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Document of The World Bank Report No: ICR00003287 IMPLEMENTATION COMPLETION AND RESULTS REPORT (IDA-H5090) ON A GRANT UNDER THE GLOBAL FOOD RESPONSE PROGRAM IN THE AMOUNT OF SDR 3.40 MILLION (US$ 5.0 MILLION EQUIVALENT) TO THE REPUBLIC OF HAITI FOR A STRENGTHENING AGRICULTURE PUBLIC SERVICES PROJECT February 20, 2015 Agriculture Global Practice Haiti Country Management Unit Latin America and Caribbean Region Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized CURRENCY EQUIVALENTS (Exchange Rate Effective December 2014) Currency Unit = Gourde Gourde 1.00 = US$ 0.0216 US$ 1.00 = 46.25 Gourdes FISCAL YEAR October 1 – September 30 ABBREVIATIONS AND ACRONYMS AOP Annual Operating Plans BAC Agriculture Communal Office CIDA Canadian International Development Agency DAAF Directorate of Administrative and Financial Affaires DDA Departmental Agriculture Directorate DEEDS Economic Development for a Sustainable Environment DEFI Rural Supply Chain Development Project DRF Research and Training Directorate DG Director General DSNCRP Poverty Reduction National Strategy Document EA Environmental Analysis EU European Union FAO Food and Agriculture Organization FIOP Investment Proposal GDP Gross Domestic Product GFRP Global Food Response Program GOH Government of Haiti IADB Inter-American Development Bank IDA International Development Association IFAD International Fund for Agricultural Development IFR Unaudited Interim Financial Report ISR Implementation Status and Results Report IT Information Technology LAC Latin America and the Caribbean Region M&E Monitoring and Evaluation MARCHE Market Chain Evaluation Project MARNDR Ministry of Agriculture, Natural Resources and Rural Development MEF Ministry of Economics and Finance MIS Management Information System MPCE Ministry of Planning and External Cooperation MPCE Monthly per Capital Expenditure NGO Nongovernmental Organization PDO Project Development Objective PEMFAR Agriculture Public Expenditure Review PIA Agriculture Intensification Project PICV Food Crop Intensification Project PIU Project Implementation Unit PPI Small Irrigation Rehabilitation Project PRODEP Participatory Development Program ii RESEPAG Strengthening Agriculture Public Services R&D Research and Development SOP Standard Operating Procedures SYSCOP Accounting Software SYSGEP Project Management Monitoring System TA Technical Assistance TP Public Treasury UEP Planning and Studies Unit USAID U . S . Agency for International Development UTES Technical and Sectoral Environmental Unit Vice President: Jorge Familiar Calderon Country Director: Mary Barton-Dock Senior Global Practice Director: Juergen Voegele Practice Manager: Laurent Msellati Project Team Leader: Pierre-Olivier Colleye ICR Team Leader: Eli Weiss ICR Author: Daniel Gerber iii Haiti Strengthening Agriculture Public Services CONTENTS Data Sheet A. Basic Information B. Key Dates C. Ratings Summary D. Sector and Theme Codes E. Bank Staff F. Results Framework Analysis G. Ratings of Project Performance in ISRs H. Restructuring I. Disbursement Graph 1. Project Context, Development Objectives and Design ............................................... 1 2. Key Factors Affecting Implementation and Outcomes .............................................. 6 3. Assessment of Outcomes .......................................................................................... 12 4. Assessment of Risk to Development Outcome......................................................... 19 5. Assessment of Bank and Recipient Performance ..................................................... 20 6. Lessons Learned ....................................................................................................... 23 7. Comments on Issues Raised by Recipient/Implementing Agencies/Partners .......... 24 Annex 1. Project Costs and Financing .......................................................................... 25 Annex 2. Outputs by Component ................................................................................. 26 Annex 3. Economic and Financial Analysis ................................................................. 32 Annex 4. Bank Lending and Implementation Support/Supervision Processes ............ 43 Annex 5. Beneficiary Survey Results ........................................................................... 45 Annex 6. Stakeholder Workshop Report and Results................................................... 46 Annex 7. Summary of Recipient's Final Report ........................................................... 48 Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders ....................... 51 Annex 9. List of Supporting Documents ...................................................................... 53 MAP iv A. Basic Information Country: Haiti Project Name: Strengthening Agriculture Public Services Project ID: P113623 L/C/TF Number(s): IDA-H5090 ICR Date: 02/20/2015 ICR Type: Core ICR Lending Instrument: SIL Recipient: REPUBLIC OF HAITI Original Total Commitment: SDR 3.40M Disbursed Amount: SDR 3.40M Revised Amount: SDR 3.40M Environmental Category: B Implementing Agencies: Ministry of Agriculture, Natural Resources and Rural Development (MARNDR) Cofinanciers and Other External Partners: B. Key Dates Process Date Process Original Date Revised / Actual Date(s) Concept Review: 01/12/2009 Effectiveness: 10/13/2009 10/13/2009 Appraisal: 04/27/2009 Restructuring(s): 05/03/2010 06/27/2014 08/27/2014 Approval: 06/25/2009 Mid-term Review: 10/31/2012 10/22/2012 Closing: 06/30/2013 08/31/2014 C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Satisfactory Risk to Development Outcome: Substantial Bank Performance: Satisfactory Recipient Performance: Moderately Satisfactory C.2 Detai led Ratings of Bank and Recipient Performance (by ICR) Bank Ratings Recipient Ratings Quality at Entry: Satisfactory Government: Moderately Satisfactory Quality of Supervision: Satisfactory Implementing Agency/Agencies: Satisfactory Overall Bank Performance: Satisfactory