Convergence of Agricultural Interventions in Maharashtra's Distressed Districts Programme

Transcription

1 Convergence of Agricultural Interventions in Maharashtra's Distressed Districts Programme Supervision report Main report and appendices Mission Dates: 4 to 16 March 2016 Document Date: 25-Apr 2016 Project No Report No: 4056-IN Asia and the Pacific Division Programme Management Department

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4 Contents Abbreviations and acronyms ii Map of programme area iv A. Introduction 1 B. Overall assessment of programme implementation 1 C. and outcomes 3 D. Programme implementation progress 9 E. Fiduciary aspects 14 F. Sustainability 18 G. Other 19 H. Conclusion 20 Appendix 1: Summary of project status and ratings 23 Appendix 2: Updated logical framework 27 Appendix 3: Summary of key actions to be taken within agreed timeframes 29 Appendix 4: Physical progress measured against AWP&B 33 Appendix 5: Financial: Actual financial performance by financier; by component and disbursements by category 43 Appendix 6: Compliance with legal covenants: Status of implementation 47 Appendix 7: Knowledge management: Learning and Innovation 53 Appendix 8: Progress against previous mission recommendations 55 Appendix 9: Validated RIMs Table 65 Appendix 10: Mission Schedule and Persons Met 69 Weights and Measures 1 quintal (q) = 100 kg 1 square metre (m 2 ) = square feet (ft 2 ) 1 acre (ac) = ha 1 hectare (ha) = 2.47 acres 1 lakh (lk) = 100,000 I crore (cr) = 10,000,000 Fiscal year (FY) 1st April 31st March i

5 Abbreviations and acronyms ABE AM AWPB BBF BCI BD BDC BPL CAIM CMRC DPM DPMT DPR GE GoI GoM IA ICO IFAD JLG KM KME LEISA M&E MAVIM MIS MLP MSAMB MSRLM MTR NGO NRLM PG PIM PMU PSC RIMS SC/ST SDR SHG SM SME SWC TA TT USD VDC VLC WA Agribusiness Expert Aide Memoire Annual Work Plan and Budget Broad-bed furrow Better Cotton Initiative Bio-dynamic Bio-dynamic compost Below Poverty Line Convergence of Agricultural Interventions in Maharashtra Community-Managed Resource Centre District Programme Manager District Programme Management Team Detail Project Report Gender Expert Government of India Government of Maharashtra Implementing Agency IFAD Country Office India International Fund for Agricultural Development Joint Liability Group Knowledge Management Knowledge Management Expert Low External Input Sustainable Agriculture Monitoring & Evaluation Maharashtra Women s Economic Development Corporation. Management Information System Micro Livelihood Plan Maharashtra State Agricultural Marketing Board Maharashtra State Rural Livelihood Mission Mid-Term Review Non-Governmental Organization National Rural Livelihood Mission Producer Group Programme Implementation Manual Programme Management Unit Programme Steering Committee Results and Impact Monitoring System Scheduled Castes and Scheduled Tribes Special Drawing Rights Self Help Groups Supervision Mission Small and Medium Enterprises Soil and Water Conservation Technical Assistance Tata Trusts US Dollars Village Development Committee Village Level Committee Withdrawal Application ii

6 A. Introduction 1 1. CAIM is being implemented in six distressed districts of the Vidarbha region, namely Akola, Amravati, Buldhana, Wardha, Washim and Yavatmal with a goal of developing resilient, sustainable and diversified households and on-farm and off-farm livelihoods to build capacity of households to face climatic and market risks without falling back into poverty and distress. CAIM is financed by an IFAD Loan of SDR million (USD 40.1 million) and an IFAD Grant of SDR 670,000 (USD 1.0 million). The IFAD Loan and Grant became effective on 4 December 2009 and the project set for completion on 31 December CAIM co-financed by the Sir Ratan Tata Trust and other Tata Trusts (TT) with a grant of Rs million (USD 16.0 million) and Government of Maharashtra (GoM) contribution of Rs 1880 million (USD 37.6 million) as convergence and counterpart financing. The Maharashtra State Agricultural Marketing Board (MSAMB) is the Lead Programme Agency. 2. IFAD fielded a Supervision Mission (SM) during 4-16 March 2016 to review progress, assess performance, and discuss any modifications needed to implementation modalities. After an initial meeting with the Programme Management Unit (PMU) in Amravati, the Mission and PMU team visited programme districts where discussions were held with the respective District Programme Management Teams, line departments, financial institutions, private sector partners as well as NGO Implementing Agencies (IAs), MAVIM, community leaders, farmer groups, SHGs and CMRCs. This Aide Memoire contains the findings and recommendations of the Mission discussed and agreed in a pre-wrap up meeting with the PMU and presented at a wrap up meeting in Mumbai held on 16 March 2016 chaired by Mr. D.K. Jain, Additional Chief Secretary (ACS), Agriculture and Marketing, GoM. 3. The ACS assured the Mission that steps will be initiated to accelerate CAIM implementation for achieving all output and outcome targets, ensure adequate flow of funds to the project with supplementary budgetary support, prepare and implement a fast track plan for IFAD grant utilization and to address project management issues. The ACS also informed the Mission that Vidarbha and Marathawada regions of Maharashtra are affected by three successive years of drought and as a result farmers distress in these areas is on the rise. To address this, GoM has issued a Government Resolution (GR) to scale up CAIM strategies of convergence led implementation of financial inclusion using SHGs and CMRCs, sustainable agriculture, soil and water conservation and market linkage activities. In response to this, a proposal to scale up CAIM strategies covering all villages in Yavatmal and Osmanabad districts is under the consideration by GoM. It is intended by GoM to fully utilize the IFAD loan and grant including the exchange gains to saturate Yavatmal district which is part of CAIM project area and to seek an extension to project completion date by 2 years. GoM will use its resources for implementation in Osmanabad district. The ACS informed the Mission, that a request will be sent to the Department of Economic Affairs (DEA), Ministry of Finance, Government of India (GoI) once all approvals from GoM are obtained. A final wrap-up meeting was held on 17 March 2016 chaired by Mr Rishikesh Singh, Director, DEA, Ministry of Finance, GoI where the Mission presented the overall findings. B. Overall assessment of programme implementation 4. Implementation progress is rated moderately satisfactory (Score=4). CAIM has completed six years of implementation. IFAD as on 29 Feb 2016 has disbursed USD million (37.4%) out of the IFAD loan of USD million and USD million (7.4%) out of IFAD grant of USD 1.01 million. The achievement in respect of GoM contribution (convergence and counterpart funding), and bank loan mobilization is 40.8% and 146.7% respectively as per table below. 1 Ms Rasha Omar, Country Programme Manager, IFAD, Ms Meera Mishra, IFAD India Country Coordinator (Partnership, Gender, NRLM and Convergence), Mr Shreekantha Shetty (Mission Leader, Institutions, Microfinance, Management and Targeting and M&E), Mr Ganesh Thapa (Agricultural Development), Mr Pratul Dube, (Financial Management & Procurement) and Mr Sankarasubramaniam Sriram, Programme Support Analyst, IFAD-ICO. The mission is grateful to Mr Ravindra Thakare, Programme Director, CAIM and his team for providing logistical support, participating in mission consultations and for providing valuable inputs. 1

