QUARTERLY PROGRESS REPORT

Transcription

1 ADB Loans 3006/ 3007/ 8271 & Grants 0349/ 0350 CAM CLIMATE RESILIENT RICE COMMERCIALIZATION SECTOR DEVELOPMENT PROGRAM QUARTERLY PROGRESS REPORT Q MEF/PMO 8/31/2017

2 Q QPR i

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4 TABLE OF CONTENTS A. INTRODUCTION... 1 B. BASIC DATA... 1 C. PROGRAM PURPOSE AND IMPACT... 3 D. SUMMARY OF PROJECT STATUS... 5 E. UTILIZATION OF FUNDS... 6 F. SUMMARY OF PHYSICAL IMPLEMENTATION PROGRESS IN Q G. PROGRESS AND ACHIEVEMENTS DURING Q Output 1: Conducive Legal and Regulatory Environment... 8 Output 2: Agricultural Land-Use Zoning Improved... 9 Output 2.1: Undertake Commune Agro-Ecological Analysis... 9 Output 2.2: Incorporation of the CAEAs into the Commune Land Use Plans... 9 Output 2.3: Rice ecosystem Mapping... 9 Output 3: Climate Resilient Rice Value Chain Infrastructure developed... 9 Output 3.1: Rehabilitation and climate proofing of irrigation systems... 9 Output 3.2: Construction of paddy drying and storage (PDS) facilities Output 3.3: Construction of seed cleaning, drying, grading and storage facilities Output 3.4: Contract services for implementation of sub-project associated initiatives Output 4: Enhanced rice value chain support services Output 4.1: Increased availability of quality rice seed Output 4.2: Expand and develop technical extension services Output 4.3: Enhance business management capacities Output 4.4: Improved Access to and Reduced Cost of Financing Output 5: Feasibility Study, Design and Pilot Testing of Weather Indexed Crop Insurance Output 6: Efficient Program management and Implementation H. GENDER ACTION PLAN I. ENVIRONMENT AND CLIMATE CHANGE J. RESETTLEMENT K. ASSESSMENTS OF RISKS, ASSUMPTIONS AND COMPLAINCE WITH CONVENANTS K1. Assessment of Risks and Assumptions K2. Compliance with Covenants K3. Compliance conditions for ADB Program Loan (CAM) L. PROGRAM ISSUES AND REMEDIAL ACTION M. LESSONS LEARNED Q QPR i

5 Annex 1 Annex 2 Annex 3 Annex 4 Annex 5 Annex 6 Annex 7 Policy Complaince Matrix Physical Progress Ratings Financial Reports Summary of irrigation sub-projects Status of Procurement of Contract Packages Gender Action Plan Agreed Action Plan Q QPR ii

6 ACRONYMS AND ABBREVIATIONS AC Agricultural Cooperative ADB Asian Development Bank AEA Agro-ecosystems Analysis AFD Agence Française de Développement AFD-SCCRP AFD Support to the Commercialization of Cambodian Rice Program BER Bid Evaluation Report CARDI Cambodian Agricultural Research and Development Institute CARM ADB Cambodian Resident Mission CCCA Cambodia Climate Change Alliance CEFP Committee for Economic and Financial Policies CISIS Cambodia Information System on Irrigation Schemes CLUP Commune Land-use Planning CS Construction Supervision DAE Department of Agricultural Extension DAEng Department of Agricultural Engineering DD Detailed Design DMF Design and Monitoring Framework EARF Environmental Assessment Review Framework EIA Environmental Impact Assessment EMP Environment Management Plan EoI Expression of Interest FAO Food and Agriculture Organization (of the United Nations) FS Feasibility Study FS/DD/CS Feasibility Study, Detailed Engineering Design and Construction Supervision FWUCs Farmer Water User Community GAFSP Global Agriculture and Food Security Program GAP Gender Action Plan GDA General Directorate of Agriculture (of MAFF) GIS Geographic Information System IEE Impact Environment Examination IRC Inter-Ministerial Resettlement Committee ISS Implementation Support Specialist LLL Laser Land Levelling LUP Land Use Planning M&E Monitoring and Evaluation MAFF Ministry of Agriculture, Forestry and Fisheries MEF Ministry of Economy and Finance MIH Ministry of Industry and Handicrafts (formerly under MIME) MLMUPC Ministry of Land Management, Urban Planning and Construction MOWRAM Ministry of Water Resources and Meteorology NIO National Implementation Office Q QPR iii

7 O&M PDS PDAFF PDWRAM PIC PIO PMO PPCR PPMS PPP PPTA QPR RGC RSPG SCF SDPS SDP SIP SNEC SPCR TA ToT TOR UNFCC WICI Operation and Maintenance Paddy Drying and Storage Provincial Department of Agriculture, Forestry and Fisheries Provincial Department of Water and Resources and Meteorology Project Implementation Consultants Provincial Implementation Offices Project Management Office Pilot Program for Climate Resilience Program Performance Monitoring System Public-Private Partnership Preparatory Project Technical Assistance Quarterly Progress Report Royal Government of Cambodia Rice Seed Producer Group Strategic Climate Fund Seed Drying, processing and Storage Facilities Sector Development Program Sub-project Identification Proposal Supreme National Economic Council Strategic Program for Climate Resilience Technical Assistance Training of Trainers Terms of Reference United Nations Framework Convention on Climate Change Weather-indexed Crop Insurance Q QPR iv