Overall Recipient Performance: Moderately Satisfactory C.3 Quality at Entry and Implementation Performance Indicators Implementation Performance Indicators QAG Assessments (if any) Rating v Potential Problem Project at any time (Yes/No): Yes Quality at Entry (QEA): None Problem Project at any time (Yes/No): Yes Quality of Supervision (QSA): None DO rating before Closing/Inactive status: Moderately Satisfactory D. Sector and Theme Codes Original Actual Sector Code (as % of total Bank financing) Agricultural extension and research 66 60 Public administration- Agriculture, fishing and forestry 34 40 Theme Code (as % of total Bank financing) Administrative and civil service reform 10 30 Rural policies and institutions 24 30 Rural services and infrastructure 66 40 E. Bank Staff Positions At ICR At Approval Vice President: Jorge Familiar Calderon Pamela Cox Country Director: Mary A. Barton-Dock Yvonne M. Tsikata Practice Manager/Sector Manager: Laurent Msellati Ethel Sennhauser Project Team Leader: Pierre Olivier Colleye Diego Arias Carballo ICR Team Leader: Eli Weiss ICR Primary Author: Daniel P. Gerber F. Results Framework Analysis Project Development Objectives ( from Project Appraisal Document ) The project development objective (PDO) is to enable MARNDR to prioritize and target investments according to sector policies, and improve local agriculture support services. Revised Project Development Objectives (as approved by original approving authority) N/A (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 vi Indicator 1 : Rate of commitment of the operating budget (excluding salaries) at MARNDR central office Value quantitative or Qualitative) 80 percent 95 percent 95% Date achieved 07/01/2009 07/01/2009 06/30/2014 Comments (incl. % achievement) Achieved (100%): Based on the annual report produced by the M&E team of the Ministry and confirmed by MEF report. Indicator 2 : MARNDR Investment budget reflects prioritization and targeting by the end of the second project year Value quantitative or Qualitative) N/A Completed Substantially achieved Date achieved 07/01/2009 07/01/2009 10/22/2013 08/30/2014 Comments (incl. % achievement) Substantially Achieved: A review of policy and prioritization completed in the last year of implementation shows investments are substantially targeted and aligned with sector strategies. Indicator 3 : At least 3000 farmers receiving more diverse support services in the pilot zones before the end of the project Value quantitative or Qualitative) 280 3000 4565 Date achieved 07/01/2009 07/01/2009 08/30/2014 Comments (incl. % achievement) Exceeded (152%): The program has generated high demand and with reallocation of resources the quantitative objective has been well surpassed. (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 : Number of MARNDR staff passing a skills test post training Value (quantitative or Qualitative) None 80 individuals dropped N/A Date achieved 07/01/2009 07/01/2009 06/30/2014 08/30/2014 Comments (incl. % achievement) Dropped: Objective testing could not be conducted as no independent testing body exists within government. Indicator was dropped in third restructuring. Indicator 2 : Preparation of Manuals of procedures for managing the operation and investment budgets Value (quantitative or Qualitative) None completed by year 2 Completed Date achieved 07/01/2009 07/01/2009 08/30/2014 Comments Achieved (100%): Following Manuals developed: vii (incl. % achievement) - Accounting and Financial Management for projects - M&E manual of principles for investment projects Indicator 3 : Establishment of a functioning Environmental Unit inside MARNDR Value (quantitative or Qualitative) None, no environmental safeguards capacity established by year 3 M&E unit of 3 people established within planning and programing unit of the Ministry (UEP) Date achieved 07/01/2009 07/01/2009 08/30/2014 Comments (incl. % achievement) Achieved (100%): Unit established with 3 people, paid mostly from project funds but with limited capacity for effective field supervision. Indicator 4 : Increase the commitments of the operating budget (except salaries) in the DDAs to 70% Value (quantitative or Qualitative) 45% 70% 99.7% Date achieved 07/01/2009 07/01/2009 08/30/2014 Comments (incl. % achievement) Exceeded (152%): According to records of MEF fiscal year exercises ending 2012-2013 Indicator 5 : 100% of procurement records over US$100,000 and managed by MARNDR published on its website Value (quantitative or Qualitative) None 10% first year 30% second year 80% fourth year 100% of documents over US$ 100,000 on web site Date achieved 07/01/2009 07/01/2009 08/30/2014 Comments (incl. % achievement) Achieved (100%): Some 20 records representing 100% of over US$100,000 procurements on web site. Indicator 6 : Reduction from 15 days to 5 days for emission of checks Value (quantitative or Qualitative) 15 days 5 days 4 to 5 days Date achieved 07/01/2009 07/01/2009 08/30/2014 Comments (incl. % achievement) Achieved (100%): With adoption of software based accounting, check issuance reduced to between 4 and 5 days Indicator 7 : Intranet and E-mail system installed for 300 MARNDR staff Value (quantitative or Qualitative) None E-mail and intranet accounts for 300 staff 260 E-mail accounts and connection of regional offices (DDAs) and research farms in pilot areas. Date achieved 07/01/2009 07/01/2009 08/30/2014 Comments (incl. % achievement) Substantially achieved (87%): Network established with computers and training on cloud based site. Technical challenges with connections. IT unit informally established to support system maintenance. Indicator 8 : FIOPs (project identification sheet) transmitted to MPCE for 80% of projects in the PIP (Public Investment Program) viii Value (quantitative or Qualitative) 10% 80% 100% of FIOPs are in the PIP Date achieved 07/01/2009 07/01/2009 08/30/2014 Comments (incl. % achievement) Exceeded (125%) Indicator 9 : Creation of a registry of services providers and producers/beneficiary for pilot zones Value (quantitative or