ConVERGE. Annual Report. Project. Project Year. Convergence on Value Chain Enhancement for Rural Growth and Empowerment

Transcription

1 Convergence on Value Chain Enhancement for Rural Growth and Empowerment Annual Report Year 2017

2 Message of the National Director The year 2017 has been a very challenging year for the project. The biggest of which, is how to move a year and a half-delayed project take-off. We also encountered various financial, operational and implementation obstacles. But indeed, it is our desire to keep the project moving to serve or beneficiaries and their communities that propelled us to keep going. This Annual Report is indeed a testament of our sincere dedication and commitment to service. The figures may not be high enough, but it is with pride that we deliver our best. To the men and women of the, thank you for the best efforts extended even beyond the normal call of duty. To the higher management of the Department of Agrarian Reform, all the oversight bodies and agencies, and the International Fund for Agricultural Development (IFAD), thank you for the guidance. To our agrarian reform beneficiaries, thank you for your desire to improve your lives --- the anchor of our inspiration. Faisar A. Mambuay, CESO IV National Director But while we accomplished this year, the project is yet far from the end. We are expecting more challenges along the way, it is our strong commitment and dedication coupled with our teamwork that will lead in reaching our goal. Thank you for the year that was, and we look forward to your support in the years to come. Mabuhay! 2017 ANNUAL REPORT l

3 Table Of Contents i Message of the National Director 1 Background 6 Loan Summary 8 Overall Physical Performance as of December 31, Overall Finance Performance 18 Initial Outcomes 20 Issues, Concerns, Lessons Highlight 2017 ANNUAL REPORT l

4 Part 1: Background The Department of Agrarian Reform (DAR), with technical assistance from the International Fund for Agricultural Development (IFAD), is currently implementing the Convergence on Value Chain Enhancement for Rural Growth and Empowerment ( ) with the overall goal of reducing the incidence of poverty in the ten (10) target provinces of Regions IX, X and Caraga (XIII) through the promotion of sustainable livelihood activities based on key commodities (e.g. rice, rubber, coffee, cassava, and coco sugar) that are deemed competitive in the areas. The project s development objective is to help in the reduction of target group vulnerability through crop diversification and increased farm income. The expected impact and outcome indicators for the 35,000 households and 70 Peoples Organizations (POs) in the 11 Agrarian Refrom Community (ARC) clusters include: (i) average annual income increased; (ii) increased farm income derived from new farming activities; (iii) increased ownership of household assets; and (iv) reduced prevalence of child malnutrition ANNUAL REPORT l 1

5 The project has four (4) components; (A) Participatory Value-Chain Analysis and Planning; (B)) Integrated Smallholders Agricultural and Rural Enterprise Development; (C) Subdivision of Collective Certificates of Landownership Award (CLOA)) and Facilitation of Land Transfer Program; and (D) Management, Monitoring and Evaluation and Knowledge Management. Convergence Initiative (NCI) as implementation platform which seeks to synchronize the initiatives of the three departments engaged in rural development, DAR, DA and DENR and optimize the use of resources available to support sustainable rural development and for an improved policy, environment and governance Government Policies Implementation Arrangements The proposed project design is consistent with the Philippine Development Plan (PDP) , the IFAD s strategic framework ( ) and the IFAD country strategy (COSOP) for the Philippines The project supports the government s Comprehensive Agrarian Reform Program (CARP). The project uses the National DAR will be the lead agency for the project implementation using the NCI platform involving DA, DENR, DTI and DOST as implementation partners. DAR, through the Support Services Office- Foreign Assisted and Special s Office (SSO-FASPO), is the lead agency. DAR has staff at the central, regional and provincial levels with Municipal Agrarian Reform Officers (MARO), and Development Facilitators (DF) to undertake and coordinate implementation in the eleven (11) ARC clusters. The DAR staff who will directly work with the beneficiaries will be given the necessary orientation in terms of the project s approach and capacity building support. DAR will engage service providers in the delivery of appropriate technology and business development services to help establish and/or expand the agribusiness projects in each ARC cluster. Further, the DA, DENR, DTI and DOST will provide technical assistance to support field level implementation ANNUAL REPORT l 2