8 A. INTRODUCTION 1. The Climate Resilient Rice Commercialisation Sector Development Program (Rice- SDP), which commenced in November 2013, supports the implementation of the Policy on the Promotion of Paddy production and Rice Export of the Royal Government of Cambodia (RGC). It is designed to help transform the predominantly subsistence rice sector into a commercially oriented one by improving household and national food security and expand rice export through (i) removing the legal and regulatory constraints inhibiting rice commercialization; (ii) improving productivity of paddy crops and consistency in quality of milled rice; (iii) enhancing rice value chain support services; and (iv) addressing risks of climate change through mitigation and adaptation. 2. The Quarterly Progress Report (QPR) for Q provides a description of the progress that has been achieved during this quarter. The PPMS that is being developed is progressively incorporated into the QPRs initially through the inclusion of the Activity Monitoring Framework. Initiatives are being made to put in place a defined approach for streamlining the data collection and reporting of the PIO and NIO teams. The QPR also includes a summary of the financial progress although the rates of disbursement remain low due to the slow progress in the implementation of many activities. This is expected to improve significantly towards latter half of 2017 as more contract awards are made which will also boost the disbursement rate. B. BASIC DATA ADB Loan/Grant Numbers Program Title Borrower Executing Agency Implementing Agencies Program Steering Committee Total Project Cost (USD million) Program Financing (USD million) Date of Loan/Grant Approval by ADB ADF Loan CAM; ADF Loan CAM; SCF Loan CAM; SCF Grant CAM; and GAFSP Grant CAM. Climate Resilient Rice Commercialization Sector Development Program (Rice SDP) Royal Government of Cambodia Ministry of Economy and Finance (MEF) Ministry of Agriculture, Forestry and Fisheries (MAFF) Ministry of Water Resources and Meteorology (MOWRAM) Ministry of Land Management, Urban Planning and Construction (MLMUPC) Provincial Governments (Battambang, Kampong Thom and Prey Veng) Committee for Economic and Financial Policies (CEFP) (excluding taxes and duties of USD 5 million) ADB Loans ADF CAM: ADF CAM: SCF CAM: 5.00 ADB Grants SCF CAM: 4.50 GAFSP CAM: Counterpart Fund RGC: June 2013 for all Loans and Grants Q QPR 1

9 Date of Signing of Loan/Grant Agreements Date of Effectiveness of ADB Loan/Grant Closing Date of ADB Loan/Grant Dates of Last ADB Review Mission 26 August 2013 for all Loans and Grants 13 November 2013 for all Loans and Grants 31 December 2017 for ADB Loan CAM 31 March 2020 for other ADB Loan and Grants and GAFSP Grant February 2017 Program Impact Increased net incomes of stakeholders along the rice value chain. Program Outcome Components Program Area Enhanced production of quality rice in Cambodia while preserving the natural resource base. 1. Conducive legal framework and regulatory environment established to facilitate climate-resilient commercialization: - Promoting production and distribution of improved quality seed. - Strengthening agricultural land management. - Strengthening farmer s organisations and promoting contract farming; - Facilitating the domestic trading and export of milled rice. 2. Agricultural land-use zoning improved: - Establishing land-use zones. - Updating rice ecosystems and soil classification maps for identification of higher yielding rice growing areas. - Incorporating agro-ecosystems analysis into commune land-use planning; - Developing the capacity of MLMUPC at national and sub-national levels to undertake joint work in relation to agricultural land-use planning. 3. Climate resilient rice value chain infrastructure developed - Rehabilitation and climate proofing of irrigation systems. - Construction of paddy drying and storage facilities. - Construction of seed cleaning, drying, grading and storage facilities. 4. Rice value chain support services enhanced to improve quality of Cambodian rice - Improving the availability and quality of commercial rice seed; - Upgrading technical extension materials to guide production in the four main rice crops. - Capacity building (technical and financial) of mill managers and operators; - Facilitating access to credit by farmers, traders and millers. 5. Weather Indexed Crop Insurance (WICI) piloted - Undertaking a detailed Feasibility Study (FS) to determine the appropriateness of a WICI scheme. - Designing the operational parameters, product penetration plan and institutional arrangement. - Piloting the scheme in selected areas in three target provinces. 6. Efficient program management and implementation - Effective project management; - Capacity building of the Project Management Officer (PMO) and each national Implementation Offices (NIOs) and the Provincial Implementation Offices (PIOs). - Coordination between policy development and investment activities. The Project covers three provinces: Battambang (BTB), Kampong Thom (KPT) and Prey Veng (PRV). A number of sub-projects will be carried out in each target province for (i) rehabilitation of existing irrigation, drainage and flood control systems; (ii) paddy drying and storage facilities to be operated by private sector under Public Private Partnerships (PPPs); and (iii) rice seed drying and storage facilities to be operated by private sector under PPP arrangements. Q QPR 2

