant/tolerant varieties, research was conducted on the following crops: Vegetables (tomatoes, French beans, African leafy vegetables, herbs and spices, medicinal plants); aromatic plants (aloe, vanilla, moringa); fruits (bananas, passion fruits, avocado, papaya, mangoes, citrus); flowers (lilies, gladiolus, tulip, morbydick, anthurium); nuts (macadamia, cashew, groundnuts); industrial crops (pyrethrum, cotton); and oil crops (sunflower, soyabeans, safflower, castor, jatropha, oil palms). The program developed partnership with other stakeholders such as international universities, private institutions, International Agricultural Research Centers, NGOs and CBOs through Memorandum of Understanding (MoUs) and letters of agreement. According to implementers of these activities, some tasks were not concluded as expected due to inadequate funds and inefficient flow of funds.

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KARI Seed Unit (KSU): KARI’s seed unit was well established and making good progress. However, the seed laws in East Africa are not harmonized and stakeholder consultations were sought by Association for Strengthening Agricultural Research in Eastern and Central Africa (ASARECA). Forty five thousand seedlings were distributed within a period of 2 years while 1.5 million cassava cuttings and 1.66 million sweet potato vines were distributed in specific areas. Over 300,000 farmers were reached through seed distribution by more than 10 NGOs in collaboration with KSU and the Ministry of Agriculture (MoA). Under this activity, the stakeholders petitioned parliament to amend seed laws CAP (326) to make the laws more beneficiary focused. The seed law bill is with the Attorney General while the seed policy was submitted to the MoA. In addition, KSU was instrumental in getting the Breeder Seed multiplication and licensing of seed companies registered with KEPHIS.

18. Regarding the seventh indicator, this component involved Agricultural Technology and Information Response Initiative (ATIRI). ATIRI was launched in KARI to address concerns that agricultural technologies developed by KARI and other stakeholders did not lead to improved livelihoods, food security, increased household incomes and sustainable use of natural resources. ATIRI’s approach was more of supply rather than demand oriented. With support from the project, ATIRI focused on farmer empowerment in order to enable farmers to articulate their needs such as technology, information and advisory services. ATIRI has been devolved to KARI centers and in the 20 pilot districts. The program’s strategic reform objective was to improve agricultural production and net incomes per unit input at the smallholder farm level through efficient and timely response to technology and information demands. More than 350 Community-based Organizations’ (CBOs) proposals, totaling more than 300 technology requests were approved, representing a 49% increase in the number of CBOs. Two KARI centers (Molo and Perkerra) and a sub-center (Matuga) were included in the ATIRI activities. Farmer feedback continued through CRAC meetings, CBO capacity building workshops, technical backstopping fora, on-station and on-farm field days, agricultural shows, and other agricultural stakeholder fora were adopted. Component 4: Support to Farmer/Client Empowerment Component (US$5.32 million, including US$5.31 million Grant and US$0.01 m Government Contribution) Achievements under this component are rated satisfactory 19. The objective was to develop and increase the ability of farmer’s organizations to effectively mobilize, scale-up agricultural technology, and influence research and extension service delivery. Under this component, one output was identified as follows: Increase the ability of farmer organizations to effectively mobilize, scale up agricultural technology, and influence research and extension service delivery. Five performance indicators were identified under this component: (i) Number and types of commodity-based CIGs formed and participating in pilot activities; (ii) Number of client fora created and participating in project activities at district and divisional levels; (iii) Number of CIGs participating in value-addition (up-scaling) related technologies; and (iv) Number of apex producer organizations involved in advocacy and lobbying on policy, research and extension issues; and (v) Number of CIGs/clients dealing with agricultural services support institutions. 20. As regards to the first indicator, an effort to enhance farmers’ ability to influence decisions on policy formulation and service delivery to increase productivity and investments in agriculture, 1,239 CIGs were formed at the location, division and district levels. The number increased from 1,013 CIGs in the first cycle. These fora played an important role in identifying harmonized approaches to integrate farmers into various services in extension and research starting from the grassroots to the national level in order to stimulate farmer-driven demand. At the farmer level, no approach for creating farmers’ fora existed before the Kenya National Federation of Agricultural Producers (KENFAP) intervention, a

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capacity building organization of Common Interest Groups (CIGs) empowerment. The project succeeded in ensuring that 10% of farmer organizations were participating in client fora. KAPP signed a Memorandum of Understanding (MoU) with KENFAP, an umbrella organization representing farmers. The MoU contained details on the extent of collaboration, commitment and obligations. However, in the Aide Memoire of June 2006, the mission observed that the role of KENFAP in the implementation of activities under this component was unclear and needed to be resolved. The mission recommended that a position paper needed to be developed indicating short- and medium-term roles. Also, in association with other stakeholders and the Ministry of Cooperative Development and Marketing (MoCD&M), the project identified important capacity building activities of specific Cooperatives, and Savings and Credit Cooperatives in the KAPP operating districts. Based on this collaboration, work plans and budgets to address the capacity building needs of beneficiary institutions were developed and facilitated by KS. 21. For the second indicator, 160 farmers’ fora were formed at various locations, 80 at divisional and 20 at district levels, that were operational and maintained. These fora enabled the farmers to influence decisions on policy formulation and service delivery as well as achieve increased yields from investments in agriculture. Through these fora, the farmers were empowered to lobby and advocate for conducive policies, service delivery and input supply. According to KAPP I Project Completion Report, during the course of the program, following consultation with various stakeholders and on the recommendations of mid-term review mission, the project revised the guidelines for farmer fora formation to ensure more diverse representation. 22. Regarding the third indicator, the project was successful in assisting farmers’ access to agro-processing, marketing, and agro-businesses ventures. Ninety two (92) CIGs were producing sufficient output volumes to scale-up technology innovations. Of this number, 57 CIGs were crop-based, 25 CIGs were livestock-based and nine were in miscellaneous categories, such as input supply. Ninety six (96) proposals for up-scaling of technologies were developed, evaluated and funded. An additional 80 proposals had been developed for funding, adding to a total of 176 proposals. An additional 20 consumer cooperative proposals were presented for funding and were under implementation. In an effort to add value to production and marketing initiatives, most of these CIGs were linked to agricultural services and related institutions. 23. As for the fourth indicator, an effort to strengthen Apex Farmers and Community Organizations, KAPP I initiated the program by identifying, verifying and documenting the existence of farmer organizations. A total of 19 Apex/Commodity Organizations and one National apex organization were initially identified and their authenticity verified. These organizations were supported by the project and were actively advocating for better services and policies for farmers in Kenya. Workshops were organized for officials to meet and exchange ideas as well as share their experiences and challenges. Through a consultative and democratic process, a commodity association’s council was established to coordinate the capacity building initiatives for these organizations. The project succeeded in providing support for increased membership as well as media services, creating awareness of the existence of the organizations and hence increasing membership registration. 24. The fifth indicator involved agricultural services and support institutions. Over 400 CIGs were working with research institutions, credit providers, input suppliers and marketing agencies and advancing towards post production activities. The project linked the CIGs to microfinance institutions that were more inclined to lend money to farmer groups for purchasing equipment for scaling up technologies and production.

25. APL Triggers. Program phases that follow KAPP I are expected to consolidate research reforms, extend implementation of reforms in the new extension framework, and build the basis for sustainable financing of the entire system. Triggers for moving into the second phase were: (i) the approval of a

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national agricultural extension policy and related institutional and implementation framework by the GoK; (ii) completion of two cycles of project monitoring and evaluation, with at least 85 percent of district intervention impacts evaluated; and, (iii) at least 60 percent of the KARI component implemented and evaluated as satisfactory. Based on satisfactory progress made under triggers (i) and (iii), and moderately satisfactory progress under trigger (ii), the Kenya Agricultural Productivity and Agribusiness Project (KAPAP - phase II of the APL) was approved by the Executive Directors on June 11, 2009.

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Annex 2

Appendix 1 PROJECT DEVELOPMENT OBJECTIVE KEY PERFORMANCE INDICATORS 26. The PAD and the legal agreement listed seven Key Performance Indicators (KPIs) for the achievement of the PDO.15 The KPIs were outputs and were not clearly linked to the PDO. Achievements under each KPI are described below.