6 Target Group The target group is an estimated 35,000 households including non-arc barangays and Indigenous People s Households of whom 30% are women. There are 300,512 individuals targeted to benefit the The project covers 11 ARC clusters covering 93 ARCs in 715 barangays within 48 municipalities in ten (10) provinces in Regions IX (Western Mindanao), Region X (Northern Mindanao) and CARAGA Region (Northern Eastern Mindanao which are among the top six (6) poorest regions of the country. The target ten (10) provinces were selected using a set of criteria that included incidence of poverty, presence of organized ARC clusters, agricultural and agribusiness development potential and availability of services ANNUAL REPORT l 3

7 Production Factors/ Local Economic Context All the ARC clusters in the ten (10) provinces were evaluated to have potential for further agricultural and agribusiness development, availability of markets, available ARC Cluster Development Plan, with high commitment of the participating ARBs and available support services The eleven (11) clusters and their respective projects identified prioritized by the POs themselves as follows: Table 1: List of ARC Clusters and Proposed s by Region and Province 2017 ANNUAL REPORT l 4

8 The ARC clusters are predominantly agricultural with about 90% of households being farmers, or landless employees whose livelihoods depend largely on agriculture. In the target clusters, there are 48 municipalities of whom 32 (64%) recorded poverty levels in excess of 50% in 2009, while the range was from 27-68%. Based on the ARC Level of Development (ALDA) ranking used by DAR to assess the stage of the development of the ARCs, 49 (53%) of the ARCs in the eleven (11) clusters are in Class 5, the highest development category, with a further 23 (25%) in Category 4. Based on 2009 data the weighted average household income of the target ARCs was PhP115, (equivalent to USD 490 per capita), of which PhP73, was from Agriculture, PhP17, poverty threshold for these three regions (PhP87, p.a.), however, for 29% of the ARCs average income was below the poverty line. The average membership of a PO is about 150 families and most are too small to realize any economies of scale in their activities; many are multi-purpose cooperatives. Almost all POs met reported a lack of finance and a significant number are inactive. A significant number of POs have failed due to mismanagement, inappropriate handling of funds and lack of necessary skill for managing the organization and associated projects. However, there are ARB organizations that have matured and can manage community programs that meet the needs of their members, but need further assistance to become fully market oriented organizations. In places several POs have banded together to realize the benefits of pooling their resources so as to obtain assistance from outside. Within the ARC clusters, the target beneficiaries will come from the said target groups who are involved in the value-chains selected, and willing and able to participate in project interventions. The project will also target business development partners, including eligible farmers cooperatives and associations (People s Organizations or POs). About 70 POs will help take a leading role as innovators in improving the returns from the existing and emerging value-chains in an enterpriseoriented development approach. There are 238 People s Organization (POs), most formed with DAR assistance and with a total membership of 35,671 or 60% of the total number of ARBs. DAR measures the maturity of POs using Organizational Maturity Assessment (OMA), which is a component of the ALDA and gauges the strength of POs. A highly mature PO is rated as 5. Of the 227 POs in the targeted ARC clusters, which had their OMA in 2010, 12% had reached a maturity level of 4 and 30% were categorized as level 5. At the other end of the scale, 30% were assessed as level ANNUAL REPORT l 5

9 Part 2: Loan Summary 2017ANNUAL REPORT l 6

10 a.funding SOURCE: International Fund for Agricultural Development (IFAD) B. Loan Agreement (LA) No. and Dates 1. L/A NO. : IFAD Loan No Signing of LA : October 26, Date of Effectivity : October 26, Loan Closing : June 30, 2022 C. Target Completion Date 1. Completion :December 31,2021 D. Name of Executing Agencies 1. Implementing/Executing Agency : Department of Agrarian Reform (DAR) 2. Co-Implementing Agencie : DA and DENR 3. Cooperating Agencies/Institutions : DTI, DILG, DPWH, NCIP, OPPAP, MINDA, LGUs and private Sector Table 2: Estimated Total Cost E. Cost 2017 ANNUAL REPORT l 7