10 C. PROGRAM PURPOSE AND IMPACT 3. The Climate Resilient Rice Commercialization Sector Development Program (Rice- SDP) comprises a policy-based program loan together with other loans and grants from ADB sources. The Rice-SDP impact will be increased net incomes of stakeholders along the rice value chain. The outcome is enhanced production of quality rice in Cambodia while preserving the natural resource base. 4. The Rice-SDP will address key high priority and strategic measures stated in the Rice Policy to improve national food security and expand rice export through (i) removing legal and regulatory constraints inhibiting rice commercialization; (ii) improving productivity of paddy crops and consistency in quality of milled rice; (iii) enhancing rice value chain support services; and (iv) addressing risks of climate change through mitigation and adaptation. The Rice-SDP has the following six outputs: Output 1 - A Conducive Legal and Regulatory Environment established to facilitate Climate-Resilient Rice Commercialization This output focuses on legal and regulatory reforms that (i) promote production and distribution of improved quality seed; (ii) strengthen agricultural land management; (iii) strengthen farmers organizations and promote contract farming; and (iv) facilitate the domestic trading and export of milled rice. Output 2 - Agricultural Land-use Zoning improved This output comprises: (i) establishing land-use zones; (ii) updating rice ecosystems and soil classification maps for identification of higher yielding rice growing areas; (iii) incorporating Commune Agro-Ecosystem Analyses into commune land-use planning; and (iv) developing the capacity of Ministry of Agriculture, Forestry and Fisheries (MAFF) and Ministry of Land Management, Urban Planning and Construction (MLMUPC) at the national and sub-national levels to undertake joint work in relation to agricultural land-use planning. Output 3 - Climate Resilient Rice Value Chain Infrastructure developed This output comprises high priority investments in three major rice-producing provinces - Battambang (BTB), Kampong Thom (KPT), and Prey Veng (PVG). The investments include: (i) rehabilitation and climate proofing of irrigation systems; (ii) construction of paddy drying and storage facilities; and (iii) construction of seed cleaning, drying, grading and storage facilities. The investments have been identified and prioritized based on provincial development priorities. Output 4 - Rice Value Chain Support Services Enhanced to Improve Quality of Cambodian Rice This output comprises: (i) improving the availability and quality of commercial rice seed; (ii) upgrading technical extension material to guide production in the four main rice crops; (iii) capacity building (technical and financial) of mill managers and operators; and (iv) facilitating access to credit by farmers, traders, and millers. Q QPR 3

11 Output 5 - Weather-indexed Crop Insurance (WICI) Piloted This output comprises: (i) undertaking a detailed feasibility study to determine the appropriateness of a weather-indexed crop insurance scheme; (ii) designing the operational parameters, product penetration plan, and institutional arrangements; and (iii) piloting the scheme in selected areas in three program provinces. Output 6 - Efficient Program Management and Implementation This output comprises: (i) effective program management; (ii) capacity building of the Program Management Office (PMO) and each National Implementation Office (NIO) and Provincial Implementation Office (PIO); and (iii) coordination between policy development and investment activities. Q QPR 4

12 D. SUMMARY OF PROJECT STATUS Status of project scope/implementation arrangements compared with those in the report and RRP, and whether major changes have occurred or will need to be made: The Program is making better progress and the capacity of the IAs and their familiarity with ADB project procedures is improving. The scope of the Program remains in line with those of the RRP to date although there have been changes made to the implementation approach in some cases, notably for the Paddy Drying and Storage (PDS) facilities including the procedure for the identification of the sites for these facilities and the provision of concessional loans for their construction. The implementation arrangements are going to be modified in the sense that the Program Implementation Consultant (PIC) contract will be closed by 15 May 2017, and replaced with necessary international and national individual consultants. Assessment of the likelihood that the Project purpose will be met in part or in full, and whether remedial measures are required based on the current project scope and implementation arrangements: It is too early to make any definitive judgement on this. The Program has made limited progress so far but the achievement of the compliance conditions for the Program loan fund release are reasonably well on track although the conditions relating to land management and plant protection require some additional time to complete and a request for extension of the loan duration has been made. Consultants are providing essential technical support to the IAs in implementation of the program. The AWPB 2017 that has been developed, which is ambitious in scope, provides a clear guide for the implementation during the year. An assessment of changes to the key assumptions and risks that affect attainment of the development objectives: Of the risks identified in the RRP the most challenging issue concerns the inherently complex nature of sector development program modality and limited technical skills and resources to implement legal and regulatory reforms. Consultants recruited under the program are assisting the government in implementing legal and regulatory reforms for compliance with the release of the Second Tranche in Q The current situation is summarised in Annex 1. Other program developments, including monitoring and reporting on environmental and social requirements that might adversely affect the project's viability or accomplishment of immediate objectives: At this early stage, no significant factors have emerged which might adversely affect the project s long-term viability. The accomplishment of immediate objectives is partly constrained by the issues that are described in Section L. Q QPR 5

13 E. UTILIZATION OF FUNDS 5. The Climate Resilient Rice Commercialization Sector Development Program (Rice- SDP) is funded through loans/grants from ADB with a total amount of USD 63.3 million, together with a Program loan amounting to USD 24 million. The breakdown is as follows: ADB Program Loan No CAM ADB Loan No CAM Global Agriculture & Food Security program (GAFSP) Grant No Strategic Climate Fund (SCF) Loan No CAM SCF Grant No CAM Royal Government of Cambodia USD 24.0 million USD 31.0 million USD 14.6 million USD 5.0 million USD 4.5 million USD 8.3 million 6. The Ministry of Economy and Finance opened the first generation imprest account (FGIA) at the National Bank of Cambodia (NBC) and the PMO opened a project account in the ACLEDA Bank PLc. so as to use the project funds. The sub-accounts were also opened at the NIOs and PIOs at the ACLEDA Bank Plc. for smooth flow of project funds to the provinces. 7. As of 31 March 2017, a total amount of $ 4,949, has been disbursed out of which $2,563, is from Loan proceeds, $1,481, from Grant proceeds, and $904, from the counterpart fund. The cumulative disbursement (for investment and recurrent costs) for each funding source as of 31 March 2017 is as follows: Table 1: Summary of Cumulative Disbursement by EA/IAs and Funding Source (to 31 March 2017) Q1 QPR