27. The National Agriculture Research System (NARS) policy developed and adopted: The NARS policy was drafted and submitted to the technical committee of the Inter-ministerial Coordination Committee (ICC) for review and it was recommended that further review and consultations are necessary. The NARS Implementation Framework (NARS-IF) was developed by the NRTF. A plan of action with defined timelines to reform the policies on inter-institutional collaborative research programs through research grants and assessment of NARS institutions was prepared. However, it is important to note that the agricultural related ministries have not yet endorsed. This task was not completed.

28. Percent competitive grants financing to non-KARI research institutes occupied by collaborative research: Of the six commissioned projects from the first cycle, 50% of the projects that were approved and funded were non-KARI institutions. (Prior to KAPP I, there was limited collaboration amongst research institutions). In the second cycle, 20 projects were approved for funding and 65% of the financing went to non-KARI institutions. The processing of grants was based on the Agricultural Product Value Chain (APVC) rather than individual or institutional approach, which was envisaged at the design stage of the project. The capacity building strategy for non-KARI NARS was developed and reviewed by NRTF, and made available for implementation. This indicator was met.

29. Inventory of KARI technologies and institutional capabilities carried out and database developed by end of year one, and updated annually thereafter: This activity was not implemented. Procurement for a consultancy to undertake the NARS inventory technology database process was approved. KARI is committed to taking a lead role in up-dating the Technology Inventory and Data Base as well as facilitating effective knowledge and information sharing among the NARS institutions. It is expected to be completed under KAPAP (Phase II).

30. Percent of resources devolved for allocation and accountability for all research programs to Center Research Advisory Committees (CRACs): This was a gradual process and 100% devolution occurred at the center level. (There was no devolution of resources to the KARI Centers before KAPP I). The responsibility of approving projects and resources for implementation of adaptive research activities was devolved to the centers and progress monitored by the CRACs. The farmers were involved in the priority-setting process that was center-based. The farmers’ participation in problem identification and proposal development up to the approval stage by the CRACs allowed them to play an active role in decision-making and ensuring accountability.

15 The Data Sheet shows results against eight KPIs – the above seven plus the one on establishment of the institutional structures. This was reflected in the Data Sheet as it was reported upon in the ISRs.

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31. Number of extension approaches tested and proven cost effective: To ensure that the approaches used were participatory and farmer oriented, six approaches were tested and four were found to be the most used. (No approaches had been tested before KAPP I). The focal area approach that embraced methods such as the CIGs, and farmer field schools that encouraged farmer-to-farmer extension were most used, while farming systems approach to technology development and transfer was used in the Coast province. Farmers in the North Eastern province were largely pastoralists and hence a multidisciplinary pastoralist approach was used. Extension approaches offered different perspectives, methods and techniques to draw from.

32. Number of client fora created and functioning at district and divisional level: Eighty (80) client fora were established at 20 districts and the members actively participated in project activities. (No client fora existed at local levels, prior to KAPP I). Guidelines for the fora were revised and applied in order to make the client fora more inclusive. The membership for the fora included both project and non-project CIGs. Farmer fora played important roles in providing a platform for farmers to lobby for extension services, accessing resources for successful implementation of enterprises and markets of products. This facilitated farmer’s direct involvement in the reform process through client consultative structures at all levels thus providing means of improved access to information on technology and services. The project provided targeted support for scaling-up application of technology innovations through establishment of farmer’s networks as they transformed into producer organizations as well as building capacity of farmers’ apex associations and commodity organizations.

33. Number of producer organizations investing in technology multiplication: The project was successful in assisting farmers to access agro-processing, marketing, and agro-business ventures, and agricultural services. The project provided grants to assist 92 CIGs that were producing sufficient volumes to scale-up technology innovations. Of this number, 57 were crop-based, 25 were livestock-based, and nine (9) were under miscellaneous categories such as input supply.

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Annex 2

Appendix 2 RESULTS FRAMEWORK (PROJECT DESIGN SUMMARY IN PAD ANNEX 1) AND STATUS

OF KEY PERFORMANCE INDICATORS

Objectives Performance Indicators Status of Performance as of December 2008

PDO: Improved performance of the agricultural technology supply and demand system through (i) reforms in extension to increase pluralism, responsiveness to clients, and participation by private providers; (ii) an evolutional change in the existing system of agricultural research to improve accountability and impact, and (iii) increased empowerment of producer organizations to influence the planning, design, implementation, funding and monitoring evaluation of research, extension, training and capacity building activities.

Increased up-take of technologies and practices in 20 pilot districts.

The Technology Adoption Survey reported an overall positive impact on adoption of hybrid maize seeds technology by target farmers (e.g. of adoption rates - Northern Arid Zone 26.7%; Western Transitional Zone 34.1%). The impact estimate on adoption of fertilizer use was 4.9%. Animal feed preservation technologies impact estimate was 4.3%.

Integrated research and extension policy, institutional framework in place

Extension policy finalized and approved by Cabinet. Research policy drafted – awaiting further review and endorsement by agricultural sector ministries, prior to approval by Cabinet.

Proportion of extension service providers whose service provision is rated satisfactory by the clients in 20 pilot districts.

70%

Component 1 Objective: Improved coordination and enhanced linkages between stakeholders in the agricultural sector

Percent completion in establishment of coordinating structures at national and district levels.

Achieved. The inter-ministerial coordination committee (ICC), KAPP Steering Committee (KSC) KAPP Secretariat (KS), District Service Units, Extension Task Force (ETF) and the Research Task Force (RTF) were commissioned and operationalized. The committees and the task forces met regularly to deliberate on project issues.

Percent completion of a decentralized and embedded monitoring & evaluation system that feeds into planning and implementation process.

Partially achieved. The project finalized the development of Monitoring and Evaluation system which guided planning, budgeting, implementation and accountability. Collaborators appreciated the effectiveness of the system in being able to track

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progress of individual farmers in a common interest group and addressing the challenges.

Component 2 Objective: Adoption of a pluralistic, efficient, farmer-led extension system.

Review and revision of the National Extension Policy completed.

Achieved. NASEP was finalized and approved by the Cabinet.

Enterprise Development Plans (EDPs) prepared and implemented.

Achieved. A total of 1,250 (93% of target) EDPs rolled out and were progressing well although they were at various stages of implementation.

Number of pilot districts/divisions in which extension approaches have been tested and comparative efficiency assessed.

Partially achieved. Extension approaches tested in 15 out of 20 districts. The innovative extension approaches were rolled out and being assessed.

Number and types of service delivery agents actively operating in pilot districts.

Achieved. There were 1,192 service providers identified and registered. Out of this 583 were private, while 609 were from public sector. These service providers facilitated implementation of the EDPs.

Component 3 Objectives: (i) Effective and efficient institutional framework for NARS coordination and sustainable financing established; (ii) Cost effective and high quality KARI research programs located within the NARS framework and based upon stakeholders’ defined priorities and outputs disseminated.

Time-bound action plan for the NARS Policy developed & adopted

Partially Completed. National Agricultural Research System (NARS) policy drafted, and awaiting further review and endorsement by the agriculture sector-related ministries. The implementation framework of the NARS policy was prepared by the National Research Task Force for wider stakeholder consultations.

50 percent of Competitive Grants financing to be made to non-KARI research institutes by collaborative activities

Achieved. From the first cycle of the Competitive Grants, 50% was allocated to non-KARI institutions. For the second cycle, 65% of Competitive Grants went to non-KARI led institutions.

NARS (KARI & non-KARI) technology inventory & institutional assessments carried out & database established

Not achieved. Procurement process for a consultancy to undertake this activity was at an advanced stage. No reasons were given for the delay. However, KARI is committed to take a leading role in updating the Technology Inventory and the Database.

Percent of resources devolved for allocation & accountability for all research programs to centers (CRACs).

Achieved. Nearly 100% allocation and accountability completely devolved to KARI centers.

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MIS for project Planning, Monitoring & Evaluation established

Partially Achieved. The design of the Management Information System was completed but, the MIS was not implemented by end of project. It requires revision under KAPAP on account of new agribusiness component.

Percent KARI research programs rated satisfactory by internal & external reviewers

Achieved. 65% of KARI research programs were rated satisfactory by external evaluators in the External Evaluation Final Report (2008). Also, Self Internal Evaluation Report (2008) by KARI rating was 71%..

Percent ATIRI proposals reviewed and approved, & at KARI centers & grass-root fora.

Achieved. ATIRI proposals vetting and approval was decentralized to Regional Steering Committees. During the project period, a total of 350 CBOs requesting for 300 technologies across the country were funded.

Component 4 Objective: Increased ability of farmer organizations to effectively mobilize resources, scale up agricultural technology, and influence research and extension service delivery

Number and type of commodity-based CIGs formed and participating in pilot activities.