Qualitative) No records of producers/beneficiaries or services providers Completed in year 2 Farm and service provider register in place in pilot areas. Date achieved 07/01/2009 07/01/2009 08/30/2014 Comments (incl. % achievement) Achieved (100%): Basic farm and beneficiary as well as services provider register established with geo-referencing of land parcels with individual identification code by beneficiary. National expansion underway. Indicator 10 : At least 2 R&D studies completed in pilot areas Value (quantitative or Qualitative) None 2 studies 1 study Date achieved 07/01/2009 07/01/2009 08/30/2014 Comments (incl. % achievement) Partially achieved (50%): A study on coffee value chain completed Indicator 11 : Coverage Mechanism against agricultural risks elaborated in pilot zones Value (quantitative or Qualitative) No risk management N/A Dropped N/A Date achieved 07/01/2009 07/01/2009 06/30/2014 08/30/2014 Comments (incl. % achievement) Dropped: Indicator was dropped due to indirect relevance to overall project and due to other donor program (CIDA) focusing on risk management in agriculture. Indicator 12 : 20 agricultural agents trained and educational material on environmentally friendly agricultural techniques prepared and disseminated in pilot zones Value (quantitative or Qualitative) 0 5 in year 2 15 in year 3 Some 38 offices trained and equipped with information material Date achieved 07/01/2009 07/01/2009 08/30/2014 Comments (incl. % achievement) Exceeded (153%): Environmental Unit Developed Integrated Pest Manual to help with more effective application of pesticides and phyto sanitary treatments. G. Ratings of Project Performance in ISRs No. Date ISR Archived DO IP Actual Disbursements (USD millions) 1 08/11/2009 Satisfactory Satisfactory 0.00 ix 2 02/17/2010 Satisfactory Satisfactory 0.00 3 05/28/2010 Moderately Satisfactory Moderately Satisfactory 0.50 4 01/24/2011 Moderately Satisfactory Moderately Satisfactory 0.50 5 07/19/2011 Moderately Satisfactory Moderately Satisfactory 0.96 6 03/28/2012 Moderately Satisfactory Moderately Satisfactory 1.10 7 09/26/2012 Moderately Satisfactory Moderately Satisfactory 1.41 8 04/24/2013 Moderately Satisfactory Moderately Satisfactory 2.14 9 12/03/2013 Moderately Unsatisfactory Moderately Satisfactory 3.24 10 06/09/2014 Moderately Satisfactory Moderately Satisfactory 4.78 11 08/11/2014 Moderately Satisfactory Moderately Satisfactory 4.97 H. Restructuring (if any) Restructuring Date(s) Board Approved PDO Change ISR Ratings at Restructuring Amount Disbursed at Restructuring in USD millions Reason for Restructuring & Key Changes Made DO IP 05/03/2010 N S S 0.50 Reallocation of resources to address needs stemming from earthquake, plus first extension of closing date to 6/30/2014. 06/27/2014 N MS MS 4.78 Project second closing date extension to 8/31/2014. 08/27/2014 N MS MS 4.97 Reallocation to input support program. I. Disbursement Profile x 1. Project Context, Development Objectives and Design 1.1 Context at Appraisal 1. The socio-economic situation in Haiti deteriorated throughout the 1990s and early 2000s. Poverty remained endemic, inequality was severe, and Haiti’s social indicators were among the lowest anywhere, signaling a chronic humanitarian crisis. At appraisal, some 76 percent of its population lived below the poverty line, with 56 percent in extreme poverty. The average per capita income of an extremely poor household was a mere 44 percent of the extreme poverty line, comparable to Sub-Saharan Africa. 1 Poverty was most widespread in rural areas where education and economic opportunities are limited, and basic social services and infrastructure are severely lacking. Some 90 percent of poor households and 67 percent of extremely poor households lived in the rural areas at appraisal. 2. Livelihood challenges - Haiti had struggled to emerge from a cycle of political instability and internal conflicts that devastated its economy, further weakened state institutions, augmented poor governance practices, increased poverty and, at times, prompted the withdrawal of external assistance to the government. The political situation had become more stable in 2004, but in 2008, a combination of exogenous shocks, once more showed the country’s high vulnerability to crises. 3. In 2007, Hurricane Noel led to flash floods and mudslides in the western part of the country, causing 66 deaths and 14,000 displaced families, while the 2008 hurricane season brought four major storms and hurricanes (Fay, Gustav, Hanna and Ike), resulting in major damage to roads, bridges, crops, and human suffering. The country had only limited capacity for recovery from these events in spite of significant emergency aid. 4. The country was also one of the worst affected by high commodity prices that had increased beginning 2007, which led to higher food prices throughout the world. The crisis most severely affected the poorest countries where a larger share of household income went to food purchases at the detriment of other household expenditures. In Haiti, the food price increases led to riots that presented a risk of increased instability. In response to the crisis worldwide, the Bank established the Global Food Response Program (GFRP) and Haiti would be one of the first beneficiaries with the Strengthening Agriculture Public Services Project (RESEPAG). 