7 Financier Appraisal USD 000 Disbursements (up to ) USD 000 % disbursed IFAD Loan 40,101 14, % IFAD Grant 1, % Government of Maharashtra 37,602 15, % Sir Ratan Tata Trust Grant 16,007 4, % Beneficiaries 3,609 4, % Banks 14,539 21, % Private Sector 5,779 1, % Total 118,646 62, % 5. However, achievement in comparison to the original Government Order (GR) issued by GoM indicating project cost in Indian Rupees varies slightly. The project financing pattern in the GR envisages Rs 2000 million from IFAD loan and Rs million from IFAD grant. Utilization until 29 Feb 2016 against IFAD loan is 43.5% and against IFAD grant is 2.63%. 6. Outcome 1- About 90,000 poor and marginalised households mobilised into socially inclusive affinity groups and empowered to effectively articulate their interest, and the resilience of the distressed households enhanced: CAIM has established 10,407 SHG federated into 58 CMRCs. The total membership of SHG is 127,929 women. Poor landless households and marginal farmers are members of the SHGs. SHGs are graded based on their performance indicators that include participation in periodic meetings, performance of savings, internal lending, bank linkages and repayment rate and it is reported that that 75% SHG are in A category. The debt redemption facility has helped the poor households repay bank loans and recover the creditworthiness: a total of 337 women have benefitted. Financial support to the Ultra Poor (on concessional terms) was extended to 4159 women. Women members of SHGs are involved in several IGAs and are actively contributing to the income of their households (up to 70% of the household income based on anecdotal evidence) and their incomes have doubled over the last 3 years. At this rate, the project is likely to achieve its first outcome. The sustainability of the CMRC needs to be further strengthened in order to ensure the backstopping to the SHGs and this will be MAVIM's focus for the remaining project period; 44% of 43 CMRCs of MAVIM (excluding 15 RNGO promoted CMRCs) have achieved more than 50% cost recovery. 7. Outcome 2. A total of 200,000 small and marginal farmers increase production by using sustainable and environmentally friendly farming methods: The M&E system of the project records that 65,850 farmers are using LEISA methods covering 123,377ha. Approximately 32% of farmers report increase in crop yield as AOS These results are greatly boosted by the project's participation in the BCI which promotes LEISA for cotton for 57,607 farmers covering about 73,227ha. This suggests that improved practices would be better adopted if integrated in a value chain approach promoting traceability. It is expected that by project end, the project would be able to add another 43,000 farmers under BCI thus bringing the total number of farmers using LEISA under BCI to more than 100,000 farmers. The likelihood of achieving the 2 nd outcome is moderately unsatisfactory. The project should focus on expanding the outreach and adoption of LEISA given the positive results on yields, reduction of input costs and improved soil structure. 8. Outcome 3. Improved livelihood opportunities for 4,000 livestock production households: The number of households benefitting from livestock enterprises (dairy cattle, goat rearing, and poultry) reached 19,600 households 2, and the project has exceeded the target for this outcome. The livestock ownership has increased for 71% of households. The dairy producers linked with milk cooperatives/ companies now receive Rs 40 per litre compared to Rs20 per litre if sold locally. The livestock mortality, notably among goats, reaches 10-20% annually: the access to paravet services needs 2 This excludes the number of beneficiaries of livestock activities under component 1 of the project. 2