11 Part 3: Overall Physical Performance as of December 31, ANNUAL REPORT l 8

12 Physical Accomplishments As of the December 31, 2017, the weighted cumulative performance of is 21.42% vis-à-vis its global targets. With time elapsed of 35.31% of the life of the project, the estimated slippage against scheduled performance is 33%. Compared against the Annual target, the s accomplishment is 21.38%. The low performance posted by the is due to delays in physical start-up. It was only in February 2017 that the overall structure of the project was put in place with the installation of the Central Management Office (CPMO) in Cagayan De Oro City and the installation of RPMOs and PPMOs in the regional and provincial levels. The has practically spent three quarters in 2017 undertaking start-up activities that include formulation of Annual Work Plan and Budget (AWPB) and the Annual Procurement Plan (APP), firming-up of the Implementation Manual (PIM), organization of the Regional Multi-Stakeholders Committee (RMSC) in each of the three regions, recruitment of project staff, review of feasibility studies and business models of the eleven value chain enterprises, formulation of infrastructure feasibility studies and detailed engineering designs and conduct of capacity building training to project staff. It was only in the 3rd quarter that the project was able to start the conduct of capacity building activities in the ARBO level. Table 3: Overall Physical Accomplishment as of December 31, The 2017 Annual target of the comprises 54.51% of the global target, this due to the carry-over balances in the 2016 target ANNUAL REPORT l 9

13 Progress of implementation in Component B: I-SHARED The Component B- Integrated Smallholders Agricultural and Rural Enterprise Development (I-SHARED) of the project is the main support facility for the development of the value chain enterprises of the Agrarian Reform Beneficiaries Organizations (ARBO). I-SHARED has two subcomponents, namely Sub-Component B.1 Support to Farm and Enterprise Development and Sub-Component B.2 Value Chain Related Infrastructures. Under Sub-Component B.1, the project will provide at the initial stages the agri-processing inputs, e.g. seedlings, fertilizers, agro chemicals to support farm level productivity and will also provide support to ARBOs in the procurement of needed value chain equipment. Table 4 shows the project investment under the sub-component B.1 Table 4: Support to Farm and Enterprise Development ANNUAL REPORT l 10

14 As of the 4th quarter of 2017, the project has inalized the investment requirement to support the development of farm productivity and the value chain enterprises anchored on the selected commodities. For agri-processing inputs, the current year investment amounts to PhP86,467 Million, of which PhP74,780 Million will be sourced from loan proceeds, while PhP11,688 will come from GOP counterpart. There are six value chain enterprises that are expected to directly benefit the provision of agri-processing inputs. On the other hand, a total of PhP57,290 Million will be utilized to procure value chain equipment in support to the value chain enterprises. Some PhP49,346 Million will be sourced from LP while PhP7,944 will be sourced from GOP. A total of eleven value chain enterprises will benefit the provision of the value chain equipment. The subprojects are undergoing procurement process and are already for bidding as IFAD already issued No Objection for the procurement. Under Sub-Component B.2 Value Chain Related Infrastructures, the project will support the rehabilitation/construction of farm-to market roads, bridges as component of the FMRs, potable water systems, Irrigation projects and other value chain related infrastructure in support to the value chain enterprises by improving access to market and production areas. Table 5: Value Chain Related Infrastructures As of the 4th quarter of 2017, the project has already prepared the necessary documentations, designs and program of works of the needed infrastructures in the ARC Clusters. Table 6 shows the details of the sub-projects and the amount of investments including the LGU and beneficiary counterparts. The indicated sub-projects are for MOA signing with the respective LGU partners. Table 5 shows the project investment under the sub-component B ANNUAL REPORT l 11