Substantially achieved. CIGs increased to 1,250 (93% of target of 1,350). Capacity building curriculum was developed but no evidence if the activity has taken off.

Number of client fora created and participating in project activities at divisional and district levels.

Completed. 20 district client fora established and 80 client fora at divisional level. Guidelines were revised and applied to be more inclusive. Fora members actively participated in project activities. Membership included farmers from KAPP I, non KAPP I CIGs

Number of Common Interest Groups (CIGs) participating in value-addition (up-scaling) related technologies.

Partially Achieved. 92 proposals funded for up-scaling of technologies were developed and evaluated. Service providers together with the farmers were working to develop an additional 80 proposals for funding.

Number of apex producer organizations involved in advocacy and lobbying on policy, research and extension issues.

Over achieved. A total of 19 Apex commodity organizations and 1 National Apex body received KAPP I support and were actively advocating for better services and policies for farmers in the country. This activity was over 100% achieved considering at design stage only 4 organizations were envisioned.

Number of CIGs/clients Partially achieved. Target 400.

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dealing with agricultural services support institutions.

Approximately 30% of KAPP I CIGs were already working with research institutions, credit providers, input suppliers, and marketing agencies as they move towards post production. These CIGs linked to lenders (microfinance firms, Constituency Development Funds (CDF))

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Annex 3. Economic and Financial Analysis

(a) Introduction 1. The identification of benefits and underlying assumptions are comparable with the economic and financial analysis at the appraisal stage (PAD). The analysis aimed to assess: (i) the farm-level viability and the national level economic viability of the investments in research based on a cost/benefit analysis, whose quantifiable benefits and costs could be assessed and reasonably estimated; (ii) the financial and economic returns (IRR), and the net present values (NPV) of the KAPP phase-1 project investments in research (2004-2007) at the global project level for 4 different agricultural enterprises (maize, potato, mango, dairy cattle); and, (iii) the impact of the investments on the national fiscal/budget (efficiency analysis). (b) Identification of KAPP I costs and benefits 2. The returns from Kenya Agricultural Research Institute’s (KARI’s) research program investments are expected to come from increased yields in crops and fruits, increased amounts in milk output and higher farm income levels. The economic and financial analysis is quite conservative, as it does not assess all of the project’s benefits. More specifically:

Quantifiable benefits noticed in phase-1 came from: (i) increased yields due to the uptake by

farmers of KARI’s new technologies such as improved seeds; (ii) improved adoption of chemical fertilizer on maize; (iii) improved agricultural practices thanks to support to farmer; (iv) enhancement of agricultural research and development of extension services (R&E); and (v) other factors, such as the participation of farmers in formal markets. As far as R&E is concerned, many ex-post economic analyses have shown high rates of return to investments in agricultural R&E (about 40 to 60 percent on the average). The most comprehensive review of literature was conducted by Alston et al. (2000)16. A meta-analysis was performed and reviewed 292 studies (including extension) reporting 1,858 estimates of returns on investments in agricultural research and development. The report of Alston et al. globally found an average return of 81 percent per year. These results confirm the global acceptance that returns on investments in agricultural R&E are relatively high.

Non-quantified benefits came from: (i) increased non-monetary benefits at the household level, helping to reduce rural poverty; (ii) benefits in terms of rural income and purchase power; (iii) social benefits in terms of food security and nutrition at the household scale, as some of the production is used for household’s self-consumption; (iv) environmental protection due to soil, water and environment conservation technologies; and, (v) economic externalities such as institutional benefits, fiscal impacts, improved efficiency and effectiveness of public services.

As assumed at appraisal, an exhaustive analysis was not attempted given the difficulty in quantifying all the project’s non-quantifiable benefits. The bulk of the economic and financial analysis is concentrated on the outcomes arising from the agricultural research component (component 3) financed in the first phase of KAPP. The project costs will be the costs of doing research on each of the 4 main enterprises chosen for the analysis. At the farm level, the costs are

16 Alston, J.M., Chan-Kang, C.M., Marra, C., Pardey, P.G., and Wyatt, T.G., 2000. “A Meta-analysis of Rates of Return to Agricultural R&D: Ex Pede Herculem”. International Food Policy Research Institute, Washington, DC.

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due to: (i) the increased demand for better quality seeds; (ii) the increased demand for DAP and CAN fertilizer; and, (iii) the gradual increase in the amount of labor input to improve soil preparation prior to planting, harvesting and handling the incremental amounts of outputs. Due to the limited data on labor and fertilizer use at the farm level during the project period, efforts were made to make sound and realistic assumptions.

3. In spite of information concerning the growing of improved fruits, no data about the benefits arising from the productivity of mangoes was available either in the rural household baseline survey or in the technology adoption survey. Because the research period to release improved arboricultural products is about 8 years, it was assumed no relevant changes could be either highlighted or observed after only 4 years. Due to data scarcity, the economic and financial returns are those assumed in the PAD. 4. In spite of several statements concerning the uptake of improved cattle breeds in the technology adoption survey, the data on dairy farm budget was scarce (the costs of animal feed technologies and the amounts of animal feed consumed per dairy farm could not be reasonably assumed). Therefore, the economic and financial returns are those assumed in the PAD. Phases II and III of KAPP should make serious efforts to improve collection of farm data concerning this enterprise.

5. It is important to emphasize that no significant and immediate benefits arose from the overall production of maize and potatoes after the 4 years of KAPP I. Overall, maize and potato yields reported in the target households were not significantly different from the yields in the baseline (potato yields were sometimes lower than reported in the baseline households at the end of phase 1). This observation can be explained by several factors such as: (i) droughts and the over reliance on rain-fed cultivation against the background of unreliable and unevenly distributed rains; (ii) scarcity of irrigated agriculture; and, (iii) the 2008 post-election social unrest in the rural areas as well, which affected the agricultural production. 6. Due to this unpredictability concerning agricultural returns, several scenarios will be proposed when discussing future benefits and when calculating the financial and economic returns over the 20 years horizon. The analysis was done over 20 years so as to assess the economic and financial soundness of the Adaptable Program Loan (APL). To achieve the long term objective of the program (sustainable increase of Kenya’s agricultural productivity and improvement of the livelihoods of its rural communities through the improved performance of the agricultural technology supply and demand system), three project phases (of 3, 4 and 5 years periods) had been forecasted for KAPP. The financial and economic analysis is done over a long period in light of the time required to achieve results. (c) Methodology and data to compute the returns 7. The farm models used in the analysis typified the average farm in the 8 agro regional zones (ARZs) and 20 districts targeted by the project, producing one specific and relevant output for the project (maize, potato, mango, dairy cattle) and operating on average 1 hectare of land (or 1 dairy farm in the case of milk production systems). The typical farm budget (valuation of production benefits and operation costs) was built from the KAPP technology adoption survey, the rural household baseline survey and other documents provided by KARI. Because of data scarcity concerning farm labor, sound assumptions were performed for the baseline and key milestones in KAPP’s life. 8. From the representative farm-model, the net benefits for 1 hectare (or 1 farm in the case of milk production systems) were valued at the total physical area adopting technology or at the total amount of farms adopting new technologies. The potential area adopting technology after 20 years is 1,200,000 ha for maize, 56,000 ha for potato and 16,000 ha for mango. Dairy herd adopting technology was assumed to be 1,400,000 cows. The annual incremental areas adopting technologies were calculated based on the rates of adoption obtained in the technology adoption survey. As far as the rates of adoption at the end of

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project are concerned, the same assumptions as in the PAD were performed (15 percent for maize, 30 percent for potato and mango, 10 percent for dairy cattle). The rates of adoption at the end of phase 1 are shown in table 1. The data were collected according to the technology adoption survey. The rate of adoption was the difference between the rate in the target households (with project situation) and the rate in the control households (without project situation). Table 3.1: Rate of adoption of some technologies17

Rate of adoption of technology 2009 (ICR) Target after 20 years (PAD)

Maize (improved seeds) 4.6% 15%

Potato (improved seeds) 4.6% 30%

Mango (improved seeds) 3.1% 30%

Dairy cattle (improved cattle breeds) 9.4% 10% (d) Results and sensibility analysis 9. Similar to the appraisal stage, the IRR was computed for an assumed project life of 20 years for the reasons discussed above and including the duration of developing and releasing the research product, and the time taken by the farmers to properly and progressively adopt the new technology. The concluded first phase was rolled out over 4 year period and the data needed for the 16 remaining years were reasonably assumed. The costs and benefits assumed for the 16 remaining years greatly benefited from the assumptions performed in the PAD, more specifically concerning the technology adoption rates, the potential areas and dairy herd targeted by the project, the research lags and the delay for farmers to adopt the technologies. However, due to the uncertainty of outcomes, 3 different scenarios were assumed for the remaining 16 years. The first scenario would be a status-quo, with no improvement in yields and farm returns in spite of R&E efforts, due to unevenly distributed rains and droughts. The second scenario would be a slight increase in yields (60 percent increase over 20 years) due to the combined effects of technology adoption and erratic but favorable rainfalls. The third scenario would be a doubling of yields thanks to the combined effects of R&E efforts and favorable rains. Those scenarios are discussed below. 10. The resulting economic (ERR) and financial rates (FRR) of returns for KAPP I, together with the net present values of the 4 enterprises, are presented below in the case of the third scenario. The results for the first and second scenario are presented below in the sensitivity analysis discussion.