14 8. As of end of March 2017, the overall progress of the project activities is estimated at about 25.06% against the elapsed loan/grant period of 52.94%, against the total disbursement of 8.00% of the total project fund As for the program loan, the first tranche amounting to $12.3 million (equivalent SDR 7.98 million) was released from ADB in December The second and final tranche is expected to be released by end of this year once the required twelve policy conditions are complied with. F. SUMMARY OF PHYSICAL IMPLEMENTATION PROGRESS IN Q Output 1: Under this output, the program has complied with the policy conditions for the first tranche. For the second tranche, out of a total of twelve policy conditions, 4 are achieved. Those are: (i) MAFF will have issued the Cambodian Seed Policy; (iv) the Government will have issued the Land Policy White Paper, including a chapter on Land and Gender Policy; (iii) MAFF will have submitted the draft Law on Agricultural Cooperatives to the National Assembly; and (iv) Ministry of Handicraft (MIH) will have issued the standards for two varieties of Cambodian milled rice, Phka Rumdoul and Phka Chan Sensor. Good progress is being made on the remaining eight policy actions. Due to the delays, a request has been submitted by the EA for an extension of the program loan duration by 6 months to end on 31 December 2017 from the current 30 June ADB has endorsed the request. 11. Output 2: The MAFF/NIO has conducted Training of Trainers (ToT) for the conduct of the Commune Agro-Ecosystem Analysis (CAEA) in each province for district extension staff. Three (3) CAEA, one in each province, is prepared under this ToT program through learning by doing approach. Based on the experience and lessons learned, Guidelines and Letters of Agreement (LoA) for implementation CAEA is prepared by MAFF and endorsed by ADB. The field work in each province for the preparation of the CAEAs will commence in April 2017 with a target to complete AEAs for 87 communes before the end of The training workshops for Commune Land Use Plan (CLUP) was completed by the MLMUPC in two target provinces and the remaining one will be completed by end of Q Recruitment of a service provider for preparing CLUP for 90 communes is on-going and service contract is expected to be awarded in Q with immediate mobilization and commencement of field work. 12. Output 3: The MOWRAM/NIO has awarded contracts for rehabilitation of two-core irrigation sub-projects which will benefit around 18 villages, 6,014 households including 796 female headed households, and create a combined potential irrigated area of 2,800 hectares. Construction works have already begun on the sites. MOWRAM has completed the feasibility studies and detailed designs for four more irrigation sub-projects and the bidding for the civil works is on-going. Rest of the pre-screened irrigation sub-projects will be considered for rehabilitation based on the budget availability and according to the priority. Climate resilient design features for each sub-project is incorporated. The procedures for the implementation of the Paddy Drying and Storage (PDS) facilities have been revised following extensive discussions between MAFF and the PMO/MEF and the outcome of the PPP forum which was conducted with the participation of wide representation from the rice milling sector. A Concept Note describing the approach is prepared in which the procedures for supporting the PDS 1 Annex 2 contains Summary of Physical Progress Ratings and Annex 3 contains Summary Tables of Expenditure and Disbursement Progress. Q QPR 7

15 facilities through PPP is described. The Concept note is endorsed by ADB. Advertisement for EoIs from rice miller is commenced in March The MAFF/NIO completed the advertisement for EoIs for the conduct of the FSs for the seed processing and paddy drying and storage (PDS) facilities and has commenced the evaluation of the five submissions. The Concept Note on Land Levelling has been revised to reflect the outcome of consultation with farmers within the selected irrigation sub-project sites to determine the level of contribution they are willing to make. The PIOs have commenced the preparation of bidding documents. 13. Output 4: The MAFF/NIO has awarded contracts for the supply of equipment for the seed testing laboratory at MAFF/GDA and the equipment has been delivered. A Rice Seed Production Manual including formats for Letters of Agreement (LoAs) for all types of seed production -Foundation Seed, Registered Seed and Certified Seed, and Farmers Field School for seed production- is drafted so as to adopt a holistic approach towards different types of Rice Seeds Production through engagement of relevant stakeholders. LoAs were signed with MAFF agriculture stations in each target province for producing registered rice seed on an area of 8 hectares to produce 16 tons of registered rice seed which will be distributed to Agricultural Cooperatives (ACs). A Farmer Field School (FFS) Training of Trainers (ToT) was completed for district extension staff who have commenced the organization of season-long FFSs for the ACs rice seed producers. A study tour was conducted for the Rice-SDP senior management from PMO, MAFF/NIO and each PIO to visit modern rice milling facilities in Cambodia and Thailand. The ToRs for similar study tours for selected rice millers from each province will be conducted once EOIs shortlisting is completed. 14. Output 5: The ToR for the feasibility study of Weather Indexed Crop Insurance (WICI) was prepared and advertised. The evaluation of submitted EoIs was completed and ADB has endorsed the evaluation. The PMO is preparing to invite the shortlisted firm to submit the RFP. The WICI consultants are expected to be mobilized in late Q and complete the initial FS by Q Based upon a satisfactory outcome, pilot studies will be designed to commence implementation in Output 6: Under this output, preparations are being made to recruit consultants for conducting the baseline survey. The PPMS which was developed is being revised to reflect the changes to the GAFSP indicators. Suitable and easy to use monitoring formats are being developed so that the IAs can collect useful data under the Rice-SDP. The Annual Work Plan and Budget (AWPB) for 2017 have been prepared for a smooth implementation of the project in G. PROGRESS AND ACHIEVEMENTS DURING Q The main accomplishments during Q1 can be summarised as follows: 2 Output 1: Conducive Legal and Regulatory Environment 17. The status of the progress of the compliance with the remaining eight policy conditions for the release of the 2 nd tranche of the Policy Loan (3006) is summarised as follows: For two policy actions relating to seed namely (i) National Seed Standards; and (ii) Prakas on Procedures for Providing Seed Quality Certification, MAFF is in the final 2 See Annex 1 for more detailed status report on agricultural policy work (Output 1). Q QPR 8