15 Another intervention under the I-SHARED component is the conduct of capacity building and training to support value chain implementation. As of the year in review, the project was able to conduct value chain related trainings and gender-based activities in the ARBO level. There are 31 training sessions conducted by the PPMOs and participated by 406 farmers (181 are male and 225 are female) project wide. Of the 406 farmer participants, 112 are male Agrarian Reform Beneficiaries and 125 are female ARBs. From the indigenous peoples, there are six and eight male and female participants, respectively. The training participants are members of 24 ARBOs in the 11 ARC Clusters. The trainings conducted to ARBOs and farmers were: 1. Financial Management; 2. Orientation on ; 3. Seminar on Gender and Development; 4. Simple Bookkeeping and Financial Anysis; 5. Abaca Production Training; and 6. ARBO Mentoring. In November 2017, the has entered into partnership with PHILIPPINE CENTER FOR ENTREPRENEURSHIP FOUNDATION, INC.-GO NEGOSYO, a private sector entity to implement the KAPATID AGRI MENTOR ME PROGRAM (KAMMP) with the DAR- pre-selected Agro Enterprises. The full implementation of the KAMMP in the 1st quarter of 2018 is expected to enhance the capacity and skills of farmer-entrepreneurs in managing the supported value chain enterprises in the ARC Clusters covered by ANNUAL REPORT l 12

16 Progress of implementation in Component D: Management During the year 2017, the project has conducted capacity building to project staff, both hired and organic from DAR. There are four training sessions conducted involving participation of 20 project staff (13 are male and 7 are female) coming from two of the PPMOs 2. The following are the capacity building trainings for project staff; Write shop for VC Trainings/Activities under ; Cross-visit and Benchmarking; Hands on Training on Rubber Farm Development and Farm Productivity Assessment; and Workshop on Updating of Business Model under 2 PPMOs Zamboanga Del Norte in Region 9 and Agusan Del Sur in Caraga ANNUAL REPORT l 13

17 On the other hand in 2017, the CPMO has conducted a number of capability building activities intended to capacitate the project staff. The following are: 1. Strategic Planning Workshop for Value Chain; 2. Workshop of the Firming-up of the 2017 APP for IFAD; 3. M&E/KM and DAR-PIO Integration Workshop; 4. Budget and Finance Workshop; 5. Training on M&E and RIMS; 6. Training on Technologies and Business Plans; 7. M&E Technical Workshop; 8. Training-orientation on NEDA ODA Reporting system and IFAD Reporting system; 9. Conduct of Modular Write shop/workshop by RPMO; 10. Value Chain Capacity Building Module (Part II); and 11. Publication 1st editorial workshop. On the other hand the was able to publish the maiden issue of the newsletter publication entitled The in November The project has also started the development of its website. The aforementioned initiatives are among the platforms being established to be used for knowledge management and information sharing ANNUAL REPORT l 14

18 Part 4: Overall Financial Performance 2017 ANNUAL REPORT l 15

19 Financial Performance (Obligations vis-à-vis Allotment) In 2017, has a total allotment of PhP634,294, The distribution of the total allotment is as follows; a) current allotment was PhP204, (32% of the total allotment) and; b) carry-over allotment was PhP429,814, (68% of the total allotment). Obligations incurred against the total allotment in 2017 is 16% amounting to PhP104,531, The distribution of the obligations in 2017 is as follows; A total of PhP30,895, was obligated against the current allotment, while a total of PhP73,635, was obligated against the continuing allotment ANNUAL REPORT l 16

20 Financial Performance (Disbursements vis-à-vis Allotment) Of the total allotment in 2017, the was able to disburse 8% amounting to PhP52,227, Of which, PhP20,811, (3.28% of the total allotment) is from the current allotment and PhP31,416, (4.95% of the total allotment) is from the continuing allotment. Of the total allotment, the GOP counterpart amounted to PhP105,065, (17% of the total allotment). The Loan Proceed amounted to PhP529,228, (83% of the total allotment). Disbursement from GOP counterpart is 26% of the total GOP allotment, while disbursement in LP is only 5% of the total LP allotment. It should be noted that the low financial performance in terms of fund utilization is due to the length of time devoted to preparation of documentary requirements to comply with the stringent procedures in procurement of goods, consultancy and civil works following the guidelines of the Philippine Procurement Law (RA 9184). Moreover, the enhancement and or revision of the agribusiness feasibility studies and investment plans in two occasions resulting to repeated budget revisions, inconsistent distribution of funds, and untimely release of sub-allotments to the operating units from the DAR Central Office have contributed to low fund utilization and thus, the delay in project implementation. The releases of capital outlay sub-aros for infrastructures and value chain equipment were done in November and early December of ANNUAL REPORT l 17