8 to be improved and the 41 paravets hired by the project are not sufficient to cover the beneficiaries. The Pashusakhi system which proved useful elsewhere is not fully operational in the project. According to the mission observation, the livestock enterprises need further support especially in animal nutrition and veterinary care so that productivity would improve and mortality would reduce. 9. Outcome 4. Water security improved and soil erosion reduced in 1,200 villages: The project has worked on soil and water conservation in 791 villages and the treated area is about 160,000 ha. The farmers met are particularly appreciative of the following works: nala deepening and widening; well recharge; farm pond; and to a lesser extent Broad Bed Furrows, Graded Bunding. They informed the mission that the nala deepening and the well recharge have improved the water table, helped them put more land under cultivation and convert some of their land to irrigation. The achievement of this outcome is moderately unsatisfactory to date. The project has set a target to expand the outreach of this activity and plans to reach 80% of the target by project completion. The PMU feels that this can be achieved in collaboration with the Government's Jalayukt Shivar by intensifying this activity in the 1300 villages that the project covers taking into account the positive results achieved to date, the water budgets developed by the Agricultural Department for some of the villages participating in CAIM, and promoting the purchase by SHGs and VDC of BBF planters. Moreover the project is proposing to carry out BBF awareness along with the training on cotton production under BCI. 10. Outcome 5. A total of 50,000 farmers have improved market access including contract farming, value addition, backward and forward linkages resulting in increased income: The project M&E data indicates that a total of 67,230 farmers have improved market access in the following value chains : cotton, pulses, spices, seed production and dairy. At project completion, the project would have linked more than 100,000 farmers to more remunerative markets and this is principally driven by the CAIM participation in the BCI. The project will overachieve on this outcome. Farmers report increased sale prices for their products or savings on transportation costs and market commissions. 11. Likelihood of achieving development objective is moderately satisfactory (Score=4). The project objective refers to incomes of 286,800 households improved, LEISA farming rendered on 403,200ha, some 9,000 women SHGs empowered and about 158,400 distressed households counselled on social and financial matters in the six districts of Vidarbha. The project has reached out to 245,500 households as direct beneficiaries; LEISA farming is currently practised on 123,377 ha; and a total of 10,407 SHG are established. Counselling of distressed households has just commenced in 65 villages in Yavatmal district by Tata Trusts (TT). CAIM's approach of promoting economic empowerment and social inclusion of distressed families in community organizations is proving to reduce farmers' stress thanks to access to information, technology, markets rendering agriculture a more viable business: the estimated increase in income is estimated to be in line with the targeted 40% income increase. Given the project s strong performance on financial inclusion, livestock development and agricultural marketing, the mission estimates that the project will largely reach its objectives. C. and outcomes 12. Component 1: SHG and CMRC Development: This component is rated satisfactory (Score=5). CAIM has provided excellent support to MAVIM to implement this component. CAIM s initiatives with CMRCs and SHGs related to agriculture service centres, goat rearing, poultry, BBF planters, BCI initiatives, ultra-poor support, and debt redemption efforts have not only increased the profile of CMRCs and SHGs in CAIM villages but also facilitated MAVIM staff to implement agriculture based activities. MAVIM is expanding this experience through collaboration with IDH and UNDP. 13. SHG and CMRC Mobilization: Out of 64 CAIM clusters, MAVIM was responsible for SHG and CMRC mobilization in 43 clusters, DHAN Foundation (DF) in 7 clusters and NIWCYD in 8 clusters. Six clusters were left out as these clusters were part of MSRLM s intensive blocks. Against appraisal target of 9,000 SHGs, CAIM in total supports 10,407 SHGs which includes 7377 SHGs promoted by MAVIM 3

9 through 43 CMRCs, 2718 SHGs promoted by NGOs through 15 CMRCs, 43 SHGs by Tata Trusts and 169 SHGs by KJBF. Total outreach of this component is 127,929 households against the appraisal target of 90,000 households. This includes 89,524 households mobilized by MAVIM, 34,616 households mobilized by NGOs, 1513 households by TT and 2276 households by KJBF. 14. Out of 58 CMRCs, in5 CMRCs, the total number of SHGs is less than 200. This work has not progressed as expected and focussed attention is required for saturation of villages and expanding number of SHGs in each CMRC to achieve economies of scale required for sustainability. MAVIM has established a system of generating alerts for ascertaining deviation in performance against standards; 5890 SHGs out of 7377 SHGs have less than 3 out of 7 alerts which indicate satisfactory performance of SHGs. In addition, out of 6,887 SHGs graded by MAVIM 5155 SHGs (75%) are in A category, 1,050 SHGs (14%) are in B category and 681 SHGs (11%) are in C category. 15. Savings, Internal Lending and Bank Linkage: SHGs save Rs every month and this amount is used for internal lending at 24% rate of interest. SM of 2015 had recommended fixation of monthly repayment schedule for repayment of internal loans as against bullet repayment practiced by SHGs. This practice is yet to be implemented. Bank linkage has been steadily improving with ICICI Bank collaboration. Under CAIM, 6098 SHGs (out of 7377 SHGs) have accessed Rs1.07 billion (107 crore) as loan from banks and of this ICICI Bank has provided Rs million (Rs Crore) as loans to 4878 SHGs. The on-time recovery rate of ICICI Bank loan is 99% in Yavatmal district, 98% in Amaravati district, 97% in Washim and Buldhana districts, 96% in Buldhana district and 94% in Akola district. Bank linkage in the CMRCs previously being covered by DF and NIWCYD is yet to take off. 16. Cost coverage of CMRCs: Introduction of a system of payment for services and developing other revenue streams are essential to achieve sustainability of CMRCs. MAVIM promoted CMRCs have increased the collection of service charges and presently all CMRCs collect Rs per SHG as service charge. In addition, CMRCs also receive 1% of the loan amount at the time of disbursement and 1% at the time of repayment from ICICI Bank for facilitating bank linkage. CMRCs also charge fees for various services provided to the members. On an average CMRCs require about Rs 600,000 towards operating costs annually and about 30% of this cost is covered by service charge and another 30% from the bank linkage incentives. Remaining 40% depends on the ability of the CMRCs to generate revenue from various enterprise related activities. Of the 43 CMRCs currently under MAVIM, 19 CMRCs cover more than 50% costs and 15 CMRCs cover 25-50% costs and 8 CMRCs are in less than 25% cost coverage bracket. 17. Social Enterprise Promotion: MAVIM has promoted various enterprises owned by CMRCs but managed by SHG members. These include establishment of 17 Agriculture Service Centres (ASCs); 3 Dal mills and pigeon pea aggregation centres; 6 pulses grading centres, 8 agriculture machinery centres, 10 milk collection centres, and 21 goat rearing units. CAIM has supported Dal mills and equipment is purchased with 30% subsidy from CAIM. ASCs of CMRCs have helped the farmers to get out of the clutches of privately owned ASCs. CMRC owned ASCs provided three major benefits to the farmers: (i) selling agricultural inputs at a discount compared to open market retail prices on account of advance booking and advance payment at wholesale prices; (ii) selling the inputs at pre-fixed prices and not taking advantage of scarcity situation to increase input prices; and (iii) providing quality inputs from reputed manufactures apart from providing appropriate usage information on fertilizers and pesticides. CMRCs have obtained necessary licences and the experience during the last season has been encouraging. Each ASC has made a profit of about Rs 150,000 and MAVIM has plans to expand the activity of ASCs to other CMRCs. 18. Ultra poor support: MAVIM has supported only 400 households under this activity during despite having a target of 1400 households in the AWPB of This is mainly on account of delays by MAVIM to submit expenditure details for timely settlement of advances and subsequent inability of CAIM to release funds due to shortage of funds. CAIM has in total supported 4159 households as at 31 4