5. The role of agriculture in the economy - The country’s surface is 80 percent mountainous with more than 50 percent of land having slopes steeper than 40 percent (that does not lend itself to efficient production of field crops), with the exception of some large irrigated valleys. At appraisal, Haiti was a net importer of agricultural products, but local production of certain food products was thought to be internationally competitive and could potentially be sourced in increasing quantities. Although the importance of the agriculture 1 Haiti Living Conditions Survey 2003 report; according to international poverty lines of US$2 PPP and US$1 PPP per capita per day. 1 sector had been declining, it remained a potentially important source of pro-poor growth in Haiti, functioning as the backbone of the rural economy, generating some 25 percent of total GDP at the time of appraisal and accounting for about 50 percent of overall employment, 66 percent of employment in rural areas, and 75 percent of employment for the poor. 6. There were an estimated one million farmers in Haiti, who in large part lived in poverty and experienced various levels of food insecurity. Average size of the holding was about 0.5 hectare and productivity of local farming was constrained by the dominance of small-scale subsistence farms, few or non-existent agriculture extension services, insufficiently developed inputs and food supply chains, limited access to rural finance markets, and the inability to meet increasingly important food safety standards. 7. Public sector role in the agriculture sector - Public sector disbursements to agriculture had diminished (in real terms) over the years, even as overall budget allocations to the sector as percentage of total budget had risen from 3 to 4 percent. However, this increase reflected more the large resources devoted to programs and projects mainly funded by the donors rather than the government providing more resources to the Ministry of Agriculture, Natural Resources and Rural Development (MARNDR). 8. The MARNDR, with its ten Departmental offices (DDA) and 155 Communal offices (BAC) throughout the country (although only 40 were operational at that time), had a relatively substantial presence in rural areas. While this presence was appreciated by farmers and local organizations, service delivery was inadequate because MARNDR’s decentralized offices needed enhanced staffing, equipment and linkages to the headquarters in Port-au-Prince. MARNDR’s poor capacity in the field, together with administrative constraints at headquarters, led the donors and partners to avoid direct involvement with the ministry by creating “autonomous” project implementation units (PIUs). While these PIUs were established to achieve expeditious results on the ground, this strategy of project execution proved to have limited absorptive capacity. 9. Rationale for Bank involvement - The World Bank had re-engaged in the agricultural sector in Haiti after almost a decade of near absence. Re-engagement was in part driven by the food price crisis. This project, with limited resources from the International Development Association (IDA) and processed under the Global Food Response Program (GFRP), was to be a testing ground for more extensive re-engagement. The Bank’s Country Assistance Strategy (CAS) for Haiti for 2009-2012 was near Board approval. Agriculture was a key sector within the CAS. Given the Bank’s involvement in public sector reform, this operation was expected to facilitate the transition from an era of uncoordinated autonomous projects to one of consolidated steering capacity in the MARNDR. The project was to coordinate with ongoing donor-financed agriculture, rural development and public sector modernization programs. Particularly, close collaboration with the Inter-American Development Bank’s (IADB) Rural Supply Chain Project was to be established. This US$18.0 million project included institutional strengthening components and investments that would complement some of this operation’s proposed activities. 2 1.2 Original Project Development Objectives (PDO) and Key Indicators ( as approved ) 10. The project development objective (PDO) was to enable MARNDR to prioritize and target investments according to sector policies, and improve local agriculture support services. 11. The key indicators as formulated in the Project Appraisal Document (PAD) were (i) increase the MARNDR Central Office non-salary operating budget commitment rate (to 95% 2 ); (ii) prioritization and targeting of MARNDR investment budget (according to agriculture sector policy 3 ); and (iii) increase in the number of farmers (target of 3,000) receiving local (and diverse) agricultural services in pilot areas. 4 12. The proposed project represented the first stage of an expected fifteen to twenty- year engagement with Haiti on agriculture public sector reform and development. In this process, the government, through the MARNDR, was to regain the stewardship of the public sector resources going to agriculture, fulfilling its normative and regulatory and coordinating mandate. While ambitious, the proposed project was designed as a significant first step in reengaging with the government for the sustainable development of agriculture in Haiti. 1.3 Revised PDO (as approved by original approving authority) and Key Indicators, and reasons/justification N/A 1.4 Main Beneficiaries 13. The project had five categories of beneficiaries: (i) About 3,000 farmers in the pilot areas around the Research Center of Ferme Levi and Thiotte-Savane Zombi; (ii) MARNDR (at the headquarters level), including the General Directorate (DG) and its Planning and Studies Unit (UEP), the Directorate of Administrative and Financial Affairs (DAAF), the Directorate of Research and Training (DRF), and the newly established Environmental Sectoral Technical Unit (UTES); (iii) MARNDR (at the local level), including the Departmental Directorates of Agriculture (DDA) and Departmental Directorates of Finance (DDF); (iv) Research and Development Centers of Ferme Levi and Thiotte-Savane Zombi; and (v) input suppliers and services providers. 1.5 Original Components Component 1: Strengthening MARNDR’s Managerial Functions (US$2.1 million) was to finance (at the central and local level) two subcomponents. 14. Subcomponent 1a: Sector policies and coordination (US$0.7 million). This subcomponent was to finance the formulation and coordination of sector and subsector policies, the mainstreaming of environmental aspects within the agriculture sector policy, 2 From Results Framework 3 According to agricultural sector policy. From Results Framework 4 From Results Framework . Related to improving diversity of services, defined as mainly extension services and incentives (partial re-imbursement grants to farmers). 