21 Part 5:Initial Outcomes 2017 ANNUAL REPORT l 18

22 In 2017, the has reached a total of 3,546 beneficiaries who were members of 11 lead ARBOs in the 11 ARC Clusters thru the conduct of capacity building and ARBO strengthening activities. Of the total membership in the lead ARBOs, there are 1,615 Agrarian Reform beneficiaries. Of the total number of ARBs in the ARBO membership, 1,011 are women, while or 604 are men. On the other hand, there are 1,931 non-arb small holder farmers from the total count of membership in the 11 lead ARBOs. In the non- ARB members, there are 901 women. The proportion of women beneficiaries reached by the project in 2017 was 42% (1,505) and men beneficiaries was 58% (2,041) ANNUAL REPORT l 19

23 Part 6: Issues & Concerns, action taken & Lessons learned 2017 ANNUAL REPORT l 20

24 The cost parameter for rehabilitation/ construction of farm to market road used during the design of the (PhP2.5M and PhP4M for rehabilitation and construction, respectively) was far much lower than the prevailing cost of rehabilitation/construction of farm to market roads (PhP6M to PhP10M) following the standard of DPWH which require Poured Cement Concrete Pavement (PCCP) for FMRs. Issues Concerns The, after consultation with IFAD, opted to comply with the DPWH standard which resulted to the implementation strategy of phasing the rehabilitation/construction of FMRs due to unavailability of budget to fund the whole stretch of a particular FMR. The then proposed to DAR and DBM the realignment of MOOE funds to Capital Outlay in the amount of PhP94 Million. The realignment for CY 2016 support to for VC infrastructure in support to VC was submitted to DBM in June 30, 2017 and eventually approved by the latter in November Actions Taken The phased type of implementation proved to be an unsound strategy due to the resulting situation of repeating the procurement process undertaken in the first phase for the second and succeeding phases. The CPMO must take a strong position to prioritize the implementation of the proposed VC infrastructure sub-projects based on the available allocations in 2018 and Lessons Learned ANNUAL REPORT l 21

25 Issues Concerns Repeated budget revisions based on enhanced FS and investment plans, inconsistent distribution of funds among operating project offices and delay in releases of capital outlay suballotment release order for the infrastructure and value chain equipment sub-projects. Actions Taken The CPMO has made follow-up actions requesting the DAR Central Office through the Manila Liaison Office to expedite the releases of sub-aros to the operating units. The releases of sub-aros materialized in late November and early December of Lessons Learned Repeated budget revisions based on enhanced FS and investment plans, inconsistent distribution of funds among operating project offices and delay in releases of capital outlay suballotment release order for the infrastructure and value chain equipment sub-projects ANNUAL REPORT l 22

26 Some of the highlights during the year in review 2017 ANNUAL REPORT l 23

27 IFAD conducts 1st Implementation Support Mission to The 1st Implementation Support Mission (ISM) for Convergence on Value Chain Enhancement for Rural Growth and Empowerment () was conducted by IFAD on June 21- July 3, The mission team from the International Fund for Agricultural Development (IFAD), the project s co-funding institution, was composed of Country Programme Officer Jerry Pacturan, Special Advisor Yolando Arban and Management Consultant Gomer Tumbali. Selected sites in two of the three covered Regions were visited by the implementation support mission. Series of dialogues with ARBOs and farmers were conducted by the ISM to validate beneficiary readiness and capability to manage the proposed value chain enterprises ANNUAL REPORT l 24

28 CPMO conducts trainingorientation on NEDA ODA Reporting system and IFAD Reporting system To enhance the capacity and skills of project staff, the Central Management Office of conducted a trainingorientation on NEDA ODA reporting system and IFAD reporting system in Cebu City on September 3-8, The activity was participated by Regional M&E/KM Staff, Regional Finance Staff and FASPO technical staff. CPMO launches the GID and Value Chain Capacity Building Modules Attended by GID and Value Chain Staff, DAR officials and officers from the three regional offices and 10 provinces, CPMO launched the GID and Value Capacity Building Modules on September 11 to 15, 2017 at Cebu City. The launching of the modules signals the start of the conduct of capacity building activities in the ARC Clusters ANNUAL REPORT l 25

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