Table 3.2: Summary of the economic and financial analysis National level: summary of Economic and Financial Analysis

Enterprise Baseline (PAD) 2009 (ICR) IRR, 20 years

Maize FRR 48% 15% ERR 38% 25%

Potato FRR 35% 18% ERR 33% 37%

Mango FRR 30% N/A ERR 20% N/A

17 Rate of adoption data is lower than reported otherwise in this ICR because the double difference method used in the technology adoption survey was not used in this analysis.

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Dairy cattle FRR 40% N/A ERR 28% N/A

NPV @12%, 20 years, USD'000

Maize Financial 1,254 24,124 Economic 22,100 143,425

Potato Financial 327 8,285 Economic 9,500 49,383

Mango Financial 799 N/A Economic 11,700 N/A

Dairy cattle Financial 3,204 N/A Economic 47,100 N/A

11. The ICR financial and economic rates of return are lower than in the PAD due to the below optimal agricultural productivity in most parts of the country during the first phase of KAPP. Both financial and economic NPVs are positive and much higher than at appraisal stage. However, if a 14% discount rate is chosen, the NPV are significantly reduced at the values averaging the ones calculated in the PAD. 12. A basic sensitivity analysis was performed by stressing the values of yields. First of all, the analysis shows that neither scenario 1 (status-quo) nor scenario 2 (60 percent in yields increase over the 20 years) would be economically desirable (no returns and negative NPV). The results given in the table above are based on the assumptions of the third scenario (doubling of yields over the 20 years). Furthermore, because former agricultural projects showed that doubling yields is a challenging target to achieve, those returns are not very robust. The sensitivity analysis also suggests that a contributing factor for the moderate efficiency of KAPP phase 1 have been low yields in maize and potato in 2008: a 25 percent increase in maize yields in 2008 would have improved the FRR and ERR up to 41 percent and 59 percent, respectively. The project is also sensitive to input and output prices. If the inputs’ price increases significantly by 10 percent or the output price decreases by 10 percent, the ERR would fall below the 12 percent threshold, suggesting risks to economic sustainability. (e) Price data 13. Like in many other low-income countries, collecting rural price data is a significant challenge, as no official rural price data exists. The calculations use average price data collected on internet trade information platforms 18 and other documentation from KARI. Price data is not disaggregated by geographical region or around the agricultural cropping cycle. It is based on average values, therefore ignoring the sometimes hefty price fluctuations during the cropping cycle. All costs and benefits were calculated in constant 2009 prices. 14. A specific effort was made to derive economic prices from financial prices. It is assumed the project will not generate any exportable output. FAO’s “food balance sheets”19 show that Kenya depends on food imports to assure its food security. Bibliography shows that the country is generally a deficit food production zone and strongly depends on imports from South Africa, Uganda and Tanzania (Govereh et al., 2008)20. Furthermore, Kenya’s economy responded to the worldwide nervousness about the food

18 www.ratin.com 19 http://faostat.fao.org/site/368/default.aspx#ancor. The import/ domestic supply ratio is around 18%. 20 Govereh, J. et al., 2008. “Maize market sheds in Eastern and Southern Africa”. Report prepared for the World-Bank, June 28, 2008.

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prices with high domestic prices: between May 2007 and May 2008, the IMF Food Price Index jumped 40%21 and the Kenyan food consumer price index (CPI)22 increased 40%. In light of these observations, it is assumed that the project will rather focus on strengthening the domestic agricultural production to ensure food security rather than enhancing exports. In other terms, it was assumed for the analysis that the project aimed to create import-substitute outputs, more specifically in the case of maize (potatoes are non-traded, the export share of mangoes is only 1% in Kenya23 and milk is considered as non-traded items since this output is highly perishable). 15. In view of this, particular attention was paid to the calculation of the economic price of maize. The economic price of maize is the foreign exchange saved by Kenya through reduced imports of this good, adjusted for differences in the economic costs of handling, distribution and transportation (HDT) to the market point. Thus the benefit of producing maize is the Cost Insurance Freight (CIF) price of maize, plus the economic costs of HDT minus the economic cost of HDT from the project areas to the domestic markets. A conversion factor of 1.1 was calculated to arrive at the economic price of maize. The figure below disaggregates the steps in the calculation.

Table 3.3: steps in the calculation of the economic price and conversion factor of maize

Steps in the calculation Unit Value

Maize FoB Ex-Durban USD/mt 190,00 Freight Charges Per ton (Ocean Freight from S-Africa) USD/mt

40,00

Insurance (1% FoB) USD/mt 1,90

Other Charges related to freight USD/mt 25,96

KPA Handling charges & duties (taxes included) USD/tm 133,54

CIF Mombasa USD/tm 391,40

Road to Nairobi & handling USD/tm 42,00

Import parity, Durban to Nairobi USD/tm 433,40

Financial price, Nairobi USD/tm 420,00

Official Exchange Rate (OER, 08/17/09) Ksh/USD 76,1

Exchange rate premium % 10

Shadow Exchange Rate (SER) Ksh/USD 83,71

Import parity, Durban to Nairobi Ksh/tm 36 280,2

Financial price, Nairobi, market Ksh/tm 31 962,0 16. As discussed above, it was assumed that potatoes, milk and mangoes are non-traded. As far as potatoes are concerned, it was assumed the export price is lower than the domestic cost of production; as for milk, it was assumed this product is a highly perishable good for direct consumption; as for mango, it was assumed production would target the domestic market. It was assumed for those outputs that the market price would be a good estimate of the opportunity cost. A conversion factor of 1 was assumed to convert financial prices to economic prices.

21 IMF, 2009. International Financial Statistics. Washington DC. 22 http://laborsta.ilo.org/ 23 FAO (date non available), “Value chain analysis: a case study of mangoes in Kenya”, Rome, p.7.

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17. Fertilizer is considered to be the only tradable input. The economic price can be computed in a similar manner to the economic price of an import substitute. The economic cost of fertilizer at the farm-gate is the CIF price plus the economic price of HDT. The exchange rate premium is estimated at 10%. A conversion factor of 1.1 was obtained for fertilizer.

Table 3.4: steps in the calculation of the economic price of fertilizer, 2008.

Step in the calculation24 Units Value Price FOB price (US Gulf, 2008)25 USD/tm 967 Freight USD/tm 40 1007 Insurance % of price 1 10.07 CIF Mombasa USD/tm 1017.07 HDT costs USD/tm 36 Import parity price USD/tm 1053.07 Official Exchange Rate (OER, 08/17/09) Ksh/USD 76.5 Exchange rate premium % 10 Shadow Exchange Rate (SER, 08/17/09) Ksh/USD 84.15 Import parity price in local currency Ksh/tm 88 615.8Financial price (2008) Ksh/tm 80 096.0

18. The following table gives the different economic and financial prices used in the analysis.

Table 3.5: Economic and financial prices, 2009 averages. Economic and Financial prices, 2009 averages Item Unit Financial Economic Output (average prices in Kenya) Maize Ksh/kg 30,9 34,0 Potato Ksh/kg 11,0 11,0 Mango Ksh/fruit 5,0 5,0 Milk Ksh/liter 18,2 18,2 Input Hybrid maize seeds Ksh/kg 115,0 126,5 Non-hybrid maize seeds Ksh/kg 23,0 23,0 Hybrid potato seeds Ksh/kg 150,0 135,0 Non-hybrid potato seeds Ksh/kg 12,0 12,0 Fertilizer (CAN) Ksh/kg 72,36 79,596 Fertilizer (DAP) Ksh/kg 80,1 88,11 Labor Unskilled Ksh/man-day 150,0 135,0

(f) Main assumptions of the economic and financial analysis (other than outlined) 19. The ERR/FRR calculations at the national level are based on the following main assumptions:

24 Source: Mose, L., Factors affecting the distribution and use of fertilizer in Kenya, preliminary assessment, TEGEMEO, KARI, MSU. 25 The FOB price was collected in the World Bank Pink Sheet (2008 annual average data)

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As assumed in the PAD, the without project situation is equated to the situation where the farmers

have not adopted the technological package in question. As a matter of fact, the farm models illustrated in the without project situation are using local non-hybrid maize, non-improved seeds of other crops and non-improved cattle breeds. This assumption is quite conservative, because some farm households out of the KAPP I project area may enjoy through time the adoption of new technologies and better agricultural practices26.