16 stages of reviewing the drafts. For the other two policy actions relating to seed namely (i) General Introduction to the Examination of DUS for new plant varieties; and (ii) Guidelines for Conduct of Tests for DUS on Rice, the final drafts of the regulations have been completed and will be approved by MAFF/GDA only. For the Law on Management and Use of Agricultural Land additional external consultations have been conducted and MAFF is reviewing the final draft. The final drafts on the National Action Program to Combat Land Degradation in Cambodia and Guidelines for establishing Agricultural Land Use Zones have been completed and the latter will be reviewed and approved by MAFF/GDA. The review of the final draft of the Law on Plant Protection and Phyto-sanitary measures by MAFF has commenced. Output 2: Agricultural Land-Use Zoning Improved Output 2.1: Undertake Commune Agro Ecological Analysis 18. A Manual including guidelines for implementation of CAEA and format for a letter of agreement (LoA) to engage relevant stakeholders has been prepared and received ADB s endorsement in January The PDAFF in each province has commenced the preparation of the draft LoAs for submission to MAFF/NIO. The PDAFF Director in each province will be required to establish a bank account to receive the funds so that financial transactions can be monitored and recorded for future audit. The LoAs must include a list of the supporting documents to support the DSA paid for each staff members who will be involved in conducting the CAEAs. As of end of Q1, draft LoA from Battambang province has been received and the MAFF/NIO is following up for speedy submission of the other two LoAs from Prey Veng and Kampong Thom provinces so that field implementation of CAEA can start as reflected in the AWPB In addition, the MAFF/NIO developed the Farming System Management Information System (FSMIS) and conducted training on data entry to the national and provincial staff. Output 2.2: Incorporation of the CAEAs into the Commune Land Use Plans 19. The MLMUPC/NIO has conducted its first training workshop on CLUP for sub-national staff in Battambang and Kampong Thom province. Similar type of training workshop is planned for Prey Veng province during Q Recruitment of a service provider for preparing CLUP for 90 communes is on-going and service contract is expected to be awarded in Q Output 2.3: Rice ecosystem Mapping 20. Training on GIS/GPS procedures to MAFF/NIO and other GDA staff has been conducted. Similar training activities have been delivered to PDAFF staff in BTB province. The updating of maps related to rice ecosystems and soil classification will be undertaken soon to identify higher yielding rice growing areas in Cambodia. Output 3: Climate Resilient Rice Value Chain Infrastructure developed Output 3.1: Rehabilitation and climate proofing of irrigation systems 21. Contract has been awarded for the rehabilitation of two core irrigation subprojects and construction work is expected to begin in February Further clarification will be needed Q QPR 9

17 among project stakeholders on the exact number of irrigation subprojects to be completed by MOWRAM as the RRP indicates that the number of pre-screened subprojects is 19 while in PAM the number of procurement packages is 13. Since each subproject is estimated to cost more than the original cost estimate, the total number of subprojects that can be constructed or rehabilitated under the program may be likely less than 13. Table 2: 1 st & 2 nd Priority Irrigation Sub-projects 3 Province Sub-project Description 1 st priority core sub-projects (Contracts awarded) Battambang Prey Sangha Rehabilitation of canal and structures. Kampong Thom Chuck Ksach Rehabilitation of canal and structures. 2 nd priority core sub-projects (Advertisements for procurement are published) Battambang Anlong Run Rehabilitation of canal and structures. Ta Maov Rehabilitation of canal and structures. Prey Veng Anlong Char` Rehabilitation of canal and structures. Chamcar Kuoy Rehabilitation of canal and structures. 2 nd priority core sub-projects (FSs and DDs on-going) Kampong Thom Bat Trang Construction of dike and canal rehabilitation Ta Soong Rehabilitation of canal and structures. Output 3.2: Construction of paddy drying and storage (PDS) facilities 22. The MAFF/NIO team completed the advertisement for EoIs for the conduct of the feasibility studies (FSs) for the PDS facilities and commenced the evaluation of the five submissions. The joint PMO/MAFF PDS Selection Committee was formed by the PMO and a Concept Note is prepared describing the implementation approaches. Preliminary discussions have taken place with the Rural Development Bank (RDB) on the terms and conditions for the concessionary loans. The Concept Note was submitted to ADB/CARM for NoL. Output 3.3: Construction of seed cleaning, drying, grading and storage facilities 23. Plans are being drawn up for the improvement of one agriculture station in each province which is under the administration of the Provincial Department of Agriculture (PDA) so that these stations can provide services to the ACs for drying, cleaning and processing the certified rice seed. Part of the remaining budgets of the civil works (grain handling) and specialized equipment (grain handling equipment) will be utilized for the construction/ renovations of storage house and purchase of seed drying equipment. Output 3.4: Contract services for implementation of sub project associated initiatives 24. The PMO organized training on the bidding procedures that will be applied for the land levelling contracts for the PIO staff. The service contract for land levelling is planned to be awarded in April 2017 and actual land levelling activity can start immediately. The PMO has recommended all PIOs to speed up the process and make sure that actual land levelling can start and be completed before the rainy season (around end of Q2 2017). 3 Annex 4 provide a summary of the irrigation sub-projects and the current status of each sub-project respectively. Q QPR 10