10 Dec 2015 against target of 12,000 households. Goat rearing (64%), poultry (25%), and other on farm (2%) and off farm (9%) enterprises are the major activities under this support. Under this activity, an amount of Rs 5,000 is provided as support to the ultra-poor which is very small; this amount is barely adequate to purchase one goat. MAVIM has also introduced the concept of recovering the investment provided to the ultra-poor households after the household is able to generate benefit from the intervention in order to provide similar support to other deserving families. This system of revolving the allocation for the ultra-poor can be expanded to all CMRCs. 19. Debt redemption: MAVIM has not implemented this activity during the current financial year despite having target of extending this support to 20 SHGs. This activity is emerging as a key driver of attitudinal change amongst members to realize the importance of credit history and credit discipline to access funds from banks and move ahead with their economic growth trajectory. CAIM supported 82SHGs and released Rs 2.33 million as support for debt redemption support covering 337 households. 20. Joint Ownership: CMRCs under CAIM have started an innovative programme of joint asset ownership by the husband and wife as against earlier system of assets owned by the male household members. Awareness programmes were conducted in 816 villages and in this respect, 23,876 households have registered their home in joint names. In respect of 4859 households, applications have been submitted for joint ownership of farm lands and in case of 1027 households this registration process has been completed. 21. Micro-livelihood Plans and Income Generation: MAVIM has implemented 106 MLPs covering 2056 members with a total investment of Rs28.6 million of which CAIM has provided a support of Rs 3.36 million. The remaining amount has been mobilized as bank loan and SHG contribution. The activities being undertaken under MLPs include goat farming, dairy enterprise, poultry, etc. To date, MAVIM has implemented income generating activities with 3107 households with a total investment of Rs million and CAIM has provided a support of Rs 7.36 million. Agreed action Responsibility Agreed date 1. Ensure achievement of minimum 200 SHGs in all CMRC by 31 Mar MAVIM Start 1 Apr Ensure 100% cost coverage by at least 20% of the CMRCs and and end 75% cost coverage by 25% of the CMRCs by 31 March by 31 Mar Increase ultra-poor support to Rs 10,000 per household and institute GE/MAVIM Immediate a system of revolving this support within the CMRC to support other deserving households. 3. Focus on enterprise owned by CMRC for developing new revenue MAVIM Immediate streams to achieve self-sustainability. Introduce a system to use corpus on CMRCs 3 into low risk trading activity such as input aggregation. 4. CAIM to allocate Rs 150,000 to each Agriculture Service Centre of CMRCs and PCs for improving physical infrastructure during under Rural Godowns budget. Based on the performance, during an additional allocation of Rs 300,000 can be made during MAVIM to submit proposals for purchase of equipment for Agriculture Machinery Centres of CMRCs. CAIM to support 30% of the total investment up to Rs 300,000 under MSME initiative. PD/MAVIM MAVIM Start by 1 Jul 2016 Start by 1 Apr Component 2: Marketing Linkages and Sustainable Agriculture progress is moderately satisfactory (Score=4) (a) Sustainable agriculture and LEISA farming systems: progress is moderately unsatisfactory (Score=3). The Better Cotton Initiative (BCI) continues to make impressive progress. BCI activities have supported 3 Amount of service charge, bank linkage incentives and other income generated by the CMRCs is kept in a bank account as corpus as Tejaswini has fully paid all operational costs of the CMRCs. 5