Yields and rates of adoption of technologies for the baseline situation (2006) and for 2008 were obtained from the technology adoption survey. Yields for years 2005, 2006 and 2007 were calculated by interpolation techniques, or linear regressions where data was scarce. No data was available concerning self-consumption and loss for maize and potato.

The yearly rates of technology adoption by farmers were used to compute the yearly incremental surface equipped with new technologies and new improved dairy herds. The yearly cumulative incremental surface is used to calculate the KAPP I benefits at the global scale from the farm models.

For maize, the rate of adoption corresponds to the adoption of hybrid maize seeds; for potato, the rate of adoption of the hybrid maize seeds was used due to data scarcity concerning this crop; for dairy cattle the rate of adoption was computed based on the improved cattle breeds uptake.

(g) Efficiency analysis 20. Public expenditure benefits: The review of Kenya’s agriculture public expenditure 27 demonstrates progressive increases in sector spending. Those expenditures can be disaggregated in: (i) development costs averaging 45 percent of the total budget in recent years; and, (ii) recurrent costs averaging nearly 58% in recent years. The PAD, where the development costs averaged 16 percent, took both public expenditure on agriculture and livestock into account. Due to data scarcity concerning MoLD expenditure, the comparison with the PAD and the emphasis on potential improvement is not appropriate at this stage. However, Kenya Agricultural Productivity and Agribusiness Project’s (KAPAP’s) PAD28 has emphasized that public expenditures on agricultural research and extension are currently about USD 155 million total. KAPAP’s PAD highlights these expenditures represent around 48 percent of the public sector budget for agriculture and an annual investment of 4.8 percent of agricultural GDP. In terms of share of agricultural GDP, these are relatively high figures, especially compared to averages for Africa.

26 The rural household baseline survey and the technology adoption survey emphasized that control households were using the technologies developed by the project, like hybrid maize seeds. 27 MoA, Economic review of agriculture 2008 : trends in budget allocation to agriculture, Nairobi. 28 Kenya Agricultural Productivity and Agribusiness Project (KAPAP, second phase of the APL), 2009. Project Appraisal Document, Washington D.C., p.103.

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Table 3.6: MoA expenditure Public expenditure on

Agriculture29 2003/2004 2004/2005 2005/2006 2006/2007 2007/2008

Ministry of Agriculture (millions of KSh)

6,828 7,894 8,333 10,281 12,293

Recurrent as % of total 52.2 45.5 61.4 56.9 57.5

Development as % of total 47.8 54.5 38.6 43.1 42.5 21. The technology adoption survey established an emerging demand-driven agricultural extension system, with 51.7 percent of households actively seeking advice and 49.6 percent receiving the services. Furthermore, private extension providers have emerged to compliment the public sector extension services, although the latter still dominates the industry. By supporting the private sector participation, the KAPP program has the potential to reduce the burden of service provision on the public sector. Even though private providers are being paid with public funds, it is recognized that private provision of extension services is more cost effective than the ones provided by civil servants. KAPP phase 2 will be challenged on auditing the efficiency of those services and monitoring the impacts on public agricultural expenditures. 22. Positive externalities: It was assumed in the PAD that KAPP I would have the potential to improve governance at the district level and below. At the ICR level, it was observed that: (i) KAPP I supported reforms for the progressive devolution of resource allocation and accountability for adaptive research programs to decentralized centers (district level). At district level, the KAPP Secretariat was linked to district service units (DSUs) acting as local secretariats. The DSUs built capacities of service providers to meet acceptable standards and to conform to the principles outlined in the reform policies (component 3); (ii) other positive economic and social externalities arising from component 4 activities, like the substantial number of client fora established at the divisional and district level. Annex 2 (outputs by components) sheds some light on outcomes for each component and puts emphasis on result indicators that feature other positive externalities.

29 MoA, Ibid 10.

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

Names Title Unit Responsibility/

Specialty Lending

Moctar Toure TTL at appraisal

Christine Cornelius Lead Operations Officer AFTAR

Moses Sabuni Wasike Sr. Financial Management Specialist AFTFM

Andrew Mwihia Karanja Agric. Economist AFTAR Turi Fileccia Sr. Agriculturalist FAO Fred Bitanihirwe Project Analyst FAO

Michael Foster Senior Agriculturist Sasakawa

Global 2000

Gem Kodhek Agricultural Economist Tegemeo Institute

Enos Esikuri Environment Specialist ENV Tesfaalem Gebreiyesus Senior Procurement Specialist AFTPC Hyacinth Brown Senior Finance Officer LOAG2 Hisham Abdo Kahin Legal Counsel/Consultant LEGAF John Boyle Environment Safeguards Specialist AFTS1 Roxanne Hakim Social Safeguards Specialist AFTS2 Dahir Elmi Warsame Senior Procurement Specialist AFTPC Melissa Brown Junior Professional Associate AFTS2 Sandra Jo Bulls Team Assistant AFTS2 Lucie Muchekehu Program Assistant AFCE2 Supervision/ICR Andrew Mwihia Karanja Sr. Agricultural Economist (TTL) AFTAR Henry Amena Amuguni Financial Management Specialist AFTFM Karen Mcconnell Brooks Sector Manager AFTAR Sandra Jo Bulls Program Assistant AFTEN Maina Gathu Consultant AFCE2 Jacob Kampen Consultant (Research) AFTAR Berhane Manna Sr. Agriculturist AFTAR Lucie Muchekehu Program Assistant AFCE2 David J. Nielson Lead Agriculture Services Specialist AFTAR Tom Mboya. Owiyo Consultant (M&E) AFCE2 Almaz Teklesenbet Program Assistant AFTAR Dahir Elmi Warsame Senior Procurement Specialist AFTPC Moses Sabuni Wasike Sr. Financial Management Specialist OPCFM Mohammed Taqi Sharif Consultant/ICR Team Leader AFTAR

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Jane K. Njuguna Consultant/ICR Team Member AFTAR Julien Vallet Consultant/ICR Team Member AFTAR Germaine Mafougong Program Assistant AFTAR (b) Staff Time and Cost

Stage of Project Cycle Staff Time and Cost (Bank Budget Only)

No. of staff weeks USD Thousands (including travel and consultant costs)

Lending FY04 42 316.91 FY05 6 7.25 FY06 0.00 FY07 0.00 FY08 0.00

Total: 48 324.16

Supervision/ICR FY04 0.00 FY05 40 87.02 FY06 52 112.91 FY07 26 110.62 FY08 44 124.62 FY09 8 0.00

Total: 170 435.17

Note: Cost of supervision not available for FY09 from the Bank’s systems.