18 Output 4: Enhanced rice value chain support services Output 4.1: Increased availability of quality rice seed 25. The seed testing laboratory equipment was received by MAFF/NIO and the design of the seed testing laboratory to be located within the existing office space of GDA has commenced. The Rice Seed Action Plan that was prepared with assistance from an IRRI consultant was reviewed and further work is required, which will be done by MAFF/GDA. The Foundation Seed requirements of the agriculture stations in 2017 were identified as a total of 300 kg which has been ordered from CARDI. The Farmer Field Schools (FFSs) for rice seed production with members of the ACs have been completed at 14 sites in BTB and PVG provinces. The FFSs will be conducted in KPT province in Q Output 4.2: Expand and develop technical extension services 26. One-week training sessions have been conducted for PDAFF staff in each province on rice post-harvest techniques by the MAFF/NIO. Output 4.3: Enhance business management capacities 27. The advertisement for the Bulk Handling Study was completed and the evaluation of the two submissions that were received has commenced. A study tour was conducted for the Rice SDP senior management from PMO, MAFF/NIO and each PIO to visit modern rice milling facilities in Cambodia and Thailand. The ToRs for similar study tours for selected rice millers from each province were completed and study tours will be conducted once EOIs shortlisting for PDS facilities is completed. Output 4.4: Improved Access to and Reduced Cost of Financing 28. No progress has been made yet. This activity will commence in Output 5: Feasibility Study, Design and Pilot Testing of Weather Indexed Crop Insurance 29. The advertisement for EoIs for the WICI service contract was completed and the evaluation of the submitted EOIs has commenced. It is expected that the consultants can be mobilized in Q Since crop insurance encompasses several cross-cutting issues such as finance, climate change and private sector, MAFF requested and PMO agreed to take over the crop insurance issue. MAFF will provide necessary support if needed by PMO. Output 6: Efficient Program management and Implementation 30. The procurement of motorcycles has been completed and contract has been awarded by the MLMUPC/NIO for 18 motorcycles as well as for two additional vehicles by the PMO. 4 The recruitment of the firm for conducting the baseline survey will be done by the PMO. The AWPB for 2017 was prepared using a more participatory process involving all PIOs and NIOs. A Launching Workshop for the AWPB was conducted on 13 January Mutual agreement was reached between the PMO and NIRAS A/S to close the NIRAS A/S PIC contract before its current completion date of 31 March 2020 based on the fact that the consultancy arrangements under NIRAS A/S PIC contract are no longer suitable for the program as the PMO will refocus on overall program management and coordination whilst the 4 Annex 5 provides an update of the Procurement of Contract packages. Q QPR 11

19 NIOs will focus on implementation of activities and delivering their specialized services and will be recruiting individual consultants themselves as well as some specialized service providers. To ensure a smooth transition on consulting services, PMO and NIRAS A/S agreed that the revised closing date of NIRAS A/S PIC contract is 15 May The PMO and NIOs developed the TORs and budget estimate for each of the necessary individual consultants needed for program implementation and submitted to ADB for NOL. H. GENDER ACTION PLAN 32. The implementation of Gender Action Plan (GAP) is integrated into the Project Performance Monitoring System (PPMA) manual, as well as the 2017 Annual Work Plan and Budget (AWPB). The Gender Specialists worked with the Gender Officer at MAFF-NIO to guide the implementation of the overall GAP and more specifically the respective gender related areas of the MAFF/NIO activities and to develop an action plan for implementation. This individual Program GAP orientation/guidance will be done with each of the Gender Officers identified in the other NIOs and PIOs in Q There are twelve gender indicators that are included in the DMF at output levels, which should also be regularly reported on. Eight of these DMF gender indicators are already incorporated into the GAP, particularly those under DMF Outputs 2, 3, 5 and 6, namely: (i) 90 groups of farmers consulted (with at least 40% female representation) during the preparation of CLUPs by 2015; (ii) 40% unskilled laborers employed in the rehabilitation of irrigation structures are women; (iii) 50% of construction subcommittee members are women; (iv) two FWUCs established in each irrigation scheme, with women occupying 30% of the management positions; (v) 30% unskilled laborers and 50% administration staff in seed drying and storage facilities are women; (vi) 50% of the WICI policy holders are women, 10% of which are from households headed by women; (vii) 30%of administrative and technical positions at PMO and PIO are filled by women by Q3 2013, and (viii) progress of gender actions included as part of Rice SDP progress reports. Four of the DMF gender indicators, are not reflected in the GAP, particularly: under DMF Output 4 (i) sex-disaggregated data of farmers in target provinces using commercial seeds every 2 years; (ii) sex-disaggregated data of farmers who have leveled their paddy fields by 2018; (iii) sex-disaggregated data of farmers in target provinces who obtained technical advice through trained input suppliers; and (iv) under DMF output 6, Rice-SOP performance monitoring system, disaggregated by sex, designed and operational within 6 months of effectiveness. The PMO has requested each of the NIOs and PIOs to report on progress of these DMF indicators in the IAs quarterly progress report. 5 I. ENVIRONMENT AND CLIMATE CHANGE 34. The MOWRAM/NIO with support from consultants conducted the FSs for two priority irrigation sub-project designs, namely Prey Sangha in BTB and Chhuk Sach in KPT. The history, status, potential and specific site conditions with the two sites were found to vary considerably. A set of specific recommendations are being prepared for each of these subprojects. 5 Annex 6 provides the current Gender Action Plan. Q QPR 12