3 and the prioritization of investment and regulatory instruments, which are today fulfilled by the MARNDR’s Direction Générale (DG) and its Planning and Studies Unit (UEP). The main products were: (i) the training of staff in policy issues for strengthening the agriculture sector; (ii) the establishment of an Environmental Unit (UTES); and (iii) regular inter-ministerial, sectoral, and sub-sectoral meetings between donors, nongovernmental organizations (NGOs) and the government. 15. Subcomponent 1b: Enhancing administrative, human resources (HR), and fiduciary management (US$1.4 million). This subcomponent was to finance the improvement of MARNDR’s administrative, HR, and financial management (FM), including budgetary processes and procurement capacity. The main products were: (i) procedural manuals for budget preparation, procurement, and administrative procedures (including the project management monitoring system--SYSGEP); (ii) improvement in check issuance, procurement processes, project monitoring and evaluation (M&E), and harmonization of financial nomenclature between DDAs (Departmental Directorates of Agriculture) and DDFs (Departmental Directorates of Finance); (iii) improvement in communications by connecting MARNDR’s staff to email; and (iv) improved job profiles and job family descriptions and management performance indicators and mechanisms. Component 2: Strengthening Farmer Extension and Support Services (US$2 million) 16. This component was to finance the expansion of the provision of improved agriculture support services in pilot areas near the Research Center of Ferme Levi and the Research Center of Thiotte-Savane Zombi. This component was executed by the UEP, in coordination with the Directorate of Research and Training (DRF). It financed: (i) technical assistance (TA) and training for extension agents, farmers, farmer-groups and service providers (including environmental and social aspects); (ii) strengthening of local support service structures (R&D Centers and DDAs); (iii) the development of a farmer and service provider registry (including equipment and software); and (iv) incentive payments to farmers for adoption of improved agriculture technologies that are both revenue increasing and environmentally friendly. 17. In pilot areas, a service contract was awarded to private operators of agriculture support services with local experience (NGOs). A contract was in place between the MARNDR and a financial institution for the payment of farmer subsidies. The operators supervised the subsidy scheme in coordination with the MARNDR, in particular the local DDA, but did not handle the financial resources. Farmer incentives for adoption of technologies were to meet certain criteria in terms of beneficiary eligibility, type of technology, and expected economic and environmental impacts. Component 3: Project Coordination and Supervision (US$0.8 million) 18. Project execution was the responsibility of the Director General (DG) of the MARNDR. This component financed incremental costs associated with project implementation. To support project coordination and supervision, this component was to finance TA, operational costs, and other related costs. The Project Coordinator would be a member of the DG advisory team, while fiduciary responsibility (procurement and FM) would be with the DAAF. The Project Coordinator in the DG team was the primary Bank 4 counterpart for the purposes of project supervision and interfaced with the fiduciary functions of the DAAF and the various directorates responsible for the various subcomponents. 1.6 Revised Components 19. The components were substantially implemented as designed and most activities were implemented as intended. Component 1 experienced a number of minor changes including: (i) cancelling the proposed support for developing risk mitigation measures because a more in-depth effort related to insurance mechanisms was already being undertaken by the Canadian International Development Agency (CIDA), (ii) dropping the strengthening of the ministry's public relations and communication campaign; and (iii) dropping the training and testing of ministry staff on agricultural policies due to lack of an adequate testing body available to the ministry. Indicators related to these activities were dropped in the final process of restructuring. 1.7 Other significant changes 20. First Restructuring (Level 2): Given the hurricanes that pounded the country before the project and the devastating effect of the earthquake in early 2010, followed by another series of hurricanes, the project was restructured on May 3, 2010. This restructuring: (i) reallocated resources from the farmer subsidy scheme under Component 2 to Component 1 to build and rehabilitate office space and facilities at the MARNDR headquarters in Port- au-Prince after the damage caused by the earthquake; (ii) simplified the disbursement categories by merging all categories related to Components 1 and 3; and (iii) extended the closing date from June 30, 2013 to June 30, 2014. An obvious effect of the transfer of funds from the farmer subsidy scheme was to reduce the number of beneficiary farmers from 3,000 to 1,500. 21. Second Restructuring (Level 2): The project was restructured on June 27, 2014 to extend the closing date by two months. The GOH had also requested a reallocation to respond to a larger than expected demand for the farmer subsidy scheme (voucher incentive program) deployed in the South and Southeast. However, the reallocation could not be processed by the June 30, 2014 Closing Date due to posting errors (funds charged to an incorrect category) that took several weeks to resolve. 