11 57,607 farmers covering 73,227 ha whereas 56,529 farmers covering 71,749 ha of cotton cultivation have passed the third party credibility checks. This initiative promotes an environment-friendly pest control and less use of chemical fertilizer and water. As a result, production costs decline, yields improve and farmers earn higher profit. A study of 8,000 BCI farmers and 1600 comparison farmers in CAIM districts show that with higher yield and price for their produce, and lower production costs, their profit was 42% higher than comparison farmers. The project expects the number of BCI farmers to reach 75,000 in and 100,000 in CAIM and BCI have developed a draft exit strategy, which is under consideration. The mission recommends that the project and BCI should review this and identify the most appropriate option based on costs and benefits for sustainable BCI expansion. BCI has implemented 16 Production Units (PUs) in 5 districts and out of this 2 PUs have been disqualified. BCI has given Corrective action plan and the same will be implemented. CAIM will have to submit Result Indicator Report on time to ensure consolidation of CAIM results in the overall global results of BCI. 23. Another important crop supported by the project is soybean, where the major intervention is the use of broad-bed furrow (BBF) for land preparation. It improves water infiltration as well as drainage, which contribute to higher yields. Farmers adopting BBF obtained on average an increase in yield of 0.25 to 0.75 mt/ha. In , the project distributed 79 BBF planters bringing the total number of BBF planters distributed to 339. In , BBF method of land preparation covered 9,562 ha of soybean, 898 ha of gram, 192 ha of wheat and 152 ha of Tur. 24. Since , the project has been promoting biodynamic composting to reduce the cost of replenishing soil nutrients and adding organic matter to the soil. In , support was provided to establish 1,870 units of biodynamic compost (BDC). So far, 13,330 BDC units have been supported in project districts. The mission met some farmers during field visits who were happy with the outcome in terms of reduction in input cost and improvement in soil structure. 25. A study undertaken by P.D. Krishi Vidyapeeth on the efficacy and profitability of biodynamic agricultural technology found that soybean and wheat yields were 31.8% and 14.5% higher compared to farmers practice but at par with chemical practice. This approach was more profitable than two other alternatives due to lower costs. Also biodynamic farming had more favourable effect on organic carbon, available N, P and K levels. The mission had two reservations about the research design of this study. First, other forms of organic composting such as vermi-compost should also have been included for a more complete comparative study. Second, the chemical practice option should have included only chemical fertilizer and not the farmyard manure. 26. Products such as BD Compost kit are generally proprietary products of companies and hence it is not advisable for CAIM to undertake large-scale promotion by purchasing products on a single source procurement basis. However, it is necessary to demonstrate these products so that farmers understand the benefits. It is reported that the culture from Cow Pat Pit (CPP) can be continued to make subsequent batches of CPP without purchasing BD kit. CAIM will have to promote alternative compost making options and reduce dependence on a single company. 27. The cumulative area under the low external input sustainable agriculture (LEISA) has reached 123,377 ha in the six project districts, which represents only about 30% of the appraisal target of 403,200 ha. This includes 73,227 ha under LEISA for cotton; 22,069 ha under BBF; 17,614 ha under other types of LEISA; 1,505 ha under biodynamic approaches; and 8,962 ha under LEISA seed area. In view of the fact that about 70% of the target has to be met in less than two years, the mission recommends that the project should re-double its efforts to promote LEISA practices. Based on the experience so far, BCI cotton and BBF offer the best potential to meet this target. Agreed action Responsibility Agreed date 6. The project should promote different types of organic composting and PMU From Mar not limit itself to biodynamic composting. Any product, which is included

12 Agreed action Responsibility Agreed date for demonstration should be approved by the Department of Agriculture /Agriculture University or ICAR. The project should limit subsidy for demonstration for a product to only one year. onwards 7. Purchase of all innovative products to promote alternative PMU 30 Apr 2016 approaches to agriculture through single source procurement requires prior approval of IFAD CAIM to submit a proposal to IFAD with rationale, cost and benefits total cost of procurement not to exceed Rs 500,000 for a product without splitting the order promote alternatives to reduce dependence on a single company. 8. The project and BCI should review the draft exit strategy and identify PMU, BCI 30 Apr 2016 the most appropriate option based on costs and benefits. 9. To meet the LEISA target of 403,200 ha, CAIM to expand coverage PMU, DPMTs Immediate of BCI, BBF and other LEISA practices through structured planning and coordination between PMU, DPMT, IAs, TT and BCI. TT to implement BCI in its 10 clusters if necessary using CAIM funds for training purposes. (b) Livestock development: Progress is rated moderately satisfactory (Score=4). 28. The design document has the target of supporting 2,500 household dairy units, 2,500 goat units and 45 milk collection centres. So far, the project has supported 1,420 household dairy units (each unit consists of 2 cows or buffaloes), and 6 milk collection centres (MCCs). Inability of Mahanand (GoM promoted milk cooperative) to provide remunerative prices to the farmers and also to establish new milk routes has constrained CAIM to expand MCC establishment in the project area. In field visits, the mission saw some promising dairy groups in Umerkhed village of Yavatmal district, Wadap village in Washim district and Dadulgavan village in Buldhana district. However, the mission feels that there is a need to improve veterinary support services to ensure sustainable returns to farmers on their investment. The project also needs to adopt a cluster approach in promoting new dairy groups, so that there is enough milk produced in the area to attract private or government dairies for milk collection. 29. Goat rearing has become a promising livestock enterprise in the project area and CAIM has supported 4,658 units of goat rearing against the Appraisal target of 2,500 goat units. However, the mission feels that the animal health services, shed facilities and fodder development should be improved so that animal productivity can be raised sustainably. Veterinary services provided by paravets and Pashusakhis are inadequate. These services should be upgraded through the provision of qualified veterinary doctors and upgrading of skills of paravets/pashusakhis. 30. The project has so far supported 13,518 units of backyard poultry. The mission observed during the field visit that the participating households, mainly belonging to ultra-poor category have benefitted from this enterprise. However, it also suffers from inadequate provision of veterinary services and proper sheds. Many of the poultry farmers the mission talked to during the field visit are interested to expand their flock size but face space problem. Agreed action Responsibility Agreed date 10. Expand the activity of milk collection centres (MCCs) establishment using VDCs and CMRCs Introduce activities related to fodder development, attach paravet and veterinary services to the milk collection centres and introduce artificial insemination in MCCs already established. PMU/DPMT Start from 1 Apr Provide funding for milk collection centres for establishing storage facility under rural godown activity 30% of the investment up to a maximum Rs 150, IAs/MAVIM to institute a system of Pashusakhis with animal health card for each household for both goats and poultry with vaccination schedule and also castration of all bucks except bucks of good quality. PMU/DPMT PMU/DPMT/MAVIM Start from 1 Apr 2016 Start from 1 Apr