20 J. RESETTLEMENT 35. The FS/DD/CS consultant teams that have been recruited by MOWRAM/NIO completed assessments of the resettlement requirements for the two priority irrigation subprojects including some site visits to assist the Inter-Ministerial Resettlement Committee (IRC) to resolve some issues. K. ASSESSMENTS OF RISKS, ASSUMPTIONS AND COMPLAINCE WITH CONVENANTS K1. Assessment of Risks and Assumptions 36. A comprehensive assessment of risks and assumptions was undertaken from the onset of project implementation. This was updated at regular interval to ensure that risk and assumptions are in line with the status of implementation. K2. Compliance with Covenants 37. The relevant loan agreements covering the Rice-SDP are as follows: Loan Type Date Loan Agreement (Special Operations) for Climate Resilient Rice Commercialization Sector Development Program (Loan 3006) Loan Agreement (Special Operations) for Climate Resilient Rice Commercialization Sector Development project (Loan 3007) Grant Agreement (GAFSP) for Climate Resilient Rice Commercialization Sector Development Project Loan Agreement (ADB Strategic Climate Fund) for Climate Resilient Rice Commercialization Sector Development Project Grant Agreement (ADB Strategic Climate Fund) for Climate Resilient Rice Commercialization Sector Development Project Agreements, Loan Agreement (Special Operations) Agreements, Loan Agreement (Special Operations) August 2013 August 2013 Agreements, Grant Agreement August 2013 Agreements, Loan Agreement (Special Operations) August 2013 Agreements, Grant Agreement August 2013 K3. Compliance conditions for ADB Program Loan (CAM) 38. The Program Loan Covenants are established in the loan and grant agreements with further reference to the Development Policy Letter (April 2013) and Appendix 4 Policy Matrix of the RRP (June 2013). The MAFF/NIO and the TWGs with support from relevant consultants have continued their efforts to achieve compliance with policy conditions for the release of the 2 nd tranche. Good progress has been made on the remaining eight policy conditions. L. PROGRAM ISSUES AND REMEDIAL ACTION 39. Some of the issues encountered during the periods are summarised below, together with where appropriate remedial action which is being applied or is required. 6 Sl. No. Issues Remedial Action 1 CAEA: There was no guidelines/procedure to carry out Conduct ToT program on CAEA through learning by doing approach. Based on the experience and lessons learned, draft guidelines and Letters of Agreement (LoA) for implementation CAEA and 6 Annex 7 includes an update of the Agreed Action Plan from the last Review Mission. Q QPR 13

21 2 3 implementation of CAEA through engagement of PDAFF staff. Irrigation Subprojects: There are insufficient funds available to support all the prioritised irrigation subprojects. Associated Interventions: There has been very slow progress on formulating the activities under the Associated Interventions within the irrigation sub-project site areas. 4 Program Implementation Support: The envisioned implementation support to the Program through a consulting firm is changed due to restructuring of the implementation arrangement for the Program. seek necessary endorsement before proceeding further. The Program has drafted the guidelines and got necessary ADB endorsement to start implementing the activity. Based upon the revised cost estimates that are available for two-core irrigation subprojects, it is assumed that the available funds will be completely utilised and there will be insufficient funds available to support rehabilitation of all the 19 subprojects. The PMO has advised the MOWRAM/NIO to prioritise the subprojects and proceeds with their rehabilitations according to the priority basis so that important and much needed subprojects are rehabilitated first. Guide the PIOs on the implementation procedures for the associated initiatives for the irrigation subprojects concerning the identification of activities to support the formation of FWUCs, strengthening of agricultural cooperatives, enhancing extension services, etc., Prepare for mutually agreeable early closure of the contract with the consulting firm, and start preparations and recruitments of all necessary individual implementation consultants to support implementation of the Program. M. LESSONS LEARNED 40. Active participation of MOWRAM/PIOs in irrigation subproject rehabilitations is helping in the expansion of canal network and realization of irrigation potential in the rural areas. 41. Raising awareness of the Private Sector partners (contractors) on adherence of the specification and design of the construction contract document, and the sanctions for breaching them is of utmost importance. Q QPR 14

22 Q1 QPR

23 Annex 1 STATUS OF POLICY COMPLIANCE (31 March 2017) No. Policy Actions for the Release of the Second Tranche Compliance Documents Status of implementation Expected Date of compliance 1. MAFF will have issued the Cambodian Seed Policy. Copy of the issued Cambodian Seed Policy. MAFF is in the final stage of reviewing the documents already submitted and discussed in several external consultations. The final approval by MAFF and compliance with the original formulation of the Policy Conditions is expected by December Final Review: November 2016 Approval by MAFF: December 2016 Issued by MAFF: December MAFF will have issued the National Seed Standards. Copy of the issued National Seed Standards. MAFF is in the final stage of reviewing the documents already submitted and discussed in several external consultations. The final approval by MAFF and compliance with the original formulation of the Policy Conditions is expected by December Final Review: November 2016 Approval by MAFF: December 2016 Issued by MAFF: December MAFF will have issued the Prakas on Procedures for Providing Seed Quality Certification. Copy of the issued Prakas on Procedures for Providing Seed Quality Certification. MAFF is in the final stage of reviewing the documents already submitted and discussed in several external consultations. The final approval by MAFF and compliance with the original formulation of the Policy Conditions is expected by December Final Review: November 2016 Approval by MAFF: December 2016 Issued by MAFF: December MAFF will have issued the General Introduction to the Examination of Distinctiveness, Uniformity and Stability of New Varieties of Plants. Copy of the issued General Introduction to the Examination of Distinctiveness, Uniformity and Stability of New Varieties of Plants. MAFF is in the final stage of reviewing the documents already submitted and discussed in several external consultations. The final approval by MAFF and compliance with the original formulation of the Policy Conditions is expected by December Final Review: November 2016 Approval by MAFF: December 2016 Issued by MAFF: December