22. Third Restructuring (Level 2): The final restructuring approved on August 27, 2014 to address the GOH’s request included reallocating the Grant proceeds to increase the financing for the voucher system for agriculture producers and dropping three activities under Component 1a (see Section 1.6 above). The amount for vouchers, which was decreased in the first restructuring, was increased in response to: (i) high demand for this subsidy system and expectation that it would serve 4,500 producers instead of the 3,000 originally targeted; (ii) an increase in the average size of the subsidy as a response to an increase in input prices (while remaining well below the maximum per-producer-amount planned in the PAD); and (iii) the interest by a number of donors to scale-up this voucher scheme to US$100 million, justifying an additional round of vouchers to strengthen the process and draw possible lessons. This increased allocation was financed through a number of savings from other activities, primarily: (i) a part of the consultant-related costs 5 for the management of the voucher system were shifted to the second phase of the project (RESEPAG2) (P126744) that was already under implementation; (ii) ministerial building rehabilitation was covered by other donors; and (iii) completion of a number of activities by other donors (e.g. agriculture insurance supported by CIDA, the creation of an unified procurement unit and the strategy to consolidate research and development (R&D) in the agricultural sector supported by IADB), or with financing by the ministry itself. 2. Key Factors Affecting Implementation and Outcomes 2.1 Project Preparation, Design and Quality at Entry 23. Background - The project was prepared after a long period of political instability that left Haiti with more poverty, weakened institutions, and the withdrawal of external assistance, including a notable retreat of the Bank’s operations in agriculture for over a decade. The Bank maintained a dialogue with the government and undertook an agricultural Public Expenditure Review (PER) in 2007. The study highlighted the disconnect between: (i) the donor resources allocated and sectoral priorities; (ii) the lack of continuity in programs and resources from year to year; and (iii) resource management inefficiency and weak program monitoring and evaluation. Finally, in 2007, the global food price crisis, which caused social tensions and riots, led to the establishment of the Global Food Response Program (GFRP). Haiti was identified as one of the first beneficiaries and within this context, the project was prepared rapidly (five months from concept review to approval). 24. Primary objectives – At the same time, the Bank was entering a deeper reengagement with the country and preparing a Country Assistance Strategy (CAS) that defined agriculture as one of the key sectors that would provide economic growth. The project appropriately aimed to institute basic management systems that would help the MARNDR to deliver substantial donor resources to farmers, generate growth from the sector, and address the issues identified in the PER. The project simply aimed to return the control of the development agenda to the ministry and help formulate policy and monitoring in line with funding largely provided by donors. The preparation team was composed of members with multifaceted skills and extensive experience. The strong involvement of MARNDR staff and most of the technical directorates in project preparation ensured full ownership. 25. The project design – The project design reflected a longer term perspective of reengagement in Haiti’s agricultural sector. This project would represent the first step to improve the institutional and administrative capacity of the MARNDR while also providing an immediate stimulus to local production to help mitigate food price hikes. The design also allowed for strong ownership from all directorates of the MARNDR. However, there were some weaknesses, particularly the large number of discrete consultancies considering the low capacity of the ministry to either source these services or even integrate them at the ministerial level. The PDO was vague, indicators did not necessarily reflect the breadth of the objective and the results framework only partially reported on the expected results of project activities. 6 26. The project had a number of disbursement categories for Component 2, intended to protect technical assistance (TA) from potential redirection of project funds to subsidies. In some ways, this made financial accounting and linking with specific project activities complicated. Given the very weak capacity for FM in the ministry, this arrangement would have presented a major continuing challenge during implementation. The first restructuring of the project simplified the disbursement categories for consultancies to provide the necessary flexibility in the project to provide TA where the needs were greatest, proactively respond to MARNDR’s requests, and simplify ledger accounts and FM. 27. The institutional arrangements reflected a desire to embed project management within the government institutions without a separate PIU or coordination body. This decision created ongoing challenges for the ministry, particularly related to satisfying the fiduciary requirements of the Bank. While the project design specifically attempted to counter this risk with consulting services in procurement and FM as well as the introduction of a software-based FM system, this software was delayed by procurement challenges. 28. Risks - Overall risks were adequately assessed and rated either Substantial or High. Fiscal and financial constraints were realistically rated High. Indeed, without further support from the follow-on project (RESEPAG2), the sustainability of the structures established and capacities built within the ministry under the project would have been unlikely to be sustained. 2.2 Implementation 29. Impact of earthquake - After effectiveness, the project was immediately affected by the earthquake that destroyed much of the ministry’s headquarters. 