13 (c) Soil and water conservation: Progress is rated moderately unsatisfactory (Score=3) 31. The total area benefitting from SWC work, including through convergence has reached 48,635 ha, which is only 12%of the target. This does not include area covered under farm ponds, CNB construction, CNB de-silting, well recharge, nala revival, water harvesting ponds and micro-irrigation, as progress for these are reported in number and not in area covered. Even if this progress is translated into area covered, the cumulative area under SWC work is estimated at 160,000 ha in 791 villages against the target of 403,000 ha and 1200 villages. The main reason for this under achievement is inadequate budget for soil and water conservation from other line departments. The mission therefore recommends that the project should expand the area covered by SWC work by focusing on low-cost interventions such as well recharge and micro-irrigation and expand the number of villages where these are implemented. 32. The state government has initiated a special programme for SWC work Jalyukt Shivar. The project should coordinate with this programme and tap into their resources under convergence. The state Department of Agriculture has completed water budgeting work in 1,300 villages last year and is planning to undertake this in additional 1,000 villages. The mission recommends that SWC work under CAIM be undertaken in the areas where water budgeting has been completed by using information available from this exercise. 33. In , the project funded 95 units of well recharge, 34 units of CNB, 157 units of CNB desilting and 22 units of nala revival using IFAD resources. In addition, it supported 1,663 ha of graded bunding, 102 units of well recharge, 8 units of CNB, 73 units of CNB de-silting and 7 units of nala revival through convergence. Agreed action Responsibility Agreed date 13. The project should focus on expanding area and also number of villages covered by SWC work by focusing on low-cost interventions such PMU, DPMTs Start from 1 April 2016 as well recharge, micro-irrigation. Provide additional budget under IFAD to VDCs and CMRCs to undertake this activity in villages not yet covered by the project. 14. Engage consultants for supervision of SWC works consultants to PMU 31 March 2016 verify quality of construction, suggest remedial measures for improvement and train DPMT staff on plans to implement remedial measures. 15. The project should coordinate its SWC work with government s Jalyukt Shivar program and avail resources for convergence work. PMU, DPMTs Start from 1 April The mission recommends that SWC work under CAIM be undertaken in the areas where the government has completed water budgeting exercise for more effective programme implementation (d) PMU, DPMTs Market linkages and value chains: Progress is rated satisfactory (Score=5). Start from 1 April The project supported BCI cotton farmers in making collective input purchase in which about 25% farmers were involved. The project also helped farmers in value addition by processing mt seed cotton into 1,380 cotton bales. Thirty-nine ginners are currently registered with BCI, who procured 9,823mt of cotton in In , a total of 21 spiral separators were distributed to women SHGs to facilitate soybean grading. So far, the project has distributed 250 spiral separators in 93 villages. Soybean farmers were also linked to ADM, a processing company for procurement of soybean. 35. For value addition in pigeon pea (Tur), 22 groups were supported in to start business activity through dal mills. The cumulative number of dal mills supported by the project is 43, of which three-fourths are owned by CMRCs. They have been trained on machine handling, management and business operation. In , they processed about 514 mt of tur dal. Based on the observation of a few dal mills, the mission recommends that in new areas, the project should support dal mills only when proper space can be provided by CMRCs for the mill, drying and storage of produce. CMRC members 8

14 should be provided training on book keeping so that they can track the financial performance and profitability of dal mills. 36. So far, the project has supported 9,623 farmers to benefit from contract farming on 11,821 ha involving the production and market linkages for crop seeds and fresh vegetables. In , farmers benefitted from contract farming on 4,120 ha, which included 2,599 ha of soybean seed, 869 ha of gram seed, 160 ha of okra seed and 120 ha of onion seed. 37. With the objective of promoting consumption of nutritious food, 467 SHG members were trained in making different products of soybean. These women, in turn will train 8,285 women through 586 batches of training in six districts. Low cost bamboo frame shed net training was given to 105 farmers and this activity will be expanded to reach 1,000 farmers. 38. Producer Companies: CAIM has promoted 7 Producer Companies (PCs) out of the project target of 64. The number of shareholders of the PCs varies from 10-2,000. Shareholding of women in these PCs remains miniscule. CAIM has allocated a support of Rs 200,000 to each PC and two PCs have received seed capital. CAIM design had established target for promotion of PCs and as a result, PCs were established without gaining experience in a business and even without having a bankable business plan. In view of this, CAIM intends to promote only 10 PCs as against the target of 64 but has plans to promote Farmer Producer Organizations (FPOs) to start a business and gain necessary experience before scaling up into a PC. PCs yet do not have full knowledge about their statutory obligations related to VAT, Service Tax and Income Tax and also compliance to the Ministry of Company Affairs requirements. Capacity of PCs will have to be strengthened to ensure that the registered PCs do not default on their statutory obligations. 39. In , the project supported 319 orange farmers in marketing orange directly to consumers in 12 cities in and outside Maharashtra. The project provided 30-50% transport subsidy. 1,235mt of oranges were sold in these cities compared to 149 mt in the previous year. The farmers received more remunerative prices (Rs per kg) compared to what middlemen offered (Rs per kg). Three cities are being targeted this year. This activity has resulted in creation of a set of orange entrepreneurs who are able to survey the markets and collaborate with government officials. This activity has raised the confidence of these famers to take up retailing of oranges independently. Possibility to piggy back retailing of other products such as unpolished dal exists. This activity will have to be taken forward. However, mission feels that the volume that can be sold in this manner would remain small and therefore the project should explore other options such as aggregating and grading fruit at the village level, organizing wholesalers to come to villages to negotiate prices, and to sell directly to wholesale markets in major cities. Agreed action Responsibility Agreed date 17. The project should support dal mills only when proper space can be provided by CMRCs for the mill, drying and storage of produce. Dal mill owners PMU, DPMTs Start from 1 Apr 2016 should be trained on book keeping so that they can track the financial performance and profitability of dal mills. 18. Establish a core group to survey and market and to identify wholesale trade PD 30 Jun 2016 channels and implement the recommendations of this group after its vetting by an expert group. 19. The project should explore other options of helping the orange farmers PMU/DPMT 30 Sept 2016 such as aggregating and grading fruit at the village level, organizing wholesalers to come to villages to negotiate prices, and to sell directly to wholesale markets in major cities. 20. Provide seed capital to eligible PCs and also conduct a workshop on statutory obligations of the PCs and impose a maximum cap of Rs 200,000 of subsidy at 30% of the equipment and machinery cost for establishing agriculture/horticulture/livestock related business. PMU, DPMTs 30 Jun

