Appraisal stage

Report No.: AB3248

1. 
   Country and Sector Background:
   

1.1 The current project, ARTP II, is the second phase of a long-term program of assistance to agricultural research in Uganda which has supported technology development and dissemination, consistent with the Government’s Policy articulated in its Poverty Eradication Action Plan (PEAP) and the PMA. ARTP II was approved by the Board on May 6, 1999 and declared effective on December 2, 1999, for a total amount of SDR 19.10 million (historical equivalent US$26 million). The project closing date has been extended twice. The first extension was from December 31, 2005 to June 30, 2007, and was necessitated primarily by disbursement lags during the original project period. These lags were due to the time required for consultations to decide on the required NARS reforms and the deliberate slowdown of project implementation to ensure that the outcome of the then proposed re-configuration of NARO was consistent with the NARP and the PMA. The project closing date has recently been extended by another five months to November 30, 2007 to allow for the processing of GOU’s request for Additional Financing.

2. 
   Objectives:
   

2.1 The project development objectives (PDOs) of the Additional Financing are identical to the original PDOs of ARTP II, namely: (a) the generation of new knowledge, strategies and technologies in support of the PMA; (b) the design and implementation of improved procedures and capacities for scaling-up the application of new technologies; and, (c) capacity building of the reformed NARS. After FY ’09, IDA envisages, continued support to the implementation of GOU’s long term AR4D program through participation in a newly designed project which is expected to finance both agricultural research and agricultural advisory services (extension) on the basis of a sector-wide approach.

3. 
   Rationale for Bank Involvement:
   

3.1 With ARTP II initially due to close by June 30, 2007, GOU requested follow-on IDA support to sustain its agricultural research efforts, including the nascent NARS reforms. The GOU also requested follow-on support for the National Agricultural Advisory Services (NAADS), which the Bank is currently financing through a parallel project (Cr. 3464-UG), expected to close by June 2009. Both the Government and the Bank’s preferred option for the proposed follow-on phase for NARS and NAADS is to shift to a broader programmatic approach, covering at a minimum the agricultural technology agenda, but also to consider other public sector activities to widen the program’s scope to a more sector-wide approach (SWAp). This new proposed program, however, is likely to be in place no earlier than June 2009, raising the need to bridge the financing gap for NARS for the next two years (FY08-09).

4. 
   Description:
   

The Additional Financing will disburse $12 million under the existing three project components, as follows: (a) Technology Development and Adaptation (US$2.8 million); (b) Outreach and Extension Program (US$ 3.7 million); and, (c) Institutional Development (US$ 5.5 million).

5. 
   Financing:
   

6. 
   Implementation:
   

6.1 The proposed scale up will not strain implementation capacity at NARO Secretariat (NAROSEC) or the decentralized research institutes. NARO and the decentralized institutes have been able to satisfactorily handle increasing disbursement levels over the past two years without negative quality or fiduciary implications. Measures to further improve research program capacity have been incorporated under this additional financing proposal. Detailed institutional, financial and procurement implementation mechanisms are set out in the ARTP II project implementation plan, which will be revised to include this additional financing. This is also part of the overall effort to further strengthen oversight, manage fiduciary and development risks, and facilitate an increased focus on results.

7. 
   Sustainability
   

7.1 The critical risks identified in the ARTP II PAD have been addressed, even if not fully resolved, during the implementation of the project. The impact of droughts is being mitigated through improved land and crop management practices. A major policy development has been the decentralization of research processes, which led to the establishment of Agricultural Research and Development Centers (ARDCs) in seven out of 12 agro-ecological zones. Under the NARS reforms, these ARDCs have subsequently been upgraded to Zonal Agricultural and Research Development Institutes (ZARDIs), and are treated at par with National Agricultural Research Institutes (NARIs). The earlier perceived risks have been further addressed by the NARIs having their own stakeholder boards, who have been assigned the mandate for research priority setting and resource allocation (based on quality of performance), and for overseeing implementation The participation of stakeholders in planning and implementation of research is progressing well through the CGSs, which are being scaled-up on account of the strong demand from stakeholders. Financing for research has been less than budgeted for during some earlier years, but Government’s actual releases of counterpart funds have increased considerably over the years from US$ 3.20 million in FY2000 to US$ 8.42 million in FY2007. Recently, GOU has also committed to appreciably higher amounts of funds for the next 3-year budget cycle. To reduce reliance on GOU counterpart funds, NARO has instituted partnership building and networking measures for resource mobilization and utilization in AR4D.

8. 
   Lessons Learned from Past Operations in the Country/Sector:
   

The key lessons learned after ARTP I and from agricultural research projects in neighboring countries were: (a) an enabling environment and a transparent incentive/reward system are required to make researchers productive; (b) the concentration of research institutes and centers in a particular part of the country, quite distant from most of the farmers spread over all the agro-ecological zones, has resulted in a lack of focus on the issues and problems of farmers which are generally location (agro-ecological zone) specific; (c) implementation of research programs works better if management is decentralized; (d) greater involvement of stakeholders in research planning and budgeting, including research priority setting, budgeting and assessment of results obtained, ensures the relevance of the research programs; (e) lack of access by farmers to improved seeds lead to delayed adoption of improved varieties; (f) monitoring and impact evaluation of research programs have been generally neglected and need to be significantly improved; and (g) measures to ensure sustainability of the national research program need to be given more attention. These lessons were taken into consideration in designing ARTP II. Whilst many of these areas have been addressed significantly thus far, funds have been provided under the Additional Financing Credit to continue to address areas where further progress is desirable.

9. 
   Safeguard Policies (including public consultation):
   

10. 
    List of Factual Technical Documents
    

1. 
   Additional Financing Project Paper
   
2. 
   Uganda National Agricultural Research System – Request for Extension and Supplementary Funding for the Second Phase of the Agricultural Research and Training Project (2007-2009) – Draft Paper Prepared by NARO (April 2007)
   
3. 
   Aide Memoires from last two Implementation Review Missions
   

11. 
    Contact Point:
    

Contact: Madhur Gautam

Title: Lead Economist

Tel: 5393+2215 / 256-41-302215

Fax: 256-41-230092

Email: Mgautam@worldbank.org

Location: Kampala, Uganda (IBRD)

12. 
    For more information contact:
    

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