30. Mid-term review - A mid-term review was undertaken in October 2012. The review did not raise any significant issues beyond the delays with a number of key activities to help administrative and budget performance at the ministry as well as the perennial FM and procurement difficulties. The project and its activities were largely maintained. By this time, the preparation of RESEPAG2 was already well advanced and it was understood that it would strengthen some of these aspects. 31. Main challenges - As explained above, the project faced challenges with the fiduciary requirements. Staffing of a procurement specialist was initially delayed because no qualified candidates could be found, even after three rounds with wide publication. Moreover, the capacity to integrate comments and revise procurement packages in line with comments from Bank procurement specialists was slow throughout project implementation. Contract management was equally challenging with many major contract deliveries, including the various information systems, only delivered within the last year of implementation. 32. As a consequence, the information technology (IT) networking of the MARNDR, including its building in Port-au-Prince, its 10 regional offices, along with the research farms, was only completed in early 2014. Similarly, the financial management software for the ministry was completed about 18 months before the closing date. Activities related 7 to strengthening the ministry were developed with a number of manuals and standard operating procedures (SOPs) in the last year of implementation. Overall training was reduced and focused mainly on the IT systems financed by the project. 33. Aide Memoires report significant challenges in the development of the various policy and training manuals. In the cases where they were drafted, the quality was questioned by UEP. Some of the manuals and SOPs were not entirely completed and the finalization of some of these products has been incorporated into the RESEPAG2 Project. 34. The cost of the IT systems, network installation, registers and databases and development of procedures were more expensive and time consuming than envisaged at project appraisal. However, it was understood that concluding these systems was of primary importance to meet the project objective and build systems that would benefit the ministry beyond the immediate project. Ultimately, given the high demand for the voucher program, as well as the availability of RESEPAG2 as a source of funding, the payments under the voucher program were financed by the GFRP project before closing, and those relating to other contracts were assigned for disbursement under RESEPAG2. This arrangement was agreed between the task team leader and the Project Coordinator and allowed the full absorption of the financial resources under the project, while dovetailing important support services with the follow-on project. 35. Introducing innovation in resource flow - The farmer support scheme required careful coordination between the various actors involved in delivering the program, which was normal for an innovative pilot project. Establishing the farmers registry and the registry of service providers, as well as organizing the flow of the resources for the program proved challenging. There were some interesting innovations that developed to make the system work. For instance, farmers were expected to pick up vouchers directly from the participating bank and proceed to input suppliers for their package of inputs, but this was time consuming due to the distances involved. To resolve this issue, in agreement with all parties, the operator was designated to pick up the vouchers at the participating Bank and deliver them to the farmers. The operators ended up playing a much bigger role in ensuring that inputs reached farmers and, in the process, somewhat weakened their primary role of providing advisory and extension services. However, it was understood that getting the voucher system to work in a transparent manner and building trust across all participating parties took priority over farm advisory support. With subsequent rounds and resolution of most of the glitches, the attention of operators has been refocused on providing technical advice to farmers. 36. Other external challenges - Project stakeholders were well aware that the project was ambitious and risky. Beyond the many internal challenges that resulted from weak institutional capacity, it had to contend with the realities that affect farmers every day, including a severe drought affecting crop production during the first voucher campaign and heavy pest infestation in the second campaign, affecting yields and the demonstrative potential. The project also had to overcome the general skepticism of farmers who had over the years, seen many unfulfilled promises of support. Similarly, convincing the participating bank to open an account for each voucher recipient and input suppliers 8 involved significant costs and was initially met with significant resistance. Over time however, these accounts have been seen as an opportunity for future business ties, especially with local input suppliers and for possible mobile phone-based payments. Finally, limited imports often led to shortages of seeds, fertilizers and agro-chemicals at the level of local input suppliers during the greatest seasonal demand. 2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization 37. The project had a basic and fairly broad PDO; there were no clear quantitative variables and it was to be understood in a continuum of longer-term engagement beyond the scope of this project. As the first step in a series of investments, project achievement was to be measured by three key indicators that were formulated in a slightly different wording and order in the results framework. These variables need to be considered in the context of the reengagement of the Bank with the Ministry of Agriculture to build capacity to improve policy making, monitoring, and streamlining of investments in line with an overall vision. 