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Annex 5. Beneficiary Survey Results 1. Two beneficiary surveys were conducted in target areas. These were: (i) The Technology Adoption Survey (2009); and (ii) The Evaluation of Extension Pilots survey (2008). The findings of the key points from each study are summarized below. 2. A Technology Adoption Survey was conducted in 2009 on 800 households in nine out of 20 pilot districts. These households were representative of all the agro-regional zones using proportional sampling. The objective was to collect information for the post project impact assessment. This survey followed a Baseline Survey that was conducted in September of 2006 and covered 2,027 households in 15 out of 20 project pilot districts. The analysis of the study used the Difference-in-Differences method where a comparison was made between the target and control households. Key findings from this study are summarized below: 3. Most households were headed by males. The proportion of female-headed households in the target area was lower (13.1%) compared to the control group (17.9%). About 18% of the household heads had no formal education, while highest level of education obtained by half of the household heads was primary level. Only 1.9% of household heads had post-secondary education. The average household land was 3.4 acres, varying from a high of 4.7 acres in the Coastal Lowlands to 1.8 acres in Northern Arid Zone and the Western Transitional Zone. A majority of farmers (82.5%) grew maize. Beans and cassava were the next common food crops grown by 44.2% and 10.4%, respectively. A significant proportion of households (41.0%) owned cattle while 15.3% of households in Central Highlands, Western Highlands and High Potential Maize zones owned grade cattle. Agricultural Extension Services 4. A majority of households (51.7%) actively sought advice on crop production, livestock and conservation methods in the last one year. The highest percentages, of households seeking advice on crops, livestock, and conservation, were recorded in the High Potential Maize zone and the Western Highlands at 69% and 64%, respectively. Target households had a relatively higher proportion (63.2%) compared to control households, which had a lower proportion (36.3%) of households seeking extension services. Of these households, nearly half had received extension services. On service provision, the public extension agents dominated in all zones. Other significant sources, among target households, included radio, television, neighbors, fellow farmers, and NGO agents. 5. A majority of target households (72.7%) indicated willingness to pay compared to a lower proportion (59.3%) for control households (see Table 5.1 below). The percentage was higher from the Evaluation of Extension survey which was at 66.9%. The households were willing to pay for advice on crop production services, which was the case for most regions. However, households in Central highlands were more willing to pay for livestock and horticulture production services than crop production services.

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Table 5.1: Percentage Distribution of Households Willingness to Pay for Agricultural Technologies

Agro-regional Zone Household Category

Target Control Total Central Highlands 68.3 71.2 69.5 Coast Lowland 70.8 51.1 61.1 Eastern Lowlands 74.4 73.1 73.8 High Maize Potential Zone 90.9 70.8 82.5 Western Highlands 91.7 39.6 68.5 Western Lowlands 85.7 76.9 81.8 Western Transitional Zone 67.8 52.5 61.6 Northern Arid Zone 32.5 37.0 34.3 Overall 72.7 59.3 66.9

Source: Technology Adoption Survey, July 2009 6. The fact that the beneficiaries were willing to pay for extension services is an indication that they valued the advice they received. Conversely, the households who were not willing to pay for services cited cost as an issue, access to free services, and services not available. Technology Adoption 7. The project had an overall positive impact on the adoption of hybrid maize seeds technology by target farmers. Farmers from Northern Arid Zone adopted this technology at a higher rate 26.7% from a zero baseline. Farmers in Central Highlands and High Potential Maize zone had the least change in the adoption of hybrid maize seeds from a baseline of 86% and 93% to 89.9% and 94.4% respectively. This is because these areas were already using hybrid seeds. The project also had a positive impact on adoption of fertilizer use for the target farmers. The fertilizer use per acre on the maize crop for farmers in all the regions within the target areas, especially the Northern Arid Zone increased. However, fertilizer use on all crops declined. The project had a positive impact on the adoption of animal feed preservation technologies; there was an overall positive impact estimate of 4.3 percentage points. Beans and cassava were the next common food crops grown after maize. Tomatoes were grown by a significantly higher proportion of target households compared to the control groups. Welfare Indicators 8. As a result of the project’s activities, target households on average reported higher percentages of improvement in the income (49%) and food security (41%) compared to the control households of 21.0% and 17.6%, respectively. This was the trend for most of the welfare indicators across the agro-regional zones. Overall, the target households performed better on all the household welfare indicators. However, the proportion reporting worsening water availability was higher for target households compared to control households in the Coastal Lowlands, and Western Transitional zones. The table below (5.2) summarizes the welfare indicators’ results. Table 5.2: Percentage Distribution of Households indicating Changes in Selected Household Welfare indicators in the Last 3 Years

ARZ and Household Categories

Income Levels

Food Security

Water Availability

Ability to meet Educational

Costs

Ability to meet Health

Costs Better Worse Better Worse Better Worse Better Worse Better Worse

Target

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Central Highlands 48.5 46.5 40.6 52.5 42.6 29.7 46.5 22.8 42.6 29.7 Coast Lowlands 45.8 45.8 45.8 41.7 43.8 27.1 56.3 29.2 60.4 25.0 Eastern Lowlands 5.1 82.1 2.6 89.7 12.8 17.9 10.3 61.5 10.3 69.2 High Potential Maize 48.5 42.4 33.3 60.6 33.3 3.0 42.4 42.4 39.4 45.5 Western Highlands 63.3 33.3 55.0 35.0 28.3 3.3 51.7 38.3 61.7 28.3 Western Lowlands 63.3 24.5 49.0 40.8 36.7 0.0 44.9 26.5 46.9 22.4 Western Transitional Zone 59.3 28.8 50.8 37.3 44.1 6.8 69.5 8.5 52.5 27.1 Northern Arid Zone 42.5 45.0 35.0 55.0 47.5 32.5 57.5 25.0 40.0 42.5

Total 49.0 42.4 41.0 49.7 37.3 16.3 48.7 29.4 45.7 33.8

Control Central Highlands 23.3 67.1 17.8 60.3 16.4 52.1 21.9 32.9 27.4 45.2 Coast Lowlands 14.9 66.0 6.4 72.3 66.0 4.3 55.3 23.4 70.2 10.6 Eastern Lowlands 3.8 96.2 0.0 96.2 0.0 38.5 7.7 65.4 15.4 65.4 High Potential Maize 33.3 41.7 33.3 37.5 4.2 12.5 33.3 33.3 20.8 20.8 Western Highlands 29.2 60.4 18.8 70.8 16.7 10.4 31.3 54.2 25.0 58.3 Western Lowlands 33.3 33.3 25.6 51.3 64.1 2.6 35.9 28.2 41.0 25.6 Western Transitional Zone 12.5 62.5 25.0 52.5 47.5 5.0 25.0 45.0 22.5 55.0 Northern Arid Zone 11.1 55.6 14.8 70.4 44.4 29.6 51.9 14.8 48.1 25.9

Total 21.0 60.8 17.6 63.6 33.3 21.3 32.4 36.7 34.6 39.2 Overall 32.1 50.8 26.9 56.2 35.2 18.6 39.7 32.8 39.8 36.4

(ii) An Evaluation of Extension Pilots study was conducted in 2008. A random sample was administered to 2,001 farming households as well as 236 extension service providers (SPs) from 15 of the 20 districts. The objective was to assess extension delivery systems, and funding mechanisms and approaches. Key findings from the survey are summarized briefly as follows: Group participation 9. Most of the households (99%) belonged to farmer groups. These groups acted as forums for information sharing, and in some cases, a savings mechanism. Crop-based groups were the majority (48%), followed by dairy cattle groups (11%), and poultry (9%), among others. These groups were not necessarily well coordinated to demand extension advisory services that would benefit their agricultural enterprises. The formation of organized farmer fora and common interest groups allowed farmers to participate in decision-making regarding provision of agricultural extension services. Most of the household heads (73%) engaged in farming as a full time activity, while 27% farmed as a part-time activity. This trend indicated dominance of agriculture in the rural households’ livelihoods and underlines the importance of improving agricultural productivity.

Extension services provision 10. Most respondents (84%) expressed satisfaction with services received, with over 80% of public and private providers rated as good or excellent. They also expressed a need for more interaction with SPs, 41 times per year on average versus the actual interactions of 25 times per year. The benefits of advice from SPs by importance were perceived to be facilitation of greater input use, increased credit acquisition, improved market access, and better planning of profitable enterprises. This was consistent with

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respondents’ characterization of the most pressing farming problems by rank: high input costs, pests, inadequate credit, erratic rainfall, and lack of markets. Extension approaches and methods 11. Regarding training, focal area and farmer field schools were the extension approaches identified as good means of client training aimed at improving production. Approximately 98% of the SPs involved farmers in development of extension programs/activities. Concerning financing models, respondents viewed the CIG model and Government financing model as providing better quality services than the SP fora or intermediary organizations. Both farmers and SPs preferred four methods which were more participatory and farmer-oriented. Demonstration/field days was best at showing practical application of technologies, barazas (public-meeting) were good at delivering clear messages, farm visits provided farmer to farmer shared experiences, while group discussions also provided clear messages, added more clarity and elaboration. Within these activities, two management approaches dominated: the focal area approach and farmer field schools versus farming systems. Farmer Empowerment 12. Farmer empowerment was imperative for adopting and utilizing technologies for agricultural development. Respondents articulated what they considered effective methods for farmer empowerment as provision of credit, training, and provision of inputs for demonstrations and technology validation. On the other hand, the SPs identified formation of farmer groups and organizations, provision of credit, and study tours as the most effective ways of empowering farmers. The SPs should strive to harmonize the services provided in order to increase farmer participation. Conclusion 13. The impacts of the project’s activities and developments will take time to be felt. There is, however, evidence to the effect that the project support played an important role in creating the necessary momentum towards a reformed and improved extension service delivery to farmers and adoption of agricultural technologies. The beneficiaries from the targeted 20 districts were able to articulate and attribute direct benefits to the project interventions. Successful organization and formation of CIGs and involvement of the members in activity priority-setting, the development and implementation of the EDPs, and increased proposals for scaling up technology contributed to decision-making abilities for the farmers.