15 Agreed action Responsibility Agreed date 21. Each PC should purchase the agriculture inputs to meet its requirements and PMUs or DPMTs should not be involved in such procurement, and there should be an equitable distribution of subsidy across districts/clusters. PMU, DPMTs Start from 1 Apr Rationalize CAIM support to orange entrepreneurs No transport subsidy & board &lodge for entrepreneurs who have availed it once and use short term Consultants for orange marketing instead of CAIM staff. D. Programme implementation progress PMU, DPMTs Start from 1 Apr Programme management performance is unsatisfactory (Score=2) and remains the major barrier to successful implementation. 41. Performance of PMU and DPMTs: Programme Management of CAIM has been a cause of concern for many years now. Excessive staff turnover not only severely hampers the pace and quality of programme implementation, but also affects the morale of other staff. It must be noted that Amravati where the PMU is located as well as the programme districts where the DPMUs are located are rather remote, making it difficult to attract good talent. Since 2013 successive Missions have raised this as a key concern and most recommendations regarding staff retention, staff benefits, continuity etc have largely not been implemented. As a result, more than a 100 staff either resigned, or their services terminated or their contracts were not renewed during the project period. This trend has particularly risen in the last two years, with 22 staff having left or having been discontinued in , including the APD who was recruited just a year ago. At the PMU level, with the exception of two staff (in accounts division), all other staff (13) have been hired after June Currently there are 10 positions that are vacant. An even greater concern is that 4 out of the 6 DPMs have been hired a month ago (in February 2016), with an average gap of 6 months between the removal/ resignation of the previous DPM and the recruitment of the new ones. This is additionally impacting the quality of reporting and co-ordination. 42. Another area that requires attention is the time management of staff. Direct marketing of oranges, for example, has brought notable benefits for the farmers. However, a majority of staff in the districts and PMU are involved for 3-4 weeks (on an average) in this activity. This has a bearing on the other responsibilities of the staff. The Project should have a way to minimise additional burden on staff and explore the option of hiring short term consultants to support direct marketing. 43. The PD holds three additional charges and is therefore only able to dedicate very limited time to CAIM. He is knowledgeable and passionate about the project but is severely handicapped by the shortage of time. The process of appointing the current PD on a fulltime basis had started last year and needs to be done on priority. Additionally there is a need to have a strong APD with clear delegation of tasks to minimise delays in decision making. With only 21 months remaining for project completion, it is also essential to create conducive environment to retain most of the project staff. 44. CAIM has not complied with the last Mission s recommendation to increase powers of DPMs to provide advance, settlement of expenditure and disbursement of INR 600,000 (cumulative) per IA per quarter. Also the recommendation to add two new staff in the Accounts division to deal with the increase in workload due to direct implementation was not complied with. Both these actions need to be done immediately to expedite disbursement and reduce the burden on PMU. Agreed action Responsibility Agreed date 23. Seek IFAD No Objection on the APD selection process, ToRs, PD 30 Apr 2016 shortlist with CVs of all shortlisted persons and recommendation for appointment. Inform IFAD when the new APD joins. 24. Engage two staff (on consultancy contract) in the Accounts PD May 2016 division of PMU. 25. Engage short term consultants to support direct marketing PD April/ Oct