38. Quality of the M&E framework: The premise of the M&E framework was that once certain activities were completed or consultancies delivered, the development objective would be achieved, and this was reflected in the three outcome indicators. However, the indicator measuring prioritization of budget resources with overall policy objectives was not clearly defined and there was no target to assess achievement. It is also clear that an open-ended indicator related to objectives such as alignment of budgets with strategy and improvements in services delivery represent by definition, elements that can be subject to near continuous improvement and refinement up until the point where costs would outstrip benefits. Overall, the results framework included useful information that would make tracking of progress fairly straightforward. 39. Use of the M&E data for project management . The M&E data was collected from the main technical partner unit (UEP). By the mid-term review however, it was clear that more efforts had gone into developing processes and procedures for M&E to improve overall institutional capacity than into the effective collection of project data to report on the results framework. Generally, M&E data was obtained too late to be used effectively or to reorient the project in a significant way. Yet, once the financial management system was in place to support better oversight, a quick reallocation was processed to ensure these resources could be absorbed quickly and effectively. Data on indicators and the results framework were only substantially completed in the last year of implementation. 2.4 Safeguard and Fiduciary Compliance 40. Environmental safeguards - The project was rated as a B category, with an environmental assessment. The assessment did not identify significant risks and assessed project environmental impacts to be mostly favorable. The agriculture support, composed of a technical package involving inputs and advisory support, helped ensure the minimization of any negative environmental impacts. No environmental issues were raised during implementation and the project focused on building the capacity of the environmental unit and ensuring input packages followed guidelines that were developed 9 by the environmental unit. Specifically, the environmental unit developed an integrated pest manual that is part of any crop support program. 41. Social Safeguards - The project was not associated with any social safeguard risks, however the importance of gender was identified. In response, the project appointed a gender specialist to conduct targeted information campaigns and ensure adequate participation of women in the program. The newly established M&E unit has a permanent gender specialist in its ranks. 42. Fiduciary – The project introduced FM software, a new accountant was engaged near the end of implementation and overall fiduciary performance started showing gradual improvements. This FM system is expected to improve the follow-up project, RESEPAG2 notably and future donor-funded projects administered by MARNDR. During early implementation, the project struggled with fiduciary compliance with challenges in both procurement as well as FM. Procurement delays accumulated mainly due to weak capacity and little familiarity with the Bank’s procurement rules. In spite of intensive implementation support, timely responses to comments from the Bank’s procurement specialist and management of procurement documentation and contracts remained a constant challenge. The weak procurement capacity also delayed the introduction of the financial management software. Due to mainly manual bookkeeping and ledger accounts on paper, significant delays were experienced with processing of payments and production of Interim Financial Reports. Similarly and as a result, audits were delayed. The rating for both FM and procurement in the last Implementation Status and Results Report (ISR) were moderately unsatisfactory in spite of gradual improvements. 2.5 Post-completion Operation/Next Phase 43. Institutional capacity building is always a challenging undertaking that takes some time. Haiti offers particular difficulties given the political climate, weak institutional capacity as well as a high vulnerability to natural catastrophes that disrupt the process. 44. IT infrastructure and registers - The investments in IT have the potential to improve the efficiency of the ministry and its departmental offices. While equipment, networking and training to users has been delivered, the management of an IT network for a decentralized structure such as the MARNDR remains an ongoing activity. To date, a functioning IT unit responsible for: (i) system maintenance; (ii) IT technical support to users; and (iii) updating of the system and software troubleshooting remains to be effectively established, although both the Bank and the IADB have stepped forward with support. The internet links with field offices (DDAs) are unstable and prone to connection issues that field offices typically do not have the capacity to resolve. Fortunately, RESEPAG2 as well as other donor programs are supporting the IT system since the farmers and services provider registries offer a platform to help improve transparency and data collection for all donor-financed programs in agriculture. In the medium term, the ministry needs an IT strategy that will help it define how to sustain the system, where to house the platform (within the ministry or cloud storage as present), and address staffing and financing. 10 45. Environmentally sustainable agricultural policy making and programming - Five technical staff were hired as consultants and assigned to the various technical units of the ministry. Three of these specialists form the Environmental Unit and help in developing the guidelines and environmental safeguards for projects. In addition, they have developed a number of manuals on specific environmental topics that will be distributed to extension offices to mainstream environmental measures into the services. The most recent document is an Integrated Pest Management handbook. Looking forward, the ministry will need to address the regulatory and legal framework given that their responsibilities are not aligned