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Annex 6. Stakeholder Workshop Report and Results

Not applicable.

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Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR

Republic of Kenya Kenya Agricultural

Productivity Programme

KENYA AGRICULTURAL PRODUCTIVITY PROJECT (KAPP)

KAPP Promoting Agriculture for Faster Development

PROJECT COMPLETION REPORT

October 2004 – December 2008

Ministry of Agriculture Ministry of Livestock Development Ministry of Fisheries Development

Kenya Agricultural Research Institute

For more Information Contact: The National Project Coordinator Kenya Agricultural Productivity Project (KAPP) P.O. Box 57811-00200, Nairobi, Kenya Tel: 254-020-4183324 Fax: 254-020-4183344 E-mail: [email protected] Website: kapp.go.ke

February 2009

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KENYA AGRICULTURAL PRODUCTIVITY PROJECT PHASE 1

PROJECT COMPLETION REPORT

SUMMARY

The KAPP development objective was to improve the overall system by Supporting generation, dissemination, and adoption of agricultural Technology through: (i) reforms in extension to increase pluralism, responsiveness to clients, and participation by private providers; (ii) an evolutionary change in the existing system of agricultural research to improve accountability and impact; and (iii) increased empowerment of producer organizations to influence the planning, design, implementation, funding and monitoring and evaluation of research, extension, training and capacity building activities. This report is a statement of progress made by the project under the four project components between October 2004 and December 2008: The components include:- Facilitation of Policy and Institutional Reforms; Support to Extension System Reform; Support to Research System Reform and Support to Farmer/Client Empowerment. Under the Facilitation of Policy and Institutional Reforms Component, key achievements are: (i) the appointment of the KAPP Secretariat to manage the consultative processes, as well as to coordinate the monitoring, evaluation and analytical input into those processes, information communication and public relations associated with KAPP; (ii) the appointment and operationalization of 20 District Service Units (DSUs), a key project implementing structure at the district level to coordinate the implementation of targeted pilot interventions for the extension and farmer empowerment components; (iii) the appointment and commissioning of the National Extension and the National Research Task Forces to spearhead national level consultations on reforms in the agricultural sector; (iv) the appointment and commissioning of the Communication Task Force to spearhead consultations on the formulation of the Agricultural Sector Communication Strategy; (v) the provision of support for Policy Analysis to the Ministries of Agriculture and that of Livestock and Fisheries Development; (v) the provision of support for Avian Influenza preparedness; (vi) the undertaking of household and community baseline surveys in all the project districts; (vii) Result oriented, detailed work planning and budgeting procedures introduced; and (viii) awareness creation on project objectives and activities through both the print and electronic media as well as face to face communication. Key achievements under the Extension System Reform Component were the finalization of the National Agricultural Sector Extension Policy (NASEP) and its Implementation Framework (NASEP-IF); the mobilization of 80 local communities to identify their needs and develop Integrated Community Action Plans (CIPs) through a community resource assessment process in the pilot districts; the formation of 1,250 Common Interest Groups (CIGs) in all KAPP locations; and the implementation of the Enterprise Development Plans (EDPs) that were developed participatorily by the service providers and the beneficiaries; and, finally the inventorization of extension service providers in Kenya. Under Research System Reform Component, a draft Policy on the National Agricultural Research System (NARS), its implementation framework and investment plan were developed; tools and mechanisms for inter-institutional collaboration including a grants manual, governance structures, and a monitoring and evaluation framework were developed and operationalized. Three research calls/cycles targeting research along agricultural product value chain were advertised and twenty five research projects approved by the proposal review committee. They subsequently received funding and are being implemented.

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Achievements under support to Farmer/Client Empowerment component include the identification, verification and documentation of the profiles of 20 Apex/Commodity Organizations; consultative workshops were held for the officials of the identified Apex Organizations to deliberate on, and share their respective experiences and challenges and capacity building needs for the commodity associations. A commodity association’s council was established to coordinate the capacity building activities of apex commodity associations. A memorandum of understanding was entered into with KENFAP as a strategic partner. The Curriculum for capacity building of CIGs was developed and used to capacity build the Chairmen and Trainers of Trainers (TOTs) from all the KAPP CIGs, and the membership to farmers’ fora was revised to encompass farmers’ representatives from the non-KAPP locations in line with the mid-term review mission’s recommendation. Eighty and twenty farmers’ fora to lobby for farmers interest and favorable policies were formed at the divisional and district levels, respectively. Nineteen apex organizations and commodity organizations as well as one National apex body received support and are actively advocating for better services and policies for farmers. Ninety two proposals for up - scaling of technologies were developed, vetted and funded. Thirty per cent of the Common Interest Groups are already working with research institutions, credit providers, input suppliers, and marketing agencies as they move towards post production activities. Other achievements under the component were the publication and application of Farmer Grant Accounting Manual by the DSUs, and the profiling of existing CIGs in KAPP locations in readiness for scaling-up of technology innovations through farmer organizations. Slow and irregular flow of funds was a major impediment to implementation of activities. KARI COMPLETION REPORT ON KAPP I (MARCH 2009) EXECUTIVE SUMMARY The Kenya Agricultural Productivity Project (KAPP) is a 12 year program being implemented in three phases from 2004-2012. KAPP aims at improving the overall agricultural system by supporting generation, dissemination and adoption of agricultural technologies in a bid to synchronize research, extension and farmer empowerment initiatives. The first phase (2004-2007) supported the ongoing reforms in agricultural research, initiation of a participatory process of change in extension services, farmer/client empowerment and piloting of extension methods and delivery systems. The implementation of this phase was through four project components namely:- 1. Facilitation of Policy and Institutional Reforms, 2. Support to Extension System Reform, 3. Support to Research System Reform and 4. Support to Farmer/Client Empowerment. This completion report focuses on sub-component 3.2: Support to the Kenya Agricultural Research Institute (KARI) whose activities built upon KARI’s Third Medium Term plan (MTPIII) as well as specific findings and recommendations made by various external reviews. As outlined in the Project Appraisal Document (PAD), KAPP support to KARI addressed key structural issues; i. Enhancing KARI’s ability to demonstrate sizeable field impact by addressing shortcomings in its capacity and approaches to extend and up-scale successful technologies, ii. Improving its research planning, review and approval processes to reflect changes prompted by feedbacks from end-users and or emerging challenges and to improve accountability, iii. Revising the quality review and assurance process, iv. Paying greater attention to socio-economic aspects within a biologically-dominated research system, v. building an adequate ICT infrastructure and, vi. Improving KARI’s working environment and incentive structure for scientists. In this context KARI envisaged to carry out activities in four thematic areas: i. Institutional strengthening, ii. Research programs, iii. Information dissemination, and iv. Research and development funding.