16 26. Get approval from PSC and increase the powers of DPMs to PD April 2016 provide advance, settlement of expenditure and disbursement to INR 600,000 (cumulative) per IA per quarter. 27. Provide annual increment to all (eligible) staff PD April IA Performance: Out of 64 clusters, CAIM appointed IAs are operating in 41 clusters and in four clusters, IAs have completed their tenure. In five clusters, CAIM intends to undertake direct implementation. Staff recruitment process has been completed and the selected staff will start functioning from 1 April Allocation must be made for setting up offices in each of these clusters. CAIM has handed over 10 clusters to TT (including two clusters where IAs have completed their tenure) and it is reported that staff recruitment is being completed in respect of these clusters. Currently DPMTs and the staff involved in direct implementation do not have a clear system for co-ordination/ communication. 46. In respect of five clusters, CAIM had submitted evaluation of the expression of interest in which three IAs have been shortlisted. RFP in respect of this procurement was reviewed with the mission and the following agreements were reached: (i) engage IAs for a period of about months to ensure that all activities including outcome surveys and RIMS impact assessment are completed prior to programme completion date of ; (ii) issue RFP using fixed cost method of procurement and call for only technical proposal from the shortlisted IAs; (iii) include cost of Village Volunteers (VVs), Agriculture Field Officer (AFO) and Para vet into the cost calculations of IA; (iv) reduce the number of Agriculture Business Experts and allocate funds for engaging an Agriculture Engineer/Civil Engineer with SWC experience; (v) include cost of establishment of cluster office with furniture and equipment of Rs 100,000 into the cost of each cluster; (vi) incorporate flexibility to change the physical targets and activities based on field level experience; and (vii) in the event CAIM finds during bid evaluation that any of the shortlisted IA do not have adequate capacity, arrangements for direct implementation should be initiated. 47. Four situations in respect of IA engagement are anticipated. They include: (i) IA completing its tenure but unable to achieve physical and financial targets in which case CAIM will extend the tenure for a maximum period of 6 months and CAIM will continue to pay VV and AFO salary during the extended period in case the IA is not willing to continue, CAIM take up direct implementation or handover to TATA Trusts for implementation ; (ii) IA completing physical targets but not financial targets in which case CAIM will extend the tenure for a maximum period of 6 months and CAIM will continue to pay for VV and AFO during the extended period in case the IA is not willing to continue, CAIM take up direct implementation or handover to TATA Trusts for implementation; (iii) IA completing financial target but not physical target in which case, CAIM to close operations in the cluster after tenure completion with justification for nonachievement of physical targets; and (iv) IA exceeding physical and financial targets in which case reimburse the agreed programme costs subject to the excess work being part of the approved AWPB and service charges to be within the amount indicated in the contract/financial bid. Agreed action Responsibility Agreed date 28. Fast track and complete the process of establishment of cluster level PD and TT 31 Apr 2016 offices in CAIM as well as TT direct implementation clusters. 29. Complete all IA procurement activities for five clusters Revise RFP PD 1 May 2016 based on agreement reached in para 46 and submit for IFAD s approval, invite bids, evaluate the bids, seek IFAD approval and sign contract and submit a copy of the contract to IFAD. 30. Deal with situations with regard to IA engagement as suggested in para 47. Immediate 11

17 31. Issue guidelines to DPMTs and TT engaged staff for field level implementation for establishing structured co-ordination mechanisms in the field and also for consolidating the output and outcome data of both CAIM and TT interventions. PD CAIM SRTT Immediate 48. Performance of SHG and CMRC Promotion Partner Agency: MAVIM remains the sole agency for promoting SHGs and CMRCs though TT and KJBF have promoted a small number of SHGs. MAVIM s performance has been impacted by its unstable financial situation and also delays in release of funds from CAIM. It was decided in August 2015 to terminate the contract of DF and NIWCYD and handover activities related to SHG and CMRC mobilization in the 13 CMRCs to MAVIM. MAVIM has conducted initial set of activities related to taking over these CMRCs. The agreement with MAVIM will have to be revised to reflect the changes in terms of outreach and financial allocation. 49. Budgetary allocation for MAVIM: During MTR, an allocation of Rs 245 million was made for SHG and CMRC activities. MAVIM has submitted an AWPB of 240 million for Taking into account the overall annual budget allocation of Rs 350 million to CAIM for , MAVIM was advised to downsize their AWPB to about 100 million. Given the low level of expenditure by the project and also the ability of MAVIM to implement activities, there exists opportunity to increase the post MTR allocation for SHG and CMRC activity by about 150 million (Rs 245 million to Rs 395 million) and accordingly increase the allocation of MAVIM by making plans for seeking additional funding from GoM under supplementary budget. Agreed action Responsibility Agreed date 32. MAVIM and CAIM to sign a revised MOU for implementation of SHG PD and MAVIM 30 Apr 2016 and CMRC activities in the CMRCs promoted by DF and NIWCYD reflecting revised budgetary provisions and revised set of activities and start implementation of activities in these CMRCs on a fast track mode by providing additional staff where required. 33. CAIM to approve an additional allocation of Rs million to MAVIM for the next two years. MAVIM to submit revised AWPB by 31 Mar 2016 PD 30 Apr Coherence between AWPB and Implementation is rated as moderately unsatisfactory (Score=3).During the year , the project had budgeted Rs million under IFAD loan, grant and counterpart funding against which Rs million was utilized (44.41%) up to February This utilization does not include claims received from IAs amounting to Rs million which remain to be settled and also advances pending with the IAs. CAIM has budgeted Rs million for convergence against which Rs million was achieved (38%). 51. Monitoring and Evaluation is moderately satisfactory (Score=4): CAIM has made substantial progress in terms of results reporting and validation. CAIM has conducted annual outcome survey for 2014 and a report has been submitted. CAIM in January 2016 completed AOS for 2015 and the report is being finalized. Important results from AOS of 2014 and 2015 are provided in the table below: Indicator Project beneficiaries Control group Project beneficiaries Control group Participation in meeting 61% NA 80% NA Participation in demonstrations 69% NA 43% NA Participation in income generating activities 58% NA 24% NA Access to loan from bank/shg 66% 60% 64% 49% Increase in crop yield 29% 8% 32% 8% Livestock ownership 76% 53% 71% 64% Receipt of benefit from SWC of CAIM 57% 15% 42% 9% No shortage of food 95% 88% 97% 96% Increase in income 30% 7% 53% 19% Satisfaction with project 29% NA 47% NA 12