24 Annex 1 No. Policy Actions for the Release of the Second Tranche Compliance Documents Status of implementation Expected Date of compliance 5. MAFF will have issued the Guidelines for the Conduct of Tests for Distinctiveness, Uniformity and Stability of Rice. Copy of the issued Guidelines for the Conduct of Tests for Distinctiveness, Uniformity and Stability of Rice. MAFF is in the final stage of reviewing the documents already submitted and discussed in several external consultations. The final approval by MAFF and compliance with the original formulation of the Policy Conditions is expected by December Final Review: November 2016 Approval by MAFF: December 2016 Issued by MAFF: December The Government will have issued the Land Policy White Paper, including a chapter on Land and Gender Policy. Copy of the issued Land Policy White Paper Completed A draft paper was first prepared by the Council for Land Policy under MLMUPC on 28 August The draft was circulated to other ministries and stakeholders over the next 3 years. In addition to consultations, economic analysis of household data was undertaken by the Supreme National Economic Council to show that poverty risk is reduced by secure land tenure rights of households. The White paper was finalized and issued on 28 August Complied 7. MAFF will have drafted the Law on Management and Use of Agricultural Land, focusing inter alia, on (a) women s access to information on land administration, management and distribution; (b) women s equal participation and representation in all commissions and committees; and (c) equal benefits for women in land related initiatives. Copy of the draft Law on Management and Use of Agricultural Land. A draft has been submitted to MAFF and some initial consultations have been undertaken. Further input on the formulation need to ensure compliance with other land regulations in Cambodia and gender issue. After completion of the review process by MAFF, further external consultations have to be undertaken to produce a new draft for submission to MAFF December 2016 and MAFF and NGO forum conducted the final national consultation workshop on the Review by MAFF Technical Committee: December 2016 External Consultation: February 2017 New Draft Submitted to MAFF: March 2017 Approval by MAFF: April

25 Annex 1 No. Policy Actions for the Release of the Second Tranche Compliance Documents Status of implementation Expected Date of compliance proposed draft law. 8. MAFF will have prepared and the Government will have adopted the national action program to combat land degradation in Cambodia. Copy of the national action program to combat land degradation in Cambodia. An initial draft prepared in 2012 was further revised and a new draft prepared in The draft was circulated to other ministries in It is not clear if a new draft has been submitted to MAFF (GDA/MAFF have to confirm). Approval by MAFF: February 2016 Submission by MAFF to Council of Ministers: March MAFF will have issued guidelines for establishing agricultural land-use zones, incorporating measures and targets for involving women in planning and decision making. Copy of the issued guideline for establishing agricultural land-use zones. GDA prepared a draft and submitted to MAFF in October Guidelines are being reviewed by MAFF. New consultations have be undertaken before preparing a new draft. Review by MAFF Technical Committee: December 2016 External Consultation: February 2017 Approval by MAFF: March 2017 Copy of the submitted Law on Agricultural Cooperatives. Completed The law was issued on 9 June Subsequently, a subdecree to establish the Department of Agricultural Cooperative was issued in Complied 10. MAFF will have submitted the draft Law on Agricultural Cooperatives to the National Assembly. In 2003, MAFF prepared a Prakas (proclamation) on the promulgation of the Royal Decree on the establishment and function of agricultural cooperatives in Cambodia. During 2003 and 2008, not much happened on agricultural cooperative (there were only 15 agricultural cooperatives in 2008). After 2008, first with the food crisis and then with the Paddy Promotion and Rice Export Policy in 2010, cooperatives were promoted more actively by MAFF. In order to accelerate the process, MAFF started to prepare a Law on 17

26 Annex 1 No. Policy Actions for the Release of the Second Tranche Compliance Documents Status of implementation Expected Date of compliance Cooperatives since 2011; the draft law required numerous consultations before arriving to be issued as a law in MIH will have issued the standards for two varieties of Cambodian milled rice, Phka Rumdoul and Phka Chan Sensor, Copies of the issued standards for various varieties of Cambodian milled rice. Completed in December 2016 The Secretariat of the Working Group No. 4 has submitted the FIRST DRAFT of the milled rice standards for two varieties (Pkha Rumduol and Phka Chan Sensor). After reviewing this draft, a SECOND DRAFT was prepared and submitted to the National Standards Council. The Council has reviewed and prepareed the THIRD and FINAL DRAFT and issued the standards (this has to be confirmed). Complied 12. MAFF will have submitted the draft Law on Plant Protection and Phytosanitary Measures to the Council of Ministers. Copy of the submitted Law on Plant Protection and Phytosanitary Measures. A first draft was submitted to MAFF by the end of October. The Draft has been reviewed by MAFF and follow further external consultations before final approval. Review by MAFF Technical Committee: December 2016 External Consultation: January 2017 Approval by MAFF: February 2017 Submission by MAFF to Council of Ministers: March