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The team reviewed several documents including, The Project Appraisal Document (PAD), the Project Implementation Plan (PIP), the Status Report on KAPP Benchmarks and KARI Divisional Programmes Progress Reports, the Revised Results Framework, the various Aide Memoirs by the WB Missions, and centre submissions on the status of the activities undertaken. In addition the team interviewed key informants, among them programme coordinators, Assistant Directors, Chiefs of Divisions, Centre Directors and scientists based at the headquarters and centres. The team also visited nine KARI centres (Thika, Embu, Naivasha, Muguga North, Muguga South, Katumani, KARI Kabete, Biotechnology and KARI Headquarters). This exercise was carried out from 12 – 19th May, 2008. The four thematic areas are composed of different programmes whose activities were supported under KAPP I. In total 14 programmes were funded, and this report covers the status of their implementation, by the completion of Phase 1, in terms of, number of activities implemented, level of implementation, utilization of allocated resources, timeliness, achievements, and constraints to implementation. Institutional strengthening: A comprehensive human resource strategy was developed and is now being implemented. Several skill-enhancement trainings were conducted including formal long-term training at PhD and MSc levels. Several short-term trainings in value chains, biometrics, PM&E, ISO certification, accounts, supplies etc. were also facilitated through KAPP support. Furthermore, staff rationalization to appropriately distribute scientists within KARI centres, establishment of a performance management/contracting system and service charter greatly enhanced the Institutes human capacity to generate and disseminate technologies. This was boosted by the development of scheme of service and salary reviews, which have created incentives and motivated scientists to carry out research. Training Needs Assessment (TNA) has been completed and a draft report is out for sharing before final report is written. This is to be followed with a Training Master Plan (TMP) for the Institute. The process of conducting TNA was rather slow, due to lengthy procurement process for consultancies. The Training Master Plan was therefore deferred to Phase II. A draft ICT strategy was developed and reviewed with assistance of FAO. Issues such as content, standardization and human resources were major challenges. Installation of LAN and WAN systems in KARI centres was initiated but is yet to be completed. This is an essential facility that will enhance access to and sharing/dissemination of information by KARI scientists and installation. Otherwise KARI has established excellent collaboration in ICT with several partners and consortia (FAO, CTA, CABI, ASARECA-RAIN, FARA, KENET, KAINET, Universities and KLISC), that has greatly improved access to on-line/electronic information. The process of reviving the East African Agriculture and Forestry Journal is in advanced stages with a strategy, Advisory Board, Editorial Board and Editor in place through KAPP support. Since the Journal caters for a wide range of institutions and other stakeholders it is suggested that future support be under NARS sub-component. KAPP support to KARI has also enabled the Institute to carry out infrastructural development in some centres to improve the working environment. Construction of an office block and laboratories at Thika and rehabilitation of staff houses and retreat facilities at NARC Muguga, plus purchase of vehicles, tractors, computers and office equipments has improved the working environment of KARI staff. During KAPP phase I, KARI upgraded its financial management system FINPRO, to FINPRONET to improve efficiency in financial management. However the system is yet to be used to its full potential due to limited capacity by the users. This should be enhanced through additional training of users especially at KARI centres. Slow flow of funds affected the rate of implementation of activities and the whole process of access to, disbursement and accounting of funds should be reviewed to improve it. Research programs: Under KAPP funding several technological and information packages were developed. These included new varieties in food crops, horticultural and industrial crops, and crop

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husbandry packages, feeds and feeding packages for dairy, beef, small ruminants and poultry. Pen-side tests and vaccines for various livestock diseases were developed. Value addition technologies for some of these crops were also developed. Several of these technologies have been channeled through a KARI Initiative (Agricultural Technology and Information Response Initiative – ATIRI) to CBOs for testing and dissemination. All these technologies will contribute significantly to the revitalization of the agricultural sector. This enhanced KARI’s ability to create field level impact especially given the Government’s commitment to creating an enabling environment for farmers to adopt new technologies. The experiences from this initiative have greatly informed the modeling of DSU functions and other Government extension pilots (e.g. NALEP). The emphasis in KAPP funding was also to promote and strengthen linkages of crop and livestock commodities to industry. Through this support, KARI has adopted the Agricultural Products Value Chain (APVC) concept and aligned its research to the national policy of commercializing agriculture. This has been incorporated in the current strategic plan and it’s Implementation Framework. This is the framework to be used during KAPP Phase II and to enhance KARI’s impact along the different Product value chains. The socio-economic research has greatly improved KARI’s priority setting capacity and targeting research to prevailing social, economic and marketing issues. Through KAPP support the programme also contributed to drafting of a number of agricultural policies. The main experience under this thematic area was inadequate, slow and untimely release of funds that delayed the implementation of activities and full achievement of the set benchmarks. There was also the issue of slow procurement especially where external consultancies and/or contracts were required. Staff turn-over rates especially of highly specialized staff members also affected implementation of programs. However this problem was partially ameliorated through staff rationalization. Information Dissemination: One of the key structural issues that KARI had to address during KAPP Phase I was to enhance the Institute’s ability to demonstrate sizeable field impact by addressing shortcomings in capacity and approaches to extend and up-scale successful technologies. Through KAPP support to ATIRI, many farmers across the country acquired desired technologies/information. This was due to the decentralization of the proposal vetting and approval mechanism, to centres by empowering Regional Steering Committees to do this. This resulted in a total of 350 CBOs and 500,000 farmers being funded through KAPP support. Under KAPP, it was expected that ATIRI was to be modified to be the main means for planning, implementing, monitoring and evaluation of farmer demand driven activities. ATIRI was also expected to contribute to capacity building and empowerment of farmer groups. The anticipated ATIRI operational modalities were, however, not effected during phase I but this is expected to be considered during phase II. ATIRI now is set to evolve into an Outreach and Partnership programme. The programme will have the responsibility to strengthen linkages with key partners (e.g. extension, DSUs, farmer organizations, private sector, universities, CG centres, other research institutions, regional networks, donors, Government Departments etc. to ensure that KARI products get to the beneficiaries in a cost effective manner. Research Development Funding: KARI mainly finances her research activities from Government and donor sources. KAPP support was to assist KARI set up the Agricultural Research Investment Services (ARIS) as a wholly owned subsidiary private company, for internal income generation. The ARIS drafted legal instruments and institutional framework, business strategy, identified business areas and developed business plans. It also initiated pilot business operations in 11 KARI centres. However the draft legal instruments are yet to be finalized and approved. This is important and necessary for ARIS to operate as a private limited liability company as initially envisaged. It is expected that once it is incorporated, ARIS will to exploit its full potential of generating revenue from the several sources already identified such as

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commercializing KARI’s surplus farm resources, laboratory and analytical services and hospitality services (i.e. catering, conference facilities and guest houses). The institute also initiated the setting up of an Agricultural Research Trust Fund through which an endowment fund can be set up, and capitalized through grants, gifts, debt swaps and royalties. Capacity will also be building, under this fund, for accessing competitive research grants, contract research and consultancies. Summary of Borrower’s Comments on Draft ICR

Text of Letter from Dr. Samuel G. Muigai, National Coordinator, KAPP, dated 25 September, 2009, sent to Andrew M. Karanja, TTL, KAPP I and KAPAP. Please refer to the draft Implementation Completion and Results Report dated September 10, 2009, transmitted to us for review and comments by the agencies and stakeholders involved in the implementation of the Kenya Agricultural Productivity Program (KAPP) Phase I. The draft has been reviewed. Overall, the review comments by all the agencies indicate agreement with the assessments and rating of achievements of the indicators. The ratings are largely in agreement with the results of the internal review undertaken by the Government. However, comments and suggestions have been given on rephrasing some of the narratives with respect to the processes and circumstances of implementation that led to the various outcomes. The specific comments by each of the agencies are attached for consideration. 30 I wish to submit these comments by the key stakeholders of KAPP Phase I and express their gratitude for the opportunity to review the draft report.

30 The comments were of an editorial nature. They have been taken into account in finalizing the ICR, as deemed appropriate.

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Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders

The comments of KENFAP, a key stakeholder in the project, were included in the summary of comments sent by the Borrower. There were no cofinanciers in KAPP I.

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Annex 9. List of Supporting Documents Preparation Documents

Project Concept Note (PCN) and PCN meeting minutes Preparation mission aide memoire PAD, appraisal meeting minutes, Appraisal mission aide memoire Development Financing Agreement (DFA) Kenya Country Assistance Strategy NARP II ICR w/ comments QER review minutes and comments

Supervision documents

All aide memoires and ISRs Mid term review aide memoire Yearly procurement plans and evaluations FM review documents (including SOE review and most recent communication on Fiduciary Review and community procurement) Reallocation; extension of Closing Date documentation

Manuals, implementation guidelines

Farmer Grants Manual (November 2005) Research Grants Manual (November 2005) Training manual for building capacity of CIGs Project Implementation Plan and manual

Special reports or studies funded by the project

Service Providers’ inventory Technology inventory

Evaluations

KAPP Baseline Survey Report KAPP follow up survey questionnaire Report of the Internal Evaluation of KAPP District Service Units Interventions, GoK, March/April 2008 External Evaluation Final Report, Cardno Agrisystems (August 2008) Evaluation of Extension Pilots, draft, September, 2008 GoK Project Completion Report (February 2009) KARI – Project Completion Report (March 2009) Technology Adoption Survey (July 2009)

Other – Borrower’s comments on draft ICR – Letter dated September 25, 2009

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MAP